Northern Trust (NASDAQ: NTRS) had a great time with taxpayer money. It spent $6.3 million for an LA bash featuring a golf tournament, spa treatments in posh hotels, and musical performances from Sheryl Crow, Earth Wind & Fire, and Chicago. Who paid? We did -- that's because Northern Trust took $1.6 billion in TARP money.
But from now on Northern Trust is going to have to use its own money if it wants to pamper its executives. Thanks to all the wonderful publicity it's received about its lavish spending, it has decided to pay back the $1.6 billion that it never wanted to take to begin with. And thanks to its excellent financial performance -- in the last year it generated $4.3 billion in revenues and $795 million in profit -- it never needed the money to begin with but Hank Paulson forced Northern to take it.
So now Northern Trust can enjoy its partying without the embarrassment of having the press find out it was using taxpayer money to foot the bill.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.
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Reader Comments (Page 1 of 1)
3-01-2009 @ 1:01AM
Reg Joe Moe said...
Good! Let's see where they take their own executives for some tender good pampering this time when they have to cough up from their own wallets. For all I care, these knuckleheads can go pamper themselves and all their croonies all the way on the moon if they like.
And this guy, Hank Paulson, needs to have his head examined, too.
3-01-2009 @ 10:22AM
carl said...
REG JOE MOE ---- You must not have read this part of the article !! it has decided to pay back the $1.6 billion that it never wanted to take to begin with. And thanks to its excellent financial performance -- in the last year it generated $4.3 billion in revenues and $795 million in profit -- it never needed the money to begin with but Hank Paulson forced Northern to take it.
3-01-2009 @ 10:43AM
Mike said...
This is false information against Northern Trust, this is their marketing program for commercial their customers to grow their business.
The Media is not providing truthful information!
3-02-2009 @ 1:11AM
John said...
I agree with Mike, this company is one of the few banks to post a profit this year! It seems to me their business model is working fine. TARP funds were not used for this event according to multiple responses from NTRS. They are paying it back to ensure they are still a great company.
Let's be honest - it's not corporate greed... it is a marketing event targeting existing customers. Northern Trust participated in the original TARP funds because ALL national banks were asked to.
I judge performance by their balance sheet... not by a congressman or the media's first view.
3-08-2009 @ 4:15PM
Brian McGovern said...
When a marketing event that attracts and retains investors more effectively than TV, newspaper and radio advertising - it gets attacked by TV, newspaper and radio companies.
What about the cost to the economy when corporations cancel events to avoid bad PR? I blab about that here ... http://brianmcgovern.com/special-event-industry-tarp/