|
|
meanwhile, AIG still knows how to spend money
122 posts
• Page 1 of 4 • 1, 2, 3, 4
meanwhile, AIG still knows how to spend money
Ya gotta love the chutzpah! 
I'm not going to get excited about those numbers unless I know how many people were involved. With a compnay as large as AIG, "Executives and salespeople" could mean a lot of people. Sales conventions are common in business like insurance, and things like that are often planned years in advance. If you tell me there were 50 people at this meeting, I would have one view of those costs. If you tell me there were 1,000 people there (which is entirely possible), I would see those numbers quite differently.
And if you suggest that they should have cancelled the meeting, you might just as well suggest that they shut down the business. If they're going to have any chance to keep going, they're going to need to honor their commitments to their sales force and to keep them loyal to the company. While a few days at a nice resort may sound like a lavish reward, you'll find that sort of thing is fairly common in American companies (and not just financial institutions) that have large sales forces.
To be fair, the retreat did not inclide anyone from the financial products division. It was for AIG's main US life insurance subsidiary.
And I've said this before - the US government is makiing a killing on the AIG "bailout" - 10% interest on the loan amount, fully repayable in 3 years. In no way, shape, or form are they receiving a gift. Should AIG fail, which is highly unlikely considering their diversification, the government will easily make a profit by breaking it up and selling off the high-performing divisions.
It's all in the timing. They gave themselves a big fat black eye - something they didn't need right now. Defer the spa trip; give them some other kind of carrot; do the spa thing later when you can 'afford' it. They'll be out of the public eye soon enough.
Easier said than done. The sales convention was undoubtedly booked a long time ago, with big deposits and big cancellation fees. You walk away from something like this and it costs you a lot of money, at a time when you can't afford to piss away a lot of money.
Stick to your trade, teach. 
Timing is sometimes everything. In this case their timing stunk. It would have been cheaper to bail. Stupid of them to OK this after the bailout. If nothing else, kill the $23,000 in cucumber baths . . .
As bad hammy said, it would have been far cheaper to cancel. The bad publicity this generated can reverberate farther into their infrastructure than is apparent just today. My 'trade' is rationality (Shut up, Mark and Stinkiham!  ) and they exhibited an alarming paucity of that.
So let me understand you guys. Here's the premise. You're running a life insurance company, and every year, like every other large life insurance company, you have a sales conference at a nice resort to reward your best producers--the sales people who bring you the revenue that keeps your business going.
This conference is planned more than a year in advance and significant financial commitments are made to the hotel. Moreover, it is announced more than a year in advance, in order to provide an added incentive for sales people to qualify for attendance. And of course those who qualify plan well in advance to attend, often bringing their spouses/partners with them. It's a big deal, much looked forward to. This year's meeting happens to come at a time when all of these producers are concerned because of publicity arising from the financial condition of the life insurer's parent company and/or affiliates. It is critical that you retain the confidence and loyalty of your best sales people because it is they who control the relationship with your ultimate customers, the policy owners. I can't imagine a time when it is more critical to go ahead with the conference and show your top producers that you appreciate their business and that their efforts will continue to be rewarded in the way it always has been if they continue to bring their business to the company. If you don't do that, you might as well fold up the shop because your business will soon dry up. That wouldn't benefit anyone. Is that really what you think they should have done? By the way, if you're running the parent company, you encourage them to go ahead with the conference because if AIG does become insolvent, the life insurance subsidiary is one of the most valuable assets they have. If you're a shareholder of AIG, you don't want the company impairing the value of one of their good assets. I seem to be outnumbered here, but that's the way I see it.
What can I say? You must work for a life insurance company and are thus in the "just don't get it" category.
Bottom line: the serfs are tired of the feudal system being forced on them by venal CEOs who seem to think that the general populace is just their for their self-aggrandizement. (Christ; next thing you know I'll be espousing Communism!)
Even their spin does nothing to diminish how bad this looks for them. Whom they spent it on is irrelevant. What is was spent on is relevant. Just look at the circumstances and common sense would scream, "Cancel!" The 'appearance of evil' is something to be avoided at all costs. There's no denying this looks really bad (check out what a lot of the money was spent on).
A regulator weighs in on this:
(From one of many news accounts of the Congressional hearing.)
