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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant    ☒

Filed by a Party other than the Registrant    ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

CARNIVAL CORPORATION

CARNIVAL PLC

 

(Name of Registrants as Specified in Its Charter)

 

  

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

No fee required.

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

 

1)

Title of each class of securities to which transaction applies:

 

 

 

2)

Aggregate number of securities to which transaction applies:

 

 

 

3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

4)

Proposed maximum aggregate value of transaction:

 

 

 

5)

Total fee paid:

 

 

 

Fee paid previously with preliminary materials.

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

1)

Amount previously paid:

 

 

 

2)

Form, Schedule or Registration Statement No.:

 

 

 

3)

Filing Party:

 

 

 

4)

Date Filed:

 

 


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LOGO

NOTICE OF 2021 ANNUAL MEETINGS

OF SHAREHOLDERS AND

PROXY STATEMENT

Tuesday, April 20, 2021

at 8:30 a.m., local time

Carnival Place

3655 NW 87th Avenue

Miami, Florida 33178

United States

 

 

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TABLE OF CONTENTS

 

LETTER TO SHAREHOLDERS FROM THE CHAIR

     1  

VOTING INFORMATION

     2  

NOTICE OF 2021 ANNUAL MEETING OF CARNIVAL CORPORATION SHAREHOLDERS

     3  

NOTICE OF 2021 ANNUAL GENERAL MEETING OF CARNIVAL PLC SHAREHOLDERS

     6  

PROXY STATEMENT

     13  

GOVERNANCE

     14  

PROPOSALS 1-12 Election or Re-Election of Directors

     14  

Board and Committee Governance

     23  

Director Compensation

     29  

Related Person Transactions

     32  

SHARE OWNERSHIP

     35  

Share Ownership of Certain Beneficial Owners and Management

     35  

COMPENSATION

     39  

PROPOSAL 13 Advisory (Non-Binding) Vote to Approve Executive Compensation

     39  

PROPOSAL 14 Advisory (Non-Binding) Vote to Approve the Carnival plc Directors’ Remuneration Report

     40  

Compensation Discussion and Analysis and Carnival plc Directors’ Remuneration Report – Part I

     40  

Report of the Compensation Committees

     63  

Compensation Committee Interlocks and Insider Participation

     63  

Compensation Tables

     63  

Potential Payments Upon Termination or Change of Control

     70  

U.S. CEO Pay Ratio

     74  

AUDIT MATTERS

     75  

Report of the Audit Committees

     75  

Independent Registered Public Accounting Firm

     76  

PROPOSALS 15  & 16 Re-Appointment and Remuneration of Independent Auditors of Carnival plc and Ratification of Independent Registered Public Accounting Firm of Carnival Corporation

     77  

OTHER PROPOSALS

     78  

PROPOSAL 17 Receipt of Accounts and Reports of Carnival plc

     78  

PROPOSALS 18 & 19 Approval of the Grant of Authority to Allot New Carnival plc Shares and the Disapplication of Pre-Emption Rights Applicable to the Allotment of New Carnival plc Shares

     78  

PROPOSAL 20 General Authority to Buy Back Carnival plc Ordinary Shares

     80  

PROPOSAL 21 Approval of the Amendment of the Carnival Corporation 2020 Stock Plan

     81  

QUESTIONS AND ANSWERS

     96  

Questions Applicable to All Shareholders

     96  

Questions Specific to Shareholders of Carnival Corporation

     101  

Questions Specific to Shareholders of Carnival plc

     104  

ANNEX A Carnival plc Directors’ Report

     A-1  

ANNEX B Carnival plc Directors’ Remuneration Report – Part II

     B-1  

ANNEX C Carnival plc Corporate Governance Report

     C-1  

ANNEX D Amendment of the Carnival Corporation 2020 Stock Plan

     D-1  

 

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LOGO

 

 

LETTER TO SHAREHOLDERS FROM THE CHAIR

 

Dear Fellow Shareholders:

You are cordially invited to attend our joint Annual Meetings of Shareholders at Carnival Place, 3655 NW 87th Avenue, Miami, Florida 33178, United States on Tuesday, April 20, 2021. The meetings will commence at 8:30 a.m., and although there are technically two separate meetings (the Carnival plc meeting will begin first), shareholders of Carnival Corporation may attend the Carnival plc meeting and vice-versa.

Details regarding the matters to be voted on are contained in the attached Notices of Annual Meetings of Shareholders and Proxy Statement. Because of the dual listed company arrangement, all voting will take place on a poll (or ballot).

As the current situation with COVID-19 evolves, we continue to closely monitor the public health advisors and governmental regulations and guidelines on holding large public events and gatherings, as well as travel bans. Based on this advice at the time of writing, the Boards have decided to make some changes to the format of the Annual Meetings of Shareholders this year. Please read the section “Safety and Security Measures” included in the Notices of Annual Meetings below for further details on how we plan to conduct the meetings to prioritize the safety and security of our employees, shareholders and other stakeholders.

While we welcome the opportunity to engage with our shareholders in person at the Annual Shareholders Meetings, we strongly encourage shareholders to follow public health advice before deciding whether to attend the meeting or not.

Your vote is important. We encourage you to vote as soon as possible to ensure your vote is recorded promptly, even if you plan to attend the Annual Meetings of Shareholders.

The Boards will continue to monitor the situation closely and may need to make further adjustments to how the Annual Shareholders Meetings are conducted. Shareholders planning to attend the meeting should therefore check the “Investor Relations” section of our website at www.carnivalcorp.com or www.carnivalplc.com for any updates. The Boards of Directors recommend that you vote in favor of Proposals 1 through 21 and consider their approval to be in the best interests of Carnival Corporation and Carnival plc and their shareholders.

Thank you for your ongoing interest in, and continued support of, Carnival Corporation & plc.

 

March 11, 2021      

 

Sincerely,

   

 

 

LOGO

    Micky Arison
    Chair of the Boards of Directors

 

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VOTING INFORMATION

 

Your vote is important. We encourage you to vote as soon as possible, even if you plan to attend the Annual Meetings of Shareholders.

Who is Eligible to Vote?

 

 

Carnival Corporation Shareholders

 

  

 

Carnival plc Shareholders

 

 

You are eligible to vote if you were a shareholder
as of the close of business (EDT) on
February 19, 2021.

 

  

 

You are eligible to vote if you are a shareholder
as of 6:30 p.m. (BST) on April 16, 2021.

 

How to Vote?

To make sure your vote is counted, please cast your vote as soon as possible by one of the following methods:

 

 

Carnival Corporation Shareholders*

 

  

 

Carnival plc Shareholders

 

 

    •

  

 

Using the Internet at

www.proxyvote.com

 

  

 

 

  

 

Using the Internet at

www.sharevote.co.uk

 

    •

  

 

Calling toll-free

1-800-690-6903

 

  

 

  

 

Using CREST electronic proxy appointment service (if you hold your shares through CREST)

 

 

    •

 

  

 

Mailing your signed form

 

  

 

 

  

 

Mailing your signed proxy form

 

 

*

If you are a record holder or your bank or broker utilizes Broadridge. Otherwise, your bank or broker will provide you with instructions on how to vote.

All eligible shareholders may vote in person at the 2021 Annual Meetings of Shareholders. Please refer to details about how to vote in person in the “Question and Answers” section.

 

Important Note: If you plan to attend the 2021 Annual Meetings of Shareholders please see the Notice of Annual Meetings for important details on admission requirements.

Directions

For directions to the 2021 Annual Meetings of Shareholders, you may contact Investor Relations at Carnival Corporation & plc, 3655 N.W. 87th Avenue, Miami, Florida 33178-2428, United States or via email at ir@carnival.com.

Enroll for Electronic Delivery

We encourage shareholders to sign up to receive future proxy materials electronically. If you have not already enrolled, please consider doing so as it is simple, saves time and money, and is environmentally friendly.

 

 

Carnival Corporation Shareholders

 

  

 

Carnival plc Shareholders

 

 

www.investordelivery.com

 

  

 

www.shareview.co.uk

 

 

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LOGO

Carnival Place

3655 N.W. 87th Avenue

Miami, Florida 33178-2428

United States

 

 

NOTICE OF 2021 ANNUAL MEETING OF CARNIVAL

CORPORATION SHAREHOLDERS

 

 

When   Where

Tuesday, April 20, 2021

8:30 a.m., local time

 

Carnival Place

3655 NW 87th Avenue

Miami, Florida 33178

United States

We are pleased to invite you to attend Carnival Corporation’s 2021 Annual Meeting of Carnival Corporation Shareholders.

Items of Business

 

1.

To re-elect Micky Arison as a Director of Carnival Corporation and as a Director of Carnival plc.

 

2.

To re-elect Sir Jonathon Band as a Director of Carnival Corporation and as a Director of Carnival plc.

 

3.

To re-elect Jason Glen Cahilly as a Director of Carnival Corporation and as a Director of Carnival plc.

 

4.

To re-elect Helen Deeble as a Director of Carnival Corporation and as a Director of Carnival plc.

 

5.

To re-elect Arnold W. Donald as a Director of Carnival Corporation and as a Director of Carnival plc.

 

6.

To elect Jeffery J. Gearhart as a Director of Carnival Corporation and as a Director of Carnival plc.

 

7.

To re-elect Richard J. Glasier as a Director of Carnival Corporation and as a Director of Carnival plc.

 

8.

To re-elect Katie Lahey as a Director of Carnival Corporation and as a Director of Carnival plc.

 

9.

To re-elect Sir John Parker as a Director of Carnival Corporation and as a Director of Carnival plc.

 

10.

To re-elect Stuart Subotnick as a Director of Carnival Corporation and as a Director of Carnival plc.

 

11.

To re-elect Laura Weil as a Director of Carnival Corporation and as a Director of Carnival plc.

 

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12.

To re-elect Randall J. Weisenburger as a Director of Carnival Corporation and as a Director of Carnival plc.

 

13.

To hold a (non-binding) advisory vote to approve executive compensation (in accordance with legal requirements applicable to U.S. companies).

 

14.

To hold a (non-binding) advisory vote to approve the Carnival plc Directors’ Remuneration Report (in accordance with legal requirements applicable to UK companies).

 

15.

To re-appoint the UK firm of PricewaterhouseCoopers LLP as independent auditors of Carnival plc and to ratify the selection of the U.S. firm of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Carnival Corporation.

 

16.

To authorize the Audit Committee of Carnival plc to determine the remuneration of the independent auditors of Carnival plc (in accordance with legal requirements applicable to UK companies).

 

17.

To receive the UK accounts and reports of the Directors and auditors of Carnival plc for the year ended November 30, 2020 (in accordance with legal requirements applicable to UK companies).

 

18.

To approve the giving of authority for the allotment of new shares by Carnival plc (in accordance with customary practice for UK companies).

 

19.

To approve the disapplication of pre-emption rights in relation to the allotment of new shares by Carnival plc (in accordance with customary practice for UK companies).

 

20.

To approve a general authority for Carnival plc to buy back Carnival plc ordinary shares in the open market (in accordance with legal requirements applicable to UK companies desiring to implement share buy back programs).

 

21.

To approve the Amendment of the Carnival Corporation 2020 Stock Plan.

 

22.

To transact such other business as may properly come before the meeting.

Record Date

The Board of Directors set February 19, 2021 as the record date for the Annual Meeting of Carnival Corporation Shareholders. This means that our shareholders as of the close of business on that date are entitled to receive this notice of the meeting and vote their shares.

How to Vote

Your vote is important. Please review the proxy materials for the 2021 Annual Meeting of Carnival Corporation Shareholders and follow the instructions.

Meeting Admission Requirements

Attendance at the Annual Meeting of Carnival Corporation Shareholders is limited to shareholders and their duly appointed proxies or corporate representatives. Each attendee will be asked to present valid government-issued picture identification, such as a driver’s license or passport. Shareholders holding shares in brokerage accounts (“under a street name”) will need to bring a copy of a brokerage statement reflecting share ownership as of the record date (February 19, 2021).

 

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Safety and Security Measures

In the interests of mitigating any risks from the ongoing COVID-19 pandemic and to prioritize the well-being of our employees, shareholders and other stakeholders, the following measures will apply at the Annual Shareholders Meetings:

 

 

social distancing measures will be in place;

 

hand sanitizer will be provided on entry to the venue and must be used;

 

no refreshments will be provided; and

 

attendees will have to comply with the health and safety measures at the venue, including having their temperature taken and the requirement to wear a face mask covering your nose and mouth at all times.

Attendees will be required to comply with any additional federal, state and/or local government guidance in force on the day of the Annual Shareholders Meetings. You should not attend the Annual Shareholders Meetings if you are suffering from any COVID-19 symptoms or you have come into close contact with someone who has tested positive for COVID-19 within the 14 days preceding the date of the Annual Shareholders Meetings. You will be asked to complete a Health Declaration Form upon arrival.

Due to security measures, all bags will be subject to search, and all persons who attend the meeting will be subject to a metal detector and/or a hand wand search. We will be unable to admit anyone who does not comply with these safety and security procedures.

The Boards will continue to monitor the situation closely and may need to make further adjustments to how the Annual Shareholders Meetings are conducted. Shareholders planning to attend the meeting should therefore check the “Investor Relations” section of our website www.carnivalcorp.com or www.carnivalplc.com for any updates.

On behalf of the Board of Directors

 

LOGO

ARNALDO PEREZ

Secretary

Carnival Corporation is continuing to take advantage of U.S. Securities and Exchange Commission (“SEC”) rules that allow it to deliver proxy materials over the Internet. Under these rules, Carnival Corporation is sending its shareholders a one-page notice regarding the Internet availability of proxy materials instead of a full set of proxy materials, unless they previously requested to receive printed copies. If you receive this one-page notice, you will not receive printed copies of the proxy materials unless you specifically request them. Instead, this notice tells you how to access and review on the Internet all of the important information contained in the proxy materials. This notice also tells you how to submit your proxy card on the Internet and how to request to receive a printed copy of the proxy materials. All Carnival Corporation shareholders are urged to follow the instructions in the notice and submit their votes using one of the voting methods described in the proxy materials. If you receive a printed copy of the proxy materials, the accompanying envelope for return of the proxy card requires no postage. Any shareholder attending the Annual Meeting of Carnival Corporation Shareholders in Miami, Florida may personally vote on all matters that are considered, in which event any previously submitted proxy will be revoked.

 

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THIS NOTICE OF ANNUAL GENERAL MEETING IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO ANY ASPECT OF THE PROPOSALS REFERRED TO IN THIS DOCUMENT OR AS TO THE ACTION YOU SHOULD TAKE, YOU SHOULD IMMEDIATELY CONSULT YOUR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT FINANCIAL ADVISOR AUTHORIZED UNDER THE UK FINANCIAL SERVICES AND MARKETS ACT 2000.

IF YOU HAVE SOLD OR OTHERWISE TRANSFERRED ALL YOUR SHARES IN CARNIVAL PLC, PLEASE SEND THIS DOCUMENT AND THE ACCOMPANYING DOCUMENTS TO THE PURCHASER OR TRANSFEREE OR TO THE STOCKBROKER, BANK OR OTHER AGENT THROUGH WHOM THE SALE OR TRANSFER WAS EFFECTED FOR TRANSMISSION TO THE PURCHASER OR TRANSFEREE.

LOGO

(incorporated and registered in England and Wales under number 4039524)

Carnival House

100 Harbour Parade

Southampton SO15 1ST

United Kingdom

 

 

NOTICE OF 2021 ANNUAL GENERAL MEETING OF

CARNIVAL PLC SHAREHOLDERS

 

NOTICE IS HEREBY GIVEN that an ANNUAL GENERAL MEETING of Carnival plc will be held at Carnival Place, 3655 NW 87th Avenue, Miami, Florida 33178, United States on Tuesday, April 20, 2021 at 8:30 a.m. (local time), for the purpose of considering and, if thought fit, passing the resolutions described below:

 

 

Proposals 1 through 18 and Proposal 21 will be proposed as ordinary resolutions. For ordinary resolutions, the required majority is more than 50% of the combined votes cast at this meeting and the Annual Meeting of Carnival Corporation Shareholders.

 

 

Proposal 19 and 20 will be proposed as special resolutions. For special resolutions, the required majority is not less than 75% of the combined votes cast at this meeting and the Annual Meeting Carnival Corporation Shareholders.

Election or re-election of 12 Directors named in this Proxy Statement

 

1.

To re-elect Micky Arison as a Director of Carnival Corporation and as a Director of Carnival plc.

 

2.

To re-elect Sir Jonathon Band as a Director of Carnival Corporation and as a Director of Carnival plc.

 

3.

To re-elect Jason Glen Cahilly as a Director of Carnival Corporation and as a Director of Carnival plc.

 

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4.

To re-elect Helen Deeble as a Director of Carnival Corporation and as a Director of Carnival plc.

 

5.

To re-elect Arnold W. Donald as a Director of Carnival Corporation and as a Director of Carnival plc.

 

6.

To elect Jeffery J. Gearhart as a Director of Carnival Corporation and as a Director of Carnival plc.

 

7.

To re-elect Richard J. Glasier as a Director of Carnival Corporation and as a Director of Carnival plc.

 

8.

To re-elect Katie Lahey as a Director of Carnival Corporation and as a Director of Carnival plc.

 

9.

To re-elect Sir John Parker as a Director of Carnival Corporation and as a Director of Carnival plc.

 

10.

To re-elect Stuart Subotnick as a Director of Carnival Corporation and as a Director of Carnival plc.

 

11.

To re-elect Laura Weil as a Director of Carnival Corporation and as a Director of Carnival plc.

 

12.

To re-elect Randall J. Weisenburger as a Director of Carnival Corporation and as a Director of Carnival plc.

Executive Compensation

 

13.

To hold a (non-binding) advisory vote to approve executive compensation (in accordance with legal requirements applicable to U.S. companies).

Directors’ Remuneration Report

 

14.

To hold a (non-binding) advisory vote to approve the Carnival plc Directors’ Remuneration Report (as set out in the annual report for the year ended November 30, 2020).

Re-appointment and remuneration of Carnival plc auditors and ratification of Carnival Corporation auditors

 

15.

To re-appoint the UK firm of PricewaterhouseCoopers LLP as independent auditors of Carnival plc and to ratify the selection of the U.S. firm of PricewaterhouseCoopers LLP as the independent registered public accounting firm of Carnival Corporation.

 

16.

To authorize the Audit Committee of the Board of Directors of Carnival plc to determine the remuneration of the independent auditors of Carnival plc.

Accounts and Reports

 

17.

To receive the UK accounts and the reports of the Directors and auditors of Carnival plc for the year ended November 30, 2020.

Allotment of shares

 

18.

THAT the Directors of Carnival plc be and they are hereby authorized to allot shares in Carnival plc and to grant rights to subscribe for or convert any security into shares in Carnival plc:

 

  (a)

up to a nominal amount of $101,719,355 (such amount to be reduced by the nominal amount allotted or granted under paragraph (b) below in excess of such sum); and

 

  (b)

up to a nominal amount of $203,438,710 (such amount to be reduced by any allotments or grants made under paragraph (a) above) in connection with an offer by way of a rights issue:

 

   

to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and

   

to holders of other equity securities as required by the rights of those securities or as the Directors of Carnival plc otherwise consider necessary,

 

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and so that the Directors of Carnival plc may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter, such authorities to apply until the end of next year’s Carnival plc Annual General Meeting (or, if earlier, until the close of business on July 19, 2022) but, in each case, during this period Carnival plc may make offers and enter into agreements which would, or might, require shares to be allotted or rights to subscribe for or convert securities into shares to be granted after the authority ends and the Directors of Carnival plc may allot shares or grant rights to subscribe for or convert securities into shares under any such offer or agreement as if the authority had not ended.

Disapplication of pre-emption rights

 

19.

THAT, subject to Proposal 18 passing, the Directors of Carnival plc be given power to allot equity securities (as defined in the UK Companies Act 2006 (the “Companies Act”)) for cash under the authority given by that resolution and/or to sell ordinary shares held by Carnival plc as treasury shares for cash as if Section 561 of the Companies Act did not apply to any such allotment or sale, such power to be limited:

 

  (a)

to the allotment of equity securities and sale of treasury shares for cash in connection with an offer of, or invitation to apply for, equity securities (but in the case of the authority granted under paragraph (b) of Proposal 18, by way of a rights issue only):

 

   

to ordinary shareholders in proportion (as nearly as may be practicable) to their existing holdings; and

   

to holders of other equity securities, as required by the rights of those securities, or as the Directors of Carnival plc otherwise consider necessary,

and so that the Directors of Carnival plc may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory or practical problems in, or under the laws of, any territory or any other matter; and

 

  (b)

in the case of the authority granted under paragraph (a) of Proposal 18 and/or in the case of any sale of treasury shares for cash, to the allotment (otherwise than under paragraph (a) above) of equity securities or sale of treasury shares up to a nominal amount of $15,257,903,

such power to apply until the end of next year’s Annual General Meeting (or, if earlier, until the close of business on July 19, 2022) but, in each case, during this period Carnival plc may make offers, and enter into agreements, which would, or might, require equity securities to be allotted (and treasury shares to be sold) after the power ends and the Directors of Carnival plc may allot equity securities (and sell treasury shares) under any such offer or agreement as if the power had not ended.

General authority to buy back Carnival plc ordinary shares

 

20.

THAT Carnival plc be and is generally and unconditionally authorized to make market purchases (within the meaning of Section 693(4) of the Companies Act) of ordinary shares of $1.66 each in the capital of Carnival plc subject to the following conditions:

 

  (a)

the maximum number of ordinary shares authorized to be acquired is 18,383,016;

 

  (b)

the minimum price (exclusive of expenses) which may be paid for an ordinary share is $1.66;

 

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  (c)

the maximum price which may be paid for an ordinary share is an amount (exclusive of expenses) equal to the higher of:

 

   

105% of the average middle market quotation for an ordinary share, as derived from the London Stock Exchange Daily Official List, for the five business days immediately preceding the day on which such ordinary share is contracted to be purchased; and

   

the higher of the last independent trade and the highest current independent bid for an ordinary share on the trading service venue where the purchase is carried out; and

 

  (d)

unless previously revoked or renewed, this authority shall expire on the earlier of:

 

   

the conclusion of the Annual General Meeting of Carnival plc to be held in 2022; and

   

18 months from the date of this resolution (except in relation to the purchase of ordinary shares, the contract of which was entered into before the expiry of such authority).

Stock Plan

 

21.

To approve the Amendment of the Carnival Corporation 2020 Stock Plan.

Safety and Security Measures

In the interests of mitigating any risks from the ongoing COVID-19 pandemic and to prioritize the well-being of our employees, shareholders and other stakeholders, the following measures will apply at the Annual Shareholders Meetings:

 

 

social distancing measures will be in place;

 

hand sanitizer will be provided on entry to the venue and must be used;

 

no refreshments will be provided; and

 

attendees will have to comply with the health and safety measures at the venue including having their temperature taken and the requirement to wear a face mask covering your nose and mouth at all times.

