Cuba's impact on cash incentives
For 2019, NCLH's compensation committee established an adjusted earnings per share target level of $5.33 for cash incentive compensation, which required an 8.3% increase from the prior year. The actual adjusted EPS was $5.09 after the company took a hit from the abrupt US decision to ban cruises to Cuba. The compensation committee deemed that an 'extraordinary event' outside management's control and excluded its impact, increasing the adjusted EPS by 45 cents per share.
Consequently, target-level cash incentives were approved for Del Rio and other named officers. However, they were capped at target level even though a full adjustment for the Cuba cessation would have resulted in a payment above the target amount.
So Del Rio's cash incentive was $3.6m, compared to $5.4m in 2018. His base salary edged up to $1.8m from $1.75m, while stock awards were valued at $12.2m, compared to $15.2m the year before. He also received $207,040 of 'other compensation,' including a car allowance, medical plan premium, travel expense allowance, tax preparation service and country club membership.
The second highest earning of NCLH's five named executives was Bob Binder, president and CEO, Oceania Cruises, and vice chairman, Oceania Cruises and Regent Seven Seas Cruises, with total compensation valued at $5.8m, up from $5.3m in 2018.
Andy Stuart, former president and CEO, Norwegian Cruise Line, followed with nearly $5.5m, up from $5.3m.
Mark Kempa and Jason Montague
Mark Kempa, EVP and CFO, who appeared for the first time as a named officer, received total compensation valued at $4m, up from $3m in 2018.
Jason Montague, president and CEO, Regent Seven Seas Cruises, also had total compensation worth $4m. That was down from $5.35m in 2018.
Binder, Stuart, Kempa and Montague each had salaries of $700,000, and each received cash incentives of $700,000. That was lower than Binder, Stuart and Montague's cash awards of $1.75m each and Kempa's of $1.57m in 2018.
Annual meeting and election of directors
The compensation appears in a proxy ahead of NCLH's annual meeting, set for June 18 in Miami. Up for election are Class I directors David Abrams, John Chidsey and Chairman Russell Galbut. Class I directors' terms expire in 2023.
Continuing directors include Del Rio, Adam Aron, Stella David, Mary Landry, Chad Leat, Steve Martinez and Pamela Thomas-Graham.