Royal Caribbean Cruises (RCL) DEF 14ADefinitive proxy

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Corporate Governance and Board Matters

We have included below detailed biographical information for each director nominee, including career highlights, other public directorships and select professional and community contributions, along with the top qualifications, experience, skills and expertise we believe each director brings to our Board. Our Board considered all of these attributes when deciding to nominate these individuals to the Board.

			John F. Brock
			BACKGROUND: Mr. Brock retired as Chief Executive Officer of Coca Cola European Partners in December 2016, having served in that role since the formation of that company in May 2016. Prior to that, Mr. Brock served as Chairman and Chief Executive Officer of Coca Cola Enterprises Inc. since April 2008 and as Chief Executive Officer since April 2006. From February 2003 until December 2005, Mr. Brock was Chief Executive Officer of InBev, S.A., a global brewer, and from March 1999 until December 2002, he was Chief Operating Officer of Cadbury Schweppes plc, an international beverage and confectionery company. From April 2007 to December 2007, Mr. Brock served as a director of Dow Jones & Company, Inc., a publisher and provider of global business and financial news. From 2004 to 2006, he served as a director of the Campbell Soup Company, a global manufacturer and marketer of branded convenience food products. From 2003 to 2005, he served as a director of Interbrew / Inbrew, a beer brewing company. He also served as a director of Reed Elsevier, a publisher, from 1997 to 2003. Mr. Brock is a Trustee of the Georgia Tech Foundation, Director of Horizons Atlanta, a philanthropic organization that enhances education for underserved children, and a member of the Smithsonian National Board. Mr. Brock also is a member of the Advisory Board of BIP Capital, a venture capital firm. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: Mr. Brock brings senior leadership and strategic and global expertise from his most recent position as Chairman and Chief Executive Officer of one of the world’s largest independent Coca-Cola bottlers. Prior to his retirement, Mr. Brock demonstrated effective and efficient leadership of a complex, publicly traded company competing in the highly competitive international beverage industry.
Age: 74 Director Since: February 2014 Committees: Nominating and Corporate Governance Committee; Talent and Compensation Committee Other Public Company Boards: None

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Corporate Governance and Board Matters

			Richard D. Fain
			BACKGROUND: Mr. Fain has served as our Chief Executive Officer from 1988 through January 2022. He has been a director of the Company since 1981 and our Chairman since 1988. Mr. Fain is a recognized industry leader, having participated in shipping for over 45 years and having held a number of prominent industry positions, such as Chairman of the Cruise Lines International Association (CLIA), the largest cruise industry trade association. He currently serves on the University of Miami Board of Trustees and the UHealth Board of Directors. He is former chairman of the University of Miami Board of Trustees, the Miami Business Forum, the Greater Miami Convention and Visitors Bureau, the UHealth Board of Directors, and the United Way of Miami Dade. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: Mr. Fain’s breadth of experiences, tenure and leadership provide incomparable insights into the history, operations, and strategic vision of the Company as well as the evolution and direction of the cruise industry as a whole. Having served as Chairman & CEO for over 33 years, Mr. Fain helped grow the Company from a one brand Caribbean centric operation with berthing capacity of approximately 5,000 to the second largest cruise company in the world with a portfolio of global and regional brands that operate around the globe with berthing capacity of approximately 140,000.
Chairman of the Board Age: 75 Director Since: January 1981 Committees: None Other Public Company Boards: None

			Stephen R. Howe, Jr.
			BACKGROUND: Mr. Howe served as U.S. Chairman and Managing Partner and Americas Area Managing Partner of Ernst & Young (“EY”) and was a member of EY’s Global Executive Board from 2006 until his retirement in 2018. In these roles, Mr. Howe directed strategy and operations for EY’s businesses of over 75,000 people, delivering professional services across all industry sectors. While leading EY, Mr. Howe also gained extensive board governance and regulatory experience and was executive sponsor for the firm’s focus on diversity and inclusiveness. He was with EY for over 35 years. Mr. Howe is also a member of the Board of Trustees of Carnegie Hall, the Board of the Peterson Institute for International Economics and the Board of Trustees (Chairman) of the Liberty Science Center. Mr. Howe was previously a member of the boards of Colgate University, the Center for Audit Quality and the Financial Accounting Foundation. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: Mr. Howe brings to the Board considerable financial and leadership experience through his service as U.S. Chairman and Managing Partner and Americas Managing Partner of EY. He provides the board with meaningful insight gained from his strategic and operational experience and from his past service as the executive sponsor of EY’s focus on diversity and inclusiveness.
Age: 61 Director Since: December 2018 Committees: Audit Committee; Nominating and Corporate Governance Committee (Chair) Other Public Company Boards: None

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Corporate Governance and Board Matters