Attendees will be required to comply with any additional federal, state and/or local government guidance in force on the day of the Annual Shareholders Meetings. You should not attend the Annual Shareholders Meetings if you are suffering from any COVID-19 symptoms or you have come into close contact with someone who has tested positive for COVID-19 within the 14 days preceding the date of the Annual Shareholders Meetings. You will be asked to complete a Health Declaration Form upon arrival.

Due to security measures, all bags will be subject to search, and all persons who attend the meeting will be subject to a metal detector and/or a hand wand search. We will be unable to admit anyone to the venue who does not comply with these safety and security procedures.

 

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The Boards will continue to monitor the situation closely and may need to make further adjustments to how the Annual Shareholders Meetings are conducted. Shareholders planning to attend the meeting should therefore check the “Investor Relations” section of our website at www.carnivalcorp.com or www.carnivalplc.com for any updates.

 

By Order of the Board

 

LOGO

Arnaldo Perez

Company Secretary

January 26, 2021

 

Registered Office:

 

Carnival House

100 Harbour Parade

Southampton SO15 1ST

United Kingdom

Voting Arrangements for Carnival plc Shareholders

Carnival plc shareholders can vote in any of the following three ways:

 

 

by attending the Annual General Meeting and voting in person or, in the case of corporate shareholders, by corporate representatives;

 

 

by appointing a proxy to attend and vote on their behalf, using the proxy form enclosed with this Notice of Annual General Meeting; or

 

 

by voting electronically as described below.

Voting in person

If you come to the Annual General Meeting, please bring the attendance card (attached to the enclosed proxy form) with you. This will mean you can register more quickly.

In order to attend and vote at the Annual General Meeting, a corporate shareholder may appoint one or more individuals to act as its representative. The appointment must comply with the requirements of Section 323 of the Companies Act. Each representative should bring evidence of their appointment, including any authority under which it is signed, to the meeting. If you are a corporation and are considering appointing a corporate representative to represent you and vote your shareholding in Carnival plc at the Annual General Meeting, you are strongly encouraged to pre-register your corporate representative to make registration on the day of the meeting more efficient. In order to pre-register, please email your Letter of Representation to Carnival plc’s registrars, Equiniti Limited, at proxyvotes@equiniti.com.

Voting by proxy

A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote in his or her stead. A proxy need not be a shareholder of Carnival plc. A shareholder may appoint more than one proxy provided that each proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder. To appoint more than one proxy, please follow the notes contained in the proxy form. A person who is nominated to enjoy information rights in accordance with Section 146 of the Companies Act, but who is not a shareholder, is not entitled to appoint a proxy.

If you are a person nominated to enjoy information rights in accordance with Section 146 of the Companies Act you may have a right under an agreement between you and the member by whom you

 

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were nominated to be appointed, or to have someone else appointed, as a proxy for the meeting. If you have no such right, or you have such a right but do not wish to exercise it, you may have a right under such an agreement to give instructions to the member as to the exercise of voting rights.

To be effective, a duly completed proxy form and the authority (if any) under which it is signed, or a notarially certified copy of such authority, must be deposited (whether delivered personally or by post) at the offices of Carnival plc’s registrars, Equiniti Limited, Aspect House, Spencer Road, Lancing BN99 6DA, United Kingdom as soon as possible and in any event no later than 1:30 p.m. (BST) on April 16, 2021. Alternatively, a proxy vote may be submitted via the Internet in accordance with the instructions set out on the proxy form.

In the case of joint registered holders, the signature of one holder on a proxy card will be accepted and the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. For this purpose, seniority shall be determined by the order in which names stand on the register of shareholders of Carnival plc in respect of the relevant joint holding.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear’s specifications and must contain the information required for such instructions, as described in the CREST Manual, which can be viewed at www.euroclear.com. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the issuer’s agent (ID RA19) by the latest time(s) for receipt of proxy appointments specified in the Notice of Annual General Meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his or her CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

Carnival plc may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Voting electronically

Shareholders are entitled to vote online at www.sharevote.co.uk. Shareholders voting electronically should vote as soon as possible, and in any event no later than 1:30 p.m. (BST) on April 16, 2021.

Shareholders who are entitled to attend or vote

Carnival plc, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those shareholders registered in the register of members of Carnival plc at 6:30 p.m. (BST) on April 16, 2021 shall be entitled to attend or vote at the meeting in respect of the number of shares registered in their name at that time. Changes to the entries on the register of members after 6:30 p.m. (BST) on April 16, 2021 shall be disregarded in determining the rights of any person to attend or vote at the meeting.

 

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Any shareholder attending the meeting has the right to ask questions. Carnival plc must cause to be answered any such question relating to the business being dealt with at the meeting, but no such answer need be given if:

 

 

to do so would interfere unduly with the preparation for the meeting or involve the disclosure of confidential information;

 

the answer has already been given on a website in the form of an answer to a question; or

 

it is undesirable in the interests of Carnival plc or the good order of the meeting that the question be answered.

Documents available for inspection

Copies of all service agreements (including letters of appointment) between each Director and Carnival plc will be available for inspection during normal business hours on any weekday (public holidays excluded) at the registered office of Carnival plc from the date of this notice until and including the date of the meeting and at the place of the meeting for at least 15 minutes prior to and during the meeting.

*    *    *

There are 21 Proposals that require shareholder approval at the Annual General Meeting this year. The Directors unanimously recommend that you vote in favor of Proposals 1 through 21 (inclusive). The Directors encourage you to submit your vote using one of the voting methods described herein. Submitting your voting instructions by any of these methods will not affect your right to attend the meeting in person should you so choose.

Website materials

This Proxy Statement and other information required by Section 311A of the Companies Act have been posted on our website at www.carnivalcorp.com and www.carnivalplc.com.

Under Section 527 of the Companies Act, shareholders meeting the threshold requirements set out in that section have the right to require Carnival plc to publish on a website a statement setting out any matter relating to:

 

 

the audit of Carnival plc’s accounts (including the auditor’s report and the conduct of the audit) that are to be laid before the Annual General Meeting; or

 

any circumstance connected with an auditor of Carnival plc ceasing to hold office since the previous meeting at which annual accounts and reports were laid in accordance with Section 437 of the Companies Act.

Carnival plc may not require the shareholders requesting any such website publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act. Where Carnival plc is required to place a statement on a website under Section 527 of the Companies Act, it must forward the statement to Carnival plc’s auditor not later than the time when it makes the statement available on the website. The business which may be dealt with at the Annual General Meeting includes any statement that Carnival plc has been required under Section 527 of the Companies Act to publish on a website.

 

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PROXY STATEMENT

 

The Board of Directors of each of Carnival Corporation and Carnival plc (together, “Carnival Corporation & plc,” “we,” “our” or “us”) is providing these proxy materials to you in connection with our joint Annual Meetings of Shareholders on Tuesday, April 20, 2021. The Annual Meetings of Shareholders will be held at Carnival Place, 3655 NW 87th Avenue, Miami, Florida 33178, United States. The meetings will commence at 8:30 a.m., local time, and although technically two separate meetings (the Carnival plc meeting will begin first), shareholders of Carnival Corporation may attend the Carnival plc meeting and vice-versa.

We are furnishing the proxy materials to shareholders on or about March 11, 2021.

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR

THE SHAREHOLDER MEETINGS TO BE HELD ON APRIL 20, 2021

The Notice of Annual Meetings of Shareholders, Proxy Statement and the Annual Report are available at www.carnivalcorp.com and www.carnivalplc.com.

 

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GOVERNANCE

 

We are committed to governance policies and practices so that shareholder and other stakeholder interests are represented in a thoughtful and independent manner. Sound principles of corporate governance are critical to obtaining and retaining the trust of investors. They are also vital in securing respect from other key stakeholders and interested parties, including our workforce, guests and suppliers, the communities in which we conduct business, government officials and the public-at-large.

Carnival Corporation and Carnival plc operate under a dual listed company (“DLC”) arrangement with primary stock listings in the United States (“U.S.”) and the United Kingdom (“UK”). Accordingly, we implemented a single corporate governance framework consistent, to the extent possible, with the governance practices and requirements of both countries. While there are customs or practices that differ between the two countries, we believe our corporate governance framework effectively addresses the corporate governance requirements of both the U.S. and the UK.

Our corporate governance principles are set forth in our Corporate Governance Guidelines and the charters of our Board Committees. The actions described in these documents, which the Boards have reviewed and approved, implement applicable requirements, including the New York Stock Exchange listing requirements and, to the extent practicable, the UK Corporate Governance Code published by the UK Financial Reporting Council in July 2018 (the “UK Corporate Governance Code”), as well our own vision of good governance. Fiscal 2020 was the first to which the UK Corporate Governance Code applied to Carnival plc.

We will continue to monitor governance developments in the U.S. and the UK to ensure a vigorous and effective corporate governance framework of the highest international standards.

Our Corporate Governance Guidelines, copies of the charters of our Board Committees and our organizational documents are available under the “Governance” section of our website at www.carnivalcorp.com and www.carnivalplc.com.

PROPOSALS 1-12

ELECTION OR RE-ELECTION OF DIRECTORS

 

 

The Boards are elected by the shareholders to exercise business judgment to act in what they reasonably believe to be in the best interests of Carnival Corporation & plc and its shareholders. The Boards select and oversee the members of senior management, who are charged by the Boards with conducting the business of the company.

Nominations of Directors

Carnival Corporation and Carnival plc are two separate legal entities and, therefore, each has a separate Board of Directors, each of which in turn has its own Nominating & Governance Committee. As the DLC arrangement requires that there be identical Boards of Directors, the Nominating & Governance Committees make one set of determinations in relation to both companies.

The Nominating & Governance Committees actively seek individuals qualified to become Board members and recommend to the Boards the nominees to stand for election as Directors at the Annual Meetings of Shareholders or, if applicable, at a Special Meeting of Shareholders.

 

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GOVERNANCE

Election or Re-Election of Directors

 

When evaluating prospective candidates for Director, regardless of the source of the nomination, the Nominating & Governance Committees will consider, in accordance with their charter, such factors as they deem appropriate, including, but not limited to:

 

 

the candidate’s judgment;

 

the candidate’s skill;

 

diversity considerations;

 

the candidate’s experience with businesses and other organizations of comparable size;

 

the interplay of the candidate’s experience with the experience of other members of the Boards; and

 

the extent to which the candidate would be a desirable addition to the Boards and any Committees of the Boards.

Our Corporate Governance Guidelines dictate that diversity should be considered by the Nominating & Governance Committees in the director identification and nomination process. This means that the Nominating & Governance Committees seek nominees who bring a variety of business backgrounds, experiences and perspectives to the Boards. The Boards believe that the backgrounds and qualifications of the Directors, considered as a group, should provide a broad diversity of experience, professions, skills, geographic representations, knowledge and abilities, as well as race, ethnicity, age, gender and sexual orientation and identification, that will allow the Boards to fulfill their responsibilities and the Nominating & Governance Committees assess the effectiveness of this approach as part of the annual evaluations of our Boards of Directors.

As of the date of this Proxy Statement, 25% of the members of the Boards are women (being three of 12 members).

The Nominating & Governance Committees will also use their best efforts to see that the composition of the Boards adheres to the independence requirements applicable to companies listed for trading on the New York Stock Exchange and the London Stock Exchange. The Nominating & Governance Committees and the Boards utilize the same criteria for evaluating candidates regardless of the source of the referral. Other than the foregoing, there are no stated minimum criteria for Director nominees.

The Nominating & Governance Committees identify nominees by first evaluating the current members of the Boards willing to continue in service. As part of director succession planning, current members of the Boards with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Boards with that of obtaining a new perspective. If any member of the Boards does not wish to continue in service or if the Nominating & Governance Committees or the Boards decide not to re-nominate a member for re-election, the Nominating & Governance Committees identify the desired skills and experience of a new nominee in light of the criteria above. Current members of the Nominating & Governance Committees and the Boards are polled for suggestions as to individuals meeting the criteria of the Nominating & Governance Committees. The Nominating & Governance Committees may consider candidates proposed by management, but are not required to do so. The Nominating & Governance Committees may engage a third-party search firm to identify and attract potential nominees.

In 2019, we engaged Russell Reynolds Associates to assist us in identifying a Board candidate with significant compliance experience. Through this engagement, the Nominating & Governance Committees identified Jeffrey J. Gearhart, who they proposed to the Boards for appointment to the Boards, which was approved effective April 20, 2020.

 

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GOVERNANCE

Election or Re-Election of Directors

 

2021 Nominees for Election or Re-Election to the Boards

The DLC arrangement requires the Boards of Carnival Corporation and Carnival plc to be identical. Shareholders are required to approve the election or re-election of Directors to each Board. There are 12 nominees for election or re-election to each Board of Directors. Each nominee currently serves as a Director of both companies. All nominees for Director are to be elected or re-elected to serve until the next Annual Meetings of Shareholders and until their successors are elected.

All of the nominees have indicated that they will be willing and able to serve as Directors.

With respect to each Board nominee set forth below, the information presented includes such person’s age, the year in which such person first became a Director, any other position held with Carnival Corporation and Carnival plc, such person’s principal occupations during at least the past five years, any directorships held by such nominee in public or certain other companies over the past five years and the nominee’s qualifications, including particular areas of expertise, to serve as a Director.

The Nominating & Governance Committees conducted performance evaluations of the members of our Boards of Directors serving during fiscal 2020 and reported the results to the Boards. The Boards determined that each nominee was an effective and committed member of the Boards and the Board Committees on which each serves. In addition, in 2019, the Nominating & Governance Committees engaged a third-party governance expert to perform an assessment of the effectiveness of the Boards. The third-party governance expert interviewed each Director and members of senior management who interact substantially with the Boards, reviewed the results of the assessment with the Senior Independent Director, and then organized and summarized the assessment for discussion with the full Boards.

Accordingly, the Boards of Directors unanimously recommend a vote FOR the election or re-election of each of the following Director nominees:

 

 

Micky Arison

 

 

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Carnival Corporation

Director since 1987

 

Carnival plc Director

since 2003

 

Age: 71

  

Mr. Arison has been Chair of the Board of Directors of Carnival Corporation since 1990. He has been Chair of the Board of Directors of Carnival plc since 2003. He was Chief Executive Officer of Carnival Corporation (formerly known as Carnival Cruise Lines) from 1979 to 2013 and was Chief Executive Officer of Carnival plc from 2003 to 2013.

 

Board Committees: Executive (Chair)

 

Other Public Company Boards: None

 

Qualifications:

Mr. Arison’s qualifications to serve on the Boards include his decades of leadership experience with Carnival Corporation & plc, as well as in-depth knowledge of our business, our history and the cruise industry, all gained through almost 50 years of service with our companies.

 

 

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GOVERNANCE

Election or Re-Election of Directors

 

 

Sir Jonathon Band

 

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Carnival Corporation

Director since 2010

 

Carnival plc Director

since 2010

 

Age: 71

  

Sir Jonathon served in the British Navy from 1967 until his retirement in 2009, having served as First Sea Lord and Chief of Naval Staff, the most senior officer position in the British Navy, until 2009. He was a Director of Lockheed Martin UK Limited from 2010 to 2015.

 

Board Committees: Compliance, Health, Environmental, Safety & Security (“HESS”) (Chair) and Nominating & Governance

 

Other Public Company Boards: None

 

Qualifications:

Sir Jonathon’s qualifications to serve on the Boards include his extensive experience in maritime and security matters gained through his 42 years of service with the British Navy. He also brings an international perspective of company and industry matters.

 

 

 

Jason Glen Cahilly

 

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Carnival Corporation

Director since 2017

 

Carnival plc Director

since 2017

 

Age: 50

  

Mr. Cahilly is the Chief Executive Officer of Dragon Group LLC, a private firm, which provides capital and business management consulting and advisory services. Mr. Cahilly previously served as Chief Strategic and Financial Officer of the National Basketball Association, a North American professional basketball league, from 2013 to 2017, as well as a Director of the Board of NBA China. Prior to that, Mr. Cahilly spent 12 years at Goldman Sachs & Co., where he served as a partner and the global co-head of media and telecommunications.

 

Board Committees: Audit

 

Other Public Company Boards: Corsair Gaming, Inc. (since September 2020)

 

Qualifications:

Mr. Cahilly’s qualifications to serve on the Boards include his more than 20 years’ experience in the global media, entertainment, sports, technology, leisure, communications and finance sectors in a variety of senior leadership roles.

 

 

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GOVERNANCE

Election or Re-Election of Directors

 

 

Helen Deeble

 

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Carnival Corporation

Director since 2016

 

Carnival plc Director

since 2016

 

Age: 59

  

Ms. Deeble was the Chief Executive Officer of P&O Ferries Division Holdings Ltd., a pan-European shipping and logistics business, from 2006 until 2017. She is also a Non-Executive Director of the Port of London Authority and a member the Supervisory Board of the UK Chamber of Shipping.

 

Board Committees: Compensation and HESS

 

Other Public Company Boards: None

 

Qualifications:

Ms. Deeble’s qualifications to serve on the Boards include her more than 30 years’ experience in retail, transport, logistics and leisure sectors in finance and general management roles, including significant maritime operational and commercial experience gained through her service as a chief executive officer of a passenger shipping organization. She is also a UK Chartered Accountant.

 

 

 

Arnold W. Donald

 

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Carnival Corporation

Director since 2001

 

Carnival plc Director

since 2003

 

Age: 66

  

Mr. Donald has been President and Chief Executive Officer of Carnival Corporation & plc since 2013. He was President and Chief Executive Officer of The Executive Leadership Council, a professional network of African-American executives of major U.S. companies, from 2010 to 2012. He previously served as President and Chief Executive Officer of the Juvenile Diabetes Research Foundation International from 2006 to 2008. From 2000 to 2005, Mr. Donald was the Chair of the Board of Merisant Company, a manufacturer and marketer of tabletop sweetener products, including the Equal® and Canderel® brands. From 2000 to 2003, he was also the Chief Executive Officer of Merisant Company. From 1998 to 2000, he was Senior Vice-President of Monsanto Company, a company which develops agricultural products and consumer goods, and President of its nutrition and consumer sector. Prior to that he was President of Monsanto Company’s agricultural sector. He previously served as a Director of Oil-Dri Corporation of America from 1997 to 2013, The Laclede Group, Inc. from 2003 to 2014 and Crown Holdings, Inc. from 1999 to April 2019.

 

Board Committees: Executive

 

Other Public Company Boards: Bank of America Corporation (since 2013)

 

Qualifications:

Mr. Donald’s qualifications to serve on the Boards include his broad leadership and other executive skills gained through his prior executive leadership experience with a Fortune-100 science-based research and development, manufacturing and marketing company, a privately held company with global operations, and as head of a large international research-based not-for-profit corporation. He also has broad experience in corporate governance, having served as a Director, past and present, of a number of other publicly-traded companies.

 

 

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GOVERNANCE

Election or Re-Election of Directors

 

 

Jeffrey J. Gearhart

 

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Carnival Corporation

Director since

April 2020

 

Carnival plc Director

since April 2020

 

Age: 56

  

Mr. Gearhart was the Executive Vice President, Global Governance and Corporate Secretary for Walmart, Inc. (“Walmart”), a global retailer, responsible for oversight of Walmart’s global legal, compliance, ethics and security and investigative functions, among others, until 2018. Mr. Gearhart joined Walmart in 2003 as Vice President and General Counsel, Corporate Division. In 2007, he became Senior Vice President and Deputy General Counsel, and then took over as the head of the company’s legal department when he was promoted to General Counsel in 2009. Mr. Gearhart was appointed corporate secretary in 2010, and in 2012 his responsibilities were expanded to include oversight of compliance, ethics and investigations, in addition to legal. Before joining Walmart, Mr. Gearhart was a partner with Kutak Rock LLP, practicing in the corporate, securities and mergers and acquisitions areas.

 

Board Committees: Compliance and HESS

 

Other Public Company Boards: Bank OZK (since 2018)

 

Qualifications:

Mr. Gearhart’s qualifications to serve on the Boards include his experience as a lawyer and his leadership experience as general counsel at a global retail company, along with his expertise from having responsibility for global legal, compliance ethics, and security and investigative functions .

 

 

 

Richard J. Glasier

 

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Carnival Corporation

Director since 2004

 

Carnival plc Director

since 2004

 

Age: 75

  

Mr. Glasier was President of Argosy Gaming Company, an owner and operator of casinos, from 2002 to 2005, and its Chief Executive Officer from 2003 until 2005. From 1995 to 2002, Mr. Glasier was Executive Vice President and Chief Financial Officer of Royal Caribbean Cruises Ltd., a global cruise company.

 

Board Committees: Audit (Chair), Compensation, Compliance and Nominating & Governance

 

Other Public Company Boards: None

 

Qualifications:

Mr. Glasier’s qualifications to serve on the Boards include significant cruise industry experience as a senior financial officer of a major cruise line, as well as his managerial and corporate governance expertise acquired as the Chief Executive Officer of a New York Stock Exchange-listed operator of hotels and casinos, and as well as many years of public company board experience.

 

 

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GOVERNANCE

Election or Re-Election of Directors

 

 

Katie Lahey

 

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Carnival Corporation

Director since 2019

 

Carnival plc Director

since 2019

 

Age: 70

  

Ms. Lahey was the Chair of Korn Ferry Australasia, a leadership and talent firm, from February through October 2019, having served as its Executive Chair since 2011. She has been a Non-Executive Director of The Star Entertainment Group Limited, which owns and operates integrated resort destinations in Australia, since 2012, and was Chair of the Tourism and Transport Forum Australia, a tourism and transportation industry group, from 2015 until 2018. She was the Executive Chair of Carnival Australia, a division of Carnival plc, from 2006 to 2013. In 2013, she was named a Member of the Order of Australia for her significant services to business and commerce and the arts and in 2003 she was awarded a Centenary Medal for contributions to Australian society in the area of business leadership.

 

Board Committees: HESS

 

Other Public Company Boards: The Star Entertainment Group Limited (since 2012)

 

Qualifications:

Ms. Lahey’s qualifications to serve on the Boards include her more than 30 years’ experience in the tourism, talent sourcing, cultural transformation, governmental, retail and the arts sectors in a variety of leadership roles, including within the cruise industry.

 

 

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GOVERNANCE

Election or Re-Election of Directors

 

 

Sir John Parker

 

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Carnival Corporation

Director since 2003

 

Carnival plc Director

since 2000

 

Age: 78

  

Sir John has been Non-Executive Chair of Laing O’Rourke, a multinational construction company, since 2017. He was the Non-Executive Chair of Pennon Group plc, an environmental utility infrastructure company from 2015 until July 2020, Lead Non-Executive Director for the UK Government Cabinet Office from 2017 to 2018, a Non-Executive Director of Airbus Group NV, an aeronautics, space and related services company, from 2007 to 2018, Non-Executive Chair of Anglo American plc, a multinational mining company, from 2009 until 2017, a Non-Executive Director of DP World Limited, a global supply chain and container handling company, from 2006 to 2015, Non-Executive Chair of Mondi plc from 2007 to 2009, Non-Executive Chair of National Grid plc from 2002 to 2012, Senior Non-Executive Director of the Court of the Bank of England from 2004 to 2009, and a Non-Executive Director of GKN plc from 1993 to 2002, Brambles Industries plc from 2001 to 2003 and BG Group plc from 1997 to 2000. He was Chair and Chief Executive Officer of Babcock International Group plc from 1994 to 2000, RMC Group plc from 2002 to 2005 and P&O Group plc from 2000 to 2003, a President of the Royal Institution of Naval Architects from 1996 to 1999, a member of the Prime Minister’s Business Council for Britain and Chancellor of the University of Southampton from 2006 to 2011. He was President of the Royal Academy of Engineering from 2011 until 2014. Sir John has been a member of the General Committee of Lloyds Register of Shipping since 1983 and was Chair of its Technical Committee from 1993 until 2002.

