Micky Arison, the Israel-born businessman who has served as CEO of the Carnival Corporation for 34 years, is stepping down from the position, Bloomberg has reported. Arison, however, will continue to serve at the cruise line company as chairman.
Arnold W. Donald will succeed Arison on July 3, according to the aforementioned report.
Arison’s resignation follows several problematic incidents involving Carnival’s cruises. 3, 100 passengers were left stranded in the Gulf of Mexico with limited access to food and toilets when a fire occurred aboard Carnival’s Triumph in February; the cruise line’s Costa Concordia ran aground off the coast of Italy last year, resulting in 32 fatalities; and 2 other Carnival vessels have been cancelled due to other problems, Bloomberg further reported.
Carnival’s sales had fallen 1.7 percent in the quarter ending May 31, according to the aforementioned report.
Bookings are also lower for the remainder of 2013 than they were at the same time last year, Reuters reported. As might be expected, the cruise line is struggling to attract interest after the latest incidents. But while its revenues have dipped, its profits remain robust: the company reported $41 million profit currently, $14 million more than it was at the same time last year, Bloomberg further reported.
Carnival’s operations chief, Howard Frank, told investors it would be two to three years before Carnival will recover the strong brand name it once held, Reuters further reported.
Shares of Carnival rose 5 percent Tuesday, however, as “investors registered their relief that Arison would stay on as chairman,” according to Reuters. Arison reportedly owns 29.4 percent of Carnival’s shares.
“I am not going anywhere. I will remain chairman and my plan is to continue in that role for the foreseeable future,” Arison told investors, the aforementioned report added.
He has also taken the latest corporate decision as an opportunity to reflect on what Carnival means to him.
“The reality is this has been my whole life for virtually my entire adult life,” he said, Bloomberg further reported. “I viewed it as a 24-7 job with a global business where things are happening at all hours of the day or night.”
In truth, Arison admits that the latest decision is nothing more than Carnival’s effort to adjust to global corporate practices, in which the CEO and a chairman, together, occupy the CEO’s earlier roles. Carnival was looking to make the move for several years, according to Arison, and the series of cruise incidents had only delayed it, according to Bloomberg.
“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,” Luis Navas, vice chair of Global Governance Advisors, a Miami-based consulting firm, explained to Bloomberg.
Arison is also the owner of the National Basketball Association’s (NBA) Miami Heat, which recently won the league’s championship. His father, Ted, founded Carnival in 1972. Micky worked at the cruise line in sales, reservation manager, and became president in 1979, according to Bloomberg.
He is worth $5.7 billion, according to Forbes’s list of the world’s richest, Bloomberg further reported.
Carnival owns the Holland America, Costa Cruises, and Cunard lines, according to the New York Daily News.