The Talent and Compensation Committee is appointed by the Board of Directors to discharge the Board’s responsibilities relating to the compensation and development of the Corporation’s senior executives. For purposes of this Charter, “senior executives” are defined as senior vice presidents and above of the Corporation.
The Talent and Compensation Committee has overall responsibility for approving and evaluating the executive compensation plans, policies and programs of the Corporation.
The Talent and Compensation Committee shall consist of at least three members. Each member of the Talent and Compensation Committee shall (i) meet the independence requirements of the New York Stock Exchange, including the additional requirements specific to compensation committee membership; and (ii) satisfy the requirements to qualify as a “non-employee director” under Rule 16b-3 promulgated pursuant to the Exchange Act The members of the Talent and Compensation Committee shall be appointed by the Board of Directors and may be replaced by the Board. Unless a Chair is elected by the full Board, the members of the Committee may designate a Chair by majority vote of the full Committee membership.
Each member should possess the qualifications necessary to carry out the responsibilities of the Committee, including possessing the analytical abilities, reputation, ethical standards, communication skills and experience.
Executive and Director Compensation
The Talent and Compensation Committee shall review periodically (but no less than annually) the Company’s executive compensation strategy to ensure that the Corporation has high quality management, organization and personnel development plans and that the remuneration is fair and equitable and meets the test of being appropriate and reasonable for the industry and environment in which the service is performed.
While it is the responsibility of senior management to assess and manage the Corporation’s exposure to risk and its response to such risk, the Talent and Compensation Committee shall regularly consider and discuss with Management the risks inherent in the design of the Corporation’s compensation plans, policies and practices.
The Talent and Compensation Committee shall recommend to the Board an executive compensation structure to compensate all levels of senior executive employees of the Corporation and, to the extent the Committee deems appropriate, senior executives of the Corporation’s subsidiaries.
The Talent and Compensation Committee shall annually review and approve corporate goals and objectives relevant to the CEO’s compensation, evaluate the CEO’s performance in light of those goals and objectives, and set the CEO’s compensation levels based on this evaluation. In determining the long-term incentive component of the CEO’s compensation, the Committee will consider the Corporation’s performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, awards given to the CEO in past years and such other factors as the Committee deems relevant.
The Talent and Compensation Committee shall annually review and set the compensation levels of the other senior executives of the Corporation.
The Talent and Compensation Committee shall annually review merit increases upon annual reviews of senior executive employee performance; review the senior executive bonus awards and promotional salary increases; and approve employment contracts and special employment arrangements with senior executives to be made by the Corporation.
The Talent and Compensation Committee shall approve the performance targets, ranges and payouts included in the Corporation’s annual and long-term incentive programs for senior executives.
The Talent and Compensation Committee shall periodically review and make recommendations to the Board with respect to the compensation of all Directors.
The Talent and Compensation Committee shall determine and oversee stock ownership guidelines for the Corporation’s officers and Directors.
The Talent and Compensation Committee shall review and approve the creation or revision of any clawback policy allowing the Corporation to recoup compensation paid to officers of the Corporation.
Equity, Benefit and Other Incentive Plans
The Talent and Compensation Committee shall recommend to the Board the establishment of and, where appropriate, modification or termination of benefit plans, incentive compensation plans and other bonus arrangements in which any of the senior executives participate as well as any other plans specified by the Committee or which provide for the granting of equity or are qualified plans subject to ERISA. Notwithstanding the foregoing, the Talent and Compensation Committee or its delegate may approve amendments to any such plans that are required by law or that are determined necessary or advisable by the Committee or its delegate from a tax, administrative or regulatory perspective. The Committee shall also administer such plans and make appropriate interpretations and determinations as shall be necessary or desirable thereunder pursuant to the terms of such plans as may at the time be in effect.
SEC and Shareholder Matters
The Talent and Compensation Committee shall review and discuss with management the Compensation Discussion and Analysis section proposed for inclusion in any SEC filing, form a recommendation to the Board of Directors regarding such inclusion and prepare the Talent and Compensation Committee report.
The Talent and Compensation Committee shall review the results of any shareholder advisory votes regarding the Corporation’s executive compensation program and recommend to the Board how to respond to such votes.
Along with the Nominating and Corporate Governance Committee, the Talent and Compensation Committee shall review and make recommendations to the Board regarding the Corporation’s response to shareholder proposals related to compensation matters for inclusion in the Corporation’s proxy statement.
Talent Development and Succession Planning
The Talent and Compensation Committee shall periodically review the Company’s talent development programs and initiatives for senior executives.
The Talent and Compensation Committee shall periodically review the Company’s programs and practices for overseeing the continuity of capable management, including succession plans for senior executives. As part of this responsibility, the Talent and Compensation Committee, in consultation with the Chairman and CEO, will make an annual report to the Board on CEO succession planning.
The Talent and Compensation Committee shall discuss regulatory developments affecting compensation matters and shall make recommendations to the Board regarding such matters, as the Talent and Compensation Committee determines appropriate.
The Talent and Compensation Committee shall annually review its own performance and the adequacy of this Charter.
