Daniel Farkas

About Daniel Farkas

Daniel S. Farkas is Executive Vice President, General Counsel, Chief Development Officer and Secretary at Norwegian Cruise Line Holdings Ltd. (NCLH). He joined NCLH in 2004 and has held progressively senior legal roles, becoming EVP & General Counsel in 2019, adding Chief Development Officer in April 2023, and Secretary in March 2024. He is 56, holds a B.A., cum laude, in English and American Literature from Brandeis University and a J.D. from the University of Miami. Notably, he was instrumental in NCLH’s IPO and the acquisition of Prestige Cruises International (PCI) . Company performance context: FY2024 Adjusted EBITDA was $2,534.0 million and cumulative TSR value was $44.05 versus $136.73 for the peer index; FY2024 Net Income was $910.3 million .

Past Roles

Organization	Role	Years	Strategic Impact
NCLH	Assistant General Counsel	2004–2005	Joined corporate legal team
NCLH	Vice President & Assistant General Counsel	2005–2008	Advanced legal leadership
NCLH	Senior Vice President & General Counsel	2008–2018	Instrumental in IPO and PCI acquisition
NCLH	Secretary	2010–2013	Corporate secretaryship
NCLH	Assistant Secretary	2013–Mar 2024	Corporate governance support
NCLH	Executive Vice President & General Counsel	Jan 2019–present	Chief legal officer
NCLH	Chief Development Officer	Apr 2023–present	Corporate development leadership
NCLH	Secretary	Mar 2024–present	Corporate secretary
Mase and Gassenheimer (law firm)	Partner (maritime litigation)	N/A (prior to 2004)	Maritime litigation expertise
Miami-Dade County State Attorney	Assistant State Attorney	N/A (prior to 2004)	Public prosecution experience

External Roles

Organization	Role
Florida-Caribbean Cruise Association (FCCA)	Chairman, Operations Committee
Cruise Industry Charitable Foundation	Chairman, Board of Directors
Steamship Mutual Underwriting Association Ltd.	Board of Directors

Fixed Compensation

Year	Base Salary ($)	Target Bonus (% of Base)	Actual Annual Performance Incentive Paid ($)	All Other Compensation ($)
2024	717,500	100%	1,435,000 (200% of target)	46,591
2025 (effective Jan 1)	750,000	—	—	—

Notes:

In 2024, his “Bonus ($)” line reflects a previously disclosed cash retention award of $1,000,000 paid in connection with March 2022 agreements .
All Other Compensation includes: automobile allowance $18,000, 401(k) employer match $5,000, executive medical plan premium $22,896, and $695 for life insurance/cruise benefits .

Performance Compensation

Incentive Element	Metric	Weighting	Target	Actual	Payout	Vesting
Annual Cash (2024)	Adjusted EBITDA	~90%	$2.200B	$2.534B	180% of target	Cash; 2024 performance period
Annual Cash (2024)	Strategic Health & Safety	~5%	USPH score ≥92 and successful Passenger Ship Safety Certificate inspections	Achieved	10% of target	Cash; 2024 performance period
Annual Cash (2024)	Sustainability (Shore Power)	~5%	59% of fleet equipped with shore power by YE2024	Achieved (>59%)	10% of target	Cash; 2024 performance period
PSUs (2024 grant)	Avg Adjusted EPS Growth (FY2023–FY2026)	50%	0–200% payout scale	Performance-period	0–200% of target	Vests after performance; time-based through Mar 1, 2027
PSUs (2024 grant)	Adjusted ROIC (as of FY2026)	50%	0–200% payout scale	Performance-period	0–200% of target	Vests after performance; time-based through Mar 1, 2027

2024 Equity Grant Details (to Farkas):

Target PSU value $1,025,000 and RSU value $1,025,000 on Mar 1, 2024 .
RSUs: 53,136 units; vest in equal tranches Mar 1, 2025/2026/2027 .
PSUs: target 53,136 units; threshold 13,284; max 106,272; 0–200% based on performance; time-based requirement through Mar 1, 2027 .

Equity Ownership & Alignment

Item	Detail
Total beneficial ownership	253,624 ordinary shares (includes shares and options exercisable within 60 days)
Ownership as % of shares outstanding	~0.057% (253,624 of 443,440,226)
Unvested RSUs (12/31/2024)	53,136 units; market value $1,367,189 (based on $25.73 closing price)
Unearned PSUs (assumed max for disclosure)	106,272 units; payout value $2,734,379 (based on $25.73; disclosure assumes max for reporting)
Options – Exercisable	30,000 @ $56.19 expiring 6/30/2025; 15,000 @ $50.31 expiring 2/28/2026
Options – Moneyness	Out-of-the-money vs $25.73 closing price on 12/31/2024
Hedging/Pledging	Prohibited for senior officers; also no margining or pledging of Company securities
Stock ownership guidelines	EVPs required to hold 3× base salary; all NEOs (other than Dahlgren, who joined in 2023) exceed requirements or are on track

