A really bad day for the meetings and incentives industry
Posted by Kristi Casey Sanders on October 8, 2008 at 2:34 pm
You know your company’s made a horrible mistake when it is made an example of during the presidential debates.
One week after getting an $85 billion bailout from the government, insurance company AIG spent $440,000 on a corporate retreat at the St. Regis Monarch Beach resort in Dana Point, Calif. Senator Barak Obama pointed out the trip as an example of the horrible corruption of executives in the corporate world.
All I can think of is the meeting planner caught between a rock and a hard place, who had booked this gathering a year or more out: Had they canceled the meeting, they would have lost a lot of money in cancellation fees, and would have been criticized for wasting the money. Choosing not to “waste” the money has resulted in a snowball of negative publicity.
Marianne McNulty, CMP, CTIE, of Clever Concierge (who gave us permission to reprint her e-mail) pointed out on the MeCo listserve that, according to the hotel bill, it looked like the incentive was for about 200 people, so the price per person evened out to about $2,000 per attendee, a reasonable amount for an incentive program.
“It also appears that this was an independent agency convention,” McNulty wrote. “If the ‘price of admission’ was to sell an ‘increase over quota’ number of policies, then the program would be ‘funded’ by these incremental sales. This is definitely not an ‘executive corporate retreat’ made up of the AIG executive base, but independent insurance agencies who sold an increase of AIG products and were rewarded. This was a sunk cost expended some time prior to the bailout and separate from that critical issue. The pro-rated cost per person of this venture is taxable as income to the recipient, so some government entity profits from this expenditure in the long run, which does not happen if the program is canceled.”
What do you think?
October 8, 2008 at 4:28 pm
I can’t help but wonder… Had the retreat been canceled and the fee quietly paid, would the funds lost in cancelation even have been noticed by the media at large? A “lavish retreat” is hard to miss, but is the general public aware (like meetings professionals are) enough to go sniffing around for a big, fat cancelation fee to broadcast across the nation? And even if some journalist out there was savvy enough to do a write-up on the costs of a “retreat that never was,” would that have possibly stimulated as much interest and scandal as the perceived bailout bash? And even if some members of the general public did become incensed at the expense, wouldn’t a cancelation be much easier to explain (and more understandable in light of the circumstances) than what looks to many people like a big ol’ slap in the face to John Q Public? I can see both sides of the meetings industry debate, but as an average American, it seems so obvious that cancelation should have been the way to go.