			William L. Kimsey
			BACKGROUND: Mr. Kimsey was employed for 32 years through September 2002 with the independent public accounting firm Ernst & Young L.L.P. From 1998 through 2002, Mr. Kimsey served as the Chief Executive Officer of Ernst & Young Global and Global Executive Board member of Ernst & Young and from 1993 through 1998 as the Firm Deputy Chairman and Chief Operating Officer. From 2003 until 2018, Mr. Kimsey served on the board, the compensation committee, and the audit committee (serving as chair from 2011-2018) of Accenture Plc. From 2004 until 2008, he served on the board of NAVTEQ Corporation and was the chairman of its audit committee. From 2003 through 2014, Mr. Kimsey also served on the board and the audit committee of Western Digital Corporation. Mr. Kimsey is a certified public accountant and a member of the American Institute of Certified Public Accountants. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: As former Chief Executive Officer of one of the largest public accounting firms in the world, Mr. Kimsey brings substantial accounting and finance knowledge and expertise to the Board as well as experience serving on and chairing the audit committees of a number of other large, well regarded public corporations.
Lead Director Age: 80 Director Since: April 2003 Committees: Audit Committee (Chair); Nominating and Corporate Governance Committee Other Public Company Boards: None

			Michael O. Leavitt
			BACKGROUND: Gov. Leavitt is the Co-Chairman of Health Management Associates, a health care consulting firm, and Chairman of Leavitt Equity Partners, a private equity fund. From 2009 to 2021, he served as the Chairman of Leavitt Partners, LLC, a health care consulting firm. He also previously served as the United States Secretary of Health and Human Services from 2005 to 2009, the Administrator of the Environmental Protection Agency from 2003 to 2009 and the Governor of the State of Utah from 1993 to 2003. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: Gov. Leavitt brings to our Board extensive management and leadership experience, including service as the Governor of Utah, a large state with a diverse body of constituents, and service in positions with the U.S. government, where he oversaw and advised on issues of national concern such as healthcare and environmental protection. These experiences were instrumental to his role as Co-Chair of the Healthy Sail Panel in developing recommendations for cruise lines to advance their public health response to COVID-19 and contributes to the Board’s oversight of these issues. Further, his experience at the EPA provides the Board with valuable insight in relation to the Company’s various environmental, social and governance initiatives.
Age: 72 Director Since: February 2022 Committees: Safety, Environment, Sustainability and Health Committee (Chair) Other Public Company Boards: American Express (New York Stock Exchange)

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Corporate Governance and Board Matters

			Jason T. Liberty
			BACKGROUND: Mr. Liberty has served as President and Chief Executive Officer since January 2022. Mr. Liberty has held several roles since joining the Company in 2005, including most recently as Executive Vice President and Chief Financial Officer since 2017 and, prior to that, as Senior Vice President and Chief Financial Officer since 2013. Before his role as Chief Financial Officer, Mr. Liberty served as Senior Vice President, Strategy and Finance from 2012 through 2013; as Vice President of Corporate and Revenue Planning from 2010 through 2012; and as Vice President of Corporate and Strategic Planning from 2008 to 2010. Before joining Royal Caribbean Group, Mr. Liberty was a Senior Manager at the international public accounting firm of KPMG LLP. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: Mr. Liberty has years of broad-based, diverse senior management experience at the Company, including service as Executive Vice President and Chief Financial Officer, where he was responsible for finance, strategy, shared service operations, legal, and technology matters, among other areas. His experience and industry knowledge make him a valuable member of our Board.
Age: 47 Director Since: January 2022 Committees: None Other Public Company Boards: WNS (Holdings) Ltd. (New York Stock Exchange)

			Amy McPherson
			BACKGROUND: Ms. McPherson served in various positions at Marriott International, Inc. for over 30 years. Most recently, from 2009 through 2019, she served as President & Managing Director, Europe. Under her leadership, Marriott launched five new brands in Europe and completed the successful integration of Starwood Hotels in Europe. Since 2017, Ms. McPherson has served as a non-executive member of the board of directors of PVH Corporation and is a member of its Audit and Nominating & Governance Committees. SPECIFIC QUALIFICATIONS, ATTRIBUTES, SKILLS AND EXPERIENCE: Ms. McPherson brings to the board considerable experience in overseeing business operations and development in Europe, having overseen multiple brands of hotels for Marriott. She has overseen acquisitions and strategic partnerships and implemented and executed strategies on both a regional and global basis. In addition, Ms. McPherson has experience managing Marriott’s global and field sales, marketing, loyalty program, revenue management, e-commerce, worldwide reservation sales and customer care, and sales channel strategy and analysis.
Age: 61 Director Since: December 2020 Committees: Talent and Compensation Committee Other Public Company Boards: PVH Corporation (New York Stock Exchange)

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Corporate Governance and Board Matters

Certain Relationships and Related Person Transactions

Review and Approval Related Person Transactions

We have a written Related Person Transaction Policy that requires review of all relationships and transactions in which the Company is a participant and in which a “related person” (including any director, director nominee, executive officer or greater than 5% beneficial owner of the Company or any immediate family member of the foregoing) has a direct or indirect material interest. Under this policy, each director, director nominee and executive officer is required to promptly notify the Corporate Secretary of any such transaction. The Corporate Secretary then presents such transactions to the Audit Committee, which is responsible for reviewing and determining whether to approve or ratify the transactions. The following types of transactions are deemed not to create or involve a material interest on the part of the related person and do not require approval or ratification under the policy, unless the Audit Committee determines that the facts and circumstances of the transaction warrant its review:

In reviewing transactions submitted to them, the Audit Committee reviews and considers all relevant facts and circumstances to determine whether the transaction is in, or not inconsistent with, the best interests of the Company and its shareholders, including, without limitation:

If after the review described above, the Audit Committee determines not to approve or ratify the transaction, it will be cancelled or unwound as the Audit Committee considers appropriate and practicable.