 

Board Committees: HESS and Nominating & Governance

 

Other Public Company Boards: None

 

Qualifications:

Sir John’s qualifications to serve on the Boards include his extensive international background and wealth of corporate experience. His past and present service as a Non-Executive Director of a number of listed UK companies provides the Boards with invaluable knowledge and insight with respect to UK corporate governance policies and practices. In addition, Sir John, as a qualified naval architect and former head of a major shipbuilding company, is very experienced in the design, construction and operation of ships.

 

 

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GOVERNANCE

Election or Re-Election of Directors

 

 

Stuart Subotnick

 

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Carnival Corporation

Director since 1987

 

Carnival plc Director

since 2003

 

Age: 79

  

Mr. Subotnick has been President and Chief Executive Officer of Metromedia Company, a privately held diversified Delaware general partnership, since 2010, having previously served as its General Partner and Executive Vice President since 1986. He previously served as a Director of AboveNet, Inc. from 1997 to 2012.

 

Board Committees: Audit, Compliance, Executive and Nominating & Governance (Chair)

 

Other Public Company Boards: None

 

Qualifications:

Mr. Subotnick’s qualifications to serve on the Boards include his significant experience in financing, investing and general business matters, as well as his past Board experience with us, which are important to the Boards when reviewing our investor relations, assessing potential financings and strategies, and otherwise evaluating our business decisions.

 

 

 

Laura Weil

 

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Carnival Corporation

Director since 2007

 

Carnival plc Director

since 2007

 

Age: 64

  

Ms. Weil is the Founder and has been the Managing Partner of Village Lane Advisory LLC, which specializes in providing executive and strategic consulting services to retailers as well as private equity firms, since 2015. She was the Executive Vice President and Chief Operating Officer of New York & Company, Inc., a women’s apparel and accessories retailer, from 2012 to 2014. Ms. Weil was the Chief Executive Officer of Ashley Stewart LLC, a privately held retailer, from 2010 to 2011. Ms. Weil served as the Chief Executive Officer of Urban Brands, Inc., a privately held apparel retailer, from 2009 to 2010. Ms. Weil was the Chief Operating Officer and Senior Executive Vice President of AnnTaylor Stores Corporation, a women’s apparel company, from 2005 to 2006. From 1995 to 2005, she was the Chief Financial Officer and Executive Vice President of American Eagle Outfitters, Inc., a global apparel retailer. She previously served as a Director of Christopher & Banks Corporation from 2016 to June 2019.

 

Board Committees: Audit, Compensation and Compliance

 

Other Public Company Boards: Global Fashion Group, S.A. (since 2019)

 

Qualifications:

Ms. Weil’s qualifications to serve on the Boards include her extensive financial, strategic information technology and operating skills developed over many years as an investment banker and senior financial operating executive. Ms. Weil also brings significant experience in global e-commerce and consumer strategies from her leadership experience with multi-billion dollar New York Stock Exchange-listed retailers.

 

 

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GOVERNANCE

Board and Committee Governance

 

 

Randall J. Weisenburger

 

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Carnival Corporation

Director since 2009

 

Carnival plc Director

since 2009

 

Age: 62

  

Mr. Weisenburger has been the Managing Member of Mile 26 Capital LLC, a private investment firm, since 2014. He was the Executive Vice President and Chief Financial Officer of Omnicom Group Inc., a Fortune-250 global advertising, marketing and corporate communications company, from 1998 to 2014.

 

Board Committees: Compensation (Chair), Compliance (Chair), HESS and Nominating & Governance

 

Other Public Company Boards: Corsair Gaming, Inc. (since September 2020), MP Materials Corp. (since November 2020) and Valero Energy Corporation (since 2011)

 

Qualifications:

Mr. Weisenburger’s qualifications to serve on the Boards include his broad leadership and operational skills gained as a senior executive of a large multi-national corporation and his extensive financial and accounting skills acquired as an investment banker and senior financial operating executive. He also has broad experience in corporate governance, having served as a Director, past and present, of a number of other publicly-traded companies.

 

BOARD AND COMMITTEE GOVERNANCE

 

 

Board Meetings

During the year ended November 30, 2020, the Board of Directors of each of Carnival Corporation and Carnival plc held a total of 36 meetings. Each Carnival Corporation Director and each Carnival plc Director attended either telephonically or in person at least 75% of all Carnival Corporation & plc Boards of Directors and applicable Board Committee meetings held during the period that he or she served in fiscal 2020.

Historically, all Board members are expected to attend our Annual Meetings of Shareholders. However, as a result of the COVID-19 pandemic, none of our incumbent Board members were in attendance at our 2020 Annual Meetings of Shareholders. At this time, we are unable to anticipate if our Board members will attend the 2021 Annual Meetings of Shareholders.

Board Leadership Structure

Our Boards of Directors are led by our executive Chair, Mr. Arison. The Chief Executive Officer position is currently separate from the Chair. The Boards maintain the flexibility to determine whether the roles of Chair and Chief Executive Officer should be combined or separated, based on what it believes is in the best interests of Carnival Corporation & plc at a given point in time. We believe that the separation of the Chair and Chief Executive Officer positions is appropriate corporate governance for us at this time, and that having Mr. Arison as our executive Chair enables Carnival Corporation & plc and the Boards to continue to benefit from Mr. Arison’s skills and expertise, including his extensive knowledge of our business.

Our Non-Executive Directors, all of whom are independent, meet privately in executive session at least quarterly. The Presiding Director leads those meetings and also acts as the Senior Independent

 

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Board and Committee Governance

 

Director under the UK Corporate Governance Code. In addition, the Presiding Director serves as the principal liaison to the Non-Executive Directors, reviews and approves meeting agendas for the Boards and reviews meeting schedules. Our Non-Executive Directors, acting in executive session, elected Randall J. Weisenburger as the Presiding Director and Senior Independent Director.

The structure of our Boards facilitates the continued strong communication and coordination between management and the Boards and enables the Boards to fulfill their risk oversight responsibilities, as further described below.

Board Committees

The Boards delegate various responsibilities and authority to different Board Committees. The Board Committees regularly report on their activities and actions to the full Boards. The Board of Directors of each of Carnival Corporation and Carnival plc has established standing Board Committees, which are each comprised of the same Directors for each company, as follows:

 

 

Audit;

 

Compensation;

 

Compliance;

 

Executive;

 

HESS; and

 

Nominating & Governance.

Each Board Committee periodically reviews its charter in light of new developments in applicable regulations and may make additional recommendations to the Boards to reflect evolving best practices. Each Board Committee can engage outside experts, advisors and counsel to assist the Board Committee in its work.

The current Board Committee members are as follows:

 

  Name

 

Board Committees

 

 

    Audit    

 

 

Compensation

 

 

Compliance

 

 

Executive

 

 

    HESS    

 

 

  Nominating &  

Governance

 

 

  Micky Arison

 

 

 

 

 

 

 

  Chair

 

 

 

 

 

 

  Sir Jonathon Band

 

 

 

 

 

  X

 

 

 

  Chair

 

  X

 

 

  Jason Glen Cahilly

 

  X

 

 

 

 

 

 

 

 

 

 

 

 

  Helen Deeble

 

 

 

  X

 

 

 

 

 

  X

 

 

 

 

  Arnold W. Donald

 

 

 

 

 

 

 

  X

 

 

 

 

 

 

  Jeffrey J. Gearhart

 

 

 

 

 

  X

 

 

 

  X

 

 

 

 

  Richard J. Glasier

 

  Chair

 

  X

 

  X

 

 

 

 

 

  X

 

 

  Katie Lahey

 

 

 

 

 

 

 

 

 

  X

 

 

 

 

  Sir John Parker

 

 

 

 

 

 

 

 

 

  X

 

  X

 

 

  Stuart Subotnick

 

  X

 

 

 

  X

 

  X

 

 

 

  Chair

 

 

  Laura Weil

 

  X

 

  X

 

  X

 

 

 

 

 

 

 

 

  Randall J. Weisenburger

 

 

 

  Chair

 

  Chair

 

 

 

  X

 

  X

 

 

  Number of Board Committee meetings in fiscal 2020

 

  13

 

  8

 

  6

 

  0

 

  10

 

  4

 

Audit Committees. The Audit Committees assist the Boards in their general oversight of our financial reporting, internal controls and audit functions, and our compliance with legal and regulatory requirements (other than health, environmental, safety and security matters). The Audit Committees are also responsible for the appointment, retention, compensation, and oversight of the work of our independent auditors and our independent registered public accounting firm. The Board of Directors of

 

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Carnival Corporation has determined that each member of the Audit Committees is both “independent” and an “audit committee financial expert,” as defined by SEC rules. In addition, the Board of Directors of Carnival plc has determined that each member of the Audit Committees is “independent” and has “recent and relevant financial experience” for the purposes of the UK Corporate Governance Code. The Boards determined that each member of the Audit Committees has sufficient knowledge in reading and understanding the company’s financial statements to serve on the Audit Committees. The responsibilities and activities of the Audit Committees are described in detail in “Report of the Audit Committees” and the Audit Committees’ charter.

Compensation Committees. The Compensation Committees have authority for reviewing and determining salaries, performance-based incentives, and other matters related to the compensation of our executive officers, and administering our stock incentive plans, including reviewing and granting equity-based grants to our executive officers and other employees. The Compensation Committees also review and determine various other compensation policies and matters, including making recommendations to the Boards with respect to the compensation of the Non-Executive (non-employee) Directors, incentive compensation and equity-based plans generally, and administering the employee stock purchase plans. For more information on the responsibilities and activities of the Compensation Committees, including the Committees’ processes for determining executive compensation, see “Compensation Discussion and Analysis” and “Executive Compensation” sections and the Compensation Committees’ charter.

Compliance Committees. The Compliance Committees assist with the Boards’ oversight of our ethics and compliance program. They receive regular reports from, and provide direction to, the Chief Ethics and Compliance Officer with respect to the implementation of the Ethics and Compliance Strategic Plan, including the adequacy of staffing and resources; monitoring, in coordination with the HESS Committees, implementation of our Environmental Compliance Plan; taking steps, in coordination with the Boards’ Audit and HESS Committees, reasonably designed to ensure that all significant allegations of misconduct by management, employees, or agents receive appropriate attention and remediation; promoting accountability of senior management with respect to compliance matters; and making recommendations to the Boards for the framework, structure, and design of the Boards’ oversight of our Ethics and Compliance Program. For more information on the responsibilities and activities of the Compliance Committees, see the Compliance Committees’ charter.

Executive Committees. The Executive Committees may exercise the authority of the full Boards between meetings of the Boards, except to the extent that the Boards have delegated authority to another Board Committee or to other persons, and except as limited by applicable law.

HESS Committees. The HESS Committees review and recommend policies relative to the protection of the environment and the health, safety and security of employees, contractors, guests and the public. The HESS Committees also supervise and monitor health, environmental, safety, security and sustainability policies and programs and review with management significant risks or exposures and actions required to minimize such risks. For more information on the responsibilities and activities of the HESS Committees, see the HESS Committees’ charter.

Nominating & Governance Committees. The Nominating & Governance Committees review and report to the Boards on a periodic basis with regard to matters of corporate governance, including succession planning. The Nominating & Governance Committees also review and assess the effectiveness of our Corporate Governance Guidelines, make recommendations to the Boards regarding proposed revisions to these guidelines, and make recommendations to the Boards regarding the size and composition of the Boards and their Committees. For more information on the responsibilities and activities of the Nominating & Governance Committees, see “Nominations of Directors” and

 

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“Procedures Regarding Director Candidates Recommended by Shareholders” sections and the Nominating & Governance Committees’ charter. Additional information with respect to Carnival plc’s corporate governance practices during fiscal 2020 is included in the Carnival plc Corporate Governance Report attached as Annex C to this Proxy Statement.

Board and Committee Independence

Under New York Stock Exchange standards of independence for directors, the Boards must determine that a Director does not have any material relationship with Carnival Corporation & plc or its subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with Carnival Corporation & plc) and meet certain bright-line tests. The Boards of Directors have determined that each of Sir Jonathon Band, Jason Glen Cahilly, Helen Deeble, Jeffrey J. Gearhart, Richard J. Glasier, Katie Lahey, Sir John Parker, Stuart Subotnick, Laura Weil and Randall J. Weisenburger is an “independent director” in accordance with the New York Stock Exchange standards of independence for directors and that all members of the Audit Committees and Compensation Committees meet the heightened independence criteria applicable to Directors serving on those Committees under SEC rules and New York Stock Exchange listing standards. Accordingly, a majority of the Directors of each company, all of our Non-Executive Directors and all of the members of the Audit, Compensation, Compliance, HESS and Nominating & Governance Committees of each company are independent (as defined by the New York Stock Exchange listing standards, SEC rules and the UK Corporate Governance Code).

Risk Oversight

Our Boards use their Committees to assist in their risk oversight responsibility as follows:

 

 

Our Audit Committees are responsible for oversight of our financial, operational and non-HESS controls and compliance activities, including those related to information technology operations, cybersecurity and privacy. In connection with its risk oversight role, the Audit Committees regularly meet privately with representatives from Carnival Corporation’s independent registered public accounting firm, the Carnival plc independent auditor, the Chief Audit Officer and the General Counsel.

 

Our Compensation Committees are responsible for oversight of risk associated with our executive compensation structure, policies and programs.

 

Our Compliance Committees are responsible for providing oversight of our ethics and compliance program.

 

Our HESS Committees are responsible for oversight of risk associated with the health, environment, safety and security of employees, contractors, guests and the public.

 

Our Nominating & Governance Committees are responsible for oversight of risk associated with Board processes and corporate governance, including succession planning.

Each Committee Chair presents on its area of risk oversight to the full Boards for review.

Discussions between management and the Boards regarding the Carnival Corporation & plc strategic plan, consolidated business results, capital structure, and other business-related activities include a discussion of the risks associated with the particular item under consideration. In response to the significant operational and financial impact of COVID-19 on our organization, the Boards held weekly or bi-weekly meetings from March 2020 through November 2020 and received regular reports from management regarding our liquidity, repatriation of guests and crew, the development of health protocols, compliance status, plans to restart operations and other critical matters.

 

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The Boards believe that the structure and assigned responsibilities provides the appropriate focus, oversight and communication of principal risks faced by our companies.

Compensation Risk Assessment

Carnival Corporation & plc’s management, in conjunction with the Compensation Committees’ independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), conducted a thorough review of our compensation programs, including those programs in which our Named Executive Officers participate, to determine if aspects of those programs contribute to excessive risk-taking. Based on the findings from this review and the annual reassessment, the Compensation Committees continue to believe that our compensation policies and practices do not encourage excessive risk-taking and are not reasonably likely to have a material adverse effect on Carnival Corporation & plc.

To reach this conclusion, key elements of our compensation programs were assessed to determine if they exhibited excessive risk. These elements included pay mix (cash vs. equity) and pay structure (short vs. long-term focus), performance metrics, performance goals and ranges, the degree of leverage, incentive maximums, payment timing, incentive adjustments, use of discretion and stock ownership requirements. Our assessment reinforced the Compensation Committees’ belief that our compensation programs are not contributing to excessive risk-taking, but instead contain many features and elements that help to mitigate risk. For example:

 

 

Pay Structure. Our compensation programs emphasize both short and long-term performance through our annual bonus program (delivered in cash) and through the delivery of long-term incentives (equity) in a balanced approach (approximately 46% through base salary and bonus and 54% in long-term equity grants). The mix of our pay program is intended to motivate management to consider the impact of decisions on shareholders in the short, intermediate and long-term.

 

Incentive Limits. Our annual bonus plans do not allow for unlimited payouts. Bonuses cannot exceed 200% of target levels. The performance-based share grants made in fiscal 2020 limit the payouts to 200% (in the case of PBS and MTE grants as described below) or 450% (in the case of SEA grants as described below) of target.

 

Performance-Based Share Grants. To strengthen the relationship between pay and performance, all of our equity grants to our leadership team for fiscal 2020 service have been in the form of performance-based share grants, with the exception of the COVID-19-related SFS and RET grants described below.

 

Performance Measurement. For corporate officers, the performance measurement used when determining their annual bonus is based on the performance of Carnival Corporation & plc. For officers of our operating units, the performance measurements used when determining their bonus is based 50% on the performance of their operating unit, with the remaining balance being based on the performance of Carnival Corporation & plc to enable a continued focus on the overall success of Carnival Corporation & plc.

 

Stock Ownership Policy. All senior executives who are designated as reporting officers under Section 16 of the Exchange Act are subject to a stock ownership policy which specifies target ownership levels of Carnival Corporation and Carnival plc shares in terms of the value of the equity holdings as a multiple of each officer’s base salary.

 

Clawback Policy. The Carnival plc 2014 Employee Share Plan (which was approved by shareholders in 2014), the Carnival Corporation 2020 Stock Plan (which was approved by shareholders in 2020) and the incentive plan used to determine annual bonuses contain clawback provisions, authorize us to recover incentive-based compensation granted under those plans in the event Carnival Corporation & plc is required to restate their financial statements due to fraud or misconduct.

 

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Board and Committee Governance

 

Corporate Governance Guidelines

Our Corporate Governance Guidelines address various governance issues and principles, including Director qualifications and responsibilities, access to management personnel, Director compensation, Director orientation and continuing education and annual performance evaluations of the Boards, their Committees and individual Directors. Our Corporate Governance Guidelines are posted on our website at www.carnivalcorp.com and www.carnivalplc.com.

Chief Executive Officer Succession Planning

Our Boards believe that planning for the succession of our Chief Executive Officer is an important function. Our multi-brand structure enhances our succession planning process. At the corporate level, a highly-skilled management team oversees a collection of cruise brands. At both the corporate and brand levels, we continually strive to foster the professional development of senior management. As a result, Carnival Corporation & plc has developed a very experienced and strong group of leaders, with their performance subject to ongoing monitoring and evaluation, as potential successors to all of our senior executive positions, including our Chief Executive Officer.

The Boards and the Nominating & Governance Committees are responsible for succession planning, including emergency succession planning. The independent Non-Executive Directors meet with the Chair and the Chief Executive Officer (both together and individually) at least quarterly to plan for the succession of the Chief Executive Officer, including plans in the event of an emergency. During those sessions, each of the Chair and the Chief Executive Officer discusses his recommendations of potential successors, along with an evaluation and review of any development plans for such individuals. As provided in our Corporate Governance Guidelines, the Nominating & Governance Committees will, when appropriate, make recommendations to the Boards with respect to potential successors to the Chief Executive Officer. All members of the Boards will work with the Nominating & Governance Committees to see that qualified candidates are available and that development plans are being utilized to strengthen the skills and qualifications of the candidates. When assessing the qualifications of potential successors to the Chief Executive Officer, the Boards and the Nominating & Governance Committees will take into account our business strategy as well as any other criteria they believe are relevant.

Procedures Regarding Director Candidates Recommended by Shareholders

The Nominating & Governance Committees will consider shareholder recommendations of qualified Director nominees when such recommendations are submitted in accordance with the procedures below. In order to recommend a candidate for consideration by the Nominating & Governance Committees for election at the 2022 Annual Meetings of Shareholders, a shareholder must provide the same information as is required for shareholders to submit Director nominations under the advance notice provision set forth in Carnival Corporation’s By-laws. Specifically, any such recommendation must include, in addition to any other informational requirements specifically set forth in Carnival Corporation’s and Carnival plc’s governing documents:

 

 

the name and address of the candidate;

 

a brief biographical description, including his or her occupation and service on Boards of Directors of any public company or registered investment company for at least the last five years;

 

a statement of the particular experience, qualifications, attributes or skills of the candidate, taking into account the qualification requirements set forth above; and

 

the candidate’s signed consent to serve as a Director if elected and to be named in the Proxy Statement.

 

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Once we receive the recommendation, we may deliver to the candidate a questionnaire that requests additional information about the candidate’s independence, qualifications and other matters that would assist the Nominating & Governance Committees in evaluating the candidate, as well as certain information that must be disclosed about the candidate in our Proxy Statement or other regulatory filings, if nominated. Candidates must complete and return the questionnaire within the time frame provided to be considered for nomination by the Nominating & Governance Committees at the Annual Meetings of Shareholders. For our 2022 Annual Meetings of Shareholders, the Nominating & Governance Committees will consider recommendations received by our Secretary at our headquarters no later than November 11, 2021.

Communications between Shareholders or Interested Parties and the Boards

Shareholders or interested parties who wish to communicate with the Boards, the Presiding Director, the Non-Executive Directors as a group or any individual Director should address their communications to the attention of the Secretary of Carnival Corporation and Carnival plc at 3655 N.W. 87th Avenue, Miami, Florida 33178, United States. The Secretary will maintain a log of all such communications, promptly forward to the Presiding Director those which the Secretary believes require immediate attention, and also periodically provide the Presiding Director with a summary of all such communications and any responsive actions taken. The Presiding Director will notify the Boards or the Chairs of the relevant Board Committees as to those matters that he believes are appropriate for further action or discussion.

Code of Business Conduct and Ethics

Carnival Corporation and Carnival plc’s Code of Business Conduct and Ethics applies to all employees and members of the Boards of Carnival Corporation and Carnival plc and provides guiding principles on areas such as identifying and resolving conflicts of interest. Our Code of Business Conduct and Ethics is posted on our website at www.carnivalcorp.com and www.carnivalplc.com.

DIRECTOR COMPENSATION

 

During fiscal 2020, our Non-Executive Directors were entitled to receive an annual retainer of $110,000 per year, equity compensation, as further described below, and reimbursement for travel, meals and accommodation expenses attendant to their Board membership. We do not provide retirement benefits or other benefits to our Non-Executive Directors. We reimburse Directors for travel expenses incurred for spouses or partners when we request that they attend a special event. Any amount reimbursed for spousal or partner travel is reported below in the “Director Compensation for Fiscal 2020” table. For fiscal 2020, the Presiding Director was entitled to receive an additional retainer of $25,000 per annum. In addition, Non-Executive Directors were entitled to receive additional $30,000 as compensation for serving as Chair of a Board Committee.

However, given the effort to reduce cash expenditures, all Non-Executive Directors agreed to receive shares of Carnival Corporation common stock in lieu of their retainers, including the additional retainer for the Presiding Director and Chairs of the Board Committees, for the second quarter as described further below. In addition, for the third and fourth quarters, all Non-Executive Directors agreed to accept a 25% reduction of their retainers.

Board members who are employed by us do not receive additional compensation for their services as a member of the Boards of Directors.

