And it’s almost over anyway, so suck it, naysayers! Still, for those of you looking for a mini vacay, might we suggest catching the tail-end of the conference Merrill Lynch is hosting for 400+ brokers at the Orlando Ritz Carlton Golf Resort this week? According to the RC rep we have on payroll, despite the hate heaped on Wells Fargo for an innocent little Vegas trip, so great that it caused the preeminent West Coast bank to cancel the damn thing, everyone in FL seems to be enjoying themselves immensely, particularly the “brokers with golf clubs in hand,” and former Countrywide CEO/current BAC caddy-in-residence Angelo Mozilo. Bank of Amerillwide’s yet to return calls for comment, so we’ll just put the words in their mouth: this was all John Thain’s idea, Ken Lewis knew nothing.
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
As long as the pay back the American taxpayers and release the Treasury from all financial guarantee commitments before the leave for their golf outing there is nothing wrong with them going.
Personally, I would be incredibly impressed if the CEO of my firm was willing to put up $350 billion to allow me to go golfing in Florida for a weekend.
I love when stuff like this sneaks out…Like they were going to get thru this without anyone finding out.
Read carefully. Its a sales incentive. No different from Barney’s paying commissions to the guys that sell suits. So lighten up.
How much Fed money has BofA received of late, anyway?
@5
How many billions in government handouts have we given Barney’s?
In reality, its no different than paying executives tens of billions in bonuses. At a basic level, financial incentives are financial incentives. This trip is a form of compensation and if the firm is receiving bailouts from the taxpayers, they have to be willing to cut back in luxury financial incentives.
@2 – bravo, classic reference.
I am the CEO of a major regional bank in the southeast. what is “Ritz Carlton”?
It amazes me that nothing is being reviewed/verified beforehand/scrutinized in any way. Once the cash is in hand it is gone – can’t unring that bell mofo’s
7 Actually, they need to make a business decision: is it good or not good for the firm to spend money sending its big producers golfing. You’re saying that taking the TARP funds prevents them from even considering that. I would disagree. After all, you’re not advocating that everyone be cut to minimum wage. We shouldn’t be micromanaging where the appropriate level above that is.
Sales incentive or not, this was dumb. Honestly, even if these guys paid for the trip out of their own pockets, it wouldn’t be worth it. It’s a public relations nightmare. I mean, are these people stupid or just that cocky? I’m leaning towards both.
But they didn’t want to take any money from the government! It was all Paulson’s fault! He made them do it – he wouldn’t give them a choice! They didn’t need the money, really they didn’t!
Is there anything preventing them from paying the government back right now? They claim they can’t but why not? Then they can take fancy trips.
12 Agree. But think about how these things work. It was probably planned and paid for a year ago. Its probably a long tradition – a sales incentive you hold out there that everyone is itching to achieve. Sales guys live for this kind of thing. Its in their DNA. You can’t very well a month or two ago say, sorry guys you achieved the stretch goal we put out there for you but we changed our mind and you cant go golfing.
I hope Dealbreaker has contacted the Orlando media so they can go get interviews from the broker/bankers about how all their IRA clients are doing of late.
@11, I’m with you, but this just further illustrates that finance in general should be de-conglomerated. (since it’s bad to be so encumbered by trading and lending losses that you can’t give perks to your brokers, who are producing almost risk-free cash flow)
If this point is too obvious, I apologize.
This confuses me.
13-
“Is there anything preventing them from paying the government back right now? They claim they can’t but why not? Then they can take fancy trips.”
In the case of Bank of America and Merrill, the warrants purchased by the Treasury are down over 88% since the bail-out. The banks will not pay an 800% premium over current market to retire the warrants.
Also, they are paying 5% on the capital provided by the feds. Buffet is getting 11%. The banks can’t afford to raise capital costs 600bps on tens of billions of dollars AND to pay an 800% premium over current market to retire the warrants.
This is an outing for retail brokers (Financial Advisors). So far, these banks have been treating that arm of their business like it’s outside the scope of TARP regulation. Is it…??
This could have SERIOUS implications for the landscape of the brokerage industry. If you crack down on golf outings, you should DEFINITELY be cracking down on hiring / retention bonuses of millions of dollars. Food for thought…
too ethnic, didn’t lynch
Question:
I need your help. I am the personal assistant to the CEO of a prominent hedge fund and I am sharing a room at a Ritz-Carleton hotel with him. (He said we had to “cut costs” so sharing a room would be “efficient”. He said he used the money we saved to buy me some lingerie since I forgot mine in the rush to get to the G9 and fly here.) Anyway, he went to sleep on a dark chocolate candy mint that the “turndown” staff left on the bed last night and it melted into the sheets! So, it looks like…well, you can guess what it looks like. Is there a way to get darck chocolate stains out of a sheet using warm champagne? The maids will be here soon and I am sort of embarrassed. I didn’t tell my boss because he is out explaining why he had to shut off redemptions. TIA !
