8-KLeadership Changes

CARNIVAL CORP 8-K Report, Executive Changes (Jan 22, 2008)

Filed January 22, 2008For Securities:CCL

Summary

Carnival Corporation filed an 8-K on January 22, 2008, detailing changes to its executive compensation structure for fiscal year 2008 and beyond. The company's Compensation Committees adopted a new Management Incentive Plan (the "Corporate Plan") designed to align executive bonuses more directly with company performance, specifically operating income. This plan introduces a "Target Bonus Opportunity" for key corporate executives, which will be adjusted based on projected operating income and publicly announced earnings per share guidance. The structure allows for bonuses ranging from 50% to 150% of the target based on achieving 72% to 123% of the operating income target, with a maximum payout of 200% of the target bonus, subject to committee discretion and consideration of other performance factors.

Key Highlights

  • 1Carnival Corp. has implemented a new "Corporate Plan" for executive bonuses effective fiscal year 2008, linking incentives to operating income and EPS guidance.
  • 2The new plan establishes a "Target Bonus Opportunity" for Corporate Executives, adjustable based on projected operating income and financial guidance.
  • 3Bonus payouts are structured on a performance scale, with 72%-123% of the Operating Income Target resulting in 50%-150% of the Target Bonus Opportunity, respectively.
  • 4The maximum bonus payout under the Corporate Plan is capped at 200% of the Target Bonus Opportunity, with the Compensation Committee retaining discretion.
  • 5Key executive officers Micky Arison, Howard S. Frank, and David Bernstein have specific target bonus opportunities set for 2008.
  • 6Equity awards for Messrs. Arison and Frank are shifting from stock options to restricted shares, with specific grant amounts defined (84,000 and 70,000 shares respectively).
  • 7Peter Ratcliffe, retiring March 6, 2008, will receive 10,000 restricted stock units for his 2007 services, vesting after three years.

Frequently Asked Questions

The Corporate Plan is designed to focus Corporate Executives on achieving outstanding company performance, primarily measured by operating income and other relevant metrics. It aims to directly link a significant portion of executive compensation to the company's financial results and strategic objectives.

Bonuses are determined based on a "Target Bonus Opportunity" set for each participant. This target is adjusted annually based on projected operating income and diluted EPS guidance. The actual bonus payout is a percentage of the target, calculated based on the achievement of the Operating Income Target, with payouts ranging from 50% to 150% for hitting 72% to 123% of the target, and a maximum of 200% of the target bonus.

For Micky Arison and Howard S. Frank, the portion of their annual equity grants previously issued as options will now be issued as restricted shares. Mr. Arison is eligible for 84,000 restricted shares and Mr. Frank for 70,000 restricted shares annually, starting in 2008. These restricted shares will cliff vest after three years.

Peter Ratcliffe, who is retiring on March 6, 2008, will receive 10,000 restricted stock units for his services in 2007. These units will be granted under his Employment Agreement and will vest after a three-year period, subject to forfeiture provisions.