 

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Director Compensation

 

The Boards of Directors are committed to attracting and retaining a highly diverse, experienced and capable group of Non-Executive Directors. To that end, the Compensation Committees annually review Non-Executive Director pay levels and compensation practices of certain other publicly-listed companies with the assistance of their consultant to ensure our compensation program is competitive.

Non-Executive Directors receive payment of their earned retainer in quarterly installments. Annual retainers are pro-rated so that adjustments can be made during the year. Unearned portions of cash retainers are forfeited upon termination of service.

Non-Executive Directors receive annual restricted share grants under the Carnival Corporation 2020 Stock Plan. In April 2020, the incumbent Non-Executive Directors received grants with a dollar value equal to approximately $175,000. As a result, a grant of 14,090 Carnival Corporation restricted shares was made to each Non-Executive Director re-elected on April 9, 2020 based on the closing price of a share on that date of $12.42. In June 2020, a pro-rated annual restricted share grant of 12,763 shares was made to Mr. Gearhart, who was appointed to the Boards on April 20, 2020.

The annual restricted share grants under the Carnival Corporation 2020 Stock Plan are released from restriction on April 9, 2023 (and are not forfeitable provided the Director has served at least a full year). Grants of restricted shares have the same rights with respect to dividends and other distributions as all other outstanding shares of Carnival Corporation common stock. Generally, Non-Executive Directors will receive their annual grants initially upon their election to the Boards and subsequently at the time of their annual re-election to the Boards.

As described above, on April 9, 2020, all incumbent Non-Executive Directors also received restricted share grants under the Carnival Corporation 2020 Stock Plan in lieu of their second quarter retainers as follows:

 

Type of Retainer

 

Approximate Value

($)

   

Number of Shares

(#)

 

Second Quarter Annual

    27,498       2,214 (1) 

Presiding Director

    6,247       503  

Committee Chair

    7,502       604  

 

(1)

Mr. Gearhart received a pro-rata share grant of 1,746 shares in lieu of his second quarter retainer.

Each of these April 9, 2020 grants was based on the closing price of a share on that date of $12.42. The restriction on the grants made in lieu of these retainers will be released on February 12, 2021.

 

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Director Compensation

 

Director Compensation for Fiscal 2020

The following table details the total compensation earned by our Directors in fiscal 2020, other than Mr. Donald who is a Named Executive Officer. Mr. Donald’s compensation is reflected in the “Summary Compensation Table,” which follows the “Compensation Discussion and Analysis” section. Board members who are employed by us do not receive additional compensation for their services as a member of the Boards of Directors.

 

  Name   

Fees Earned or

Paid in Cash(1)

($)

    

Stock

Awards(2)(3)

($)

    

All Other

Compensation(4)

($)

    

  Total  

($)

 

 

  Micky Arison(5)

 

    

 

309,393

 

 

 

    

 

 

 

 

    

 

93,717

 

 

 

    

 

403,110  

 

 

 

  Sir Jonathon Band

 

    

 

87,500

 

(6)  

 

    

 

209,997

 

 

 

    

 

 

 

 

    

 

297,497  

 

 

 

  Jason Glen Cahilly

 

    

 

68,750

 

 

 

    

 

202,496

 

 

 

    

 

 

 

 

    

 

271,246  

 

 

 

  Helen Deeble

 

    

 

68,750

 

 

 

    

 

202,496

 

 

 

    

 

 

 

 

    

 

271,246  

 

 

 

  Jeffrey J. Gearhart(7)

 

    

 

41,250

 

 

 

    

 

249,990

 

 

 

    

 

 

 

 

    

 

291,240  

 

 

 

  Richard J. Glasier

 

    

 

87,500

 

 

 

    

 

209,997

 

 

 

    

 

 

 

 

    

 

297,497  

 

 

 

  Debra Kelly-Ennis(8)

 

    

 

18,333

 

 

 

    

 

 

 

 

    

 

 

 

 

    

 

18,333  

 

 

 

  Katie Lahey

 

    

 

68,750

 

 

 

    

 

202,496

 

 

 

    

 

 

 

 

    

 

271,246  

 

 

 

  Sir John Parker

 

    

 

68,750

 

 

 

    

 

202,496

 

 

 

    

 

 

 

 

    

 

271,246  

 

 

 

  Stuart Subotnick

 

    

 

87,500

 

 

 

    

 

209,997

 

 

 

    

 

 

 

 

    

 

297,497  

 

 

 

  Laura Weil

 

    

 

68,750

 

 

 

    

 

202,496

 

 

 

    

 

 

 

 

    

 

271,246  

 

 

 

  Randall J. Weisenburger

 

    

 

121,875

 

 

 

    

 

223,746

 

 

 

    

 

 

 

 

    

 

345,621  

 

 

 

(1)

Refer to the section above describing the retainer for the Chair of Board Committees.

(2)

No stock option grants were made in fiscal 2020. Represents the grant date fair value, assuming no risk of forfeiture, of the grants of Carnival Corporation restricted shares made in fiscal 2020, calculated in accordance with Accounting Standards Codification Topic 718, “Stock Compensation” (“ASC 718”). In April 2020, each of the incumbent Non-Executive Directors received a grant of 14,090 restricted shares based on the closing price of a share on April 9, 2020, the day they were re-elected, of $12.42. Mr. Gearhart, who was appointed to the Boards on April 20, 2020, received a pro-rated grant of 12,763 restricted shares in June 2020. The restricted shares granted in 2020 vest on April 9, 2023. As described above, each Non-Executive Director also received restricted share grants in lieu of their second quarter retainers based on the April 9, 2020 closing price of $12.42, which will be released from restriction on February 12, 2021. The restricted shares granted to Non-Executive Directors also vest in full upon the death or disability of the Director, and continue to vest in accordance with the original vesting schedule and are not forfeited if a Director ceases to be a Director for any other reason after having served as a Director for at least one year. Other than Mr. Gearhart, all of the Directors who received grants served for all of fiscal 2020.

(3)

None of the directors holds stock options. The aggregate number of Carnival Corporation and Carnival plc restricted shares outstanding at November 30, 2020 were as follows:

 

  Name   

  Unvested Restricted  

Shares

  Micky Arison

       0

  Sir Jonathon Band

       22,850

  Jason Glen Cahilly

       22,246

  Helen Deeble

       22,246

  Jeffrey J. Gearhart

       14,509

  Richard J. Glasier

       22,850

  Katie Lahey

       19,497

  Sir John Parker

       22,246

  Stuart Subotnick

       22,850

  Laura Weil

       22,246

  Randall J. Weisenburger

       23,957

 

(4)

Benefits provided to Mr. Arison include private medical health insurance costs ($59,507), driver and security ($17,986), and the following other benefits: accidental death or dismemberment insurance premiums, disability insurance premiums, life

 

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Related Person Transactions

 

 

insurance premiums, automobile lease and automobile repairs and expenses ($16,224). For the Non-Executive Directors, benefits represent reimbursement of expenses associated with spousal or partner travel and tax gross-ups for spousal or partner travel.

(5)

Represents compensation for Mr. Arison’s service as executive Chair. Effective April 1, 2020, at Mr. Arison’s request, in order to preserve cash, Carnival Corporation suspended his salary through November 30, 2020.

(6)

Exclusive of value-added tax.

(7)

Mr. Gearhart was appointed to the Boards on April 20, 2020.

(8)

Ms. Kelly-Ennis resigned from the Boards effective January 27, 2020.

The following policies also apply to our Non-Executive Directors:

 

 

Stock Ownership Policy. The stock ownership policy for Non-Executive Directors provides that all Non-Executive Directors are required to own shares (inclusive of unvested restricted shares, restricted stock units (“RSUs”) and shares in a trust beneficially owned by the Director) of either Carnival Corporation common stock or Carnival plc ordinary shares with a value equal to five times the cash retainer. New Directors must achieve this requirement no later than five years from the date of their initial election to the Boards by the shareholders. The stock ownership policy for Non-Executive Directors was modified to provide that a Non-Executive Director will be deemed to be in compliance with the ownership requirements if the decline in the Carnival Corporation or Carnival plc share price after February 28, 2020 resulted in the Non-Executive Director falling below the applicable ownership level, provided that they were in compliance prior to February 28, 2020 and do not sell or transfer ownership of any such shares until after the ownership target has again been achieved, unless otherwise approved by the Boards of Directors. This modification was deemed appropriate given the extraordinary impact of the COVID-19 pandemic on our share price. Other than Ms. Deeble (initially elected in 2017), Mr. Cahilly (initially elected in 2018), Ms. Lahey (initially elected in 2019) and Mr. Gearhart (proposed for election in 2021), each of the Non-Executive Directors elected has achieved this Board-mandated requirement.

   

Product Familiarization. All Non-Executive Directors are encouraged to take a cruise(s) for up to a total of 14 days per year for product familiarization and pay a fare of $35 per person per day for such cruises (or $50 per day in the case of Seabourn), plus taxes, fees and port expenses. All other charges associated with the cruise (e.g., air, ground transfers, gratuities, tours and fuel supplements, if any) are the responsibility of the Non-Executive Director.

Carnival plc

Additional information with respect to Carnival plc’s compensation and reimbursement practices during fiscal 2020 for Non-Executive Directors is included in Part II of the Carnival plc Directors’ Remuneration Report, which is attached as Annex B to this Proxy Statement.

RELATED PERSON TRANSACTIONS

 

Review and Approval of Transactions with Related Persons

Consistent with our written policies and procedures, it is our practice to review all relationships and transactions in which Carnival Corporation or Carnival plc is a participant and in which our Directors, nominees and executive officers and their immediate family members and any five percent beneficial holders have an interest in order to determine whether such related persons have a direct or indirect material interest. Our Legal and Global Accounting and Reporting Services Departments are primarily responsible for the development and implementation of processes and controls to obtain information from the Directors, nominees and executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether a related person has a direct or

 

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GOVERNANCE

Related Person Transactions

 

indirect material interest in the transaction. As required under SEC rules, transactions exceeding $120,000 in which Carnival Corporation & plc was or is to be a participant and a related person had or will have a direct or indirect material interest are disclosed in this Proxy Statement.

In addition, in accordance with our Schedule of Matters Reserved to the Boards and their Committees for their Decision, the Boards review and approve or ratify any related person transaction involving:

 

 

a Director, regardless of the amount; and

 

a Non-Director executive officer with an aggregate value in excess of $50,000.

In the course of their review and approval or ratification of a related person transaction, the Boards may consider factors as follows:

 

 

the nature of the related person’s interest in the transaction;

 

the material terms of the transaction, including, without limitation, the amount and type of transaction;

 

the importance of the transaction to the related person;

 

the importance of the transaction to Carnival Corporation & plc;

 

whether the transaction would impair the judgment of a Director or executive officer to act in our best interest; and

 

any other matters the Boards deem appropriate.

Any member of the Boards who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting approval or ratification of the transaction, provided, however, that such Director may be counted in determining the presence of a quorum at a meeting of the Board that considers the transaction.

Transactions with Related Persons

Transactions with Micky Arison. Micky Arison, our Chair, is also the Chair, President and the indirect majority shareholder of FBA II, Inc., the general partner of Miami Heat Limited Partnership (“MHLP”), the owner of the Miami Heat, a professional basketball team. He is also the indirect shareholder of Basketball Properties, Inc., the general partner of Basketball Properties, Ltd. (“BPL”), which is the manager and operator of the American Airlines Arena. In May 2019, Carnival Cruise Line entered into an amendment of the advertising and promotion agreement between Carnival Cruise Line, MHLP and BPL, to extend the term through 2024, with an additional four-year extension option. In April 2020, Carnival Cruise Line entered into an additional amendment to postpone the remaining payments due during fiscal 2020 until fiscal 2021. Pursuant to this agreement, Carnival Cruise Line paid $140,000 during fiscal 2020. Carnival Cruise Line also paid $7,000 during fiscal 2020 for in-game promotions to publicize Carnival Cruise Line during Miami Heat games.

In August 2015, Carnival Corporation entered into a nonexclusive Aircraft Lease Agreement with an owner trustee under a trust agreement with Ad Astra I, LLC (the “Lease Agreement”); and a Services Agreement with AFO, LLC. The Services Agreement with AFO, LLC was terminated in August 2020 and a new Services Agreement was entered into between Carnival Corporation and Nickel Cayman Management, LLC in August 2020 (the “Services Agreement” and together with the Lease Agreement, the “Aircraft Agreements”).

Each of Ad Astra I, LLC, AFO, LLC and Nickel Cayman Management, LLC are companies directly or indirectly controlled by a trust of which Mr. Arison is a beneficiary. He is also an officer of Nickel Cayman Management, LLC and was an officer of AFO, LLC until his resignation in August 2020.

 

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Related Person Transactions

 

Under the terms of the Lease Agreement, Carnival Corporation leases an aircraft beneficially owned by Ad Astra I, LLC for additional flight capacity from time-to-time in exchange for an hourly rent of $4,500 plus applicable taxes, which is based on market charter rates for similar aircraft as adjusted for costs of operations borne by Carnival Corporation (i.e., fuel, crew costs and line maintenance during its operation of the aircraft) and hourly service plan expenses.

Under the terms of the Services Agreements, Carnival Corporation provides aircraft management services to Nickel Cayman Management, LLC (and previously to AFO, LLC) with respect to the aircraft, including overseeing its operation, maintenance, and staffing, and is paid an annual fee of $216,000 (which is based on market rates for similar arrangements) (the “Service Fee”). In addition, Carnival Corporation is reimbursed for operating, maintenance and personnel costs and related third party costs incurred in connection with the services (“Service Costs”). The terms of the Aircraft Agreements are one year and renew automatically for one-year periods, unless terminated sooner by either party upon 30 days’ written notice.

During fiscal 2020, Carnival Corporation paid Ad Astra I, LLC $235,000 under the Lease Agreement, and Nickel Cayman Management, LLC and AFO, LLC collectively paid Carnival Corporation $216,000 for the Service Fee and reimbursed Carnival Corporation $1,920,000 for the Service Costs.

The Boards have reviewed and approved or ratified these transactions.

 

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SHARE OWNERSHIP

 

SHARE OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

Directors and Executive Officers

Set forth below is information concerning the share ownership as of January 14, 2021 of:

 

 

each of our Directors;

 

each individual named in the “Summary Compensation Table” which appears elsewhere in this Proxy Statement; and

 

all Directors and executive officers as a group.

The number of shares beneficially owned by each entity, person, Director or executive officer is determined under SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has the sole or shared voting power or investment power and also any shares that the individual would have the right to acquire as of March 14, 2021 (being 60 days after January 14, 2021) through the vesting of RSUs.

 

  Name and Address of

  Beneficial Owners or

  Identity of Group(1)

 

 

Amount and Nature of

Beneficial Ownership of

Carnival Corporation

Common Stock*

 

 

Percentage of

Carnival

Corporation

Common Stock

(%)

 

 

Amount and

Nature of

Beneficial

Ownership of

Carnival plc

Ordinary

Shares

 

 

Percentage of

Carnival plc

Ordinary

Shares

(%)

 

 

 Percentage of 

Combined

Voting

Power**

(%)

 

 

Micky Arison

 

     

 

121,136,034

 

(2)(3)

 

 
     

 

13.0

 

 

 

     

 

0

 

 

     

 

 

 

     

 

11.1

 

 

 

 

Sir Jonathon Band

 

     

 

36,147

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

David Bernstein

 

     

 

40,123

 

(4)

 

 
     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Jason Glen Cahilly

 

     

 

22,246

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Helen Deeble

 

     

 

24,955

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Arnold W. Donald

 

     

 

625,803

 

(4)(5)

 

 
     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Jeffrey J. Gearhart

 

 

     

 

14,509

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Richard J. Glasier

     

 

53,635

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Stein Kruse

 

 

     

 

97,935

 

(4)  

 

     

 

***

 

 

     

 

4,567

 

 

     

 

***

 

 

     

 

***

 

 

 

Katie Lahey

     

 

19,497

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Sir John Parker

 

 

     

 

46,323

 

 

     

 

***

 

 

     

 

17,100

 

(6)  

 

     

 

***

 

 

     

 

***

 

 

 

Arnaldo Perez

     

 

49,152

 

(4)(7)

 

 
     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Stuart Subotnick

 

     

 

67,066

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Michael Thamm

     

 

0

 

 

     

 

 

 

     

 

98,893

 

(4)

 

 
     

 

***

 

 

     

 

***

 

 

 

Laura Weil

 

     

 

66,263

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

Randall J. Weisenburger

     

 

1,393,367

 

 

     

 

***

 

 

     

 

0

 

 

     

 

 

 

     

 

***

 

 

 

All Directors and executive officers as a group

   (16 persons)

 

     

 

123,609,971

 

 

     

 

13.3

 

 

     

 

115,993

 

 

     

 

***

 

 

     

 

11.3

 

 

*

As part of the establishment of the DLC arrangement, Carnival plc issued a special voting share to Carnival Corporation, which transferred such share to the trustee of the P&O Princess Special Voting Trust (the “Trust”), a trust established under the laws of the Cayman Islands. Trust shares of beneficial interest in the Trust were transferred to Carnival Corporation. The trust shares represent a beneficial interest in the Carnival plc special voting share. Immediately following the transfer, Carnival Corporation distributed such trust shares by way of a dividend to holders of shares of Carnival Corporation common stock. Under a pairing agreement, the trust shares of beneficial interest in the Trust are paired with, and evidenced by, certificates representing shares of Carnival Corporation common stock on a one-for-one basis. In addition, under the pairing agreement, when a share of Carnival Corporation common stock is issued to a person after the implementation of the DLC arrangement, a paired trust share will be issued at the same time to such person. Each share of Carnival Corporation

 

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SHARE OWNERSHIP

Share Ownership of Certain Beneficial Owners and Management

 

 

common stock and the paired trust share may not be transferred separately. The Carnival Corporation common stock and the trust shares (including the beneficial interest in the Carnival plc special voting share) are listed and trade together on the New York Stock Exchange under the ticker symbol “CCL.” Accordingly, each holder of Carnival Corporation common stock is also deemed to be the beneficial owner of an equivalent number of trust shares.

**

As a result of the DLC arrangement, on most matters that affect all of the shareholders of Carnival Corporation and Carnival plc, the shareholders of both companies effectively vote together as a single decision-making body. Combined voting is accomplished through the special voting shares that have been issued by each company.

***

Less than one percent.

(1)

The address of each individual is 3655 N.W. 87 Avenue, Miami, Florida 33178.

(2)

Mr. Arison is a member of the Arison Group (defined below), which has filed a joint statement on Schedule 13D with respect to the shares of Carnival Corporation common stock held by such persons. Each member of the Arison Group may be deemed to own the shares of common stock held by all other members of the Arison Group. For information on the share ownership of other members of the Arison Group, see “Principal Shareholders” table below.

(3)

Includes (i) 4,934,166 shares of common stock held by the various Arison family trusts, (ii) 80,736,445 shares of common stock held by MA 1994 B Shares, L.P. and (iii) 35,465,423 shares of common stock held by the Artsfare 2005 Trust No. 2 by virtue of the authority granted to Mr. Arison under the last will of Ted Arison. Mr. Arison does not have an economic interest in the shares of common stock held by Artsfare 2005 Trust No. 2.

(4)

Includes PBS and SFS grants scheduled to be released on February 12, 2021. The executive officer will also receive additional shares at the time of vesting to take into account dividend reinvestment during the period.

(5)

Includes 565,199 shares held by The Arnold W. Donald Revocable Trust UAD 5/26/98.

(6)

Includes 7,048 shares held by Barclays Wealth on behalf of Barnett Waddingham Trustees Ltd., the trustee for Sir John Parker’s Fixed Unapproved Restricted Retirement Scheme.

(7)

Includes 34,832 shares held by The Arnaldo Perez Trust U/A/D 3/18/2014.

Principal Owners

Set forth below is information concerning the share ownership of as of January 14, 2021:

 

 

all persons known by us to be the beneficial owners of more than 5% of the 932,485,510 shares of Carnival Corporation common stock and trust shares of beneficial interest in the P&O Princess Special Voting Trust outstanding; and

 

all persons known by us to be the beneficial owners of more than 5% of the 183,830,161 ordinary shares of Carnival plc outstanding, 25,666,636 of which are directly or indirectly owned by Carnival Corporation and have no voting rights.

 

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SHARE OWNERSHIP

Share Ownership of Certain Beneficial Owners and Management

 

Micky Arison, Chair of the Board of each of Carnival Corporation and Carnival plc, certain other members of the Arison family and trusts for their benefit (collectively, the “Arison Group”), beneficially own shares representing approximately 13.0% of the voting power of Carnival Corporation and approximately 11.1% of the combined voting power of Carnival Corporation & plc and have informed us that they intend to cause all such shares to be voted in favor of Proposals 1 through 21. The table below begins with the ownership of the Arison Group.

 

  Name and Address of Beneficial

  Owners or Identity of Group

 

Amount and Nature of

Beneficial Ownership of

Carnival Corporation

Common Stock*

 

Percentage of

Carnival

Corporation

Common Stock

(%)

 

Amount and

Nature of

Beneficial

Ownership of

Carnival plc

Ordinary

Shares

   

Percentage of

Carnival plc

Ordinary

Shares

(%)

 

Percentage of  

Combined  

Voting  

Power**  

(%)  

MA 1994 B Shares, L.P.
1201 North Market Street
Wilmington, DE 19899

  80,736,445(1)(2)   8.7     0       7.4  

MA 1994 B Shares, Inc.
1201 North Market Street
Wilmington, DE 19899

  80,736,445(1)(2)   8.7     0       7.4  

Artsfare 2005 Trust No. 2
c/o SunTrust Delaware Trust Company
1011 Centre Road, Suite 108
Wilmington, DE 19805

  35,465,423(1)(4)   3.8     0       3.3  

Verus Protector, LLC
Two Alhambra Plaza, Suite 1040
Coral Gables, FL 33134

  35,465,423(1)(3)
  3.8     0       3.3  

Richard L. Kohan
Two Alhambra Plaza, Suite 1040
Coral Gables, FL 33134

  121,138,034(1)(4)
  13.0     0       11.1  

James M. Dubin
Madison Place Partners, LLC
One Madison Place
Harrison, NY 10528

  85,671,611(1)(5)(7)
  9.2     0       7.9  

JMD Delaware, LLC
1201 North Market Street
Wilmington, DE 19899

  82,419,457(1)(5)(7)
  8.9     0       7.6  

KLR, LLC
Two Alhambra Plaza, Suite 1040
Coral Gables, FL 33134

  82,419,457(1)(8)   8.9     0       7.6  

Nickel 2015-94 B Trust
1313 North Market Street, Suite 5300
Wilmington, DE 19801

  80,736,445(1)(2)
  8.7     0       7.4  

SunTrust Delaware Trust Company
1011 Centre Road, Suite 108
Wilmington, DE 19805

  35,465,423(1)(6)
  3.8     0       3.3  

Norges Bank
Bankplassen 2
PO Box 1179 Sentrum

                  0      
7,995,215
(9) 
 
  5.1   ***  

*, ** and *** have the same meanings as indicated in the table above.

 

(1)

The Arison Group has filed a joint statement on Schedule 13D with respect to the shares of Carnival Corporation common stock held by such persons. Each member of the Arison Group may be deemed to own the shares of common stock held by all other members of the Arison Group.

