Arison’s fortune declines after cruise ship disaster
Micky Arison, chairman, chief executive and majority owner of Carnival Corp., has experienced a sharp decline in his personal wealth in the wake of the wreck of the Costa Concordia, according to a report in The Guardian. The cruise ship is owned by Carnival. Arison has a 30% stake in the company, whose shares have dropped dramatically.
The cruise ship ran aground off the coast of Italy Jan. 13. At least six people died, and 29 remain missing, according to a Bloomberg report. Carnival shares fell 16% on Jan. 16, the biggest drop in more than 11 years, the Bloomberg article said.
Tim Ramskill, a Credit Suisse analyst, told The Guardian, "This tragedy will be a black mark on the cruise industry and a negative headline for Carnival." About a third of cruise bookings are made between January and March, the report noted.
The Bloomberg article pointed out that Arison is overseeing the response to the worst accident in the company's history from headquarters in Miami -- more than 5,000 miles from the scene -- and has "so far left it to regional managers to face the press." Peter Hirsch, director of reputation risk at Ogilvy Public Relations Worldwide, told Bloomberg: "Whenever there are fatalities and serious injuries, it's important for the most senior leadership to be visible."
Arison's father, Ted, founded Carnival in 1972. The Guardian noted that the company's board is scheduled to publish Micky Arison's 2011 compensation later his month. The Guardian report said:
His bonus, which came in at $2.25 million last time, is likely to be scaled back. The company's annual report states that its compensation committee considers safety and security matters, among other factors, when determining executive compensation.
A major institutional shareholder, who requested anonymity, told The Guardian:
"Micky Arison is well-liked in the industry -- staff and investors. Unlike many children who take over businesses founded by their fathers, he has a real grasp of detail and the numbers -- and works tirelessly for the company."
The Bloomberg report said:
Arison, who also owns the Miami Heat basketball team, became Carnival's CEO in 1979 and chairman in 1990. He has expanded the company into the world's biggest cruise group via acquisitions of individual ships and ultimately entire cruise lines -- including the biggest cruise merger -- while building new vessels to accommodate thousands.
Bloomberg also noted that residents of the island of Giglio, where the ship ran aground, are afraid that an oil spill may occur.
(Sources: The Guardian, Jan. 16, 2012; Bloomberg, Jan. 17, 2012.)
Posted Monday, January 16, 2012 • Permalink