Banks learning to restrain themselves
TARP recipient Northern Trust is feeling the heat from Congress for spending lavishly on a golf tournament. As Jeremy Hobson reports, it's just the latest example of the financial industry figuring out what's OK and what's not.
Phil Mickelson plays his approach shot during the Northern Trust Open at the Riviera Country Club in Pacific Palisades, Calif. (Stuart Franklin/Getty Images)
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TEXT OF STORY
KAI RYSSDAL: Not that it's any of my business, but have you been on any good company golf outings lately? Nah, I didn't think so.
A lot of companies are cutting back on those kinds of things, what with mass layoffs and a dismal economy. But you may have heard about Northern Trust's golf tournament over the weekend. The one with the Tiffany gift bags and performances by Sheryl Crow and the band Chicago.
Northern Trust has taken more than $1.5 billion in TARP money. So as you might imagine, the bank's now in some hot water with Congress over that little party.
Marketplace's Jeremy Hobson reports the financial industry's still figuring out what's OK and what's not.
JEREMY HOBSON: Northern Trust says it didn't use any taxpayer money for the golf tournament -- and didn't want any to begin with. We've heard that line before.
PAUL HODGSON: They get it but they don't get it.
That's Paul Hodgson with the Corporate Library. He says corporations, even the ones funded by taxpayers -- are still adjusting to the new landscape - which, he says, is all about restraint when it comes to entertaining clients or employees.
HODGSON: If you want to provide a party for your employees, it needs to be at the local amusement park rather than in Disneyland or some other exotic location.
Julie Jacobs is at the center of the world of corporate events. She's the director of sales for Watson Adventures, which organizes scavenger hunts for companies. Well-known names like AIG, Lehman Brothers and Bear Stearns.
JULIE JACOBS: We've had some clients who really go over the top. I mean probably the most over the top is they had some of our staff fly out to Hawaii for a week-long sales meeting.
Jacobs defends the concept. She says there is value in getting employees to bond outside the workplace. But she says if Citigroup called her tomorrow asking for a week in Vegas, she might still take the money but . . .
JACOBS: Honestly, inside it would kind of sadden me if a company like that that was really struggling would be spending that kind of money. 'Cause I really believe there are ways to accomplish that without spending that kind of money.
Morgan Stanley seems to have gotten the message. The bank said today it will not entertain clients and executives at its golf tournament in June. Though it will remain the sponsor.
In New York, I'm Jeremy Hobson for Marketplace.
Comments
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From NY, NY, 03/02/2009
Northern Trust was forced to take the bailout from the Treasury Secretary, along with a number of other banks. They are not a government agency and have every right to spend their money now they see fit. It is none of anyone's business how they do this. This event was an economic stimulus of its own putting money directly in the hands of working people, unlike the current government plan.
From CA, 02/26/2009
Brendan has a good point, that some on Wall St - and elsewhere - need to learn lessons of wise investments of time and money for travel. However, lost in this point is the value of employees and colleagues from across the country and world coming together to learn from each other. I don't think Brendan would suggest that educators and administrators of schools not travel and gather to meet and share ideas from one city/state/region to the next and help raise the level of our educational system by sharing best practices.
From Sterling, VA, 02/26/2009
I loved this piece. It seems like Wall Street and others are unable of understanding how to curb splurge and bonuses. As an educator, I can offer some ideas for appreciation of employees--how about a mug and a pencil once a year? That does it for most of us.
From CA, 02/25/2009
This and other reports are going down a slippery slope, intimating that meetings and travel to those meetings are all boondoggles. Some may be, but many, many others are opportunities to learn best practices to help people and organizations perform more efficiently, to help teach each other, and to inspire/motivate to acheive greater levels of performance and productivity.
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