Does shareholder OBC have a future?

[cruising.mark.uk]

CCL's annual report for 2023 was published yesterday.

 

https://www.carnivalcorp.com/static-files/fcbec4e1-3a75-4c6e-a3ad-721a95250782

 

There is no clear mention of the shareholder OBC perk that has existed for many years.

 

Compare this year's report with page 3 (5 in the pdf) of last year's report.

 

https://www.carnivalcorp.com/static-files/ef80ac8c-e40e-42ad-ba8e-62a02fb13d6d

 

I'd like to think the perk will not be done away with because I don't think it costs much in the context of CCLs overall finances and I suspect that removing it would send worrying signals to the market, investors, shareholders and passengers about the company's post-Covid financial stability and recovery.  But, it does seem strange that it is not mentioned at all this year.  Any views as to why else that might be if they do not intend to discontinue it?

[rodndonna]

8 minutes ago, cruising.mark.uk said:

CCL's annual report for 2023 was published yesterday.

 

https://www.carnivalcorp.com/static-files/fcbec4e1-3a75-4c6e-a3ad-721a95250782

 

There is no clear mention of the shareholder OBC perk that has existed for many years.

 

Compare this year's report with page 3 (5 in the pdf) of last year's report.

 

https://www.carnivalcorp.com/static-files/ef80ac8c-e40e-42ad-ba8e-62a02fb13d6d

 

I'd like to think the perk will not be done away with because I don't think it costs much in the context of CCLs overall finances and I suspect that removing it would send worrying signals to the market, investors, shareholders and passengers about the company's post-Covid financial stability and recovery.  But, it does seem strange that it is not mentioned at all this year.  Any views as to why else that might be if they do not intend to discontinue it?

 

I doubt it for as you say, it is peanuts to them overall financially, but also they have just migrated to StockPerks...and I wouldn't think they would  go through the effort of changing for just one year before ending.

 

Edit: Also-the submission info on the previous report is now out of date with StockPerks so it had to removed as it was. 

Edited February 24 by rodndonna

[david63]

Without it being approved within the annual report then it is not happening

[cruising.mark.uk]

8 minutes ago, david63 said:

Without it being approved within the annual report then it is not happening

Actually, I think it needs to be approved at the AGM rather than in the annual report.  So, it could still be put as a proposal to the AGM even though it is not mentioned in the report.

Edited February 24 by cruising.mark.uk

[Arizona Wildcat]

14 minutes ago, david63 said:

Without it being approved within the annual report then it is not happening

The annual report is simply that - a report.  It reports the significant changes made by the executives and BOD and financial data.  An annual report does not make changes. 

Changes to the shareholder benefit would not require approval of shareholders at an AGM.

Edited February 24 by Arizona Wildcat

[Bgwest]

2 hours ago, cruising.mark.uk said:

CCL's annual report for 2023 was published yesterday.

 

https://www.carnivalcorp.com/static-files/fcbec4e1-3a75-4c6e-a3ad-721a95250782

 

There is no clear mention of the shareholder OBC perk that has existed for many years.

 

Compare this year's report with page 3 (5 in the pdf) of last year's report.

 

https://www.carnivalcorp.com/static-files/ef80ac8c-e40e-42ad-ba8e-62a02fb13d6d

 

I'd like to think the perk will not be done away with because I don't think it costs much in the context of CCLs overall finances and I suspect that removing it would send worrying signals to the market, investors, shareholders and passengers about the company's post-Covid financial stability and recovery.  But, it does seem strange that it is not mentioned at all this year.  Any views as to why else that might be if they do not intend to discontinue it?

Yes it does. 

[ontheweb]

There was so much chatter in these boards about Carnival Corporation dropping the shareholders' OBC when the stock tanked after Covid. Many, including me, argued that it would remain as it promoted sales and cost the corporation almost nothing. 

 

They are not going to drop it; it is an easy vote each year to extend it.

[nasa1974]

31 minutes ago, ontheweb said:

There was so much chatter in these boards about Carnival Corporation dropping the shareholders' OBC when the stock tanked after Covid. Many, including me, argued that it would remain as it promoted sales and cost the corporation almost nothing. 

 

They are not going to drop it; it is an easy vote each year to extend it.

If they drop it a lot of people will be selling their stock. Not sure if it would hurt the company though.