Related Person Transactions

There were no related person transactions during 2022.

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Corporate Governance and Board Matters

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires our executive officers and ownership and changes in ownership with the SEC. Based on our review of such reports and written representations from our directors and officers, one transaction on June 1, 2022 was not timely reported on Form 4 on behalf of R. Alexander Lake due to administrative error.

Corporate Governance Principles

We have adopted Corporate Governance Principles which, along with our Board committee charters, provide the framework for the governance of the Company. The Corporate Governance Principles address such matters as director qualifications, director independence, director compensation, Board committees and committee evaluations. Copies of these principles and our Board committee charters are posted in the corporate governance section on our website at www.rclinvestor.com.

Code of Ethics

The Board has adopted a Code of Business Conduct and Ethics that applies to all our employees, including our executive officers, and our directors. A copy of the Code of Business Conduct and Ethics is posted in the corporate governance section of our website at www.rclinvestor.com and is available in print, without charge, to shareholders upon written request to our Corporate Secretary at Royal Caribbean Cruises Ltd., 1050 Caribbean Way, Miami, Florida 33132. Any amendments to the code or any waivers from any provisions of the code granted to executive officers or directors that require disclosure under the applicable SEC or NYSE rules will be posted on our website at www.rclinvestor.com.

Trading in Company Securities

Our Securities Trading Policy prohibits hedging transactions in Company securities by officers, directors and employees. In addition, it prohibits officers and directors from holding Company Securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Additionally, we require officers and directors to pre-clear every transaction in Company securities for themselves, their immediate family members, and any family trust with the Corporate Secretary. This includes purchases, sales, gifts, contributions to a trust and any other transfers.

Compensation Committee Interlocks and Insider Participation

During 2022, none of the members of the Talent and Compensation Committee (a) was an officer or employee of the Company or any of its subsidiaries, (b) was a former officer of the Company or any of its subsidiaries or (c) had any related party relationships requiring disclosure under Item 404 of SEC Regulation S K. During 2022, no executive officer of the Company served as a member of the board of directors or on the compensation committee of any other company, one of whose executive officers or directors serve or served as a member of the Board or the Talent and Compensation Committee of the Company.

Contacting Members of the Board

The Board welcomes questions and comments. Interested parties who wish to communicate with non-management members of the Board can address their communications to the attention of our Corporate Secretary at our principal address at 1050 Caribbean Way, Miami, Florida 33132 or via email to corporatesecretary@rccl.com. The Corporate Secretary maintains a record of all such communications and promptly forwards to the Lead Director those communications that the Corporate Secretary believes require immediate attention. The Corporate Secretary periodically provides a summary of all such communications to the Lead Director and he, in turn, notifies the Board or the chairs of the relevant committees of the Board of those matters that he believes are appropriate for further action or discussion.

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Environmental, Social and Governance Overview

Our Board provides oversight and guidance on the Company’s performance and management of environmental, social and governance (“ESG”) issues, including climate change, environmental stewardship, supply chain risk management, human rights, diversity, equity and inclusion and ESG reporting.

	Safety, Environment, Sustainability and Health Committee
	Reviews and monitors overall strategies, policies and programs that impact the safety, environment, sustainability and health of our guests, crew, the communities where we operate and the ports where our ships call, as well as our overall development of strategies, policies, and practices in the areas of energy consumption, greenhouse gas, physical and transition risks related to climate change and other criteria, pollutant emissions, waste disposal and water use.
	Talent and Compensation Committee
	Oversees the Company’s human capital management strategies, including initiatives for talent diversity, equity and inclusion, talent management, pay equity, succession planning and corporate culture.
	Audit Committee
	Discusses with management any potential enterprise risks associated with ESG and the controls and procedures concerning the Company’s environmental, social and governance disclosures.
	Nominating and Corporate Governance Committee
	Oversees various aspects of corporate governance and reviews and makes recommendations to our Board concerning Board and committee structure and composition, consistent with the Board’s endeavor to be composed of individuals with varying skills and backgrounds (including diversity of race, gender and ethnicity) and experience in business and in other areas that may be relevant to the Company’s activities, including those related to ESG.

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Environmental, Social and Governance Overview

ESG is at the core of our business and rests on five key principles:

	Champion Communities and the Environment
	We recognize our responsibility to the guests who travel with us, the people who work for us, the communities and destinations that we visit, and the oceans we traverse.
	Provide Unforgettable Cruise Experiences
	We connect people to the wonders of the world and help them create unforgettable memories.
	Foster Human Rights and be an Employer of Choice
	We treat our guests, employees, crew, and suppliers with dignity and respect. We act ethically and with integrity so we all can thrive.
	Advance Net Zero Innovation
	We are committed to decarbonizing our operations through innovation, collaborative partnerships, and an accelerated transition to cleaner fuels, smarter technologies, and improved energy efficiencies.
	Govern Responsibly
	We believe that good governance and transparency are critical to ESG and help us align corporate decision-making to our ESG strategy and performance. We take an integrated approach to board oversight, risk management and stakeholder engagement and we embed appropriate policies and practices for ethics, compliance, and data security within our operations.

