The Wells Fargo Withdrawal

Emotions always trump statistics. So, when companies that are taking billions of dollars from Washington during a deep recession continue to appear to be living too high on the hog, the negative perceptions are damaging.

Some might make a case that these trips—often called junkets—help transfuse cash into supporting businesses (e.g., hotels, taxis, tour guides, etc.). But, we’re seeing that time and again the company in question will be vilified because of the way things appear.

Thus, it should’ve been no surprise to Wells Fargo, one of those banks on the receiving end of billions of dollars in TARP money, that when word broke the company was planning a Las Vegas-bound event for employee recognition and appreciation there would be loud and angry fallout.

Wells Fargo CEO John Stumpf has complained about the media in full-page ads in both the New York Times and Wall Street Journal. He cancelled the trip, yet also defended it.

His letter to the public reads in part:

“OK, time out. Something doesn’t feel right…deliberately misleading” (news reports created an impression) “every employee recognition event is a junket, a boondoggle, a waste, or that it’s for highly paid executives. Nonsense!”

But what doesn’t make sense is the fact that Wells Fargo had not learned from the sins of others and that the company even considered this trip in the first place. While hundreds of thousands are losing their jobs, now is not the time. It makes you wonder who’s not paying attention, and why.

The media can be blamed for many things but, in this case, Wells Fargo’s management need look no farther than their own headquarters. They may have had good and honest reasons for their plans, but there’s an old saying that “the road to hell is paved with good intentions.” Especially when so much of the country is going through hell right now.

One thought on “The Wells Fargo Withdrawal

  1. Q. What’s the difference between a legitimate business meeting and a junket? A. Perception, based on who’s describing the trip.

    Yes, hundreds of thousands of Americans have lost their jobs. Yes, times are tight. Yes, the credit and equity markets and the ‘real’ economy have tanked.

    But pandering to ‘politically correct’ thinking and posturing is not going to help. It may be expedient, but it’s not an answer.

    Rather, have the courage to defend the trip if it really is for legitimate business reasons. Point out that trips like this are planned and booked months, sometimes years, in advance – and have hefty cancellation costs. Outline the reasons and the value that you expect from the investment in the meeting. Point out the economic value of the money being spent on lodging, meals, etc. Underscore the need for morale building events in tough times.

    If we all ‘pull in our horns’ because we’re afraid of being accused of spending money on things others, perhaps unfairly, describe as ‘trivial,’ then we’re not leaders, we’re sheep.

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