(2)

MA 1994 B Shares, L.P. (“MA 1994, L.P.”) owns 85,736,445 shares of common stock. The general partner of MA 1994, L.P. is MA 1994 B Shares, Inc. (“MA 1994, Inc.”), which is wholly-owned by the Nickel 2015-94 B Trust, a trust established for the benefit of Mr. Arison and members of his family (the “B Trust”). The sole limited partner of MA 1994, L.P. is the B Trust. Under the terms of the instrument governing the B Trust, Mr. Arison has the sole right to vote and direct the sale of the common stock indirectly held by the B Trust. By virtue of the limited partnership agreement of MA 1994, L.P., MA 1994, Inc. may be deemed to beneficially own all such 85,736,445 shares of common stock. By virtue of the B Trust being the sole stockholder of MA 1994, Inc., the B Trust may be deemed to beneficially own all such 85,736,445 shares of common stock. By virtue of Mr. Arison’s interest in the B Trust and the B Trust’s interest in MA 1994, L.P., Mr. Arison may be deemed to beneficially own all such 85,736,445 shares of common stock. The administrative trustee of the B Trust is the Northern Trust Company of Delaware.

(3)

Verus Protector, LLC is the protector of Artsfare 2005 Trust No. 2. Verus Protector, LLC has shared voting and dispositive power with respect to the shares of common stock held by Artsfare 2005 Trust No. 2.

 

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Share Ownership of Certain Beneficial Owners and Management

 

(4)

By virtue of being the sole member of Verus Protector, LLC, the sole member of KLR, LLC and a trustee of various Arison family trusts, Mr. Kohan may be deemed to own the aggregate of 126,136,034 shares of common stock beneficially owned by such entities, as to which he disclaims beneficial ownership. Mr. Kohan owns 1,000 shares of common stock directly and owns 1,000 shares of common stock indirectly by virtue of such shares owned by Mr. Kohan’s wife.

(5)

By virtue of being the sole member of JMD Delaware, LLC and trustee of various Arison family trusts, Mr. Dubin may be deemed to own the aggregate of 90,670,611 shares of common stock beneficially owned by such entities, as to which he disclaims beneficial ownership.

(6)

SunTrust Delaware Trust Company acts as trustee for the Artsfare 2005 Trust No. 2.

(7)

JMD Delaware, LLC is a Delaware limited liability company wholly owned by Mr. Dubin. JMD Delaware, LLC acts as an investment and distribution advisor of various Arison family trusts and has shared dispositive power over the shares of common stock held by certain of such trusts.

(8)

KLR, LLC is a Delaware limited liability company wholly owned by Mr. Kohan. KLR, LLC acts as an investment and distribution advisor for various Arison family trusts and has shared dispositive power over the shares of common stock held by certain of such trusts.

(9)

As reflected in a Schedule 13G, filed on February 14, 2020, with the SEC, Norges Bank reported sole voting power and sole dispositive power over 7,983,882 ordinary shares and shared dispositive power over 11,333 shares.

 

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COMPENSATION

 

PROPOSAL 13

ADVISORY (NON-BINDING) VOTE TO APPROVE EXECUTIVE COMPENSATION

 

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and pursuant to Section 14A of the Exchange Act, our shareholders are being provided with the opportunity to cast an advisory (non-binding) vote to approve our executive compensation. We refer to this vote as the “say-on-pay” vote. Although this vote is advisory and is not binding on the Boards, the Compensation Committees will take into account the outcome of the vote when considering future executive compensation decisions.

The “say-on-pay” vote is required to be offered to our shareholders at least once every three years. In 2017, our Boards recommended that we provide shareholders with the opportunity to cast their “say-on-pay” vote each year and our shareholders agreed. As a result, the next “say-on-pay” vote is expected to occur at the 2022 Annual Meetings of Shareholders.

The Boards are committed to corporate governance best practices and recognize the significant interest of shareholders in executive compensation matters. The Compensation Committees seek to balance short-term and long-term compensation opportunities to enable Carnival Corporation and Carnival plc to meet short-term objectives while continuing to produce value for their shareholders over the long-term. They also promote a compensation program designed to attract, motivate and retain key executives. As discussed in the Compensation Discussion and Analysis, the Compensation Committees believe that our current executive compensation program directly links executive compensation to our performance and aligns the interests of our Named Executive Officers with those of our shareholders. For example:

 

 

Our compensation philosophy places more emphasis on variable elements of compensation (such as annual bonuses and equity-based compensation) than fixed remuneration.

 

In accordance with the Compensation Committees’ focus on long-term shareholder returns, they approved performance-based share grants for our Named Executive Officers which vest based upon the extent to which certain pre-grant or post-grant performance criterion are attained. These grants also have maximum payout limitations. Performance criterion may include annual operating income (“OI”), return on invested capital (“ROIC”), absolute total shareholder return (“TSR”) and/or TSR rank relative to the Peer Group (defined below).

 

To further promote long-term shareholder alignment, we require our Named Executive Officers to meet and maintain stock ownership requirements.

 

The Compensation Committees review the position of each element of total direct compensation relative to the competitive market, and use the range of total direct compensation levels in the competitive market to assess the extent to which the compensation provided to our Named Executive Officers is generally consistent with that offered by the competitive market to their named executive officers.

 

Carnival Corporation & plc does not offer U.S. executives excise tax gross-up protections.

We encourage you to read our Compensation Discussion and Analysis contained within this Proxy Statement for a more detailed discussion of our compensation policies and procedures.

Our shareholders have the opportunity to vote for or against, or to abstain from voting on, the following resolution:

“Resolved, that the shareholders approve the compensation of our Named Executive Officers as disclosed pursuant to the compensation disclosure rules of the SEC (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and any related material disclosed in this Proxy Statement).”

 

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COMPENSATION

Advisory (Non-Binding) Vote to Approve the Carnival plc Directors’ Remuneration Report

 

The Boards of Directors unanimously recommend a vote FOR approval of the compensation of our Named Executive Officers as disclosed pursuant to the compensation disclosure rules of the SEC (which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and any related material disclosed in this Proxy Statement).

PROPOSAL 14

ADVISORY (NON-BINDING) VOTE TO APPROVE THE CARNIVAL PLC DIRECTORS’ REMUNERATION REPORT

 

In accordance with Section 439 of the Companies Act and Schedule 8 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulations 2008, as amended (the “LMCG Regulations”), shareholders are voting to approve adoption of the Carnival plc Directors’ Remuneration Report. The Carnival plc Directors’ Remuneration Report is in two parts. Part I also constitutes the Compensation Discussion and Analysis as required by regulations promulgated by the SEC, and includes information that Carnival plc is required to disclose in accordance with the LMCG Regulations. Part II of the Carnival plc Directors’ Remuneration Report is set forth as Annex B to this Proxy Statement and includes the additional information that Carnival plc is required to disclose in accordance with the LMCG Regulations, including certain information which has been audited for the purposes of the Carnival plc Annual Report.

UK law only requires an advisory vote on the substance and content of the Carnival plc Directors’ Remuneration Report. Accordingly, disapproval of this Proposal 14 will not require us to amend the report or require any Director to repay any amount. However, the Boards and Compensation Committees are expected to take into account both the voting result and the views of our shareholders in their application, development and implementation of compensation policies and plans.

The Boards of Directors unanimously recommend a vote FOR the approval of the Carnival plc Directors’ Remuneration Report.

COMPENSATION DISCUSSION AND ANALYSIS

and

CARNIVAL PLC DIRECTORS’ REMUNERATION REPORT – PART I

 

Introduction

Carnival Corporation and Carnival plc are separate legal entities (together referred to in this Report as “Carnival Corporation & plc”) and each company has its own Board of Directors and Compensation Committee. However, as is required by the agreements governing the DLC arrangement, the Boards of Directors and members of the Committees of the Boards, including the Compensation Committees, are identical and there is a single senior management team.

Carnival Corporation and Carnival plc are subject to disclosure regimes in the U.S. and UK. While some of the disclosure requirements are the same or similar, some are very different. As a result, the Carnival plc Directors’ Remuneration Report is in two parts. The information contained in this Part I constitutes the Compensation Discussion and Analysis as required by regulations promulgated by the SEC and includes information that Carnival plc is required to disclose in accordance with Schedule 8 of the LMCG Regulations. Part II of the Carnival plc Directors’ Remuneration Report is set forth as Annex B to this Proxy Statement and includes the additional information that Carnival plc is required to disclose in accordance with the LMCG Regulations, including certain information that has been audited for the purposes of the Carnival plc Annual Report.

 

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COMPENSATION

Compensation Discussion and Analysis and Carnival plc Directors’ Remuneration Report—Part I

 

Parts I and II of the Carnival plc Directors’ Remuneration Report are in compliance with the LMCG Regulations, the UK Corporate Governance Code, the Companies Act and the Listing Rules of the UK Financial Conduct Authority (the “FCA”). Both Parts I and II form part of the Carnival plc Annual Report for the year ended November 30, 2020.

Pursuant to rules promulgated by the SEC and the LMCG Regulations, this Compensation Discussion and Analysis reviews the compensation of the following Named Executive Officers of Carnival Corporation & plc:

 

 

 

  Named Executive Officers

 

 

 Arnold W. Donald

 

 

President and Chief Executive Officer

 

 

 David Bernstein

 

 

Chief Financial Officer and Chief Accounting Officer

 

 

 Stein Kruse

 

 

Former Group Chief Executive Officer of Holland America Group and Carnival UK

 

 

 Arnaldo Perez

 

 

Secretary & Former General Counsel

 

 

 Michael Thamm

 

 

Group Chief Executive Officer of Costa Group and Carnival Asia

 

Executive Summary

Our executive compensation program was designed to reward financial results and effective strategic leadership through use of both short-term rewards and long-term incentives and to promote alignment of the financial interests of our executive officers with our shareholders. We seek to provide a total direct compensation package (salary, bonus and equity grants) that allows us to be competitive in the labor markets where we compete for executive talent, adjusted as necessary to take into consideration factors including the relevant senior executive’s performance, experience and responsibilities. We endeavored to align our compensation program’s performance measures with the interests of our shareholders and senior executives by linking actual pay to operating performance and shareholder outcomes.

Our compensation philosophy has historically been to emphasize at-risk incentive pay in order to drive a pay-for-performance culture. In furtherance of this philosophy, all direct compensation for our Named Executive Officers, other than base salary, was 100% at-risk and performance-based.

Given the impact of the COVID-19 pandemic, we made changes to the compensation elements of our Named Executive Officers as outlined below.

Most of our executive officers are located in the U.S., with others based in Europe. As a global entity, it is challenging to establish consistent compensation practices across geographic and operating company units that satisfy the particular requirements of all jurisdictions and local market demands. Since the largest presence of executive officers is in the U.S., our compensation policies primarily reflect U.S. market practices. However, the Compensation Committees seek to incorporate UK compensation principles, including those contained in the UK Corporate Governance Code, to the degree practicable.

 

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Summary

 

Pre-Pause in Guest Cruise Operations

105ships

 

Under nine global brands with a

diverse workforce of 150,000 team members

 

Over 700 ports

 

Visited

totaling 254,000 lower berths

 

13 million guests in 2019

 

Nearly 45 percent of

global cruise guests

 

Fiscal 2020

9 month pause in sailing

 

For substantially all our fleet due to the COVID-19 pandemic

 

$10.2 billion net loss

 

vs. $3.0 billion in net income in fiscal 2019 on account of the extended pause in sailing

 

3% earned in incentive pay

 

For Named Executive Officers for the performance periods ending November 30, 2020

Prior to COVID-19, Carnival Corporation & plc had a fleet of over 100 ships that visited over 700 ports around the world and carried 13 million guests in 2019.

In fiscal 2019, prior to the COVID-19 pandemic, we demonstrated strong business momentum with a record $20.8 billion in total revenues, net income of $3.0 billion and record adjusted net income of $3.0 billion, representing the highest full-year adjusted earnings in our history for the fourth straight year. In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March 2020. In response to this unprecedented situation, we acted to protect the health and safety of guests and shipboard team members, optimize the pause in guest operations and increase our liquidity position. This marked the first complete cessation of our guest cruise operations in our nearly 50-year history.

As a result of the pause, our fleet was not engaged in guest cruise operations for primarily all of fiscal 2020. We anticipate a gradual return to service over time. As we have never previously experienced a complete cessation of our guest cruise operations, we cannot predict the timing of our complete return to service and when various ports will open to our ships. We believe the ongoing effects of COVID-19 on our operations and global bookings have had, and will continue to have, a material negative impact on our financial results and liquidity. Consistent with our long-standing pay-for-performance philosophy, payments were limited to 3% of target, in aggregate, under any executive incentive plans for the fiscal year ended November 30, 2020.

 

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Response to COVID-19 Pandemic and Business Recovery Strategy

We have been deliberate and decisive in our response to the COVID-19 pandemic:

 

   

Health and Safety

 

Liquidity

 

Fleet Optimization

 

As the understanding of COVID-19 continues to evolve, we have been working with a number of world-leading public health, epidemiological and policy experts to support our ongoing efforts with enhanced protocols and procedures for the return of cruise vacations. These advisors will continue to provide guidance based on the latest scientific evidence and best practices for protection and mitigation, as well as regulatory requirements.

 

 

We have taken, and continue to take, significant actions to preserve cash and obtain additional capital to increase our liquidity. Between March 2020 and January 14, 2021, we raised $19 billion through a series of transactions.

 

 

We expect future capacity to be moderated by the phased re-entry of our ships, the removal of capacity from our fleet and delays in new ship deliveries. Since the pause in guest operations, we have accelerated the removal of ships in 2020 which were previously expected to be sold over the ensuing years. We now expect to dispose of 19 ships, 15 of which have already left the fleet as of January 14, 2021. In total, the 19 ships represent approximately 13 percent of pre-pause capacity and only three percent of operating income in fiscal 2019. The sale of less efficient ships will result in future operating expense efficiencies of approximately two percent per available lower berth day (“ALBD”) and a reduction in fuel consumption of approximately one percent per ALBD.

 

Protecting the Health and Safety of Guests and Team Members

Early in the pause period, we returned over 260,000 guests to their homes, coordinating with a large number of countries around the globe. We chartered aircraft, utilized commercial flights and even used our ships to sail home guests who could not fly. We also worked around the clock with various local governmental authorities to repatriate our shipboard team members as quickly as possible, using our ships and chartering hundreds of planes. We focused on the physical and mental health of our shipboard team members who experienced extended stays onboard during our repatriation efforts. Wherever possible, we provided shipboard team members with single occupancy cabin accommodations, many with a window or balcony. Shipboard team members also had access to fresh air and other areas of the ship, movies and internet, and available counseling. We were able to successfully repatriate our shipboard team members to more than 130 countries around the globe, other than the safe manning team members who remained on the ships.

 

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We also implemented significant changes in the way we work, pivoting our shoreside operations to allow for remote working, where possible, in order to facilitate physical distancing protocols. We believe these measures are critical to helping keep our employees, their families and the communities in which we work safe and healthy.

Resumption of Guest Operations

We resumed limited guest operations in September 2020, with Costa Cruises (“Costa”) and then with AIDA Cruises (“AIDA”) in October 2020. The initial cruises will continue to take place with adjusted passenger capacity and enhanced health protocols developed with government and health authorities, and guidance from our roster of medical and scientific experts. As of January 14, 2021, none of our ships were operating with guests onboard. These and other brands and ships are expected to return to service over time, as part of our goal to provide guests with unmatched joyful vacations in a manner consistent with our vision regarding our highest priorities, which are compliance, environmental protection and the health, safety and well-being of our guests, crew, shoreside employees and the people in the communities our ships visit.

Health and Safety Protocols

As the understanding of COVID-19 continues to evolve, we have been working with a number of world-leading public health, epidemiological and policy experts to support our ongoing efforts with enhanced protocols and procedures for the return of cruise vacations. These advisors will continue to provide guidance based on the latest scientific evidence and best practices for protection and mitigation, as well as regulatory requirements.

Working with governments, national health authorities and medical experts, Costa and AIDA have a comprehensive set of health and hygiene protocols that has helped facilitate a safe and healthy return to cruise vacations. These enhanced protocols are modeled after shoreside health and mitigation guidelines as provided by each brand’s respective country, and approved by all relevant regulatory authorities of the flag state, Italy. Protocols will be updated based on evolving scientific and medical knowledge related to mitigation strategies. Costa is the first cruise company to earn the Biosafety Trust Certification from Registro Italiano Navale. The certification process examined all aspects of life onboard and ashore and assessed the compliance of the system with procedures aimed at the prevention and control of infections.

We are also working directly with the Centers for Disease Control and Prevention (“CDC”) on the development of protocols necessary to resume cruising from the U.S. We, in conjunction with our advisors, are currently evaluating the requirements set forth in the CDC’s Framework for Conditional Sailing Order effective as of October 30, 2020. The current framework consists of several initial requirements that cruise ship operators will need to follow prior to resuming guest operations. Further, the current framework is subject to additional technical instructions and orders from the CDC and may change based on public health considerations. While the current framework represents an important step in our return to service, many uncertainties remain.

Our plans to resume U.S. operations will be designed to comply with the numerous requirements in the CDC’s framework. We continue to work closely with governments and health authorities in other parts of the world to ensure that our health and safety protocols will also comply with the requirements of each location. Implementing these initial and subsequent requirements may result in an increase in cost and take time before the continued resumption of our guest operations.

 

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Liquidity

We have taken, and continue to take, significant actions to preserve cash and obtain additional capital to increase our liquidity. Between March 2020 and January 14, 2021, we have raised $19 billion through a series of transactions.

Optimizing the Pause in Guest Operations

While our highest responsibility and top priorities remain focused on maintaining compliance everywhere we operate, protecting the environment and the health, safety and well-being of our guests, the people in the communities we touch and serve, and our shipboard and shoreside employees, we significantly reduced operating expenses by transitioning ships into pause status, reducing marketing and selling expenses, implementing a combination of layoffs, furloughs, reduced work weeks and salary and benefit reductions across the company, including senior management, instituting a hiring freeze across the organization and significantly reducing consultant and contractor roles. In addition, we reduced non-newbuild capital expenditures.

Optimizing the Future Fleet

We expect future capacity to be moderated by the phased re-entry of our ships, the removal of capacity from our fleet and delays in new ship deliveries. Since the pause in guest operations, we have accelerated the removal of ships in 2020 which were previously expected to be sold over the ensuing years. We now expect to dispose of 19 ships, 15 of which have already left the fleet as of January 14, 2021. In total, the 19 ships represent approximately 13 percent of pre-pause capacity and only three percent of operating income in 2019. The sale of less efficient ships is expected to result in future operating expense efficiencies of approximately two percent per ALBD and a reduction in fuel consumption of approximately one percent per ALBD.

Since the pause in guest cruise operations began and through November 30, 2020, we have taken delivery of only two (Enchanted Princess and Iona) of the four ships originally scheduled for delivery in fiscal 2020. Subsequent to November 30, 2020 and through January 14, 2021, we took delivery of two additional ships (Mardi Gras and Costa Firenze). We expect only one more ship to be delivered in fiscal 2021 compared to five ships that were originally scheduled for delivery in fiscal 2021.

Based on the actions taken to date and the scheduled newbuild deliveries through 2022, our fleet is expected to only experience a 1.9 percent compounded annual average capacity growth rate through 2022, be more cost efficient with a roughly 14 percent larger average berth size per ship and an average age of 12 years in 2022 versus 13 years, in each of these cases as compared to 2019.

 

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Fiscal 2020 Performance-Based Compensation (pre-pause)

Our fiscal 2020 incentive compensation program was established at the beginning of the year (pre-pause) after a comprehensive review of our business strategy, operating outlook and in consideration of shareholder feedback and support. The fiscal 2020 program, which structurally resembled the fiscal 2019 incentive compensation program, further supported our compensation philosophy, which emphasizes at-risk incentive pay to drive a pay-for-performance culture. All incentive plans established at the beginning of the fiscal 2020 year for our Named Executive Officers were 100% at-risk and performance-based.

 

Management Incentive

Plan

 

Management Incentive

Plan-Tied Equity

(“MTE”)

 

Performance-Based

Shares (“PBS”)

 

Shareholder Equity
Alignment (“SEA”)

     

Formulaic annual cash incentive plan.

 

Measures annual OI and Health, Environmental, Safety and Security (“HESS”) goals.

 

Equity award contingent upon one-year OI and HESS performance in connection with the Management Incentive Plan.

 

Performance determines the number of shares granted, which vests two years from the date of grant.

 

 

Long-term performance-based shares.

 

Measures long-term normalized OI growth and ROIC over a three-year performance period.

 

Long-term performance-based shares.

 

Measures Carnival Corporation’s absolute and relative TSR over a three-year performance period.

Subsequent Pay Actions to Support Business Stability and Recovery

In the face of the global impact of COVID-19, we paused our guest cruise operations in mid-March. In response to this unprecedented situation, we acted to protect the health and safety of guests and shipboard team members, optimize the pause in guest operations and increase our liquidity position. In September, we began the resumption of limited guest operations as part of our phased-in return to service. As of January 14, 2021, none of our ships were operating with guests onboard. We anticipate a gradual return to service over time. As we have never previously experienced a complete cessation of our guest cruise operations, we cannot predict the timing of our complete return to service and when various ports will reopen to our ships.

The Compensation Committees and management discussed the merits of resetting quantitative performance goals for outstanding incentives or making other adjustments to recognize that the initial fiscal 2020 incentive plan structure was developed under the backdrop of record business results and could not anticipate the unprecedented negative impact of a global COVID-19 pandemic. The Compensation Committees ultimately decided not to modify any outstanding grants as we were unable to definitively determine when the fleet would return to normal operations.

 

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Instead, given that the global COVID-19 pandemic would have a long-term impact on our organization, the Compensation Committees elected to take special actions to preserve cash, promote retention and leadership stability and realign compensation around our business’ sudden change in priorities to ensure management was incentivized and rewarded for achieving them.

 

   

Stock for Salary Grants

  

Salary Reduction

  

Special Retention and Incentive
Program

   

In efforts to preserve cash, Messrs. Donald, Bernstein, Kruse and Thamm received RSU grants in lieu of base salary for the three-month period from April 1, 2020 to June 30, 2020, with such RSUs remaining restricted until February 12, 2021.

   From July 1, 2020 to November 30, 2020, reduced the base salaries of Mr. Donald by 50%, Messrs. Bernstein, Kruse and Thamm by 25% and Mr. Perez by 20%.   

A one-time program was adopted in August 2020 to align the workforce around business recovery actions. Over 5,400 employees were eligible to participate in this program.

 

For our Named Executive Officers, 50% of the plan was delivered in the form of retention grants that vest semi-annually over a two-year period and 50% was delivered in the form of special performance-based grants which are subject to environmental, social and governance (“ESG”) performance goals that cliff vest in February 2023.

 

The retention grants were designed to promote retention and leadership stability. The special performance-based grants were designed to reward qualitative performance objectives under an extended pause in cruise operations. The objective was to concentrate global company-wide efforts on our highest near-term priorities, which are to be in compliance everywhere we operate in the world, to protect the environment and the health, safety and well-being of our guests, the people in the communities we touch and our shipboard and shoreside employees.

