Wells Fargo cancels ritzy Las Vegas retreat
Posted
Feb 04 2009, 06:59 AM
by
Kim Peterson
Rating:
Why don't banks hold executive retreats at someplace like the Hyatt Regency Wichita? I'm sure Wichita, Kan., is a beautiful place, and holds none of the indulgent excess of, say, 12 nights at the Wynn Casino in Las Vegas.
The Wynn is where Wells Fargo (WFC) had booked rooms for a dozen nights to reward its top employees and their guests. But after suffering intense criticism for the move -- Wells Fargo did get $25 billion in taxpayer money, after all -- the company abruptly canceled the event Tuesday.
At first, Wells Fargo defended the junket as an annual tradition. Previous trips have included private Jimmy Buffett concerts, horseback riding, wine tasting and gifts laid on pillows, The Associated Press reports. But as time went by, Wells found it harder to justify the expense.
So once again we witness a culture clash between Wall Street and the real world. Banks like Merrill Lynch have been pummeled for awarding huge bonuses to employees at a time when the taxpayers are bailing out the sector. Citigroup (C) was loudly criticized for ordering a $50 million luxury jet for executive travel.
And they give the same chorus of response when asked about it: This is just the way things are done. Top executives get rewarded for bringing the company business. Bonuses are a way of life, an incentive that helps a worker make more money for the company. All-expense-paid casino trips would have never made the headlines before the bailouts.
But the bailouts are a reality, and taxpayers are suddenly paying attention to how banks and other companies spend their money. Lavish corporate retreats are out, as are lavish jets. Anything that even seems remotely excessive is off-limits -- even if the companies argue that no bailout money is being used to pay the bills.
It's a new world for bailout companies, and employees who have grown accustomed to splashy corporate perks cannot be happy about that.
Related reading:
Obama squashes Citigroup's $50 million luxury jet
AIG cancels pedicures for now
