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Carnival CEO Arnold Donald will step down as the cruise industry aims for freshness

Carnival forecasts on Tuesday that Arnold Donald will step down as CEO of the world’s largest cruise line after some investors withdrew at a shareholder meeting earlier this month about measures related to the $ 21 million 2021 compensation package for the 67-year-old. the situation told CNBC.

“The end of an era,” said one investor who asked not to be named. The company was not ready to respond to a request for comment.

Donald – who will be vice president from August 1 – took over as chief executive nine years ago, two of whom spent Carnival holding the Covid-19 pandemic, raising billions of dollars in debt and shares.

While Donald has certainly played a key role in reviving the cruise industry from the depths of the pandemic, Carnival’s shares have struggled to keep pace with rivals like the Royal Caribbean, about four months ago when industry veteran Richard Fain resigned as CEO. Over 33 years old. The 72-year-old president continues.

Carnival shares fell nearly 13% in 2022, a slightly more than 11.5% drop in the S&P 500 over the year-over-year period, and more than 35% in the last 12 months. In contrast, Royal Caribbean shares have risen by almost 3% year-on-year and have fallen by only 9% in the last 12 months.

The change in leadership at Carnival and Royal Caribbean will see a new guard navigate the next phases of the recovery of the giant cruisers. At the carnival, current COO Josh Weinstein, 48, has been chosen as the new CEO. In the Royal Caribbean, 46-year-old former CFO Jason Liberty entered the top spot earlier this year.

“Change can be a good thing,” analyst Steven Wieczynski wrote in a recent note to analyst Stifel.

In the coming weeks, shareholders want to learn about Weinstein’s cruise line game plan, which has been at Carnival for 20 years, and how it could be different from Donald’s point of view.

“He’s younger, he should bring new energy,” Wieczynski told CNBC.

When the Centers for Disease Control and Prevention struggled to maintain order, Carnival CEO Arnold Donald played a key role in trying to change the course of this order to encourage discussions with lawmakers, industry leaders and the White House.

Scott Mlyn | CNBC

As the head of the world’s largest cruise operator, Donald quickly became the face of the industry at the height of the pandemic, with many ships with Covid-infected guests and crew stopped aboard during the day.

When the Centers for Disease Control and Prevention struggled to maintain order, Donald played a leading role in trying to change the course of this order to encourage discussions with lawmakers, industry leaders and the White House.

As the economy began to recover in 2021, the outlook for sea voyages remained bleak. But Donald, one of the few Black CEOs on Wall Street, remained optimistic about the industry.

At CNBC’s Evolve Global Summit last summer, Donaldi was asked if he ever doubted whether Carnival had weathered the storm. He said at the time, “I never doubted we would make it, but … it was awesome.”

In the fall of 2021 during the annual Seatrade conference, Carnival ships were slowly returning to the sea after a 15-month hiatus. “We know where the road is going, and the road is moving into the bright future,” Donald said at a roundtable ceremony. Fain, then the CEO of Royal Caribbean, was at the table and expressed similar optimism.

The pandemic was not Donald’s first crisis. Entering Carnival in 2013, a fire in the Carnival Triumph sewer system shut off power that year, leaving more than 4,200 passengers and crew stranded at sea in critical conditions. Last year, one of Carnival’s boats, the Costa Concordia, capsized off the coast of Italy, killing 32 people.

During Donald’s five-year term as CEO, Carnival’s share price nearly doubled to a record high of $ 72.70 per share in January 2018. Since then, shares have declined, in part due to the pandemic, which sold for $ 17.41 per share on Wednesday. close.

However, the demand for cruises is on the rise, with Carnival announcing three weeks ago that the booking week was a record week in the company’s history.

“The demand for cruises is very high in the middle of this year, and in 2023. Those who have not traveled for two years are ready to go,” Wieczynski said.

New data from the Cruise Lines International Association trade group also show that the desire to cruise exceeds pre-pandemic levels.

As bookings have risen, Carnival has returned almost 75% of its vessels, leaving at the same time old vessels with less fuel.

Analysts and investors are waiting to see when the cruise lines will turn into a positive cash flow. Carnival and Royal Caribbean executives have said this will happen sometime in the coming months.

Carnival CEO Arnold Donald will step down as the cruise industry aims for freshness

Source link Carnival CEO Arnold Donald will step down as the cruise industry aims for freshness

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