Cruising!

February 26, 2004

Not to begrudge someone a comfy retirement in their old age, but the $166,557 per month that Carnival PLC (CUK) plans to pay Holland America CEO A. Kirk Lanterman for 15 years once he retires seems a tad bit excessive, no? That’s just shy of $2 million a year. Sure, Lanterman, 72, who is up for re-election this year to Carnival’s board, has worked hard for many years, and is something of an icon in the cruise industry. But it’s still an awful lot of money. In the proxy, Carnival describes this as deferred compensation for annual bonuses Lanterman gave up prior to 1999. But in the K, it’s simply described as a retirement and consulting contract that has Lanterman collecting the money for providing five hours of consulting services each month. A Carnival spokesman describes the deal as “tax planning” and says he’s “not sure why it would be set up as a consulting agreement”. Nor am I. Perhaps a CPA out there can clarify.

UPDATE : Thanks to Bob, a tax CPA in Boston, for clarifying this. By setting it up as a consulting agreement, there’s the potential to deduct business expenses from the income.

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