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Environmental, Social and Governance Overview

Throughout 2022, Royal Caribbean’s efforts were concentrated on the critical ESG needs of, and issues for, the cruise industry:

	Environmental Stewardship
	Protecting the environment has been a longstanding core value for us. Thriving, healthy and sustainable oceans are inextricably tied to the health of our business that is why we set ambitious targets in a variety of facets of our business to improve our operations including waste and water management, emission reduction, and sustainable sourcing. Since returning to full service in 2022, we relaunched the third phase of the program to advance our goal of eliminating all single-use plastics from our ships. By the end of 2022, we had achieved a waste from landfill diversion rate of 91%, while producing over 90% of our freshwater on board with an average guest water consumption rate of 66 gallons per day. Our advanced wastewater purification systems purify all wastewater and exceed regulations for most cities within the U.S. Treated wastewater is discharged at least three nautical miles away from land in accordance with sustainable practices and international law.
	Decarbonization of Operations
	We are committed to decarbonizing our operations through meaningful innovation, partnerships, and action. We have been monitoring and reducing emissions and tracking our energy consumption since 2010. In 2021, we announced our Destination Net Zero strategy which is focused on achieving net zero cruise ship by 2035 and net zero emissions by 2050. In 2022, we added to our strategy a near-term target to reduce our carbon intensity by double digits by 2025, aimed at continuing our advancement in decarbonizing our business. Both our near-term reduction target along with our Destination Net Zero strategy are built on a four-pronged approach which includes the modernization of our global brands fleet through the introduction of new energy-efficient and alternatively fueled vessels, continued investment in energy efficiency programs, development of alternative fuel and alternative power solutions, and optimized deployment and integration of strategic shore-based supply chains. To help on our journey, we are forging strong partnerships with maritime experts, shipyards, and industry associations such as Maersk Mc-Kinney Moller Center for Zero Carbon Shipping.
	A Healthy Return to Cruising
	We have long maintained some of the industry’s most rigorous and thoughtful health and safety protocols. Summer of 2022 marked the return of all our ships to service. It also marked over a year’s worth of efforts, going above and beyond, to create a safe, healthy experience for our guests and employees. We delivered over 6 million vacations in 2022, putting into practice the robust and multi-layered approach that positions our cruises at the forefront of healthy sailing.

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Environmental, Social and Governance Overview

At its core, tourism depends on the beauty of the environment. Ensuring the destinations we visit are vibrant and healthy far into the future is critical to the success of our business.

	A Partnership for our Oceans
	In 2016, we joined forces with World Wildlife Fund to help ensure the long-term health of the oceans by setting, and achieving, ambitious sustainability targets to lessen the company’s environmental impact, raise awareness of ocean conservation for our guests and crew, and support ocean conservation projects around the world. We have supported WWF initiatives on wildlife trafficking, commitment to deliver on the promise of the Paris Agreement through the We Are Still In coalition and signed on to the Cascading Materials Vision for a more sustainable supply chain.
	Exploring the World Sustainably
	We deepened our commitment to responsible tourism in 2016, when we set a goal to offer our guests 1,000 destination tours certified by the Global Sustainable Tourism Council (GSTC) by 2020. By 2021, we had more than doubled our 2020 goal, with 2,000-plus GSTC-certified tours available to guests. GTSC-certified tour operators agree to protect the overall health of destinations, preserve local heritage, maximize social and economic benefits to the community, and reduce negative impacts to the environment from travel-related waste. In 2022, we continued to expand this commitment and have now set a goal to have 60% of all tours offered by RCG certified to the GSTC standard by 2025. For us, GSTC certification enables us to align our sustainability philosophy with the practices of our third-party tour operators.
	Sourcing Sustainably
	Our supply chain, through a large and diverse network of suppliers, fuels everything we do. As a result, we collaborate with partners to support the sustainable sourcing movement and the improvement of animal welfare throughout the food supply. Most notably we are working with World Wildlife Fund to source Marine Stewardship Council (MSC) and Aquaculture Stewardship Council (ASC) seafood and supporting fishery improvement projects that boost the overall supply of responsibly produced seafood and ensure the livelihoods of artisanal fishers and their communities. Additionally, we worked with the U.S. Humane Society to set targets aimed at improving the treatment of farm animals raised for consumption in our supply chain.

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Environmental, Social and Governance Overview

Great vacations begin with great employees. Each day, our employees from all around the world go above and beyond to deliver exceptional vacations to our guests. Our leadership team, with oversight from our Board of Directors, strives to maintain a work environment that reinforces collaboration, motivation and innovation, and believes that a strong employee-focused culture is essential to a good business.

