Carnival Corp. CEO was paid $8.7 million last year

Carnival Corp. president and CEO Arnold Donald received $8.7 million in compensation last year, an increase of 11% from 2013.

The cruise company’s 2014 net income rose 14.4% in 2014. Carnival’s stock price rose 12.8% over the year.

Donald earned a salary of $1 million, plus stock compensation worth $3.5 million, non-equity compensation plan remuneration of $3.9 million and $291,000 of other compensation, including private use of the corporate jet.

The five mostly highly paid executives at CarnivalCorp.  earned a combined $32.7 million, including $6.5 million for Costa Group CEO Michael Thamm, $6.1 million for departed Carnival Cruise Lines president and CEO Gerry Cahill, $6.1 million for chief operations officer Alan Buckelew, and $5.2 million for CFO David Bernstein.

The information is contained in a statement filed with U.S. financial regulators in advance of the annual shareholders meeting, which is set for April 14 in London.

New Carnival CEO says she can ‘relate to the brand’

With the appointment of Christine Duffy, Carnival Cruise Line becomes one of the few and certainly the largest cruise brand to be headed by a former travel agent.

That bodes well for Carnival, which over the years has sometimes struggled to manage tensions between its commitment to agents and the preference of some customers to buy direct.

Duffy, 53, started her career as an agent with McGettigan Partners, a specialist in incentive travel, where she rose through the ranks to become president.

On Dec. 17, Carnival Corp. CEO Arnold Donald chose her to become the fourth president of the 24-ship Carnival brand, succeeding Gerry Cahill, who retired in November.

Duffy said her background as an agent was one of the things that prepared her to move into her new role, with its high visibility and responsibility.

“Certainly when I was a travel agent I sold a lot of Carnival cruises, and I certainly can relate to the brand and our guests,” she said.

Since 2010, Duffy has been president and CEO of CLIA, the industry’s trade association. Before that, she spent a decade at St. Louis-based Maritz Travel, which acquired McGettigan in 2001.

In searching for Cahill’s successor, Donald said that the ideal candidate would be someone who resonates with Carnival’s sociable and fun-loving brand.

“We did talk a lot about the brand and about my admiration for Carnival Cruise Line,” Duffy said about her discussions with Donald regarding the job. “I do like people. I’m definitely a people person. I’m very social, and I like to be busy and engaged and interact. Everything I know about the Carnival brand is that it’s all about fun, and I think that’s what vacations should be.”

Duffy will begin her new duties on Feb. 1, the same day that Carnival Corp. rolls out its first-ever Super Bowl ad. Although the ad covers all of Carnival’s brands and is meant to reinforce cruising as a vacation option, it serves as the culmination of a comeback for the Carnival brand in particular.

Duffy steps into the president’s chair as the line has rebounded from a collapse in demand following the Carnival Triumph engine room fire in February 2013 and a roasting in the consumer media over Carnival’s handling of the disabled ship.

Shortly after the fire, Carnival said its consultants expected the brand’s full recovery to take three years. Earlier this year, the company cited YouGov’s BrandIndex survey, which found Carnival the most improved U.S. brand in consumer perception for the first half of 2014.

As part of its recovery bid, the line launched its Carnival Conversations initiative to solicit feedback from travel agents and make changes to boost its standing with the trade.

Duffy said she very much appreciates the importance of agents.

“I’m very supportive of the channel,” she said. “And I believe that with so many cruise options out there, using a travel professional … is the best way to ensure that you get on the right cruise for you.”

At the same time, she said, Carnival will continue to offers customers a choice for those who want to book direct.

“Any business has to pay attention and work with customers the way customers want to work with you,” she said.

Duffy said she first met Donald through Maritz Travel CEO Steve Maritz. Maritz, who said he’s talked to Donald about Duffy “any number of times,” said she combines a good strategic perspective with the ability to execute.

“On top of that she’s been through some crises in the travel business and she’s shown a cool head and leadership ability,” he said.

Duffy’s impending departure from CLIA leaves a hole at the trade group just as it is in the process of consolidating its operations in a new office in Washington.

A transition plan is underway and will be announced shortly, said Adam Goldstein, chairman-elect of CLIA and president and COO of Royal Caribbean Cruises Ltd.

“While Christine will certainly be missed at CLIA, she has a strong team at CLIA who will continue to support our membership and the many activities we have underway around the world,” Goldstein said.

With the job change, Duffy stands to get a big pay increase. While Carnival has not yet disclosed her salary, as president and CEO of CLIA Duffy earned $872,569, according to a filing nonprofits are required to make with the Internal Revenue Service.

The retiring Cahill earned total compensation of more than $2.9 million last year, according to Carnival’s proxy statement for the 2014 annual shareholders meeting.

Duffy’s appointment gives the cruise industry its fourth female brand president in a little over a year, following the appointments of Edie Rodriguez at Crystal, Jan Swartz at Princess and most recently Lisa Lutoff-Perlo at Celebrity.

Rodriguez said that if the top of the cruise industry was once a boys club, women now have a boardroom of their own.

“I think it’s a wonderful girls club to be in, and more power to the girls club,” Rodriguez said.

In naming Duffy president, Donald didn’t mention gender but rather cited her dynamic leadership and wealth of experience as qualifications for the job.

Brad Tolkin, co-chairman and CEO of World Travel Holdings, called Duffy “a respected industry leader,” while Vicky Garcia, COO and co-owner of Cruise Planners, of Coral Springs, Fla., predicted, “She will resonate with travel agents and be front and center in the industry.”

Duffy said that when she started her career as an agent in 1982, she never imagined she would end up as president of a cruise line, much less of the world’s largest line.

“But, boy, it just shows that with a lot of hard work and passion, a girl from Philadelphia can work her way through the ranks to become president of the largest cruise company,” Duffy said. “I’m honored and thrilled to be taking on the challenge.”

Carnival gets bigger in Texas

By Jerry Limone
Carnival FreedomCarnival Cruise Lines will have three ships based in Galveston when the Carnival Freedom joins the Magic and Triumph at the Texas port next February.

Carnival said no other cruise line has deployed three year-round ships in Texas.

“In partnership with the Port of Galveston and the local community, we have been able to increase our passenger counts fivefold since we first launched service from Galveston in 2000,” Carnival Cruise Lines CEO Gerry Cahill said. “Additionally, we are extremely grateful for the support of our travel agent partners who have played a key role in the growth of our Texas cruise program.”

Before arriving in Galveston, the 3,000-passenger Freedom will undergo a previously announced makeover that will add Fun Ship 2.0 product enhancements, including Guy’s Burger Joint, BlueIguana Cantina, RedFrog Pub and the Camp Ocean kids’ club.

Carnival Freedom will sail a 12-day repositioning cruise departing Fort Lauderdale on Feb. 2, arriving in Galveston on Feb. 14. The cruise will call in St. Kitts, St. Lucia, Curacao, Aruba and Grand Cayman.

The Freedom will kick off its new schedule from Galveston with a six-day Caribbean voyage to Costa Maya, Mexico; Belize; and Cozumel. Following the six-day voyage, the Freedom will sail seven-day Caribbean cruises year-round.