Associated Bank Gives Up
Welcome to the Socialist Machine
Last week, Associated Bank's CEO, Paul Beideman, made several mistakes in rapid succession. First he proved to be completely tone-deaf in the face of media criticism about a "junket" planned for Associated Bank's 100 top performers. Then, he cancelled the trip.
The Milwaukee Journal-Sentinel's Dan Bice certainly blew the lid off this scandal. A sales-based organization is rewarding its employees with a trip to Puerto Rico- the horror, the horror. Unfortunately, this particular bank took taxpayer funds as part of the TARP program. That means YOU BELONG TO US, Associated Bank. Welcome to the socialist machine.
First, let's examine the word "junket". Even such pillars of the conservative community as Mark Belling repeatedly referred to this trip as a "junket". Sending a group of top performing employees to a sunny, warm place during a Wisconsin February- after they were promised the trip if they met certain benchmarks- is NOT a junket. This is called a "bonus", or "compensation". If, on the other hand, a handful of Associated Bank executives were sent to Hawaii for five days to attend a half-day seminar on lending to the orchid industry- that would be a junket.
Second, let's talk about the TARP funds that Associated Bank accepted. CEO Beideman made it clear that Associated did not need the TARP funds, as the bank actually made money in 2008. His obtuse and incomplete explanation is unforgivable, coming from the CEO of a large and successful local bank. Of course Associated Bank would take the TARP funds. The purpose of the TARP program was to give banks extra funds, which the banks would then make available to businesses and individuals in the form of loans. TARP was specifically designed to increase banks' ability to lend. Whether or not the bank made a profit in 2008 is irrelevant. The $525 million that Associated Bank accepted is to be distributed to qualified candidates in the form of loans. Beideman did make it clear that none of the taxpayer funds accepted by Associated Bank would be used for the trip to Puerto Rico, a moot point and one that sounds disingenuous when poorly explained.
The Associated Bank employees who were slated to go to Puerto Rico were promised this trip in 2008, as part of an incentive program for top performers. The banking industry, in general, does not offer commissions to loan officers, for various reasons. Trips like the "junket" to Puerto Rico function as incentives for these employees to go above and beyond the minimal requirements of their jobs. The Democrats are continuously reminding us that we are in the worst economic times since the Great Depression (a view that only a revisionist historian could love). Isn't this the type of economic climate in which a business (or a bank) would desperately need their best people to be performing at the top of their game? Wouldn't taking back a promised incentive from people who earned that incentive be detrimental to morale and performance?
Unfortunately, Mr. Beideman did not articulate any of these points very well. Hindsight is 20/20, but here is what he should have said:
"Associated Bank took TARP funds so that our bank would have more money to lend to help stimulate the economy. That is the purpose of the TARP program. Since Associated Bank had a better year in 2008 than most banks, and did in fact make money, we are rewarding our top performers-that is what successful companies do. This reward, in the form of a trip to Puerto Rico, was promised to these employees and earned by these employees. All taxpayer TARP funds will go to loans in the coming months. All funding for the trip to Puerto Rico came from 2008 profits- made possible by the very people being rewarded with this trip."
Associated Bank has discovered that taking taxpayer funds comes at a cost- the cost of a business's autonomy and ability to function in the way it feels will best serve its financial goals. That's socialism at work- government telling business how it can spend money, how it can reward its employees, and when it has made too much money. It's too bad that Associated Bank let a shortsighted spurt of righteous indignation from the media dictate how it treats its most valuable employees.