March 27 (Reuters) - Norwegian Cruise Line Holdings said on Friday it had appointed five new independent directors and entered into an agreement with activist investor Elliott Investment Management,
Cruise line Norwegian shakes up board amid pressure from activist Elliott
Norwegian Cruise Line Board Restructuring and Activist Investor Influence
By Svea Herbst-Bayliss
Background: Activist Pressure and Company Performance
March 27 (Reuters) - Norwegian Cruise Line Holdings 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.
Elliott's Stake and Demands
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.
Financial Challenges Facing Norwegian
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.
Key Board Changes and New Appointments
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.
Comparison to Previous Board Shakeups
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.
Market Performance and Elliott's Vision
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 saw its stock price surge 211% during the same time.
Elliott, which is also currently pushing for changes at software company Synopsys and orthodontics company Align Technology, 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.
Potential for Value Creation
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.
Speculation on Future Strategies
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.
(Reporting by Svea Herbst-Bayliss in Boston with additional reporting by Sanskriti Shekhar in Bengaluru; Editing by Susan Fenton)
