What crisis? AIG unit parties like it's 1999 (IN CANADA)

Bymark is a popular Bay Street watering hole known for its frisky financial district frisson and $37 burgers. The champagne isn't cheap, either. So it came as a surprise to some destined for the adjacent Bymark restaurant last Thursday evening to see a private party in full roar in the lounge - hosted, according to Bymark, by American International Group (AIG). Yes, the same AIG that narrowly avoided bankruptcy in the U.S. and is now being sold off. Turns out it was a splash-out laid on for clients by AIG United Guaranty, the mortgage insurance lending arm, and billed as "an evening of celebration" in the invitation from CEO Andrew Charles. "Together," the invitation read, "we're helping more Canadians realize their dreams of home ownership."

How disgusting does this have to get before the Government calls for the loan to be paid back, with penalties?

I don't have any association with AIG, I'm not a customer, employee, or independent agent for them, I don't know anyone who works for them. In fact, they are the major sponsor of a sports team I detest, so I have no axe to grind for them.

However, I think you are being hard on them over this "junket" in California. I appreciate the timing makes it look really bad, but on listening to the facts, I don't know what else AIG should have done.

My understanding is that the meeting in question was an event to reward their top 100 independent agents. These are not AIG employees, but independent insurance agents that sell AIG products. As part of the incentive / commission scheme the top performers get a fabulous weekend getaway as a reward for meeting and exceeding their sales goals. This event is budgeted into the annual sales budget and is deemed by nearly every business in the nation as an effective incentivizing strategy to boost sales.

No doubt this was part of a sales program that finished two or three months ago and just happened to unhappily get overtaken by the bailout.

So what was AIG to do? Renege on their promise to their top performing independents and destroy their sales structure? Face potential law suits for breach of contract? Drive away all the independents from ever selling their products again?

The reason it was lavish is because it was meant to be. That was part of the inducement to sell.

Ironically, it probably cost a lot more than the $440,000 that has been reported. If there were 100 independent reps there, they were likely invited with their spouse/partners, and AIG almost certainly picked up the tab for the airfares to get them there.

So while it is understandable that the folks would get pissed at seeing AIG holding a big party just after receiving a huge handout, it was probably meeting it's obligations to an important company asset, it's top performing sales staff. 80 % of the business is generated by 20% of the sales staff so it is important to keep that top 20% incentivized.

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