Cruise line Norwegian shakes up board amid pressure from activist Elliott
By Svea Herbst-Bayliss
March 27 (Reuters) - Norwegian Cruise Line Holdings NCLH.N is shaking up its board to improve performance amid pressure from activist investor Elliott Investment Management.
The world's third-largest cruise operator said on Friday it will add five new directors at the end of the month, including executives with experience in running an airline, a theme park and an investor who has expertise in taking companies private.
Last month Elliott, one of the world's busiest activist investors with approximately $80 billion in assets, unveiled its more than 10% stake in Norwegian alongside calls for management to improve the guest experience and financial results.
Earlier this month, Elliott, now Norwegian's largest shareholder, called for a board overhaul after the company reported lower profits and a weak outlook for 2026.
The cruise operator warned on Friday that rising fuel costs linked to geopolitical uncertainties would weigh on profits this year and that new reservations had slowed as consumers face rising prices and are watching their spending more.
Chief Executive John Chidsey, who has been credited with previously turning around sandwich chain Subway and was appointed to the cruise line's top job in February, will be given the additional title of chairman of the board.
Alex Cruz, a former chief executive of British Airways, will become lead independent director. Former Disney Experiences chief financial officer Kevin Lansberry, Steve Pagliuca, a former managing partner of private equity giant Bain Capital, Brian MacDonald, president of integrated software provider CDK Global and Jonathan Cohen, founder and chief executive of investment firm Hepco Capital Management, will also join the board on March 31.
Four long-serving directors, including Stella David who had been the chairperson, will leave.
The change in directors marks one of the most dramatic reshaping of a board since 2024 when five of Elliott's 10 nominees became directors at Southwest Airlines after the hedge fund threatened a proxy fight.
Norwegian has a market value of roughly $8.6 billion and its stock price has fallen nearly 30% in the last five years. Its much bigger rival Royal Caribbean Cruises RCL.N saw its stock price surge 211% during the same time.
Elliott, which is also currently pushing for changes at software company Synopsys SNPS.O and orthodontics company Align Technology ALGN.O, wanted Norwegian to develop and implement a new business plan to better compete with rivals and to have leadership in place to oversee a successful transformation.
Elliott previously said the right kind of changes could help Norwegian's stock price surge to $56 a share, compared to its$18.81 per share price on Friday.
"We see the potential for significant value creation ahead under (CEO John Chidsey's) leadership," Elliott partner John Pike said, adding that the new board will help restore investor confidence.
While Elliott is foremost focused on operational improvements at Norwegian, industry analysts said the reshaped board's expertise in taking companies private might also signal readiness to pursue a sale at some point in the future.