Pay for Performance

 

CEO Target Total Direct Compensation

 

Our executive compensation program directly links executive compensation to our performance and aligns the interests of our Named Executive Officers with those of our shareholders.

 

As demonstrated by our CEO’s mix of pay, our compensation philosophy places more emphasis on variable elements of compensation (such as annual bonus and equity-based compensation) than fixed remuneration.

  

 

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CEO Realized Incentive Compensation

 

   
           

 

CEO Realized Incentive Compensation ($000)

   

$9.7 million

Target Award Opportunity

 

         

CEO

Incentives(1)

  

Target

Opportunity

($)

  

Earned

(% of target)

  

Actual

Payout

($)

   
     

2020 Management Inventive Plan

   3,000      0        0    

$271,000

Estimated Payout

   

2020 MTE(2)

 

   1,500      0        0  
   

2018-2020 PBS(3)

   3,000    31    271       
   

2018-2020 SEA

   2,209      0        0  
   

Total

   9,709      3    271  

 

The extended pause in sailing operations required by the COVID-19 pandemic had a material impact on our profitability and total shareholder return in 2020.

   

(1)  Reflects performance-based incentives earned at the end of fiscal 2020.

(2)  Reflects MTE earned based on 2020 Management Incentive Plan performance.

(3)  Estimated payout value.

 

 

Mr. Donald’s incentives earned at the end fiscal 2020 failed to achieve target performance resulting in only 3% payout.

                

Process for Making Compensation Determinations

The Compensation Committees determine the compensation policy and the compensation payable to all of our executive officers. The Compensation Committees interact with the management of Carnival Corporation & plc on compensation issues primarily through communications, meetings and discussions with the Chief Executive Officer, the Chair of the Boards of Directors and the Chief Human Resources Officer, who also attend meetings of the Compensation Committees as requested by the Compensation Committees. As part of the fiscal 2020 annual compensation determination process, the Chief Executive Officer and the Chair of the Boards of Directors recommended to the Compensation Committees key initiatives and goals for Carnival Corporation & plc at the beginning of the fiscal year.

At the onset of the COVID-19 pandemic, the Boards of Directors held weekly meetings to receive updates on the status of operations, cash preservation efforts and repatriation and employee welfare issues and provided feedback to management, which also informed the Compensation Committees’ efforts. After the pause in operations as a result of the COVID-19 pandemic, the Compensation Committees consulted with the leadership team and FW Cook on matters such as compensation planning, staffing levels and retention incentives with the dual goals of supporting employees and preserving cash. The Compensation Committees took into consideration business needs and the impact of decisions on employees and shareholders. Key compensation decisions undertaken included:

 

 

no change to fiscal 2020 Management Incentive Plan or MTE targets, resulting in no payouts;

 

no change to performance metrics of the 2020 PBS grants;

 

reduction of base salary from July 1 through November 30, 2020 for leadership team and shoreside employees; and

 

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use of equity grants to preserve cash and provide:

  ¡ 

base salary for April 1 through June 30, 2020 to our leadership team, which included Messrs. Donald, Bernstein, Kruse and Thamm;

  ¡ 

severance payments to involuntarily separating employees; and

  ¡ 

special equity-based grants to remaining employees to promote retention and to realign around the new priorities.

After the fiscal year was completed, the Chief Executive Officer and the Chair of the Boards of Directors reviewed with the Compensation Committees the results of those initiatives, progress towards goals and other material items relating to overall Carnival Corporation & plc performance. The Chief Executive Officer reviewed the annual competitive market analysis provided by the independent consultant, as well as individual performance of each Named Executive Officer and the results of the group of brands or company-wide results, as appropriate, and provided the Compensation Committees with recommended total target compensation levels for each Named Executive Officer, except for his own. The compensation for our Named Executive Officers’ was then determined by the Compensation Committees using their discretion to evaluate the individual performance of our Named Executive Officers and the overall performance of Carnival Corporation & plc.

Independent Compensation Consultants. The Compensation Committees have engaged Frederic W. Cook & Co., Inc. (“FW Cook”) (together with its UK affiliated firm, FIT Remuneration Consultants LLP (“FIT”)) to assist in their annual review of our executive and Director compensation programs. The Compensation Committees believe that FW Cook and FIT provided objective advice to the Compensation Committees. FW Cook and FIT provide no other services to Carnival Corporation & plc.

During fiscal 2020, a consultant from FW Cook attended meetings of the Compensation Committees and provided FW Cook’s views on proposed actions by the Compensation Committees.

During fiscal 2020, the Compensation Committees also engaged Willis Towers Watson (“WTW”) to assist the Compensation Committees with the U.S. and UK CEO Pay Ratio calculations and disclosures.

In accordance with the New York Stock Exchange rules relating to compensation consultant independence, the Compensation Committees have determined that FW Cook, FIT and WTW and their consultants are independent after taking into consideration the factors set forth in the New York Stock Exchange rules. Pursuant to the foregoing factors, the Compensation Committees have determined that FW Cook’s, FIT’s and WTW’s work raised no conflicts of interest.

Peer Group Characteristics. The Compensation Committees perform an annual review of the compensation practices of certain other publicly-listed companies with the assistance of their consultant. This annual market assessment consists of an analysis of executive pay at a group of publicly-listed peer companies.

In April 2019, based on the recommendations of FW Cook, the Compensation Committees approved a peer group listed below (the “Peer Group”), which was used when assessing the fiscal 2020 compensation for our Named Executive Officers. The Peer Group consists of 19 publicly-listed companies from diverse industries that exhibit similar pre-COVID-19 pandemic size and business characteristics with Carnival Corporation & plc. At the time the Peer Group was approved, our revenue ranked at the 45th percentile and market capitalization ranked at the 59th percentile of the Peer Group. We operate in a niche industry with a limited number of other publicly traded cruise operators. The Peer Group reflects the market in which we may compete for business, investor capital and/or executive talent and is more closely aligned to our business complexity, breath, scope, median reviews and market capitalization. The Peer Group reflects a balanced group of companies in the consumer

 

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discretionary sector, including media, retailing, services and transportation companies. For these reasons, the Peer Group was not changed in response to the COVID-19 pandemic and is anticipated to be used in assessing fiscal 2021 compensation for our Named Executive Officers.

 

 

Peer Group Companies

  

American Airlines Group Inc.

 

  

Marriott International, Inc.

  

Darden Restaurants, Inc.

 

  

McDonald’s Corporation

  

Delta Air Lines, Inc.

 

  

MGM Resorts International

  

FedEx Corporation

 

  

Mondelēz International, Inc.

  

General Mills, Inc.

 

  

Norwegian Cruise Line Holdings Ltd.

  

Hilton Worldwide Holdings Inc.

 

  

Royal Caribbean Cruises Ltd.

  

International Consolidated Airlines Group, S.A.

 

  

Starbucks Corporation

  

Kimberly-Clark Corporation

 

  

United Continental Holdings, Inc.

  

Las Vegas Sands Corp.

 

  

United Parcel Service, Inc.

  

Live Nation Entertainment, Inc.

        

Competitive Market (Peer Group) Comparison. Annually, the Compensation Committees’ independent consultant, FW Cook, conducts a competitive market review to assist the Compensation Committees in their assessment of our Named Executive Officers’ competitive positioning of total compensation relative to the markets in which Carnival Corporation & plc competes for executive talent. FW Cook conducted a competitive market assessment on behalf of the Compensation Committees for fiscal 2020. The Compensation Committees reviewed our aggregate Named Executive Officer total compensation in comparison to the competitive market, which consists of the Peer Group as well as third-party surveys that reflect a broad database of hundreds of companies. The Compensation Committees were not provided with the identities of the companies in the surveys generally (or of the subsets of companies which had data for relevant comparable positions). As applicable, any utilized survey data was combined with the data for the Peer Group to produce a consolidated aggregated competitive market range for total direct compensation.

These analyses suggest that, in the aggregate, total direct compensation levels for our Named Executive Officers are competitively positioned. The Compensation Committees, as advised by FW Cook, consider total direct compensation to be generally competitive when within a range of 15% above or below the market median. Actual pay positioning can vary based on factors including job responsibilities, experience, impact of role and individual performance.

Consistent with the approach that the Compensation Committees take in reviewing each element of total direct compensation, the Compensation Committees utilize these analyses to assess the extent to which the compensation provided to our Named Executive Officers is generally consistent with that offered by companies with whom Carnival Corporation & plc competes for executive level talent. The Compensation Committees do not use these analyses to peg any particular element of compensation (or total compensation) to any specific targeted Peer Group level.

Named Executive Officer Compensation Design, Elements and Pay Mix

The compensation elements for our Named Executive Officers consist of base salary, an annual bonus, equity-based compensation and perquisites.

 

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The compensation practices for each of our Named Executive Officers vary in order to reflect the organizational structure of Carnival Corporation & plc. Three of our Named Executive Officers (Messrs. Donald, Bernstein and Perez) had company-wide roles during fiscal 2020 and two of our Named Executive Officers (Messrs. Kruse and Thamm) were Chief Executive Officers of groups operating two or more brands during fiscal 2020. As a result, the compensation practices for these two types of roles are different.

 

Named Executive
Officer
  Type of Role   Base Salary   Annual Bonus  

Equity-Based

Compensation

  Perquisites

 

Arnold W. Donald

 

  Company-wide role   Based on level of
responsibility and
increases based
on performance  or
other market
factors
  Based 100% on
company-wide
OI
  MTE, PBS and SEA
grants to align
with
shareholder
outcomes

 

 

RET and SPBS
grants to promote
retention and
business recovery

  Reflect country
practices where
a Named
Executive
Officer is employed

 

David Bernstein

 

 

Arnaldo Perez

 

 

Stein Kruse

 

  CEO of a group of brands  

 

Based 50% on
company-wide
OI and 50% on
a group of
brands’ operating
income

 

 

Michael Thamm

 

In determining the amount of any particular compensation element, the Compensation Committees consider the impact of such an element on total compensation (and thus, each element affects the amount paid in respect of other elements of compensation). For example, the Compensation Committees consider the amount of the base salary and annual bonus that may be earned by a Named Executive Officer when making an equity grant.

2020 Compensation Recommendations and Rationale

The established compensation program for the Named Executive Officers places a strong focus on performance-based compensation and enhances the alignment between executive rewards and long-term gains for Carnival Corporation & plc and its shareholders. At the beginning of fiscal 2020, the rationale was that this compensation structure would consist of base salary, performance-based annual bonus and three performance-based equity components tied to achievement of business objectives and total shareholder return. Therefore, every component of the compensation program, with the exception of base salary, is performance-based and at-risk. This compensation philosophy continues to extend beyond our Named Executive Officers to include other key executives, reflecting the Compensation Committees’ commitment to aligning compensation with the success of Carnival Corporation & plc.

However, given the impact of the COVID-19 pandemic and unanticipated pause in our guest cruise operations, the Compensation Committees adopted a special equity program for the Named Executive Officers and other key executives, to promote retention, leadership stability and realign management around our rapidly changing new priorities.

Risk Considerations

The Compensation Committees believe that the incentive structure for senior management does not raise environmental, social or governance risks by inadvertently motivating irresponsible behavior, and that risks arising from Carnival Corporation & plc’s compensation policies and practices for their

 

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workforce are not reasonably likely to have a material adverse effect on Carnival Corporation & plc. Please refer to the “Compensation Risk Assessment” section for additional information.

Base Salaries

Base salaries are intended to provide a level of fixed compensation that is reflective of each Named Executive Officer’s level of responsibility. Base salaries of our Named Executive Officers for fiscal 2020 are reported in the “Summary Compensation Table.” The Compensation Committees annually review each Named Executive Officer’s performance and may increase the base salary of a Named Executive Officer at their discretion if merited by performance or other market factors necessary to attract and retain our executives.

Salaries for fiscal 2020 were established for our Named Executive Officers in January 2020 after performance results for the prior fiscal year were available. There was no increase in the base salaries of our Named Executive Officers for fiscal 2020.

In April 2020, to preserve cash, the Compensation Committees:

 

 

Issued shares to Messrs. Donald, Bernstein, Kruse and Thamm in lieu of base salary for the three-month period beginning April 1, 2020 to June 30, 2020, with such shares vesting February 12, 2021; and

 

Beginning in July 2020 until November 30, 2020, temporarily reduced the base salaries of Mr. Donald by 50%, Messrs. Bernstein, Kruse and Thamm by 25% and Mr. Perez by 20% (consistent with the salary reductions for all other employees).

Annual Bonuses

In fiscal 2020, each Named Executive Officer’s target bonus comprised a significant portion of their respective total cash compensation opportunity, supporting Carnival Corporation & plc’s objective to emphasize pay for performance. Annual bonus payments are intended to reward short-term individual, corporate, and a group of brands’ performance results and achievements. The emphasis on the annual bonus as compared to base salary allows Carnival Corporation & plc to more closely link financial results to individual and overall company performance. Fiscal 2020 bonuses for our Named Executive Officers are reported in the “Summary Compensation Table” under the column labeled “Non-Equity Incentive Plan Compensation.”

For fiscal 2020, the annual bonuses for our Named Executive Officers were determined in accordance with the Carnival Corporation & plc Management Incentive Plan (the “Management Incentive Plan”) described below.

The Management Incentive Plan is designed to focus the attention of our executives, including our Named Executive Officers, on achieving outstanding performance results as reflected by income from the operations of Carnival Corporation & plc as well as other relevant measures. For the Named Executive Officers who are Chief Executive Officers of a group of brands, the Management Incentive Plan is designed to also focus their attention on achieving outstanding performance results as reflected in the operating income of the group of brands they oversee.

Under the Management Incentive Plan, the Corporation Operating Income Target, Brand Operating Income Target and target bonus for each executive are established by the Compensation Committees for each plan year. The respective operating income targets are the adjusted U.S. Generally Accepted Accounting Principles net income of Carnival Corporation & plc, or the respective brand (or group of brands), excluding interest income and expense, other nonoperating income and expense, and income taxes, as reported by Carnival Corporation & plc, or the respective brand (or group of brands), as

 

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applicable, for the plan year. The Management Incentive Plan contains clawback and forfeiture provisions in the event of fraud or conduct contributing to any financial restatements or irregularities.

The “Corporation Operating Income Target” and “Brand Operating Income Target” for each year is established by the Compensation Committees taking into account historical performance, company/industry growth, Carnival Corporation & plc’s annual plan, consultation with management, investor guidance (as to the Corporation Operating Income Target), the brand’s annual plan (as to the Brand Operating Income Target) and such other factors as the Compensation Committees deem appropriate. In order to measure management’s controllable operating contribution to the company, the Corporation and Brand Operating Income Targets and the actual Corporation and Brand Operating Income achieved for fiscal 2020 were measured using a constant fuel price per ton and constant currency exchange rates.

In January 2020, the Compensation Committees set the Corporation Operating Income Target for fiscal 2020 at $3.307 billion, which was 1% less than the actual Corporation Operating Income achieved in fiscal 2019 when normalized for fuel price and currency exchange rate impact, consistent with historical methodology. The Compensation Committees believed that this target represented a challenging performance goal.

Under the Management Incentive Plan, the preliminary bonus amounts payable were dependent upon the amount of Corporation Operating Income achieved as compared to the Corporation Operating Income Target as follows:

 

Plan Provisions

Corporation Operating

Income (in billions)

  

Performance Level

(% of Target Achievement)

  

Payout

    Percentage(1)    

<$3.042

   Below Threshold (<92%)           0%

  $3.042

   Threshold (92%)         50%

  $3.307

   Target (100%)       100%

  $3.472

   Maximum (105%)       200%
(1)

The payout curve includes four linear slopes. Payouts between these points are calculated using interpolation.

Bonus funding under the Management Incentive Plan for the Named Executive Officers who are Chief Executive Officers of a group of brands was calculated by reference to a bonus schedule that calibrates the respective weighted Brand Operating Income Target of 50% (proportionally weighted by the size of each brand, when more than one brand is under the scope of the Named Executive Officer) and Corporation Operating Income Target of 50% for the fiscal 2020 plan year with the target bonus.

In January 2020, the Compensation Committees considered the attainment of each brand’s Brand Operating Income Target for fiscal 2020 to be achievable but challenging given each brand’s fiscal 2019 performance.

The fiscal 2020 Brand Operating Income Target for the Holland America Group and Carnival UK (both applicable to Mr. Kruse) were 2% and 3%, respectively, and the Costa Group (applicable to Mr. Thamm) was 6% more than the actual Brand Operating Income achieved in fiscal 2019 when normalized for fuel price and currency exchange rate impact. The Compensation Committees believed that these targets represented challenging performance goals and were both higher than the normalized actual results for fiscal 2019.

In January 2020, the Chief Executive Officer provided the Compensation Committees with his recommendations regarding the fiscal 2020 target bonus amounts under the Management Incentive Plan for our Named Executive Officers (other than himself), in which there was no increase from their fiscal 2019 target bonuses. The Compensation Committees accepted the Chief Executive Officer’s recommendations.

 

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These amounts were established by the Compensation Committees after taking into consideration the competitive market analysis (described above), historical bonus payout levels, the challenging Corporation Operating Income Target established by the Compensation Committees for fiscal 2020 and the Compensation Committees’ continued philosophy to place emphasis on performance-based pay elements.

One factor incorporated into the Management Incentive Plan program that would further modify the bonus funding percentage was our HESS performance, as determined by the HESS Committees. To make this annual determination, the HESS Committees met regularly with our Chief Maritime Officer to review an extensive analysis of each brand’s and Carnival Corporation & plc’s enterprise-wide performance in HESS-related areas tracked throughout the course of the fiscal year. The analysis includes an evaluation of more than 20 individual factors of HESS performance, within the three categories focused on: safe ships, safe passengers and crew and safe environment. Each factor is evaluated based on each brand’s overall performance and trend. If a bonus funding level is achieved, based on the results of the analysis, the bonuses would be adjusted up or down to reflect the HESS performance of the Corporation as a whole for Messrs. Donald, Bernstein and Perez, or the brands overseen by Messrs. Kruse and Thamm.

When the results of the analysis were applied, the Compensation Committees did not make changes to the fiscal 2020 Management Incentive Plan targets. As a result of the impact of the COVID-19 pandemic and pause in guest operations, neither the Corporation Operating Income Target nor the Brand Operating Income Targets for fiscal 2020 were achieved and no bonuses have been earned by any of the Named Executive Officers. The fiscal 2020 target and earned bonuses were as follows:

 

Named Executive Officer

 

  

Fiscal 2020

    Target Bonus    

 

  

Fiscal 2020

    Earned Bonus    

 

Arnold W. Donald

       $3,000,000        $0

David Bernstein

       $1,000,000        $0

Stein Kruse

       $1,200,000        $0

Arnaldo Perez

       $   450,000        $0

Michael Thamm

       1,116,000        0

Equity-Based Compensation

A.    General

The Compensation Committees grant equity-based compensation to our Named Executive Officers to provide long-term incentives and align management and shareholder interests. The Compensation Committees believe that a substantial portion of compensation should be equity-based. The equity-based compensation program is designed to recognize scope of responsibilities, reward demonstrated performance and leadership, motivate future superior performance and align the interests of the executive with our shareholders. To further augment these views the equity program approved in January 2020 for fiscal 2020 was 100% performance-based for our Named Executive Officers and other key executives within Carnival Corporation & plc. For fiscal 2020, this includes three different types of performance-based equity grants:

 

 

MTE grants;

 

PBS grants; and

 

SEA grants.

These equity grants provide for performance-based vesting or granting criteria and align our senior management team’s long-term compensation opportunities with Carnival Corporation & plc’s long-term

 

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performance. In addition, the value of these equity grants serves to link pay and performance in two ways: they have pre- or post-grant performance criteria to determine the number of shares earned and the value of the shares earned appreciate or depreciate based on the trading price of our shares.

Our equity-based compensation grants are made pursuant to the Carnival Corporation 2020 Stock Plan or the Carnival plc 2014 Employee Share Plan, which have been approved by Carnival Corporation & plc’s shareholders. Messrs. Donald, Bernstein, Kruse and Perez received equity grants under the Carnival Corporation 2020 Stock Plan. Mr. Thamm received equity grants under the Carnival Corporation 2020 Stock Plan and the Carnival plc 2014 Employee Share Plan.

The specific equity grants made to our Named Executive Officers in early 2020 reflected the desire of the Compensation Committees to link this compensation to performance. The number and form of equity grants made annually to our Named Executive Officers are determined both in the discretion of the Compensation Committees and pursuant to certain agreements with certain Named Executive Officers. Existing ownership levels are not a factor in grant determinations, as the Compensation Committees do not want to discourage executives from holding significant amounts of Carnival Corporation and Carnival plc shares.

The value of equity grants made to our Named Executive Officers other than the Chief Executive Officer was determined by the Compensation Committees after reviewing the recommendation of the Chief Executive Officer and the Chair of the Boards of Directors and the other elements of the Named Executive Officer’s current year compensation, taking into account the position and role of the Named Executive Officer, the individual performance in the preceding fiscal year and historically, and the perceived future value to Carnival Corporation & plc. When reviewing the competitive market assessment provided by FW Cook for total direct compensation, the Compensation Committees also evaluated the long-term and short-term incentive compensation components to confirm that the value of a Named Executive Officer’s aggregate equity-based compensation and total direct compensation remains generally competitive. Similar to the approach taken for the other Named Executive Officers, the value of equity grants made to the Chief Executive Officer was determined by the Compensation Committees after consultation with FW Cook, taking into account his position and role, his individual performance, perceived future value and competitive market position.

B.    Disclosure and the Timing of Equity-Based Compensation

The Compensation Committees met in January 2020 to determine the target values of the MTE grants and SEA grants and in February 2020 to determine the PBS grants, all of which are part of the equity-based compensation for key executives in fiscal 2020.

We describe below the MTE grants made in early 2020 (which were discussed previously in last year’s Proxy Statement but first appear in the “Summary Compensation Table” and “Grants of Plan-Based Awards in Fiscal 2020” table in this year’s Proxy Statement).

C.    Fiscal 2020 Annual Grants

2020 MTE Grants. In January 2020, the Compensation Committees approved an MTE target grant value for each of our Named Executive Officers and certain other executives. Each target grant value was determined after consideration of recommendations received from the Chief Executive Officer and the Chair of the Boards of Directors, as well as reviewing the scope of the Named Executive Officer’s responsibilities, performance and long-term retention considerations. There was no increase in the MTE target for the Named Executive Officers for fiscal 2020.

 

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For fiscal 2020, the performance metrics of the MTE grants are the same as the performance metrics for the Management Incentive Plan, which are described in the “Annual Bonuses” section. Following the end of fiscal 2020, the actual 2020 Management Incentive Plan payout percentage is applied to the MTE target grant value to determine the actual MTE grant values, which may be from zero to 200% of target. In January 2021, the Compensation Committees confirmed that the MTE grant goals were not achieved, and no MTE grants were made.