The Talent and Compensation Committee shall take such other actions as it deems appropriate, or as requested by the Board, consistent with this Charter, the Corporation’s Bylaws and applicable laws and regulations and shall direct and report to the Board from time to time on actions taken and matters reviewed.
The Talent and Compensation Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other advisor and, in so doing, shall be directly responsible for the appointment, compensation and oversight of the advisor’s work. In engaging or requesting advice from any compensation consultant, legal counsel or other advisor (other than in-house legal counsel), the Talent and Compensation Committee shall consider all independence factors required to be considered by the listing standards of the New York Stock Exchange. The Company will provide appropriate funding, as determined by the Talent and Compensation Committee, for payment of reasonable compensation to any compensation consultant, legal counsel or other advisor retained by the Talent and Compensation Committee.
In addition, the Talent and Compensation Committee may request management to perform studies and furnish other information.
The Talent and Compensation Committee may delegate its authority to the Chair subject to such conditions as the Talent and Compensation Committee deems appropriate and in the best interests of the Corporation. In addition, the Talent and Compensation Committee may delegate administrative tasks to employees of the Corporation.
The Talent and Compensation Committee shall have the authority to make recommendations to the boards of directors of subsidiaries of the Corporation with respect to such of the above matters as the Committee deems appropriate.
Each year the Chair of the Talent and Compensation Committee shall establish a schedule of meetings. Additional meetings of the Talent and Compensation Committee may be called by the Chairman of the Board or by any member of the Committee upon notice given at least forty-eight hours prior to the meeting, or upon such shorter notice as shall be approved by the Committee. The Chair of the Committee shall be responsible for establishing the agendas for meetings of the Committee. A majority of the Committee members then serving on the Committee shall constitute a quorum. A majority of the members present shall decide any question brought before the Committee except to the extent otherwise required by the Corporation’s Articles of Incorporation. Minutes of all meetings of the Committee shall be prepared.
Certain statements in this release relating to, among other things, our future performance estimates, forecasts and projections constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to: statements regarding revenues, costs and financial results for 2020 and beyond. Words such as “anticipate,” “believe,” “could,” “driving,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “will,” “would,” “considering”, and similar expressions are intended to help identify forward-looking statements. Forward-looking statements reflect management’s current expectations, are based on judgments, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the following: the impact of the global incidence and spread of COVID-19, which has led to the temporary suspension of our operations and has had and will continue to have a material adverse impact on our business and results of operations, or other contagious illnesses on economic conditions and the travel industry in general and the financial position and operating results of our Company in particular, such as: the current and potential additional governmental and self-imposed travel restrictions, the current and potential extension of the suspension of cruises and new additional suspensions, guest cancellations; our ability to obtain sufficient financing, capital or revenues to satisfy liquidity needs, capital expenditures, debt repayments and other financing needs; the effectiveness of the actions we have taken to improve and address our liquidity needs; the impact of the economic and geopolitical environment on key aspects of our business, such as the demand for cruises, passenger spending, and operating costs; incidents or adverse publicity concerning our ships, port facilities, land destinations and/or passengers or the cruise vacation industry in general; concerns over safety, health and security of guests and crew; further impairments of our goodwill, long-lived assets, equity investments and notes receivable; an inability to source our crew or our provisions and supplies from certain places; the incurrence of COVID-19 and other contagious diseases on our ships and an increase in concern about the risk of illness on our ships or when traveling to or from our ships, all of which reduces demand; unavailability of ports of call; growing anti-tourism sentiments and environmental concerns; changes in US foreign travel policy; the uncertainties of conducting business internationally and expanding into new markets and new ventures; our ability to recruit, develop and retain high quality personnel; changes in operating and financing costs; our indebtedness, any additional indebtedness we may incur and restrictions in the agreements governing our indebtedness that limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; the impact of foreign currency exchange rates, interest rate and fuel price fluctuations; the settlement of conversions of our convertible notes, if any, in shares of our common stock or a combination of cash and shares of our common stock, which may result in substantial dilution for our existing shareholders; our expectation that we will not declare or pay dividends on our common stock for the near future; vacation industry competition and changes in industry capacity and overcapacity; the risks and costs associated with protecting our systems and maintaining integrity and security of our business information, as well as personal data of our guests, employees and others; the impact of new or changing legislation and regulations or governmental orders on our business; pending or threatened litigation, investigations and enforcement actions; the effects of weather, natural disasters and seasonality on our business; emergency ship repairs, including the related lost revenue; the impact of issues at shipyards, including ship delivery delays, ship cancellations or ship construction cost increases; shipyard unavailability; and the unavailability or cost of air service.
In addition, many of these risks and uncertainties are currently heightened by and will continue to be heightened by, or in the future may be heightened by, the COVID-19 pandemic. It is not possible to predict or identify all such risks.
More information about factors that could affect our operating results is included under the caption “Risk Factors” in our most recent quarterly report on Form 10-Q, as well as our other filings with the SEC, and the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent annual report on Form 10-K, copies of which may be obtained by visiting our Investor Relations website at www.rclinvestor.com or the SEC’s website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.