[david63]

58 minutes ago, Arizona Wildcat said:

Changes to the shareholder benefit would not require approval of shareholders at an AGM.

Yes it would.

 

17 minutes ago, nasa1974 said:

Not sure if it would hurt the company though.

Not significantly in the long term - perhaps a little in the short term

[ontheweb]

5 hours ago, nasa1974 said:

If they drop it a lot of people will be selling their stock. Not sure if it would hurt the company though.

Yes, but I think the main reason they keep it is it is a marketing tool that costs them practically nothing.

[startedwithamouse]

We bought 300 shares when it tanked in March 2020, in addition to a few other stocks which tanked. 

 

We've received several thousand dollars of OBC, sailing in multiple cabins, and the stock is worth double what we paid for it.  

 

Been very beneficial to us, but if they won't have the shareholder credit again, it's been a good ride!

[BamaVol]

6 hours ago, nasa1974 said:

If they drop it a lot of people will be selling their stock. Not sure if it would hurt the company though.

It wouldn’t hurt them unless they needed to issue a significant number of new shares.  And issuing new stock would be a much more troubling action than dropping the shareholder OBC.  It would tell me lenders were turning them down.

[Steelers36]

7 hours ago, david63 said:

Without it being approved within the annual report then it is not happening

They do not necessarily need to document it in the Annual Report.

[david63]

8 hours ago, Steelers36 said:

They do not necessarily need to document it in the Annual Report.

No but if it isn't in the Annual Report then it would need to be a separate resolution at the AGM - which currently it is not

[cruzsnooze]

16 hours ago, ontheweb said:

Yes, but I think the main reason they keep it is it is a marketing tool that costs them practically nothing.

The loyalty benefit also cost them nothing and they dropped that perk so it wouldn't surprise me if they did away with this one too. 

[BamaVol]

1 hour ago, cruzsnooze said:

The loyalty benefit also cost them nothing and they dropped that perk so it wouldn't surprise me if they did away with this one too. 

Shareholder OBC is more likely to attract new cruisers than loyalty OBC.  And Princess/Carnival is trying to attract new cruisers all the time.

[david63]

1 hour ago, BamaVol said:

Shareholder OBC is more likely to attract new cruisers than loyalty OBC.  And Princess/Carnival is trying to attract new cruisers all the time.

In terms of new passengers apart from Cunard, and maybe P&O, there will probably be very few new Carnival passengers that will own shares to warrant OBC.

 

I suspect that the issues is that since Covid the price of Carnival shares has plummeted from it pre Covid price making it a much more affordable purchase and I would make a guess that many have bought shares for the OBC and it has now become unsustainable.

 

I would also make a guess that there could be a new shareholder option next year - something like $100 for 500 shares per 14 night cruise

[Cruisemeister2002]

On 2/24/2024 at 3:36 PM, cruising.mark.uk said:

CCL's annual report for 2023 was published yesterday.

 

https://www.carnivalcorp.com/static-files/fcbec4e1-3a75-4c6e-a3ad-721a95250782

 

There is no clear mention of the shareholder OBC perk that has existed for many years.

 

Compare this year's report with page 3 (5 in the pdf) of last year's report.

 

https://www.carnivalcorp.com/static-files/ef80ac8c-e40e-42ad-ba8e-62a02fb13d6d

 

I'd like to think the perk will not be done away with because I don't think it costs much in the context of CCLs overall finances and I suspect that removing it would send worrying signals to the market, investors, shareholders and passengers about the company's post-Covid financial stability and recovery.  But, it does seem strange that it is not mentioned at all this year.  Any views as to why else that might be if they do not intend to discontinue it?

Living in the UK we get OBC via holding 100 Carnival shares .In 2022 I bought 100 share which at the time cost me £700, early 2023 we went on a 35 night cruise on P&O Ventura to the US and Caribbean, also taking in Cozumel Mexico, Roatan and Belize. I received £150 OBC. When I got home a short while later the shares reached over £13 per share so I sold them for £1300 a profit of £600. We had fully intended due to age and health that we wouldn't be going on anymore long cruise so the profit would more than make up for OBC gained in future. Besides OBC isn't really worth the amount you receive as goods and services onboard all have huge mark up's. So say £150 OBC is probably worth £75. Also if you are say Elite tier if you spend $150 onboard you will receive $15 refund on your final bill.

