8-KLeadership Changes

CARNIVAL CORP 8-K Report, Executive Changes (Oct 18, 2013)

Filed October 18, 2013For Securities:CCL

Summary

This Form 8-K filing from Carnival Corporation and Carnival plc on October 18, 2013, primarily details the new compensation arrangement for Arnold W. Donald, who was appointed President and CEO on October 14, 2013. The agreement establishes a three-year term for Mr. Donald's employment and outlines a base salary of $1,000,000, with potential increases. The filing also specifies bonus structures, including a fixed bonus for 2013 and targeted incentive payments for 2014 and beyond, with a 2014 target of $2,650,000 and a maximum of $5,300,000. Significant components of Mr. Donald's compensation package include a one-time performance-based restricted stock unit award valued at $3,000,000 and annual long-term incentive awards totaling $3,500,000, comprising both performance-based and time-based equity. The agreement also covers additional benefits, relocation expenses, and detailed provisions for compensation upon various termination scenarios, including "Cause," "Good Reason," death, disability, and Change in Control. Additionally, Mr. Donald will be subject to restrictive covenants for one year post-termination.

Key Highlights

  • 1Appointment of Arnold W. Donald as President and CEO, effective October 14, 2013.
  • 2A three-year employment agreement term for the new CEO.
  • 3Initial base salary set at $1,000,000 per year, subject to review.
  • 42014 incentive targets include a bonus of up to $2,650,000 and a maximum of $5,300,000.
  • 5Significant equity awards: a $3,000,000 one-time performance-based RSU award and annual long-term incentives valued at $3,500,000.
  • 6Compensation terms upon termination are detailed for various scenarios, including "Cause," "Good Reason," death, disability, and Change in Control.
  • 7Restrictive covenants are in place for one year post-employment, covering competition, employee solicitation, and customer/supplier interference.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the executive compensation arrangement for Arnold W. Donald upon his appointment as President and Chief Executive Officer of Carnival Corporation and Carnival plc.

Mr. Donald's compensation includes a base salary of $1,000,000, annual incentives with a 2014 target of $2,650,000 (up to $5,300,000), a one-time performance-based restricted stock unit award valued at $3,000,000, and annual long-term incentive awards valued at $3,500,000 (split between performance-based and time-based equity).

The agreement outlines specific compensation for various termination scenarios. If terminated by the company without cause, or by Mr. Donald for "Good Reason," he is entitled to accrued compensation, severance pay, and continued medical/dental coverage for up to 18 months. In case of death or disability, he receives accrued compensation and benefits under relevant insurance plans, with accelerated vesting of some RSUs. If terminated "for Cause" or by Mr. Donald without "Good Reason," he only receives accrued compensation. Specific terms also apply in the event of a "Change in Control."

Yes, for one year following the termination of his employment for any reason, Mr. Donald is prohibited from working for a competing business, soliciting certain employees of Carnival, and interfering with relationships between Carnival and its customers or suppliers.