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2 comments:
I agree it sounds bad when you first hear it, but when you break it down I have no qualms about it. Things to think about:
- The retreat was for execs in the life insurance division, a group that was and is performing strongly for AIG.
- Retreats of this nature are very common in the business world. We had a similar thing at PwC, Kyle's company does a retreat at the Ritz every year, etc. They aren't done for the pure luxury of the people going but to give everyone a chance to cool off of work, spend time together and get to know coworkers better, and blow off steam.
- Since retreats like this are so common, it clearly had to have been planned far in advance of the actual retreat. Considering this, I am very sure that the cancellation fees with such a trip would have not really made it worth it to just cancel and let that money just go down the drain.
- Since this IS one of the well-performing branches of AIG - they really do need to try to keep these execs from jumping ship and going elsewhere. How do you do that? Incentives. Also - AIG is planning on focusing on their Property & Casualty insurance division, so there is a good chance this life division will be sold off. They NEED to keep the execs around in that division, who have actually done a good job, so that they can get a good price for the division.
- And to the cost of the retreat - $400,000 I believe. Merely .00047 % (or something like that) of the total bailout plan. And, as Kyle and I both noted while hearing Obama mention it last night and demand they pay the government back - we burst out laughing at the absurdity of that statement. Of course they are paying the government back. At about 12% interest. Silly Obama - that's the essence of what a loan is.
So, while it sounds really bad when you first hear it, it really doesn't sit with me the wrong way. I think there are much worse wastes of taxpayer money, which McCain brings up frequently, than getting all riled up about the retreat. And trust me, I have never been a fan of AIG. Not at all. I just think it's getting blown out of proportion.
jeez meg, you had a lot on your mind didn't you? :)
I see your point of view, but it still doesn't sit well with me. There can be incentives without going and spending half a million dollars on 100 people! My company used to go on crazy, extravagant retreats to the Ritz. Much to my chagrin, the retreats stopped the year I started. But is that such a bad thing? No, I think it's smart leadership in business. Shouldn't all the companies on Wall Street, and especially the ones the American taxpayers are bailing out, rethink their costs and extravagance? Maybe we can excuse them for this one, since it was planned in advance...but it still upsets me, and I wonder how much they knew they were failing at the time they planned a retreat like this.
Sacrifices. I thought that was an interesting topic in the debate on Tuesday. When are Americans, as individuals and companies, going to realize that we can't continue a culture of excess and living outside means? And now AIG gets a 2nd loan of $38 billion. Are they really ever going to be able to pay those loans back?
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