@ 16… 19, here.
You hit the nail on the head. However, although the brokerage business is essentially “risk-free” cash flow, it’s still currently part of the parent co’s cost structure and thus a beneficiary of tax-payer money.
Just sayin…
Didn’t the guy in white on the left work for Motherrock?
Hey 14?
Your wrong!
I’m a sales guy and I don’t “live for this stuff”
I would rather they put my incentive in a white envelope every 2 weeks vs a set of steak knives or a cheesy trip to an over priced golf resort.
@24…you are wrong. the knives and trips are only part of the package, and never in lieu of the white envelope(?)
brokers deserve this for maintaining accounts in the face of the disaster wrought by the ib clowns. the only valuable asset Merrill/BAC has is the retail brokerage operation.
24 OK, I stand corrected. ALMOST ALL sales guys live for this stuff. Its probably because 1) the programs are cleverly designed to exploit the competitive nature of sales people and 2) they’re an add on, rather than substitute for, what’s in the pay envelope.
The brokers earn these trips based on their production levels and the whole thing is paid for by mutual fund companies, money managers,etc that want the brokers business. BAC will have the franchise completely destroyed before year end so let these guys tee is up and guzzle some beers for a few days.
Gang…this is a crap story. As an ML Broker of 15 years, I have been on this trip 5 times. It is anything but a boondoggle. It is a confernce for the top 400 advisors in managed money for advanced training. It invites only the top advisors, these are very established pros running big money. The confernce starts at 8:30 am and runs until 5pm for about 4 days. It is all classes, advanced training in the class room. No golf (unless you want to cut class, and pay for it yourself). No perks… nothing. They do have a dinner for you each night, but no activities (we usually just headed out on our own after dinner). It is 8ish hours of classes for advanced eduacation on managed money investing, due dilligence on managers, and best practices. They do have meals provided but that is it. Great stuff, but I have never come back with a tan in any of the five I attended. No golf, no spa perks, no dine arounds, no cash allowance….nothing! Just classes from 8:30am to 5pm. Most of it is evan paid for buy wholesalers of mutual fund companies and money managers. It is a first class business conference but NOT A BOONDOGGLE!! It is 100% busness trip. I even stopped going the past few years, because I come back more tired than when I left, and it is too far to travel from NY, when a hotel in NYC would suffice. Why they go to a Ritz Carloton is besides me, there is not time to enjoy the place. 8 hours of classes is exhausting. ML has cancelled all of the party type recognition trips for 2009 (and maybe forever).
Thanks, and sorry to rain on the f-wall street parade these days.
J
@28– bull shit.
@28- also, this story makes no mention of “spa perks” or “cash allowances,” only that some brokers were seen with golf clubs. yet here you are, so defensive. why is that?
-29
@28 Trust me, the ML FAs I know won’t take a piss unless they get a lemon scented towel handed to them and can complain about the lack of a candy mint bowl. So not buying the work-work-work message.
Unbelievable. I go to these meetings often. No money comes out of Merrill Lynch (they are paid for by third party money managers who are outstanding partners) and these advisors need education and perspective more then ever right now.
Here is what makes me sick – check out the golf link at http://www.grandelakes.com/. The picture in this article comes from the website, not from anyone actually golfing. Should be ashamed. This kind of crap is what hurts the economy and further hurts these firms. I am looking forward to the future Merrill Lynch advanced training meetings.
I have been to this conference, and as @28 said, it is all work, and you pay out of pocket if you want to golf etc.
@30 nice “come back”. fool.
@31 yes, there are many lame ass fa’s both at ML and elsewhere. This is the top 400 out of 16,000 advisors. Do the math, the 1000th guy works his ass off and makes a small fortune.
@32. love how nieve these guys are about private client. They wouldn’t understand hard work (I spent ten years as an ML trader before private client…it was EASY and the money was sick). Traders/IBK add no value and get paid too much for it. Of course, i now completely understand why four firms want to pay me $3mm up front to join them and the institutional crowd will be asking “tall or grande?” from now on.
ZVOoVT Great blog.Much thanks again. Great.