	Empowering Women in a Male-Dominated Industry
	The maritime world has always been male-driven – in fact, there was a time having a woman on board ranked at the top of a long list of sailors’ superstitions. That’s since changed. In 2015, Celebrity Cruises appointed Captain Kate McCue as the first American female captain, starting an intentional effort by the brand to attract more women to the industry and into leadership roles across our fleet. Now, our Celebrity Cruises brand is taking it further, with ambitions to raise the ratio of women to men on their ships’ bridges.
	Diversity, Equity, and Inclusion
	We have always promoted an inclusive workplace – both on land and at sea – where our employees can contribute fully and bring their diverse perspectives to the workplace. We have seven employee resource groups (ERGs) with international participation: Multicultural Organization for Royal Employees, Pride (LGBTQ+), Served (Veterans), Network of Women, Royal Organization for Abilities, African Americans, and Young Professionals. Each ERG provides opportunities for employees to connect, network and develop. They also partner with leadership to provide ongoing feedback and establish a culture of belonging. RCG is proud of our diversity achievements, which include being named as a Latino Equity 100 Organization by Latino Magazine and a 2022 LGBTQ Workplace Equality Honoree by the Human Rights Campaign Foundation. Our DEI efforts and all human capital metrics are reviewed annually with our Talent and Compensation Committee.
	Employee Engagement and Development
	We measure employee engagement on a quarterly basis on land and monthly on our ships. Since the start of the pandemic, we’ve increased our listening through surveys and focus groups and dedicated ourselves to act on the feedback we receive. We’ve also increased our wellness programs and improved our employee assistance program. During 2022, we worked on the development of our “Propelled by People” campaign, a new platform to share the voices and stories of our employees and crew members across the world and increase employee engagement. Our employee development programs are designed to grow and advance our leaders by developing premier learning, mentorship, coaching and planning programs. We are also focused on succession planning and increasing the readiness of internal talent to take on business-critical roles. Our Talent and Compensation Committee regularly reviews our succession planning process and pipeline talent.

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Proposal 2

PROPOSAL 2 Advisory Vote to Approve the Compensation of Our Named Executive Officers			The board recommends a vote “FOR” this proposal.

In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our shareholders have the opportunity to cast an advisory vote to approve the compensation of our NEOs.

As described in detail under the heading “Compensation Discussion and Analysis,” we adhere to a pay-for-performance philosophy and, to this end, our executive compensation programs are designed to align the interests of our executives with the interests of our shareholders, recruit, retain and motivate a talented and high-performing management team and reward our NEOs for their positive contributions to both short-term and long-term corporate performance. Shareholders are urged to read the Compensation Discussion and Analysis, which discusses in detail how our compensation policies and procedures implement our compensation philosophy.

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Executive Compensation

Letter from the Talent and Compensation Committee

Dear Shareholders,

It is incredible to consider that just over one year ago, Royal Caribbean Group was in the midst of managing Omicron, still in the process of returning ships to service, and sailing at load factors below 60%. Despite these challenges, we finished 2022 on a high note as we returned our business to full operations, normalized occupancy levels, achieved positive operating cash flows, and also achieved greater revenue per passenger cruise day as compared to 2019. We are proud of the efforts of our entire workforce for executing so well on our mission of delivering the best vacation experiences, responsibly, and building the foundation for our future growth.

2022 Compensation Program

As we reflect on the challenges and progress from recent years, we remain committed to maintaining strong executive pay and governance practices in which compensation is tied to performance. The Talent & Compensation Committee structured the 2022 compensation program to ensure our NEOs were appropriately incentivized and rewarded for their achievements:

Shareholder Engagement

We view engagement with our shareholders as a top priority. During the 2022 engagement season, RCG contacted its top 50 shareholders, representing approximately 65% of its outstanding common stock and held meetings with 15 of them, collectively holding about 55% of our outstanding common stock (or 90% of the common stock held by the top 25 investors). During these conversations and meetings, most shareholders understood the rationale for the compensation-related actions taken during 2020 and 2021 in order to continue to reward, incentivize and retain our NEOs during such an unprecedented time. They also supported our plans to return to the use of more quantitative metrics for our incentive compensation program for 2022 as our operations stabilized, as well as the introduction of ESG measures. As a result of this engagement, 79% of the votes cast at our 2022 Annual Meeting of Shareholders supported our say-on-pay proposal. We intend to continue to engage with our shareholders to ensure that our actions are in-line with, and responsive, to their expectations.

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We look forward to continuing to work with the full Board of Directors and executive team in overseeing and executing on our strategic priorities. We will continue to be responsive to our shareholders as we seek to maintain a highly performance-based executive compensation program that drives long-term value creation for our shareholders.

Sincerely,

Vagn O. Sørensen, Chair		John F. Brock		Amy C. McPherson		Ann S. Moore		Donald Thompson

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Compensation Discussion and Analysis

Compensation Discussion and Analysis

RCG’s executive compensation program is designed to align executive compensation with the long-term interests of our shareholders. This CD&A provides shareholders with information about our business, 2022 performance, our disciplined approach to compensation and 2022 compensation decisions for our 2022 Named Executive Officers (“NEOs”) listed below.

As discussed earlier in this proxy statement, on November 6, 2021, Mr. Fain announced that he would be stepping down from his position as Chief Executive Officer effective January 3, 2022. In connection with this transition, the Board promoted Jason Liberty to serve as President and Chief Executive Officer, transitioning from his former position as EVP and Chief Financial Officer, and promoted Naftali Holtz, our former SVP of Finance, to the role of Chief Financial Officer. Mr. Fain did not receive any compensation in 2022 for his role as Chief Executive Officer.