[cruising.mark.uk]

39 minutes ago, Cruisemeister2002 said:

Living in the UK we get OBC via holding 100 Carnival shares .In 2022 I bought 100 share which at the time cost me £700, early 2023 we went on a 35 night cruise on P&O Ventura to the US and Caribbean, also taking in Cozumel Mexico, Roatan and Belize. I received £150 OBC. When I got home a short while later the shares reached over £13 per share so I sold them for £1300 a profit of £600. We had fully intended due to age and health that we wouldn't be going on anymore long cruise so the profit would more than make up for OBC gained in future. Besides OBC isn't really worth the amount you receive as goods and services onboard all have huge mark up's. So say £150 OBC is probably worth £75. Also if you are say Elite tier if you spend $150 onboard you will receive $15 refund on your final bill.

Yes, everyone's experience will be different, depending on their circumstances.

 

We're in the UK as well and have had shares since about 2005.  In that time, we've cruised about 30 times with CCL brands.  All of those cruises have been 14 nights or longer, so we've received £150 / $250 on each.  Even allowing for the fact that the shares are now worth not much more than half of what we paid for them, we are thousands up.

 

And, although I hear your argument that onboard prices have a large mark-up, we would have purchased the drinks, speciality meals, excursions etc that we have used shareholder OBC whether we had that credit or not.  So, we would have paid in 'real' money for what we have effectively got for nothing.  

 

Overall, we have profited hugely from the 100 shares we bought (and, for many years, they also paid a dividend as well).  If this perk is now to go or to be diminished, I will be sad, but will remain grateful for the substantial benefit I have accrued from it over many years.

 

I am lucky enough to benefit from military OBC as well.  Hopefully, they won't do away with that!  At a guess, I'd estimate that military OBC costs CCL a lot more than shareholder OBC and those who qualify for it are not necessarily investing directly in CCL in the same way that shareholders have.  So, if shareholder OBC is removed or reduced as a cost-saving measure, I suspect that military OBC may be vulnerable as well.

Edited February 25 by cruising.mark.uk

[BamaVol]

1 hour ago, david63 said:

In terms of new passengers apart from Cunard, and maybe P&O, there will probably be very few new Carnival passengers that will own shares to warrant OBC.

 

I suspect that the issues is that since Covid the price of Carnival shares has plummeted from it pre Covid price making it a much more affordable purchase and I would make a guess that many have bought shares for the OBC and it has now become unsustainable.

 

I would also make a guess that there could be a new shareholder option next year - something like $100 for 500 shares per 14 night cruise

Stockperks drew half as many responses on the Carnival forum as Princess but way more than any other line here on CC.

[ontheweb]

2 hours ago, david63 said:

In terms of new passengers apart from Cunard, and maybe P&O, there will probably be very few new Carnival passengers that will own shares to warrant OBC.

 

I suspect that the issues is that since Covid the price of Carnival shares has plummeted from it pre Covid price making it a much more affordable purchase and I would make a guess that many have bought shares for the OBC and it has now become unsustainable.

 

I would also make a guess that there could be a new shareholder option next year - something like $100 for 500 shares per 14 night cruise

And several people on these forums guessed that after Covid, the Carnival Corporation Board of Directors would either not renew the shareholder OBC or at least make you own twice the amount of stock to receive it. But instead, they not only renewed it but the first time they renewed it was not for one year as they normally did, but for 2 years.

[BlerkOne]

Most Carnival shares are held be institutions and they aren't eligible, anyway.

 

A big nothing burger, the perk will be renewed.

[BlerkOne]

2 hours ago, Cruisemeister2002 said:

 Besides OBC isn't really worth the amount you receive as goods and services onboard all have huge mark up's. So say £150 OBC is probably worth £75. Also if you are say Elite tier if you spend $150 onboard you will receive $15 refund on your final bill.

It's worth the same as money to me in the casino.

[Steelers36]

11 hours ago, david63 said:

No but if it isn't in the Annual Report then it would need to be a separate resolution at the AGM - which currently it is not

Right, but why do you think the Board cannot do it on their own by passing a resolution?

[david63]

3 minutes ago, Steelers36 said:

Right, but why do you think the Board cannot do it on their own by passing a resolution?

Unless the Board hold over 50% of the shares between them, either directly or by proxy, then they will not have a mandate to pass any resolution, except in an emergency.