Beleaguered insurance giant
The St. Regis Monarch Beach Resort: Too rich a reward?
American International Group Inc. found itself in the headlines and in the hot seat last month, when word got out that the company held an elaborate, $440,000 executive retreat just days after receiving an $85 billion bailout by the government.
In a letter to U.S. Treasury Secretary Henry M. Paulson, AIG chairman/CEO Edward M. Liddy explained that the event -- held in late September at the St. Regis Monarch Beach Resort in Southern California -- was in fact an incentive program one of its subsidiaries held for its top-producing independent agents, and no AIG executives from headquarters attended.
Subsequently, the company pulled the plug on a similar incentive program, by another of its divisions, that had been slated to take place this month at the Ritz-Carlton Half Moon Bay in California. In mid-October, it canceled 160 meetings and events that would have cost $80 million.
Did AIG take the right action in holding the first incentive? M&C asked incentive professionals to weigh in.
One planner (who requested anonymity) noted, "The cost of this program was probably more than paid for by the incremental income earned by AIG. They are the exact people the company has to keep motivated."
Joan M. Buck, CMP, CMM, president of Denver-based eMeetingExperts, recalled a client that had huge layoffs just before an event was to take place. "They went ahead with the meeting, addressing the dire situation in a professional manner, expressing the grief of the loss, and thanking the attendees," she said. "That company stands strong today."