RCG’s 2022 Named Executive Officers

Richard Fain Chairman & Former Chief Executive Officer	Jason Liberty President and Chief Executive Officer (“CEO”) and Former Chief Financial Officer	Naftali Holtz Chief Financial Officer (“CFO”)	Michael Bayley President and Chief Executive Officer, Royal Caribbean International	Lisa Lutoff-Perlo President and Chief Executive Officer, Celebrity Cruises	Harri U. Kulovaara Executive Vice President, Maritime

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Compensation Discussion and Analysis

RCG’S 2022 Performance – Key 2022 Successes

Successful Return to Full Operations		100%		95%		+3.5%		6 M
		of fleet in operation since June 2022		Significant ramp-up in load factors, from 57% in first quarter to 95% in the fourth quarter of 2022		Strong demand for our vacation experiences; 3.5% increase in revenue per passenger cruise day versus 2019		6 million vacations delivered during 2022 at high guest satisfaction scores
Enhancing Platform for Long-Term Growth				≈1,000
		Launched 3 new ships Strong pipeline capacity of 10 new ships to be delivered in 2023-2026		Destinations visited Advanced critical port and destination efforts for a diversified port portfolio		Continued investments in private destinations and our digital infrastructure to enhance our guest experience and commercial capabilities		In November 2022, the Company introduced the Trifecta program, a new three-year initiative designed to drive superior performance
Strong Liquidity and Improving Financial Performance		> $2.9 B
		Year-end liquidity		Disciplined cost management and focus on profitability, abating inflationary cost increases of more than 25% since 2019		Successfully refinanced $6.9 billion of debt to manage debt maturity profile		Generated approximately $500M of operating cash flow
ESG is Core to our Business
		Opened the first net zero cruise terminal in Galveston, Texas		Launched a new environmental protection initiative – “Blue Green Promise” – aimed at supporting resilient and sustainable ocean communities		Set a short-term target for Destination Net Zero to reduce carbon intensity by double digits by 2025		Introduced our “Propelled by People” campaign, a new platform to increase employee engagement

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Compensation Discussion and Analysis

Compensation Overview

Maintain Robust Corporate Governance Policies that Align Executives’ Interests with Those of our Shareholders

Our Talent and Compensation Committee seeks to align our compensation practices with strong corporate governance practices. As reflected below, we believe that robust corporate governance practices are integrated into our 2022 executive compensation program.

What We Do
Robust stock ownership guidelines - 6x base salary for CEO and 3x for other NEOs	What We Do Not Do No extensive perquisites – All Other Compensation represented approximately 2% of CEO’s 2022 Total Compensation No acceleration of vesting of equity awards in connection with terminations, absent a change in control No pledging or hedging of shares No tax gross-ups on perquisites or change in control benefits No pension or supplemental retirement plan benefits Equity plan does not permit liberal share recycling No liberal change of control definition in equity plan or employment agreements
Clawback policy that applies to cash and equity incentive compensation “Double trigger” change in control provisions in employment agreements “Double trigger” change in control provision for acceleration of equity Both short-term and long-term incentive awards tied to performance metrics designed to deliver long-term growth, drive shareholder value, and align with our ESG commitments Equity Plan requires minimum one-year vesting for all equity awards Multi-year vesting of equity awards Independent compensation consultants, report directly to Talent and Compensation Committee Comprehensive annual assessment of compensation risks Annual say-on-pay vote

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Compensation Discussion and Analysis

Designed our Executive Compensation to Be Performance-Based

Our commitment to performance-based compensation is illustrated by the following charts, which show the mix of each compensation component at target levels for our President & CEO and for our other NEOs for 2022 (excluding Mr. Fain who served as NEO for only the first two calendar days of 2022).

President & CEO	Other Named Executives
89% Variable Compensation	81% Variable Compensation

Aligned Strategy and Pay

Our executive compensation program ties a significant portion of our NEOs’ compensation to the operational and financial performance of our company. 2022 was a transitional year for the Company which marked the return to full operations and more normalized occupancy levels. In anticipation of this, the Talent & Compensation Committee returned to using a quantitative performance-based approach for our Executive Bonus Plan, as described below. This quantitative approach aligns with our compensation philosophy and in large part with the structure of our pre-COVID-19 compensation program. This approach is also responsive to the feedback we received from our shareholders during 2022. As such, 100% of our CEO’s payout for the Executive Bonus Plan was based on company-wide performance and no longer includes individual performance. As it relates to the long-term performance-based equity awards, the PSU Awards granted in 2022 for the performance period ending December 31, 2024 were granted with target performance levels that were challenging and in-line with Board-approved three-year ROIC, Adjusted EPS and Leverage targets as well as ESG targets. We’ve also embedded ESG targets as part of both short-term and long-term incentive awards to drive continued improvement in areas such as alternative energy sourcing, employee engagement, cyber maturity ratings, and diversity, equity and inclusion initiatives, among others.