Employment Terms

Provision	Description
Employment Agreement	Dated July 17, 2023; initial term through Dec 31, 2026; auto-renews annually unless non‑renewal notice given ≥60 days prior to term end
Base Salary Floor	Minimum annual base salary $700,000; increased in 2024 and 2025 per Compensation Committee
Annual Incentive	Determined by Compensation Committee
Long-term Incentives	Determined by Compensation Committee
Non-compete/Non-solicit	Two-year non-compete; non-solicit of employees and guests for two years after termination
Severance (no-cause/good reason)	2× current base salary; pro‑rata earned annual incentive; up to 18 months medical/vision/dental continuation; equity accelerated only per specific CEO terms; for Farkas, equity acceleration occurs only upon CIC termination or per retirement/death/disability terms
Change-in-control (CIC)	Double-trigger: upon qualifying termination around CIC, all outstanding unvested equity receives full accelerated vesting
Retirement eligibility benefits	Age ≥55, service ≥10 years, age+service ≥70: acceleration for time-based awards (subject to grant dates); pro‑rata for recent awards; continued vesting eligibility for performance awards; cruise benefits; 18 months medical/vision/dental
Clawback	NYSE/SEC-compliant clawback adopted Oct 2023; mandatory recoupment on restatement and discretionary recovery for misconduct
Hedging/Pledging Policy	Hedging, short sales, margins, pledging prohibited for senior officers/directors

Potential Payments (as of 12/31/2024)

Scenario	Severance Payment ($)	Insurance Continuation ($)	Equity Acceleration ($)
Voluntary/for cause	—	—	—
Death/Disability	1,435,000 (pro‑rata incentive)	—	5,170,238
Termination without cause / good reason	2,870,000	83,191	—
CIC Termination (double‑trigger)	2,870,000	83,191	11,272,467
Retirement (if eligible)	1,435,000 (pro‑rata incentive)	83,191	3,116,083

Compensation Structure Analysis

Pay mix emphasizes at-risk incentives: 2024 annual bonus paid at 200% of target on strong Adjusted EBITDA outperformance; long-term PSUs comprise 50% of annual target equity, with 0–200% payout over a three-year period and additional time-based vesting through March 2027 .
No single-trigger CIC vesting; double-trigger required; no excise tax gross-ups; equity plan prohibits option repricing without shareholder approval .
Robust clawback policy and prohibitions on hedging/pledging improve alignment and risk controls .
Shareholder feedback improved program alignment: 2025 short- and long-term metrics correlate to 2026 Charting the Course targets (Adjusted ROIC, Net Leverage, Adjusted Operational EBITDA Margin, Adjusted EPS and GHG intensity reduction) .

Say-on-Pay & Shareholder Feedback

2024 say-on-pay approval: ~89.25% votes in favor (for 2023 NEO compensation) .
Compensation Committee outreach led to integrating 2026 strategy targets into 2025 incentive design and maintained Adjusted ROIC in LTIs, reflecting shareholder preferences .

Compensation Peer Group (reference for benchmarking)

Carnival, Royal Caribbean, Alaska Air, JetBlue, Spirit Airlines, Marriott Vacations, Travel + Leisure, MGM Resorts, Las Vegas Sands, Penn Entertainment, Wynn Resorts, Hyatt Hotels, Host Hotels, Park Hotels & Resorts, Vail Resorts, Caesars Entertainment, Yum! Brands .

Risk Indicators & Red Flags

No pledging or margining; hedging prohibited (reduces misalignment risk) .
No single-trigger CIC; double-trigger with full acceleration only upon qualifying termination .
Equity plan forbids option repricing/buyouts without shareholder approval (mitigates pay inflation) .
Clawback policy compliant with SEC/NYSE; discretionary clawback for misconduct .
Related-party transaction review in place; notable 2025 ship charters with a former director’s affiliates disclosed and negotiated at arm’s length (not tied to Farkas) .

Investment Implications

Strong alignment: meaningful ownership, strict anti-hedging/pledging, 3× salary ownership guideline, performance-heavy awards (PSUs) with multi-year metrics and time-based vesting drive retention and long-term value creation .
Retention risk: sizable equity acceleration only under CIC; otherwise limited acceleration for Farkas under standard termination—suggests continued service to realize full equity value .
Trading signals: options are out-of-the-money vs $25.73 price, while unvested RSU/PSU values are substantial—reduces near-term selling pressure and ties value realization to performance and tenure .
Governance and shareholder support improved markedly (say-on-pay up to 89.25%); 2025 metrics tied to public Charting the Course targets increase transparency of pay-for-performance linkage .