Managing ships is big business. It should come as no surprise that bosses of ship-operating companies are highly compensated. What may surprise you is that the CEOs with the largest fleets don’t necessarily earn the highest compensation.
The biggest winners last year were almost certainly heads of private shipowning companies that sold or leased container ships for eye-watering sums and stashed windfalls in offshore accounts. Outside of the families themselves and their lawyers and accountants, no one will know how much they made.
For CEOs employed as managers of public companies, compensation is sometimes (but not always) disclosed. Now that all the annual reports are in, annual general meetings have been held and remuneration reports have been filed, these numbers are publicly available.
Container shipping CEOs
Maersk: The world’s second-largest container-line operator, Denmark-listed A.P. Moller-Maersk, is unusual among commercial shipping entities. Its business model — end-to-end logistics with a focus on long-term relationships — is much less commoditized than, for example, a spot-trading tanker owner whose profits hinge almost entirely on volatile oil flows. Management decisions at a company like Maersk matter, a lot.
A.P. Moller-Maersk CEO Soren Skou (Photo: AP /Ludovic Marin)
Soren Skou, CEO of A.P. Moller-Maersk, received total 2021 compensation of 46.8 million Danish kroners ($7.16 million based on end-of-year exchange rates), up from $7.08 million in 2020 and $5.71 million in 2019. Of Skou’s 2021 compensation, 25% was in stock and options.
Maersk’s net profit spiked by $15.2 billion in 2021 versus 2020, or by 514%. Skou’s compensation, measured in kroners, increased 8.6%.
Hapag-Lloyd: Rolf Habben Jansen is the CEO of Germany-listed Hapag-Lloyd, the world’s fifth-largest liner operator. In 2021, Habben Jansen earned total compensation of 2.9 million euros ($3 million). That’s up from $2.97 million in 2020 and $2.51 million in 2019. Habben Jansen’s compensation is all cash, no shares,“due to the low volume of Hapag-Lloyd shares in free float,” said the company.
Hapag-Lloyd’s net profits jumped by $9.7 billion last year versus 2020, or by 907%. Habben Jansen’s compensation, measured in euros, rose 14%.
Matson: Compensation for CEOs of U.S.-listed container-line operators is considerably higher than for European-listed companies when adjusted for fleet size, albeit more focused on stock awards.
Matson’s net income increased by $734.3 million in 2021 versus 2020, or 380%. Cox’s remuneration rose by 9% (with 53% of his total in stock).
According to Alphaliner data, Zim has the world’s 10th-largest liner fleet, with less than an eighth the capacity of Maersk and less than a third the capacity of Hapag-Lloyd. Yet Glickman earned total compensation of $9.92 million last year, up sharply from $2.79 million in 2020. That’s triple what Habben Jansen earned and almost $3 million more than Skou.
Zim’s net income was $4.1 billion higher in 2021 than in 2020, equating to an increase of 787%. Glickman’s compensation rose by 255% (with 74% of Glickman’s reported 2021 compensation in stock, not cash).
Note: Zim CEO compensation not disclosed for 2019 (Chart: American Shipper based on company filings)
Bulk commodity shipping CEOs
Eagle Bulk CEO Gary Vogel (Photo: John /Marine Money)
Many U.S.-listed commodity shipping owners are so-called “foreign private issuers” and do not have to report individual executive compensation. Rather, they report aggregate compensation for management teams. Most of these disclosures reported total team compensation in the range of $2 million-$3 million for 2021, while others were considerably higher.
In addition, several listed shipowners do substantial related-party transactions with private entities owned by the public entity’s sponsor. The founder, the CEO of the public entity, can obtain profits via his or her private holdings.
Cruise shipping compensation
Management compensation in commercial shipping pales in comparison to cruise shipping, where vessels are run for hospitality, not transport.
NCL CEO Frank Del Rio (Photo: AP /Richard Drew)
In 2020, Del Rio’s package totaled a headline-grabbing $36.38 million. During the annual general meeting vote that year, 83% opposed the payout, but those votes were nonbinding.
For 2021, the head of NCL’s compensation committee told shareholders that Del Rio’s new package was designed to “address the concerns that shareholders expressed” the prior year. Del Rio’s compensation in 2021: $19.67 million, with 72% in stock. During this May’s annual general meeting, there were more than five times as many nonbinding votes opposed to his compensation as there were in favor.
To put Del Rio’s package in perspective, NCL lost $9.5 billion in 2020-2021 combined. Maersk had net income of $21.1 billion over the same period. NCL’s current market cap is now around one-ninth the size of Maersk’s. And yet, over the past two years, the NCL CEO’s compensation was almost quadruple that of Maersk’s CEO.