Engaged with Shareholders and Responded to their Comments

It is our long-standing practice to actively engage with our shareholders throughout the year. We believe it is important to directly engage with our shareholders as a means of soliciting their views on matters such as corporate governance, executive compensation and environmental and social initiatives, among other important topics. We use this feedback to assist management and the Board with matters requiring a broader shareholder perspective. We also take into account the feedback our shareholders provide through the annual say-on-pay advisory votes on our executive compensation.

Historically, our shareholders have overwhelmingly supported our executive compensation program, which has received an average of 91% support from 2011 when we held our first say-on-pay vote through our 2022 Annual Meeting of Shareholders. Last year, certain large proxy advisory firms recommended a vote against our say-on-pay proposal. In light of these recommendations, prior to the 2022 Annual Meeting of Shareholders, we conducted a robust shareholder engagement process to further explain our executive compensation program, our Talent and Compensation Committee’s decisions regarding our pay-for-performance philosophy and the rationale for certain compensation decisions made during 2020 and 2021 as a result of the challenges created by the pandemic and in connection with our planned leadership transition. During these conversations and meetings, most shareholders expressed understanding of our rationale for the compensation-related actions taken during 2020 and 2021 in order to continue to reward, incentivize and retain our NEOs during such an unprecedented time. They also supported our plans to return to the use of more quantitative metrics for our incentive compensation program for 2022 as our operations stabilized as well as the introduction of ESG measures. As a result of this engagement, 79% of the votes cast at our 2022 Annual Meeting of Shareholders supported our say-on-pay proposal.

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Compensation Discussion and Analysis

The table below describes the feedback we received during our recent engagements related to our executive compensation program and the revisions that our Talent and Compensation Committee implemented for 2022 in light of these discussions.

What We Heard		Actions Taken
Our shareholders generally viewed our management’s performance as strong and understood our need to utilize more qualitative metrics for a limited period of time and exercise discretion in challenging circumstances. However, our shareholders supported us returning to our historical use of quantitative financial and operational metrics once operations had normalized and using limited discretion in evaluating performance against those pre-determined quantitative metrics.		●For 2022, the short-term incentive plan for the CEO returned to our historical practice of being based solely on financial and objective operational metrics, with the short-term incentive plan for the NEOs also being based primarily on financial and objective operational metrics. ●The performance-based long-term incentive awards granted in 2022 for the performance period ending December 2024 are based on quantitative financial and operational metrics. ●The performance-based long-term incentive awards granted in 2022 for the performance period ending December 2024 were granted with target performance levels that were challenging and in-line with Board-approved three-year ROIC, Adjusted EPS, leverage targets as well as ESG targets. ●PSUs granted in 2020 for the period ended December 2022 paid out at 35% of target, with no discretionary adjustments.
Our shareholders understood the competitive nature of our operational performance metrics but generally wanted more transparency with respect to the difficulty of our financial metrics.		●This CD&A includes enhanced disclosure of the financial targets and performance levels of Adjusted EPS, which metric determines 60% of the payout under our company-wide performance component of our Executive Bonus Plan and 40% of the payout under the PSUs granted in 2020 for the period ending December 2022.
Our shareholders expressed support for adding ESG measures to our compensation program.		●An ESG composite metric was added to both our 2022 Executive Bonus Plan and the metrics used for the PSUs granted in 2022 for the period ending December 2024 (as further described below).

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Compensation Discussion and Analysis

Aligned our Compensation with Our ESG Commitments

Our commitment to meet the environmental, social and governance (ESG) challenges of our time is core to our business strategy. Continuous improvement is the persistent wave that drives our work, the ships we build, the infrastructure we develop in coastal communities, and the ESG targets we aim to achieve. As part of that commitment, commencing in 2022, we embedded ESG metrics in the annual and long-term metrics upon which we evaluate our NEOs. With respect to our annual Executive Bonus Plan, ESG metrics are a component of our corporate and our brand operational performance metrics. With respect to our PSU program, 20% of the performance target is based on a composite of ESG metrics. These metrics take into account performance with respect to our goals on alternative energy sourcing, employee engagement, cyber maturity rating from the National Institute of Standards and Technology (NIST), and diversity, equity and inclusion initiatives, among others.

How We Make Compensation Decisions

Our Compensation Philosophy and Principles

Our fundamental compensation philosophy remains unchanged: we adhere to a pay-for-performance philosophy. In line with this philosophy, we have designed our compensation programs to support three main goals:

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2022 Compensation Elements and 2022 Decisions

Compensation Elements

We provide compensation to our executives consisting of three principal elements: base salary, performance-based annual incentive bonus and long-term equity awards. The objectives and key features of each pay element are described below.

