Not only do investment bankers need to be bribed with bonuses bigger than their firms earnings to do their jobs—they need to be feted at fancy Florida resorts too.
The Orlando Sentinel is reporting that as late as last week, Merrill Lynch was still flying employees down to the Ritz-Carlton in Orlando, Florida for a “training event.”
Now, look, we realise that training is important, and the events are so boring you probably have to throw them in nice places. Otherwise everyone would try to figure out how to be too busy to attend. But this is another reason the government shouldn’t be propping up insolvent financial institutions—every single expense is essentially on the taxpayers.
Here’s the deal, lads and lasses. If you run a bank, you have to figure out a way to survive on without government aid or accept deep changes to the way you do business. And if you can’t take the deep changes and can’t survive without government support, well, prepare to be liquidated. You are broken.
What’s funny is the Merrill has apparently been ratted out by the very people they’re spending money with.
Merrill and other financial-services companies have been frequent guests at Orlando-area resorts in recent years, business officials said. But while some curtailed their travel as the financial meltdown deepened last year, Merrill kept flying in employees from across the country.
“Some have completely canceled these kinds of programs, but Merrill is not one of them,” said Rita Lambert, sales manager for Norman’s at the Ritz-Carlton Orlando, Grande Lakes. She said Merrill employees stayed at the hotel throughout the fall into this year and often ate at the high-end restaurant.
Somehow we think that not many Merrill people will be showing up at Norman’s in the near future. Hopefully, Miss Lambert has her resume ready.
Merrill will claim that it needs to do these things, but employees who worked before the boom of this century remember more frugal times.
Some former Merrill employees said they were stunned by the trips. In the past, Merrill would recognise top-selling executives at no-frills quarterly meetings, said Monica Schmieler, a retired broker and sales-support staffer who lives in Orlando.
“I used to go to those functions in the 1990s,” she said. “And believe me . . . I almost had to pack my own sandwich for it back then.”
Merrill Lynch’s mouthpiece Jessica Oppenheim says we shouldn’t pay any attention to these junkets because clients pay for them. Well, fine. But one banking analyst points out that clients don’t just pony up the dollars for these things without expecting some value back.
“Really, that doesn’t look good, either,” said Avivah Litan, a banking analyst for Gartner Inc., a research firm based in Stamford, Conn. “No matter who’s paying for it, I’m sure the money is flowing both ways.
“If Merrill’s advisers are selling products for these companies, they’ve got to be sharing fees, and those costs get passed along to investors,” Litan said. “I just think it’s still bad judgment to have a training event at an expensive place like the Ritz-Carlton.”