Repercussions Of Cancellation

Jerry Coffee
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Wednesday - April 22, 2009
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Last November I had been confirmed for months to speak at an AIG conference in Charleston, S.C. The “Charleston experience” embodies the essence of Southern charm and hospitality: big, beautiful oak trees dripping with Spanish moss, horse-drawn carriage rides through gas-lamp-lit streets, statues of Robert E. Lee, restaurants featuring the best of Southern cuisine, and lovely Victorian architecture dating back to the Civil War.

This was to be a typical incentive conference for AIG’s top producers: the insurance and financial product salespeople who have met or exceeded their sales goals for the previous period, the ones normally most responsible for the company’s financial success or failure.


 

Sure, AIG could have divided the projected expense of the conference by the number of qualifiers and just paid each a “thank you” bonus. But that wouldn’t have provided the same value to the qualifiers or to AIG. For starters, the bonus would be taxable but the conference would not be. Furthermore, incentive conferences bring people together in a relaxed atmosphere for networking, a chance to familiarize themselves with new products and services, to share best practices, brainstorm solutions to common problems, and to interface with management on corporate tactics and product development or refinement. Corporate officers from the CEO on down connect with their people in the trenches on a personal basis to share firsthand the “state of the company” and to personally present awards to the highest performers. This face-to-face dialogue imparts to the attendees a sense of ownership and a deeper sense of loyalty toward their company - no small things in modern corporate America.

And more important than one might guess, incentive conferences share the reward with spouses and partners, most of whom endure the long hours and business pressures right along with the principle. Some attendees say they get as much pressure from their spouse as from their boss: “Have we qualified for Charleston yet? No? Better get on it. I don’t want to miss that one!”

No, corporate incentive meetings are not just big, wild, expensive parties or boondoggles. In fact, they have become an integral part of America’s corporate culture. They enhance communication, dedication to common goals and a sense of ownership among employees - all affecting the corporate bottom line. It’s good corporate citizenship, while making a reasonable profit.

Well, as we all know now, AIG (already reeling from criticism of a generous executive conference on Grand Cayman Island), for a myriad of reasons unfathomable to most of us, required a huge bailout package to keep from going under, dragging dozens of related enterprises with it. Further celebration of any kind appeared unseemly, so, under significant government and social pressure, AIG canceled the Charleston conference and others that were planned.

Such pressure has been terribly misplaced and shortsighted.


Hotel contracts that had been signed for a year were canceled, incurring significant penalties particularly untimely for AIG. Contracts with destination management companies, production companies and transportation companies were canceled. Charleston’s retail businesses, restaurants, taxi and carriage drivers all lost business. Airlines lost out on AIG travelers. As we know here in Hawaii, the “trickle down” effect of a canceled convention is deadly in terms of lost business and jobs. Such governmental micromanagement does nothing to solve the macro problems underlying the company’s failings, and only compounds the economic difficulties for the “little people” inside and outside the corporation.

Don’t get me wrong. Like you, I am totally turned off by the obscene, disproportionate bonuses that corporate directors have been approving for their top executives regardless of the company’s profitability. That must stop. But these bonuses should not be confused with the corporate incentive meetings and conventions that have become a legitimate part of a corporation’s most-productive employees’ compensation package.

Oh, and by the way, like most professional speakers would do, I’ve retained AIG’s 50 percent deposit of my fee, to be applied to the full fee whenever the company is able to reschedule its conference - which should be interesting!

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