After 34 years at the helm of the cruise company founded by his father, Micky Arison is stepping down as CEO of Carnival Corporation & plc.
Arnold W. Donald, a 12-year board member who has held leadership roles at Monsanto Company and Merisant, a producer of sweeteners, was named CEO at Arisons suggestion. He starts July 3. Second-in-command Howard Frank, the vice chair and chief operating officer, will remain in his job.
The reality is this has been my whole life for virtually my entire adult life, said Arison, who will remain the companys chairman. I viewed it as a 24-7 job with a global business where things are happening at all hours of the day or night.
And while plenty has happened during the last couple years under his watch a deadly shipwreck, disabling fire, a series of technical glitches the limelight-averse Arison has drawn criticism for making more public appearances at basketball games than cruise line crises.
The announcement came Tuesday morning as Carnival prepared to discuss second-quarter earnings and the day after the Miami Heat, which Arison owns, celebrated back-to-back NBA championship wins with a parade in Miami. Making the week even more momentous, Arison will turn 64 on Saturday.
Despite a slight drop in revenues, from $3.54 billion to $3.48 billion, the company that owns 10 cruise brands around the world reported a $41 million profit, up from $14 million during the same time last year. Bookings for the rest of 2013 are slower than a year ago with lower prices, executives said, due largely to weakness in the Carnival Cruise Lines brand.
Headlines Tuesday suggested Arison, had been thrown overboard, but he said the decision to split the chairman and CEO roles had been years in the making and was, if anything, delayed by the recent spate of cruise incidents. In the U.K, where the company is also listed, the standard model for corporate governance is to split the two roles, and U.K. shareholders have been pushing for the change.
The model has also been gaining popularity in the U.S. and Canada, said Luis Navas, vice chair of Global Governance Advisors, a consulting firm based in Miami.
The view of governance groups is how can the CEO be truly independent and balanced in terms of meeting shareholders needs if he or she also is chairman of the board, he said, adding that joint roles are usually accepted in situations where a founder or family member fills both positions.
Donald, 58, a St. Louis resident who said he plans to keep his home there, said the board did not force Arison out.
There has never ever been any crisis of confidence, lack of confidence, anything like that in Mickys leadership, he said in an interview Tuesday.
The move comes in the midst of major changes at the worlds largest cruise ship company, which has been in damage control mode on and off since the January 2012 shipwreck of the Costa Concordia. This year, the disabling fire aboard the Carnival Triumph has taken a major toll on the companys earnings, and Carnival revealed during an earnings call Tuesday that advisors have said the brands image might not recover for as many as three years.
This could be a little bit of fallout from just the fact that hes caught a lot of heat and wants somebody to be the face of the business, said Jaime Katz, equity analyst for Morningstar in Chicago. There was all this publicity about how he didnt show up for any of the incidents maybe he just realized thats not really what he wants to do.