Royal Caribbean Cruises Ltd. today announced that its board of directors had named its first lead director, approved a plan to replace staggered terms for directors with annual election, and more than doubled the quarterly dividend on its common shares.
The moves, which were approved unanimously at the board’s September 11th meeting, reflect the board’s continuing efforts to enhance its corporate governance structure and drive long-term value creation for its shareholders.
The board elected William L. Kimsey as its lead director. Mr. Kimsey, who is the former chief executive officer of Ernst & Young Global, Ltd., has served on the board since 2003 and is Chairman of the company’s Audit Committee. Mr. Kimsey also serves on the board of directors of Accenture PLC and Western Digital Corporation. As lead director, he will be the liaison between the board’s non-management members and Chairman and Chief Executive Officer Richard D. Fain. He will preside at meetings of the non-management directors, will advise and approve the content and scheduling of board meetings and discussions, and will be available for discussion with major shareholders.
Said Fain: “I’m delighted that Bill Kimsey has agreed to become our lead director. He’s been a consistent source of wise counsel, and his voice will be even more important as we move forward.”
Said Kimsey: “I am pleased by the steps our board has taken to further enhance our corporate governance, and I look forward to working with my fellow directors and management to improve shareholder value.”
The board of directors also adopted changes to its bylaws as a result of which candidates elected to the board will serve one-year terms, and will stand for re-election annually thereafter, effective with the slate of directors to be elected at the company’s 2014 annual meeting. This implements a proposal adopted by shareholders at the company’s May 2013 annual meeting.
Today’s actions demonstrate the company’s commitment to continuous improvement in its corporate governance practices following the 2011 termination of the Shareholders’ Agreement between Royal Caribbean’s two largest shareholders, AWilhelmsen & Co and Cruise Associates. Under that agreement, the two groups exercised effective control of the company, with key decisions – including the selection of directors, the choice of top management, and the approval of major capital expenditures – made at the discretion of the two shareholders.
“The board’s decisions affirm our focus on robust corporate governance. These steps are a sensible progression forward from our earlier governance structure,” said Tom Pritzker, chairman of the company’s nominating and corporate governance committee.
The board also approved an increase of the quarterly cash dividend to $0.25 per common share, payable October 8, 2013 to shareholders of record September 24, 2013. This represents an exceptional jump, more than doubling the previous $0.12 per common share dividend level.
Said Fain: “Dividends are an increasingly important component of total shareholder return. This dividend increase was made possible by our profitability improvement program and our improving financial position. It reflects our confidence in our ability to grow our investment returns into the future, given strengthening results and modest capacity growth.”