Quarterly report pursuant to Section 13 or 15(d)

Employee Benefits and Compensation Plans

v3.21.2
Employee Benefits and Compensation Plans
9 Months Ended
Sep. 30, 2021
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Employee Benefits and Compensation Plans

9.   Employee Benefits and Compensation Plans

In January 2013, NCLH adopted the 2013 Performance Incentive Plan, which provided for the issuance of up to 15,035,106 of NCLH’s ordinary shares pursuant to awards granted under the plan. In May 2016, the plan was amended and restated (“Restated 2013 Plan”) pursuant to approval from the Board of Directors and NCLH’s shareholders. Among other things, under the Restated 2013 Plan, the number of NCLH’s ordinary shares that may be delivered pursuant to all awards granted under the plan was increased by an additional 12,430,000 shares to a new maximum aggregate limit of 27,465,106 shares. In May 2021, the Restated 2013 Plan was further amended and restated to increase the number of NCLH ordinary shares that may be delivered by 4,910,000 shares to 32,375,106 shares.

Share Option Awards

The following is a summary of option activity under NCLH’s Restated 2013 Plan for the nine months ended September 30, 2021:

Weighted-

Number of Share Option Awards

Weighted-Average Exercise Price

Average

Aggregate

Time-

Performance-

Market-

Time-

Performance-

Market-

Contractual

Intrinsic

Based

Based

Based

Based

Based

Based

Term

Value

    

Awards

    

Awards

    

Awards

    

Awards

    

Awards

    

Awards

    

(years)

    

(in thousands)

Outstanding as of January 1, 2021

 

4,525,207

114,583

 

208,333

$

51.96

$

59.43

$

59.43

 

4.42

$

Forfeited and cancelled

 

(96,862)

 

52.49

 

  

Outstanding as of September 30, 2021

 

4,428,345

114,583

 

208,333

51.95

59.43

59.43

3.68

Restricted Share Unit Awards

In June 2021, NCLH granted 3.1 million time-based restricted share unit awards to our employees, which primarily vest in substantially equal installments each March 1 over three years. Additionally, in June 2021, NCLH granted 0.7 million performance-based restricted share units to certain members of our management team, which vest upon the achievement of certain pre-established performance targets established through 2023 and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through March 1, 2024.

The following is a summary of restricted share unit activity for the nine months ended September 30, 2021:

Number of

Weighted-

Number of

Weighted-

Number of

Weighted-

Time-Based

Average Grant

Performance-

Average Grant

Market-

Average Grant 

    

Awards

    

Date Fair Value

    

Based Awards

    

Date Fair Value

    

Based Awards

    

Date Fair Value

Non-vested as of January 1, 2021

 

6,663,925

$

30.54

 

1,565,184

$

39.42

 

50,000

$

59.43

Granted

 

3,135,993

30.89

736,898

40.89

 

Vested

 

(1,746,838)

47.01

(460,969)

56.73

 

Forfeited or expired

 

(225,752)

28.71

 

Non-vested as of September 30, 2021

 

7,827,328

27.05

 

1,841,113

35.68

 

50,000

59.43

The compensation expense recognized for share-based compensation for the periods presented include the following (in thousands):

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

Payroll and related expense

$

6,525

$

5,483

$

16,225

$

15,214

Marketing, general and administrative expense

 

33,397

 

20,379

 

72,749

 

65,795

Total share-based compensation expense

$

39,922

$

25,862

$

88,974

$

81,009