Incentive - November 2008 - (Page 8)

HEADLINES Where Are We? PAGE 10 If you can figure out where in the world we are this month, you could receive a $50 gift card Moove Up or Moove Out PAGE 10 A prescient prediction about the relative strengths of Goldman Sachs and Lehman Brothers Recovering From AIG Mitigating the bad publicity from the insurer’s ill-timed incentive trip will take time and effort BY LEO JAKOBSON here may be a way to obtain worse publicity for your company than treating a group of executives to a lavish half-million-dollar resort “holiday” just days after accepting $85 billion worth of taxpayer money to avoid bankruptcy, but it’s hard to imagine how. Certainly the (ex) leaders of insurer American International Group (AIG), who were grilled by the House Oversight and Government Reform Committee, lampooned on Saturday Night Live and excoriated on every editorial page in the country for running a $443,000 program at the St. Regis Resort, Monarch Beach, in California from Sept. 22 through 30, would have trouble imagining a worse one. And the fact that it wasn’t an executive junket but an incentive program for independent insurance agents who outsold all their competitors—and that it helped drive sales whose profits likely exceeded the cost substantially—doesn’t make a bit of difference, says Bill Boyd, president and CEO of Sunbelt Motivation and Travel, a Dallasbased incentive travel company. “You’ll never get your day in court on the ROI,” says Boyd, a past president of the Society of Incentive & Travel Executives T Giving testimony: AIG’s Robert B. Willumstad, former chairman & CEO and Martin Sullivan, former president & CEO (SITE). “It’s not for the meeting planner to decide, but a CEO should say, ‘We are accepting government money, cancel everything.’ If attrition would cost more, pay it.” What Comes Next “I am very concerned,” says Fay Beauchine, executive vice president of global engagement and events at Minneapolis-based Carlson Marketing. “The right to reward employees for a job well done is different than executive compensation packages for failed strategies. Keeping employees engaged and happy is a good investment for the company and for the economy. Employees of corporations can’t be penalized for the good business practice of rewarding employees.” And yet, they are being penalized already. In a joint statement issued on Friday, October 17, insurance provider American International Group and New York State Attorney General Andrew Cuomo announced that the insurer “agreed to immediately cancel all junkets or perks which are not strictly justified by legitimate business needs… [including] more than 160 conferences and events, some exceeding more than $750,000 per event.” This specifically includes a $750,000 “best operator” conference planned for Las Vegas, a half-million-dollar conference that was to have been held last month at The Ritz-Carlton, Half Moon Bay in California, and a $350,000 sales conference that was scheduled for this month at the Sea Island resort in Georgia. In total more than $8 million worth of AIG conferences and events have been canceled. And as Beauchine predicted, Cuomo’s office pushed AIG’s new leaders continued on page 11 8| Incentive | November 2008 | incentivemag.com http://www.incentivemag.com

Table of Contents Feed for the Digital Edition of Incentive - November 2008

Incentive - November 2008 Editor’s Note Headlines Cover Story: Pop, Fizz! Incentive Interview Cracking the Recognition Code Primer Travel News Canada, City Style Potentials Here and Now Cameras: Picture of Innovation The Spirit of Giving Advertiser Index Last Word

Incentive - November 2008

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