The MTE grants made during January 2020 were previously discussed in detail in our 2020 Proxy Statement. However, as discussed above, due to SEC disclosure rules, the grant date fair value of these grants is included in this Proxy Statement’s “Summary Compensation Table” and “Grants of Plan-Based Awards in Fiscal 2020” table.

2020 PBS Grants. The PBS grants made to our Named Executive Officers and other key executives in February 2020 vest zero to 200% of target based upon the extent to which Corporation Operating Income, as adjusted for certain fuel price change and currency exchange rate impacts, for each of the three fiscal years in the 2020-2022 performance cycle, the average of the fiscal 2021 and 2020 ROIC performance results and ESG metrics results exceeds the specified performance goals. The ESG metrics focus on reductions in CO2e intensity, food waste and single use items. Under the terms of the grant, the Corporation Operating Income result is weighted 50%, ROIC result is weighted 25% and the ESG metrics results are weighted 25%. The maximum payout is 200% of target. The Corporation Operating Income target, ROIC target and ESG targets will be disclosed at the end of the performance period (as these targets are deemed strategic and commercially sensitive).

The Compensation Committees believed that growth in the Corporation Operating Income was a critical measure of Carnival Corporation & plc’s ability to maintain and grow earnings over time. The grants were designed to align an increasing proportion of the total compensation of key members of our management team (126 senior managers worldwide, including our Named Executive Officers) with the long-term growth of Carnival Corporation & plc.

The Compensation Committees approved the PBS grants to our Named Executive Officers after an evaluation of current market practice, the aggregate market positioning of total direct compensation, and the Compensation Committees’ focus on the alignment between our Named Executive Officer’s pay outcomes and Carnival Corporation & plc’s long-term performance.

2020 SEA Grants. In January 2020, the Compensation Committees made SEA grants to the Named Executive Officers and certain other key executives. All Named Executive Officers received SEA grants in the form of RSUs of Carnival Corporation common stock.

The SEA grant is based upon Carnival Corporation’s absolute TSR performance as modified by our TSR rank relative to the Peer Group over the period of December 1, 2019 through November 30, 2022. The maximum possible payout is 4.5 times the target number of SEA RSUs, subject to a value cap of 5.5 times the grant date value. While dividends are taken into account in assessing the TSR calculations, these RSUs do not accrue any dividends over the performance period. Absolute TSR growth is calculated using the 90-day average stock price as of December 1, 2019 of $44.55. Any earned shares will vest after the Compensation Committees certify the results and are contingent upon continued employment.

 

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The SEA grant requires an absolute TSR condition that is linked to Carnival Corporation’s share price growth as follows:

 

Goal Levels

Absolute TSR

Compound Annual

Growth per Year

(%)

Vesting

Payout

(%)

 

Below Threshold

 

 

 

Less than 6

 

 

0.0%

 

 

0

 

 

Threshold

 

 

6

 

 

At 6%, each 0.3% increase in the compound annual
growth rate increases the absolute TSR vesting by 5.6% of the initial number of SEA restricted stock units granted
until the maximum growth is reached

 

 

50

 

 

Target

 

 

9

 

 

100

Maximum

20

 

At maximum, three times the initial number of SEA restricted stock units granted is earned subject to a cap that the number of shares be reduced to such shares as have a value equal to 5.5 times the grant date value if, at the end of the performance period, they would then be worth more than 5.5 times the grant date value

 

300

The absolute TSR payout percentage is then multiplied by a modifier tied to Carnival Corporation’s TSR ranking relative to the 2020 Peer Group which may increase or decrease the absolute TSR result, as follows:

 

 

  Quintile

 

    

 

Fifth

 

    

 

Fourth

 

    

 

Third

 

    

 

Second

 

    

 

First

 

 

  Relative TSR Ranking (%)

 

    

 

0-14

 

    

 

15-29

 

    

 

30-69

 

    

 

70-84

 

    

 

85-100

 

 

  Relative TSR Modification (%)

 

 

    

 

33

 

 

    

 

75

 

 

    

 

100

 

 

    

 

125

 

 

    

 

150

 

 

The Compensation Committees believe that these SEA grants provide the Name Executive Officers with meaningful upside tied explicitly to shareholder outcomes and create alignment among the Named Executive Officers and senior management team.

The SEA grants made to our Named Executive Officers in January 2020 are included in the “Grants of Plan-Based Awards in Fiscal 2020” table.

2020 Shares in Lieu of Salary (“SFS”) Grants. In order to preserve liquidity, the leadership team, which included Messrs. Donald, Bernstein, Kruse and Thamm, requested that the Compensation Committees consider making SFS grants in lieu of their second quarter base salaries for the dual purpose of preserving cash and demonstrating their belief in the organization. In April 2020, the Compensation Committees approved the SFS grants. The amount of each of their base salaries was converted into a number of RSUs based on the grant date closing price of $12.42 for Carnival Corporation common shares and £9.66 for Carnival plc ordinary shares. The SFS grants vested on June 30, 2020 but remain subject to restriction until February 12, 2021.

2020 Special Retention (“RET”) and Special PBS (“SPBS”) Grants. Given that the global COVID-19 pandemic would have a long-term impact on our organization, the Compensation Committees elected to take special actions to preserve cash, promote retention and leadership stability, and realign compensation around our business’ sudden change in priorities to ensure management was incentivized and rewarded for achieving them. As a result, on August 28, 2020, the Compensation Committees approved a special equity incentive program to promote retention and to recognize employees for their efforts in the face of the COVID-19 pandemic business environment. This program includes a broad range of shore-based and ship-based employees, as well as the Named Executive Officers.

As part of this program, each Named Executive Officer received a RET grant and a SPBS grant. The Compensation Committees approved grants of a fixed number of RSUs with an aggregate value of

 

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approximately 35% of each Named Executive Officer’s total target direct compensation. The number of RSUs was divided equally between the RET and SPBS grants. The RET grant will vest over time on a 25% pro-rata basis in January and July of each of 2021 and 2022. The SPBS grants measure performance over fiscal 2020-2022 and will vest in February 2023 from zero to 150%, depending upon the achievement of ESG performance targets, which are based upon the same ESG metrics and targets applicable to the 2020 PBS grants. These targets will be disclosed at the end of the performance period (as they are deemed strategic and commercially sensitive).

D.    Disclosure of Prior Years’ Equity Grant Results

2018 PBS Grants. The 2018 PBS grants made to the Named Executive Officers in February 2018 reached the end of the performance period at the end of fiscal 2020 and vested on February 12, 2021. Under the terms of the 2018 PBS grant, shares vested based upon the extent to which Corporation Operating Income (60% weighting), as adjusted for 100% of year-over-year fuel price changes and currency exchange rate impact for each of fiscal 2018, 2019 and 2020 and three-year average ROIC result (40% weighting) reached or exceeded the following:

 

  Goal Level

 

  Annual Operating Income
Growth Goal

 

  Annual Operating Income Goal

 

 

Three-Year

Average

 

ROIC

Goal

(%)

 

 

 

Payout for

Operating

 

2018

(%)

 

 

2019

(%)

 

 

2020

(%)

 

 

2018

($ in billions)

 

 

2019

($ in billions)

 

 

2020

($ in billions)

 

 

 Income & ROIC 

Goals

(%)

 

 

  Threshold

 

     

 

1

 

 

     

 

5

 

 

     

 

6

 

 

     

 

3.070

 

 

     

 

3.460

 

 

     

 

3.505

 

 

     

 

9.800

 

 

     

 

50

 

 

 

  Target

 

   

 

 

 

 

9

 

 

 

   

 

 

 

 

10

 

 

 

   

 

 

 

 

10

 

 

 

   

 

 

 

 

3.335

 

 

 

   

 

 

 

 

3.625

 

 

 

   

 

 

 

 

3.637

 

 

 

   

 

 

 

 

10.000

 

 

 

   

 

 

 

 

100

 

 

 

 

  Maximum

 

 

   

 

 

 

 

 

16

 

 

 

 

 

   

 

 

 

 

 

15

 

 

 

 

 

   

 

 

 

 

 

15

 

 

 

 

 

   

 

 

 

 

 

3.565

 

 

 

 

 

   

 

 

 

 

 

3.789

 

 

 

 

 

   

 

 

 

 

 

3.802

 

 

 

 

 

   

 

 

 

 

 

10.387

 

 

 

 

 

   

 

 

 

 

 

200

 

 

 

 

 

The Corporation Operating Income and ROIC results for the 2018 PBS grant were as follows:

 

  Operating Income and ROIC Results  

 

2018

Corporation

Operating Income

($ in billions)

 

 

 

2019

Corporation

Operating Income

($ in billions)

 

 

 

2020

Corporation

Operating Income

($ in billions)

 

 

Three-

Year
Average

ROIC

 

 

  Annual Adjusted Operating Income

 

     

 

$3,463

 

 

     

 

$3,423

 

 

     

 

($5,026

 

)

 

   

 

  Percent of Target Annual Adjusted Operating Income Growth

 

     

 

103.84

 

%

 

     

 

3.89

 

%

 

     

 

(252.02

 

%)

 

   

 

  Annual Operating Income Growth Payout (%)

 

     

 

155.55

 

%

 

     

 

0.00

 

%

 

     

 

0.00

 

%

 

   

 

  Three-year Average ROIC (%)

 

                 

 

 

2.50

 

 

%

 

 

The fiscal 2018, 2019 and 2020 annual adjusted Corporation Operating Income growth payout percentages were averaged, and the three-year average ROIC result was calculated to determine the respective payout percentages that were then weighted to obtain final payout percentages, as follows:

 

  Payout % and TSR Modifier   

Unweighted

Payout

(%)

 

  

Weighting

(%)

 

  

  Weighted  

Payout

(%)

 

 

  Average Annual Adjusted Operating Income Payout

 

      

 

51.85

 

 

      

 

60

 

 

      

 

31.11

 

 

 

  ROIC Payout

 

      

 

0.00

 

 

      

 

40

 

 

      

 

0.00

 

 

 

  Final Payout

 

                

 

31.11

 

 

 

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Based on these performance measures and a 31.11% final payout percentage, the Named Executive Officers received the following:

 

  Named Executive Officer   

2018 PBS

Target Shares

(#)

 

    

2018 PBS

Earned Shares(1)

(#)

 

 

 

  Arnold W. Donald

 

    

 

43,623

 

 

 

    

 

13,571

 

 

 

 

  David Bernstein

 

    

 

12,360

 

 

 

    

 

3,845

 

 

 

 

  Stein Kruse

 

    

 

17,449

 

 

 

    

 

5,428

 

 

 

 

  Arnaldo Perez

 

    

 

7,270

 

 

 

    

 

2,261

 

 

 

 

  Michael Thamm

 

    

 

20,474

 

 

 

    

 

6,369

 

 

 

 

(1)

Additional shares will be provided to take into account dividend reinvestment during the period.

2018 SEA Grants. The 2018 SEA grants made to the Named Executive Officers in April 2018 reached the end of the performance period at the end of fiscal 2020. Under the terms of the 2018 SEA grant, shares vest based upon the extent to which our absolute TSR compound annual growth rate over the November 30, 2019 to November 30, 2020 performance period and TSR ranking relative to the 2018 Peer Group for the same period reached or exceeded certain goals. The 90-day average starting price for the 2018 SEA grant was $66.04. As a result of the COVID-19 pandemic’s impact on our share price, the ending 90-day average price at November 30, 2020 was $17.25, resulting in no payout for these grants.

Perquisites and Other Compensation

Our Named Executive Officers are provided various perquisites believed by the Compensation Committees to be representative of common practices for executives in their respective countries. Some of Messrs. Donald’s and Thamm’s perquisites and other benefits are provided pursuant to terms of their employment agreements. The Compensation Committees, with the assistance of FW Cook, review perquisites provided to our Named Executive Officers on a periodic basis and take into account each Named Executive Officer’s particular circumstances and overall level of compensation, and believe that perquisites provided by Carnival Corporation & plc continue to be an appropriate element of the overall compensation package used to attract and retain such officers.

The Compensation Committees have approved a policy to establish procedures and controls as to the authorized use of aircraft owned or chartered by Carnival Corporation & plc (the “Aircraft”). According to the policy, the Aircraft can only be used for business purposes. Guests may accompany these executives when traveling. The Compensation Committees have also agreed to allow Mr. Donald to use the Aircraft for personal use so long as the incremental cost to Carnival Corporation & plc does not exceed $200,000 per year. Once that threshold is reached, Mr. Donald will reimburse us for those costs. The Compensation Committees determined that the Aircraft usage policy and levels of usage and costs were consistent with those offered by large multinational companies like Carnival Corporation & plc.

In lieu of participation in the Carnival Corporation Nonqualified Savings Plan under which plans were discontinued in accordance with Section 457A of the U.S. Internal Revenue Code, the Compensation Committees approved payment of additional annual compensation directly to these employees in an amount equal to what would have been deposited on behalf of those employees into that plan, less, as described below, any amount Carnival Corporation contributes to the Carnival Corporation Fun Ship Savings Plan, a 401(k) plan (the “401(k) Plan”). These payments are taxable as ordinary income.

 

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Beginning with the 2010 calendar year, the 401(k) Plan was amended and currently allows Messrs. Donald, Bernstein and Perez (as well as all other highly compensated employees) to defer a limited amount of compensation into the 401(k) Plan subject to nondiscrimination testing. Until May 2020, when the matching contributions were suspended through the end of December 2020, Carnival Corporation made a matching contribution to the 401(k) Plan under the plan’s formula, subject to nondiscrimination testing.

The perquisites received by each Named Executive Officer in fiscal 2020, as well as their incremental cost to Carnival Corporation & plc, are reported in the “Summary Compensation Table” and its accompanying footnotes.

Post-Employment Compensation Obligations

Carnival Corporation & plc does not have any change of control agreements that provide cash severance to our Named Executive Officers upon a change of control of Carnival Corporation & plc, with the exception of the employment agreement with Mr. Donald. Carnival Corporation & plc does not have employment agreements with any of our Named Executive Officers that provide cash severance benefits in connection with the termination of the executive’s employment, with the exception of employment agreements with Messrs. Donald and Thamm.

Mr. Donald’s employment agreement is subject to renewal annually on October 14th of each year. If Mr. Donald wishes to leave prior to the end of the current term, he would generally need to provide at least 60 days’ written notice. The payments to Mr. Donald in the event of termination are set forth in the “Post-Employment Cash Compensation Obligations to Mr. Donald” section.

Mr. Thamm’s employment agreement provides that he is generally entitled to an amount equal to 50% of his total remuneration most recently received by him as compensation for his agreement not to engage in competition with us. The Compensation Committees believe that the severance benefits provided to Mr. Thamm under his employment agreement are reasonable and in accordance with market practice in the European Union.

Upon termination of employment for certain circumstances or upon a change of control, our Named Executive Officers may be entitled to retain or receive accelerated vesting of equity grants. Under the terms of the Carnival Corporation 2011 Stock Plan, the Carnival plc 2014 Employee Share Plan and the Carnival Corporation 2020 Stock Plan, however, the default provision upon a change in control would provide only for a “double trigger” acceleration of equity grants (such that no acceleration would occur unless the participant’s employment were subsequently terminated by Carnival Corporation & plc (or its successor) without cause). These benefits are provided under the terms of the plans pursuant to which the equity grants were made, the grant agreement and under individual agreements with certain Named Executive Officers. However, none of our Named Executive Officers are entitled to receive any tax gross-up payments in respect of their severance benefits or accelerated equity grants. The benefits that our Named Executive Officers may be eligible to receive in connection with the termination of their employment or upon a change of control are described in detail in the “Potential Payments Upon Termination or Change of Control” section.

The Compensation Committees believe that these arrangements are reasonable and encourage an executive to comply with post-termination non-compete and other restrictive covenants and to cooperate with us both before and after their employment is terminated.

Pensions and Deferred Compensation Plans

Carnival Corporation & plc do not operate pension or deferred compensation programs for the Named Executive Officers.

 

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Compensation Discussion and Analysis and Carnival plc Directors’ Remuneration Report—Part I

 

Stock Ownership Policy

Our Boards of Directors and Compensation Committees believe it is important for Directors and executive officers to build and maintain a long-term ownership position in Carnival Corporation or Carnival plc shares in order to align their financial interests with those of our shareholders and to encourage the creation of long-term value. Our compensation structure provides for a significant percentage of compensation to be equity-based, which places a substantial portion of compensation at risk over a long-term period. Accordingly, our executive officers, including our Named Executive Officers who are currently executive officers, are subject to a stock ownership policy. The policy specifies target ownership levels of Carnival Corporation or Carnival plc shares for each executive expressed in terms of the value of the equity holdings (excluding PBS and SEA grants which have not vested) as a multiple of each executive officer’s base salary. The target ownership levels are as follows:

 

  Officers

 

  

  Ownership Target  

  Multiple of Base Salary  

 

  Chair and/or Chief Executive Officer

   6X salary

  Vice Chair and/or Chief Operating Officer

   4X salary

  Other Executive Officers

   3X salary

Individuals who are newly designated as executive officers are expected to be in compliance with the stock ownership policy within five years of the date of becoming an executive officer.

The stock ownership policy for executive officers was modified to provide that an executive officer will be deemed in compliance with the ownership requirements if the decline in the Carnival Corporation or Carnival plc share price after February 28, 2020 resulted in the executive officer falling below the applicable ownership level, provided that they were in compliance prior to February 28, 2020 and do not sell or transfer ownership of any such shares until after the ownership target has again been achieved, unless otherwise approved by the Compensation Committees. The modification deemed appropriate given the extraordinary impact of the COVID-19 pandemic on our share price.

All of our executive officers are in compliance with the stock ownership policy. Carnival Corporation & plc does not make any commitment to any persons covered by the stock ownership policy that they will receive any particular level of equity-based grants.

The stock ownership policy provides that executive officers be required to retain at least 50% of the shares received upon release (other than the shares received upon release of the SFS and RET shares) after deducting withholding taxes, until their target ownership is achieved.

Hedging Policy

Because we believe it is improper and inappropriate for any Board member or employee to engage in short-term or speculative transactions involving Carnival Corporation & plc securities, our Securities Trading Policy provides that they may not engage in any of the following activities with respect to Carnival Corporation & plc securities at any time:

 

 

purchasing of shares of either Carnival Corporation or Carnival plc on margin;

 

short sales; or

 

buying or selling puts, calls or other derivatives in respect of Carnival Corporation & plc securities.

Board members and employees may pledge shares, including as part of a margin account, but they are warned that sales of such shares could have securities law implications, including under Section 16 of the U.S. Securities Act.

 

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COMPENSATION

Compensation Discussion and Analysis and Carnival plc Directors’ Remuneration Report—Part I

 

Although we discourage speculative hedging transactions, employees (other than executive officers) are permitted to engage in long-term hedging transactions that are designed to protect their investment in Carnival Corporation and Carnival plc shares (i.e., the hedge must be for at least one year and relate to shares or options held by the individual). Any such transactions must be pre-cleared by the Legal Department. Because these activities raise issues under the U.S. federal securities laws, any person intending to engage in permitted hedging transactions is strongly urged to consult his or her own legal counsel.

Our Securities Trading Policy provides additional restrictions for Directors and executive officers. They are prohibited from purchasing, selling or writing any exchange-traded call and put options that have Carnival Corporation or Carnival plc shares as the underlying security. In addition, Directors and executive officers may not engage in any hedging transaction on Carnival Corporation or Carnival plc shares that they beneficially own, including, but not limited to, “forward contracts,” “collars,” “equity swaps” or “straddles.”

Shareholder Engagement

Carnival Corporation & plc has a long-standing shareholder outreach program and routinely interacts with shareholders on a number of matters, including executive compensation. The Compensation Committees consider all feedback received about executive compensation.

In April 2020, shareholders approved our “say-on-pay” proposal with 81.1% of the votes cast in favor of the compensation paid to our Named Executive Officers. During the past year, we continued to engage with shareholders and seek feedback on our compensation program and incorporate the results of that feedback in our compensation decisions. The Compensation Committees did not make any changes to the executive compensation program specifically as a result of the 2020 “say-on-pay” vote.

The Compensation Committees have and will continue to consider results from the annual shareholder advisory votes, including the next vote in April 2021, as well as other shareholder input, when reviewing executive compensation programs and policies.

Impact of Regulatory Requirements on Compensation

In making determinations regarding executive compensation, the Compensation Committees consider relevant issues relating to accounting treatment, tax treatment (both company and individual) and regulatory requirements. The global nature of Carnival Corporation & plc’s operations necessarily means that monitoring these technical issues and considering their potential impact on the appropriate design and operation of executive remuneration programs is an increasingly complex exercise. Technical issues are evaluated in light of Carnival Corporation & plc’s philosophy and objectives for executive compensation and their corporate governance principles, as described earlier in this Compensation Discussion and Analysis.

 

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COMPENSATION

Report of the Compensation Committees

 

REPORT OF THE COMPENSATION COMMITTEES

 

The Compensation Committees have reviewed the Compensation Discussion and Analysis and discussed it with the management of Carnival Corporation & plc. Based on their review and discussions with management, the Compensation Committees recommended to our Boards of Directors that the Compensation Discussion and Analysis be incorporated by reference into the Carnival Corporation & plc 2020 joint Annual Report on Form 10-K and included in the Carnival Corporation & plc 2020 Proxy Statement. This Report is provided by the following independent Directors, who comprise the Compensation Committees:

 

    The Compensation Committee

    of Carnival Corporation

 

The Compensation Committee

of Carnival plc

    Randall J. Weisenburger, Chair

 

Randall J. Weisenburger, Chair

    Helen Deeble

 

Helen Deeble

    Richard J. Glasier

 

Richard J. Glasier

    Laura Weil

 

 

Laura Weil

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

 

 

During fiscal 2020, the Compensation Committees were comprised of the four independent Directors listed above, with Helen Deeble joining the Compensation Committees on February 1, 2020. No member of the Compensation Committees is a current, or during fiscal 2020 was a former, officer or employee of Carnival Corporation, Carnival plc or any of their subsidiaries. During fiscal 2020, no member of the Compensation Committees had a relationship that must be described under the SEC rules relating to disclosure of related person transactions. In fiscal 2020, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on the Board or the Compensation Committee of Carnival Corporation or Carnival plc.

COMPENSATION TABLES

 

 

Although Carnival Corporation and Carnival plc are two separate entities, our business is run by a single senior management team. The following tables, narrative and footnotes discuss the compensation of our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers for the year ended November 30, 2020, who are referred to as the Named Executive Officers. Mr. Thamm’s cash compensation was payable in euro. These euro amounts have been converted into U.S. dollars at the average U.S. dollar to euro exchange rate for fiscal 2020 of $1.13:1.

