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meanwhile, AIG still knows how to spend money

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  • meanwhile, AIG still knows how to spend money

    http://www.sfgate.com/cgi-bin/article.c ... .DTL&tsp=1

  • #2
    Lawmakers revealed Tuesday that just days after the Sept. 16 federal bailout of AIG, executives and salespeople at the firm met at the lavish St. Regis Monarch Beach resort in Dana Point (Orange County), where the rooms can cost $1,000 a night. According to the invoices, the company spent $200,000 on rooms, more than $150,000 on meals, $23,000 in spa charges and $7,000 on golf.
    Ya gotta love the chutzpah!

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    • #3
      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.

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      • #4
        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.
        There are no strings on me

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        • #5
          Originally posted by tandfman
          And if you suggest that they should have cancelled the meeting, you might just as well suggest that they shut down the business.
          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.

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          • #6
            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.

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            • #7
              Originally posted by tandfman
              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.
              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 . . .

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              • #8
                Yep, bad timing, bad priorities, PR.

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                • #9
                  Originally posted by tandfman
                  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.
                  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! :twisted: ) and they exhibited an alarming paucity of that.

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                  • #10
                    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.

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                    • #11
                      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!)

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                      • #12
                        AIG responds.

                        http://news.moneycentral.msn.com/provid ... id=9246188

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                        • #13
                          Originally posted by tandfman
                          AIG responds.
                          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).

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                          • #14
                            Originally posted by tandfman

                            I seem to be outnumbered here, but that's the way I see it.
                            It's you vs the 12 year olds here. Everything you said was Ton-80 to the grown-ups.

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                            • #15
                              I wonder what it feels like to have 90% of the country hate you, and the guilty deserve it. :x
                              phsstt!

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