					Pay Elements
					CEO		Other NEOs		Objective		Key Features
									●Provide a base level of income in line with expertise, experience, tenure, performance, potential and scope of responsibility		●Set annually based on market competitiveness and in-line with performance and contributions to the achievement of Company goals ●Increases, when appropriate, are provided based on market movements, scope of responsibilities, and merit
									●To focus executives on annual financial and operational performance ●To reward executives for performance relative to our short-term goals and initiatives		●Earned based on company-wide and, if applicable, brand-specific financial and operational objective metrics and individual performance against previously established strategic goals, including, but not limited to, Adjusted EPS (corporate), adjusted brand operating income, if applicable, and an ESG composite ●Payouts range from 0% and 200% based on achievement of results during the year ●For our President and CEO, payout is entirely based on corporate performance. For other NEOs, one-third is determined based on individual performance and two-thirds is determined by corporate and, if applicable, brand performance
									●Structured to align with shareholder interests, reward the achievement of long-term goals and promote stability and corporate loyalty among the executives		●Earned only if specified financial performance measures are met ●Typically, with a three-year performance measure ●PSU Awards granted in 2022 for the period ended December 2024 will be earned based on Adjusted EPS, ROIC, Leverage and an ESG composite ●PSU Awards granted in 2022 for the period ended December 2024 can range from 0% to 200% of target
									●Multi-year vesting requirements align our executives’ interests with our shareholders and incentivize retention of our executive talent		●Set annually based on market competitiveness and in-line with performance and contributions to the achievement of Company goals ●Increases, when appropriate, are provided based on market movements, scope of responsibilities, and merit.

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Compensation Discussion and Analysis

Base Salary

Why we pay base salaries. Base salaries comprise, on average, less than 20% of the target total direct compensation for our NEOs. During 2022, base salary represented 11% of target total direct compensation for our CEO and an average of 19% for our other NEOs. However, base salaries are an important and customary element of pay for attracting and retaining executives. The Talent and Compensation Committee seeks to pay each NEO a level of base salary that competitively reflects their scope of responsibility.

The primary considerations used in setting base salary levels include each NEO’s:

The Talent and Compensation Committee generally reviews salaries in the early part of each year and, if appropriate, adjusts them to reflect changes in the above considerations and to respond to market and competitive pressures.

Our 2022 Base Salary Decisions. The Talent and Compensation Committee approved base salary increases for 2022 for each of Mr. Liberty and Mr. Holtz to account for their increased roles and responsibilities following their respective promotions to Chief Executive Officer and Chief Financial Officer in early 2022. The Talent and Compensation Committee also considered compensation benchmarking provided by the Committee’s independent compensation consultant and adjusted the base salary for Mr. Liberty and Mr. Holtz to move them closer to the market median for their respective positions. The Talent and Compensation Committee approved modest base salary increases for the other NEOs in recognition of their strong leadership during the pandemic and the Company’s successful return to service. In making this determination, the Talent and Compensation Committee also considered that none of the NEOs received a base salary increase in 2021.

Performance-Based Annual Incentive

Why we pay annual performance-based compensation. We believe that annual incentive programs focus executives on annual financial and operational performance enabling them to better manage the cyclical nature of our business and to reward executives for performance relative to our annual goals and initiatives. We pay our annual performance-based compensation pursuant to our Executive Short-Term Bonus Plan (the “Executive Bonus Plan”). The Executive Bonus Plan is designed to reward our executives for the achievement of RCG’s annual financial and/or strategic goals and to recognize individual contributions. For 2022, the Executive Bonus Plan represented approximately 23% of the NEOs’ target total direct compensation.

How we determine annual target bonus. Each year, the Talent and Compensation Committee considers the responsibilities of each executive and the competitiveness of our target bonus opportunity compared to our Market Comparison Group. The Talent and Compensation Committee then sets the annual Executive Bonus Plan target for each NEO, as a percentage of base salary. For 2022, the Talent and Compensation Committee approved an increase to the Executive Bonus Plan target for Mr. Liberty and Mr. Holtz in connection with the Company’s leadership transition and their respective promotions. There were no changes to the target percentages for the other NEOs.

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Compensation Discussion and Analysis

How we measure annual performance. For 2022, the Talent and Compensation Committee reverted to the pre-COVID framework of the Executive Bonus Plan, pursuant to which annual performance is based on: (1) company-wide performance as well as brand performance, depending on the NEO’s areas of responsibility and (2) for NEOs other than the CEO, individual performance against previously established strategic objectives. Company-wide and brand performance is measured 60% based on financial measures (Adjusted earnings (loss) per share for company-wide and adjusted brand-specific operating income for brand performance) and 40% based on a composite of financial, operational, and ESG-related key performance indicators (“KPIs”).

For 2022, the framework of the Executive Bonus Plan was as follows:

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Metrics Comprising the Executive Bonus Plan

Company-Wide Financial Metric. For 2022, the Talent and Compensation Committee approved using Adjusted EPS as an important financial metric for evaluating annual company-wide performance, reflecting our renewed focus on delivering profitable growth as we resumed operations.

In accordance with the terms of the Executive Bonus Plan, the Talent and Compensation Committee adjusted this number for purposes of 2022 annual bonuses to account for fuel price and interest rate variances from the prices and rates used for the Company’s initial forecast when setting targets, net of hedging impacts. These adjustments avoid penalizing or benefiting our NEOs for significant fluctuations in fuel prices and interest rates that are outside of the initial forecasted range and over which they have no control. In addition, and consistent with the Talent and Compensation Committee’s discretion under the Executive Bonus Plan, the net financial results and interest expense related to the opportunistic acquisition of the Silver Endeavour vessel were excluded from the Company’s financial results, as the targets for the Executive Bonus Plan were established prior to that acquisition. This adjustment increased Adjusted EPS.

The table below sets forth the targets and the achieved performance results approved by the Talent and Compensation Committee for this financial metric.