 

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COMPENSATION

Compensation Tables

 

Summary Compensation Table

 

Name and

Principal Position

 

Fiscal

Year

 

Salary

($)

 

Stock

Awards(1)

($)

 

Non-Equity

Incentive Plan

Compensation

($)

 

All Other

Compensation(2)

($)

 

Total

($)

Arnold W. Donald

      2020       857,413       12,228,417       0       220,267       13,306,097    

    President & CEO

      2019       1,500,000       7,111,120       2,250,000       288,394       11,149,514    
      2018       1,500,000       7,028,094       4,689,000       289,790       13,506,884    

David Bernstein

      2020       526,902       3,682,967       0       216,455       4,426,324    

    CFO & CAO

      2019       750,000       1,979,949       750,000       292,472       3,772,421    
      2018       750,000       1,959,205       1,563,000       283,589       4,555,794    

Stein Kruse

      2020       613,701       4,532,977       0       82,083       5,228,761    

    Former Group CEO of Holland

      2019       925,000       2,559,153       565,200       84,039       4,133,392    

    America Group & Carnival UK

      2018       925,000       2,704,688       1,808,400       78,305       5,516,393    

Arnaldo Perez

      2020       414,347       1,698,758       0       211,869       2,324,974    

    Secretary & Former General

      2019       450,000       1,016,893       337,500       266,016       2,070,409    

    Counsel

      2018       450,000       996,096       703,350       256,462       2,405,908    

Michael Thamm

      2020       631,781       4,369,595       0       175,443       5,176,819    

    CEO of Costa

      2019       963,480       3,284,809       474,970       476,915       5,200,173    

    Group & Carnival Asia

      2018       1,023,698       2,415,232       1,760,981       83,666       5,283,577    
(1)

No stock option grants were made in fiscal 2018 through 2020. The amounts included in the “Summary Compensation Table” reflect the grant date fair value, assuming no risk of forfeiture, of the grants of Carnival Corporation restricted shares and Carnival plc RSUs made to our Named Executive Officers in fiscal 2020, calculated in accordance with ASC 718. The valuation of share-based grants is discussed in Notes 2 and 13 to the financial statements in the Carnival Corporation & plc joint Annual Report on Form 10-K for the year ended November 30, 2020. The amounts reflect the grant date fair value (100% of target) of the annual SEA, PBS and SPBS grants made in January, February and August 2020, respectively, calculated in accordance with ASC 718. The grant date fair value of the annual SEA, PBS and SPBS grants assuming combined maximum performance (being 450%, 200% and 150% of target, respectively) is $21,560,201 for Mr. Donald, $6,410,624 for Mr. Bernstein, $8,070,030 for Mr. Kruse, $2,537,797 for Mr. Perez and $7,977,142 for Mr. Thamm. For the proceeds actually received by the Named Executive Officers upon the vesting of restricted shares or RSUs, see the “Stock Vested for Fiscal 2019” table.

(2)

See the “All Other Compensation” table for additional information.

All Other Compensation

Each component of the All Other Compensation column in the “Summary Compensation Table” for fiscal 2020 is as follows:

 

Item

 

  

Arnold W.

Donald

($)

 

  

David

Bernstein

($)

 

  

Stein

Kruse

($)

 

  

Arnaldo

Perez

($)

 

  

  Michael 

Thamm

($)

 

Profit sharing contribution

       75,000        135,000        16,344        118,125       

Employer contributions to defined contribution plan

       11,375        11,375        5,078        11,375       

Private medical/health insurance costs and premiums(1)

       52,621        49,858        27,018        63,286        13,630

Accidental death and dismemberment insurance premiums

       104        104               104        17,940

Automobile lease or allowance

       24,000        11,400        13,000        11,400        20,693

Personal use of Aircrafts and other personal air travel(2)

       50,015               13,364              

Driver and security

                                   23,128

Reimbursement of advisor fees and associated gross-up(3)

                                   95,614

Other(4)

       7,152        8,718        7,280        7,579        4,438
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

TOTAL

       220,267        216,455        82,083        211,869        175,443
(1)

Certain of our Named Executive Officers are eligible to participate in an executive health insurance program, which includes a fully insured plan and a secondary insured plan. Amounts reported represent the cost of the premiums paid on a Named

 

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COMPENSATION

Compensation Tables

 

 

Executive Officer’s behalf under these plans plus the additional costs of medical services rendered during the fiscal year. Named Executive Officers participating in this plan generally have until March 31, 2021 to submit their 2020 claims for reimbursement, and as a result, these amounts may increase. The maximum amount that may be reimbursed in any year under the secondary plan is $20,000.

(2)

Represents the aggregate incremental cost to Carnival Corporation & plc for travel on the Aircraft not related to company business. The aggregate incremental cost for the use of the Aircraft for personal travel is calculated by multiplying the hourly variable cost rate for the Aircraft used by the hours used. The hourly variable cost rate primarily includes fuel, airport handling and other fees, Aircraft repairs and maintenance, crew expenses and catering. The hourly variable cost rate is recomputed annually to reflect changes in costs. Fixed costs which do not change based on usage, such as pilots’ salaries, Aircraft depreciation and overhead costs, are excluded.

(3)

In connection with the reimbursement of over withheld taxes described in the “Transactions with Related Persons” section in last year’s Proxy Statement, we reimbursed a portion of Mr. Thamm’s advisor fees incurred in connection with that transaction and provided an additional payment to cover taxes incurred related to the reimbursement.

(4)

Includes the total amount of other benefits provided, none of which individually exceeded $10,000 for the designated Named Executive Officer. These other benefits include: automobile repair and expenses, life and disability insurance premiums, tax planning and return preparation fees and gross-ups for a portion of income taxes for spousal travel.

Additional information with respect to Carnival plc’s compensation and reimbursement practices during fiscal 2020 for Non-Executive Directors is included in Part II of the Carnival plc Directors’ Remuneration Report, which is attached as Annex B to this Proxy Statement.

Grants of Plan-Based Awards in Fiscal 2020

Equity grants and non-equity awards made to the Named Executive Officers during fiscal 2020 are as follows:

 

    Grant           Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(1)
($)

 

    Estimated Possible Payouts
Under Equity Incentive Plan
Awards(2)
(#)

 

   

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units(3)

   

Grant Date

Fair Value

of Stock

Awards(4)

 

Name

  Type     Grant Date     Threshold     Target     Maximum     Threshold     Target     Maximum     (#)     ($)  

Arnold W. Donald

        1,500,000       3,000,000       6,000,000            
    MTE       1/17/2020                   21,676       1,124,984  
    SEA       1/17/2020             25,000       50,000       225,000         2,597,336  
    PBS       2/21/2020             35,980       71,959       143,918         2,999,971  
    SFS       4/9/2020                   27,815       345,462  
    RET       8/28/2020                   150,000       2,581,500  
    SPBS       8/28/2020             75,000       150,000       225,000         2,581,500  

David Bernstein

        500,000       1,000,000       2,000,000            
    MTE       1/17/2020                   5,780       299,982  
    SEA       1/17/2020             7,500       15,000       67,500         779,201  
    PBS       2/21/2020             10,194       20,388       40,776         849,976  
    SFS       4/9/2020                   11,982       148,816  
    RET       8/28/2020                   46,650       802,846  
    SPBS       8/28/2020             23,325       46,650       69,975         802,846  

Stein Kruse

        600,000       1,200,000       2,400,000            
    MTE       1/17/2020                   4,537       235,470  
    SEA       1/17/2020             9,000       18,000       81,000         935,041  
    PBS       2/21/2020             14,392       28,783       57,566         1,199,963  
    SFS       4/9/2020                   17,186       213,450  
    RET       8/28/2020                   56,650       974,946  
    SPBS       8/28/2020             28,325       56,650       84,975         974,946  

 

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COMPENSATION

Compensation Tables

 

    Grant           Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(1)
($)

 

    Estimated Possible Payouts
Under Equity Incentive Plan
Awards(2)
(#)

 

   

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units(3)

   

Grant Date

Fair Value

of Stock

Awards(4)

 

Name

  Type     Grant Date     Threshold     Target     Maximum     Threshold     Target     Maximum     (#)     ($)  

Arnaldo Perez

        225,000       450,000       900,000            
    MTE       1/17/2020                   3,612       187,463  
    SEA       1/17/2020             2,000       4,000       18,000         207,787  
    PBS       2/21/2020             5,997       11,993       23,986         499,988  
    RET       8/28/2020                   23,350       401,853  
    SPBS       8/28/2020             11,675       23,350       35,025         401,853  

Michael Thamm

        714,240       1,428,480       2,856,960            
    MTE       1/17/2020                   4,050       195,226 (5) 
    SEA       1/17/2020             9,000       18,000       81,000         935,041  
    PBS       2/21/2020             15,572       31,144       62,288         1,209,290 (5) 
    SFS       4/9/2020                   19,270       228,867 (5) 
    RET       8/28/2020                   64,700       900,585 (5) 
    SPBS       8/28/2020             32,350       64,700       97,050         900,585 (5) 

 

(1)

Represents the potential value of the payout of the annual bonuses under the Management Incentive Plan for fiscal 2020 performance. The Non-Equity Incentive Plan awards were made under the Management Incentive Plan. The actual amount of a Named Executive Officer’s annual bonus paid in fiscal 2021 for fiscal 2020 performance is shown in the “Summary Compensation Table” in the “Non-Equity Incentive Plan Compensation” column. For a more detailed description of the potential payout under each plan, see the description in the “2020 Annual Bonuses” section of the Compensation Discussion and Analysis.

(2)

Represents the potential number of shares under the annual PBS, SEA and SPBS grants. For a more detailed description of the potential payout under annual PBS, SEA and SPBS grants, see the description in the “Fiscal 2020 Annual Grants” section of the Compensation Discussion and Analysis.

(3)

Represents the number of shares under the annual 2019 MTE grants made in fiscal 2020 under the Carnival Corporation 2011 Stock Plan, SFS and RET grants made under the Carnival Corporation 2020 Stock Plan, with the exception of Mr. Thamm. Mr. Thamm received the MTE, SFS and RET grants under the Carnival plc 2014 Employee Share Plan.

(4)

Represents the full grant date fair values of the equity grants made in fiscal 2020, which were determined based on the assumptions set forth in Notes 2 and 13 to the financial statements in the Carnival Corporation & plc joint Annual Report on Form 10-K for the year ended November 30, 2020 (disregarding estimated forfeitures). The full grant date fair value for a grant is the amount that Carnival Corporation & plc will expense in their financial statements over the grant’s vesting schedule or until the retirement eligibility date, if such date is earlier than the vesting date, when vesting is not contingent upon future performance. The full grant date fair value may not correspond to the actual value that will be realized.

(5)

The value for Carnival plc ordinary shares has been converted from sterling into U.S. dollars based on the exchange rate on the date of grant, being $1.30:£1 on January 17, 2020, $1.29:£1 on February 21, 2020, $1.23:£1 on April 9, 2020 and $1.32:£1 on August 28, 2020.

Narrative Disclosure to the “Summary Compensation Table” and the “Grants of Plan-Based Awards in Fiscal 2020” Table

Employment Agreements

Two of our Named Executive Officers have employment agreements as follows:

 

 

Mr. Donald entered into an employment agreement in October 2013, which was amended in October 2016, setting forth the contractual and economic terms of his post as the President and Chief Executive Officer of Carnival Corporation & plc. The employment agreement is subject to automatic renewal annually. Mr. Donald’s compensation is determined at the discretion of the Boards of Directors.

 

Mr. Thamm entered into a new agreement in April 2017 setting forth the contractual and economic terms of his post as the Chief Executive Officer of Costa Group and Carnival Asia. Mr. Thamm’s compensation is determined at the discretion of the Compensation Committees.

 

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COMPENSATION

Compensation Tables

 

For more detailed information regarding the employment agreements, please refer to the Compensation Discussion and Analysis and the exhibit index to the Carnival Corporation & plc 2020 joint Annual Report on Form 10-K.

Annual Bonus Plans

Annual bonuses for our Named Executive Officers are determined based on the Management Incentive Plan. For more detailed information regarding this plan, please refer to the Compensation Discussion and Analysis and the exhibit index to the Carnival Corporation & plc 2020 joint Annual Report on Form 10-K.

Equity-Based Compensation

The Compensation Committees made MTE, SEA, PBS, SFS, RET and SPBS grants between January and August 2020, all in the form of RSUs to our Named Executive Officers.

None of these grants receive dividends or have voting rights. Each grant (other than the SEA and SPBS grants) is credited with dividend equivalents equal to the value of cash and stock dividends paid on Carnival Corporation common stock or Carnival plc ordinary shares. The dividend equivalents are settled only when these RSUs are released from restriction.

Please refer to the Compensation Discussion and Analysis for additional detail on these grants. For further information regarding forfeiture and treatment upon termination or change of control, refer to the “Potential Payments Upon Termination or Change of Control” section.

Outstanding Equity Awards at Fiscal 2020 Year-End

Our Named Executive Officers do not hold options over either Carnival Corporation or Carnival plc shares. Information with respect to outstanding Carnival Corporation restricted shares and RSUs granted by Carnival Corporation & plc to and held by our Named Executive Officers as of November 30, 2020, except for Mr. Thamm whose RSUs are related to Carnival plc ordinary shares, is as follows:

 

     Stock Awards
  Name    No. of
Shares or
Units of Stock
That Have Not
Vested
(#)
  

Market Value

of Shares or

Units of Stock

That Have

Not Vested(1)

($)

  

Equity Incentive

Plan Awards:

No. of Unearned

Shares, Units or

Other Rights

That Have

Not Vested

(#)

 

 

Equity Incentive

Plan Awards:

Market or

Payout Value

of Unearned

      Shares, Units or      

Other Rights

That Have

Not Vested

($)

 

  Arnold W. Donald

       22,457 (2)         448,691        43,623       271,151 (3) 
       10,838 (4)         216,543        53,323       1,065,394 (5) 
       27,815 (6)         555,744        71,959       1,437,741 (7) 
       150,000 (8)         2,997,000        150,000       2,997,000 (9) 
                 35,000       0 (10) 
                 35,000       699,300 (11) 
                 50,000       999,000 (12) 
    

 

 

           

 

 

     

 

  TOTAL

    

 

 

 

211,110

 

         

 

 

 

438,905

 

   

  David Bernstein

       5,989 (2)         119,660        12,360       76,827 (3) 
       2,890 (4)         57,742        15,108       301,858 (5) 
       11,982 (6)         239,400        20,388       407,352 (7) 
       46,650 (8)         932,067        46,650       932,067 (9) 
                 10,000       0 (10) 
                 10,000       199,800 (11) 
                 15,000       299,700 (12) 
    

 

 

           

 

 

     

  TOTAL

    

 

 

 

67,511

 

         

 

 

 

129,506

 

   

 

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COMPENSATION

Compensation Tables

 

     Stock Awards
  Name    No. of
Shares or
Units of Stock
That Have Not
Vested
(#)
  

Market Value

of Shares or

Units of Stock

That Have

Not Vested(1)

($)

  

Equity Incentive

Plan Awards:

No. of Unearned

Shares, Units or

Other Rights

That Have

Not Vested

(#)

 

 

Equity Incentive

Plan Awards:

Market or

Payout Value

of Unearned

      Shares, Units or      

Other Rights

That Have

Not Vested

($)

  Stein Kruse

       7,217 (2)         144,196        17,449       108,459 (3) 
       2,269 (4)         45,335        21,329       426,153 (5) 
       17,186 (6)         343,376        28,783       575,084 (7) 
       56,650 (8)         1,131,867        56,650       1,131,867 (9) 
                 12,000       0 (10) 
                 12,000       239,760 (11) 
                 18,000       359,640 (12) 
    

 

 

           

 

 

     

  TOTAL

    

 

 

 

83,322

 

         

 

 

 

166,211

 

   

  Arnaldo Perez

       7,485 (2)         149,550        7,270       45,189 (3) 
       1,806 (4)         36,084        8,887       177,562 (5) 
       23,350 (8)         466,533        11,993       239,620 (7) 
                 23,350       466,533 (9) 
                 2,500       0 (10) 
                 2,500       49,950 (11) 
                 4,000       79,920 (12) 
    

 

 

           

 

 

     

  TOTAL

    

 

 

 

32,641

 

         

 

 

 

60,500

 

   

  Michael Thamm

       13,600 (2)         240,176        20,474       112,485 (3) 
       4,050 (4)         71,523        23,590       416,599 (5) 
       19,270 (6)         340,308        31,144       550,003 (7) 
       64,700 (8)         1,142,602        64,700       1,142,602 (9) 
                 12,000       0 (10) 
                 12,000       239,760 (11) 
                 18,000       359,640 (12) 
    

 

 

           

 

 

     

  TOTAL

    

 

 

 

101,620

 

         

 

 

 

181,908

 

   
(1)

Market value of the stock awards is based on the closing price of Carnival Corporation common stock on November 30, 2020 of $19.98, except for the Carnival plc RSUs granted to Mr. Thamm under the Carnival plc 2014 Employee Share Plan, which are based on closing price of Carnival plc ordinary shares on November 30, 2020 of £13.28, which has been converted into $17.66 based on the November 30, 2020 exchange rate of $1.33:£1.

(2)

Restrictions lapsed on January 14, 2021.

(3)

Market value reflects the final performance payout of 31.11% of target on the February 2018 PBS grant for which the performance period ended on November 30, 2020. These grants vested based upon the extent to which annual Operating Income, as adjusted for fuel price changes and currency exchange rate impacts for each of the three fiscal years in the 2018-2020 performance cycle and ROIC for the three-year performance cycle. The TSR modifier had no impact. Additional shares were provided to take into account dividend reinvestment during the performance period.

(4)

Restrictions lapsed on January 18, 2020.

(5)

Market value of based on target performance assuming 100% payout on the January 2019 PBS grant as at November 30, 2020. These grants vest zero to 200% of target based upon the extent to which annual Operating Income, as adjusted for fuel price changes and currency exchange rate impacts, for each of the three fiscal years in the 2018-2020 performance cycle and the average of ROIC results for the three-year performance cycle, exceeds specified performance goals.

(6)

Restrictions lapse on February 12, 2021.

(7)

Market value is based on target performance assuming 100% payout on the February 2020 PBS grant as at November 30, 2020. These grants vest zero to 200% of target based upon the extent to which annual Operating Income, as adjusted for fuel price changes and currency exchange rate impacts, for each of the three fiscal years in the 2020-2021 performance cycle, the average of ROIC for fiscal 2021 and 2022 and certain ESG metrics over the three-year performance cycle, exceeds specified performance goals.

(8)

The RET grant vests on a 25% pro-rata basis in January and July of each of 2021 and 2022. The first tranche vested on January 14, 2021.

(9)

Market value is based on target performance assuming 100% payout on the August 2020 Special PBS grant as at November 30, 2020. These grants vest zero to 150% of target based upon the extent to which certain ESG metrics for the three fiscal years in the 2020-2022 performance cycle exceeds specified performance goals.

(10)

Market value reflects final performance for the April 2018 SEA grant as at November 30, 2020. These grants vest zero to 300% of target based on attaining certain absolute TSR growth goals and may be modified by TSR rank relative to our 2017

 

68            LOGO Carnival Corporation & plc 2021 Proxy Statement


Table of Contents

COMPENSATION

Compensation Tables

 

 

Peer Group at the end of a three-year performance period. The maximum relative TSR modification is 200% of the absolute TSR performance for a combined maximum payout of six times target. The 2017 SEA grant is also subject to a value cap of seven times the grant date value. Threshold performance was not achieved resulting in no payout.

(11)

Market value is based on target performance assuming 100% payout on the January 2019 SEA grant as at November 30, 2020. These grants vest zero to 300% of target based on attaining certain absolute TSR growth goals and may be modified by TSR rank relative to our 2019 Peer Group at the end of a three-year performance period. The maximum relative TSR modification is 200% of the absolute TSR performance for a combined maximum payout of six times target. The 2019 SEA grant is also subject to a value cap of seven times the grant date value.

(12)

Market value is based on target performance assuming 100% payout on the January 2020 SEA grant as at November 30, 2020. These grants vest zero to 300% of target based on attaining certain absolute TSR growth goals and may be modified by TSR rank relative to our 2020 Peer Group at the end of a three-year performance period. The maximum relative TSR modification is 150% of the absolute TSR performance for a combined maximum payout of 4.5 times target. The 2020 SEA grant is also subject to a value cap of 5.5 times the grant date value.

Stock Vested for Fiscal 2020

None of our Named Executive Officers held options during fiscal 2020. The following table provides information for our Named Executive Officers on the number of shares acquired upon the vesting of RSUs and the value realized, before the payment of any applicable withholding tax and broker commissions.

 

     Stock Awards    

Name

  

Number of Shares

Acquired on Vesting

(#)

  

Value Realized

on Vesting(1)

($)

   

Arnold W. Donald

       138,708        6,558,089  

David Bernstein

       29,432        1,353,770  

Stein Kruse

       41,037        1,882,198  

Arnaldo Perez

       24,328        1,151,971  

Michael Thamm

       39,658        1,710,442  
(1)

The fair market value of Carnival Corporation common stock realized on vesting has been determined using the average of the highest and lowest sale prices reported as having occurred on the New York Stock Exchange on the date of vesting. The fair market value of Carnival plc ordinary shares realized on vesting has been determined using the average of the highest and lowest sale prices reported as having occurred on the London Stock Exchange on the date of vesting. The value for Carnival plc ordinary shares has been converted from sterling into U.S. dollars based on the exchange rate on the date of vesting.

Pension Benefit in Fiscal 2020

None of the Named Executive Officers participate in any defined benefit pension plans sponsored by Carnival Corporation or Carnival plc.

Nonqualified Deferred Compensation in Fiscal 2020

None of the Named Executive Officers participate in any non-qualified deferred compensation plans sponsored by Carnival Corporation or Carnival plc.

Messrs. Donald, Bernstein and Perez and other Carnival Corporation employees who are deemed highly compensated employees under IRS regulations are paid the equivalent of an annual matching award (less any amount actually contributed by Carnival Corporation to the 401(k) Plan on their behalf as a matching contribution) and profit sharing contribution as additional cash compensation. As of November 30, 2020, Messrs. Donald, Bernstein and Perez had 8, 23 and 29 years of service, respectively.

 

LOGO Carnival Corporation & plc 2021 Proxy Statement  

 

    69


Table of Contents

COMPENSATION

Potential Payments upon Termination or Change of Control

 

Until May 2020, when the matching and profit-sharing contributions were suspended through the end of December 2020, Carnival Corporation matched 50% up to the lower of:

 

 

50% of the U.S. Internal Revenue Service qualified plan limitation; or

 

6% of their eligible pay.

“Eligible pay” includes regular pay (before any pre-tax contributions from his pay and taxes) and bonus. The profit-sharing contributions made in March 2020 were based upon their eligible pay and years of service according to the following schedule:

 

Years of Service   

Award

(% of Eligible Pay)

Less than 2    0%
2-5    1%
6-9    2%
10-13    3%
14-16    5%
17-19    7%
20-22    9%
23-25    12%
26 and over    15%

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

 

Each of our Named Executive Officers may be eligible to receive certain payments and benefits in connection with termination of employment under various circumstances. The potential benefits payable to our Named Executive Officers in the event of termination of employment under various scenarios on November 30, 2020 are described below.

In addition to benefits described below, our Named Executive Officers will be eligible to receive any benefits accrued under Carnival Corporation & plc broad-based benefit plans, such as distributions under life insurance and disability benefits and accrued vacation pay, in accordance with those plans and policies. These benefits are generally available to all employees.

Cash Severance Benefits

It is the policy of the Compensation Committees for executive officers t