Who said anything about fleeing the company? All the CEO had to do was send out a message to everyone saying that this retreat comes at a bad time for the public's perception (credibility being everything in business), so it will be postponed until such time as the company is on firmer ground. In the meantime he goes about an extensive internal Damage Control program. This is just common sense, and to say otherwise is to buy into their rationalizations. The very fact that AIG is being seen in such a poor light is proof that it was a bad idea - if ONLY for the perception generated! All the points tandfman made were valid . . . but not prudent at this time.
Obviously, you don't work in the private sector, nor are you displaying any common sense at all. Any CEO who would make a dumbass statement like that would be telegraphing to his most productive people the ship had suck and they'd better flee. The insurance business is a relationship business. top producers can and will take their clients elsewhere.
In my Former Life I was an Employee Benefits Consultant for a significant number of medium and large corporations. I placed a large volume of Special Risk ( Accidental Death) coverages for many of these clients with AIG for the simple reason that they were the best as to pricing, underwriting flexibility, service, claims payments, etc. I am just SO GLAD that I am now RETIRED, and not fielding phone calls from CEO's, CFO's, and Human Resources VP's, saying, " Get rid of those guys for us or we'll hire a new Consultant to do it ! "
The Oakland mayor is good at high-end junketeering too:
http://www.sfgate.com/cgi-bin/article.c ... 01&sc=1000
I don't care how AIG spins it or rationalizes this "retreat", it was dumb, dumb, dumb.
Apparently, some people are favorably impressed/influenced by ostentatious consumption and freebies.. but some of us are not. I spent twenty years in corporate life, wining and dining and being wined and dined to no apparent benefit except to the winers and diners. I made my decisions based on price, product and service not prime rib and generous mulligans. When times got tough we cut out the wining and when they got really tough we cut out the dining. For the past thirty plus years, I have been in a position where people offer to entertain me, obviously seeking favors or business or financing. My standard reaction is: Why are you spending money you can't afford trying to get money out of me to replace it? (On re-read, I suppose the answer is obvious.. but it ain't working) Maybe it is just me. I have the same attitude about family buying me presents on my credit card.
$3500 is low-level gangsta' junketeering. Had he stayed at one of Nancy Pelosi's union-busting resorts, now THAT would have been high-end!
The holding company and the insurance company are not the same. The insurance company is one of the main assets the Fed will make money on if they have to sell the company. The insurance company has none of the counter-party risk that caused AIG's liquidity crunch.
One more politically charged comment and you're gone for good. Got it?
I am with tandfman on this one. The non-AIG salesmen and families have already paid to fly there and back, AIG foots the bill because the insurance business is the large piece and if their insurance business bites the dust you lose a lot of money - probably personally Should they have paid twice as much [they would have to re-reimburse all those attending the event for their tickets and other considerations] to move it to a budget place that would not reward those that need rewarding (without them doing their jobs well, the bailout is bigger and more likely to actually cost something). It does not look good if you only read the headline; you need to read the story.
Wait a minute, you're the one who injected the Oakland mayors junket into a non-political thread. I just put the mayors trip in perspective, and in the same theme as your post. You are also the one who starts a lions share of the political threads. How could one possibly ascertain where the land-mines are here? The best way to avoid confusion is to ban political threads, including yours, altogether. Banning those who are merely following your lead is confusing.
AIG is lucky to be in business. They are only still in business because the government made a fairly unprecedented move on the public dime. If you and the AIG folks cannot see why allowing a $400k boondoggle, including $23k of avocado scrubbs, weeks after the bailout, we are obviously inhabiting different universes. And the fact that malmo is backing you does not enhance your argument.
The children have spoken. The holding company received the loan from the Feds, not the insurance company. Last edited by malmo on Wed Oct 08, 2008 2:53 pm, edited 1 time in total.
Oh, and AIG now looking for an additional $37.8 billion. Nice!
(Assholes . . .) http://money.cnn.com/2008/10/08/news/co ... tm?cnn=yes
They haven't taken any of your money. They are spending THEIR money on that retreat, actually they are spending the money that was made by those who were on that retreat. What is it you aren't understanding about that?
I always like Howie's take on things but this is priceless (no pun intended)
http://www.bostonherald.com/news/opinio ... id=1123480
122 posts
• Page 1 of 4 • 1, 2, 3, 4
Who is onlineUsers browsing this forum: Google [Bot] and 6 guests |
|
