NEW YORK (Reuters) - The United States may be emerging from recession but some firms are canceling holiday parties for a second year in a row and others are bragging about having fun on the cheap.
With one in 10 U.S. workers unemployed and the prospect of a double-dip recession looming, companies are aiming to balance rewarding their employees for a tough year against avoiding criticism for holding celebrations that are too lavish.
“This is not an environment where anyone, including Wall Street, wants to have big Christmas parties,” former Merrill Lynch Chief Executive John Thain said. “I think that you will see a much more conservative tone across all the firms.
“Everyone is pretty sensitized to the fact that excessive consumption or excessive anything is not acceptable,” he said.
For several companies the easiest decision was simply to cancel holiday party plans, some for the second year in a row.
American Express Chief Financial Officer Daniel Henry and FBR Capital Markets banking analyst Paul Miller said their firms did not hold a party in 2008 and would not be celebrating this year.
Wall Street’s dominant firm, Goldman Sachs, criticized for preparing to pay at least $16 billion in pay and bonuses to employees after taking a taxpayer bailout, also is forgoing a holiday party for a second year, spokeswoman Gia Moron said.
Goldman Sachs has paid back the government bailout and has reported more than $3 billion in profits in each of the past two quarters.
The U.S. Treasury’s pay czar, Kenneth Feinberg, who is in charge of compensation at seven companies who received government bailouts and recently slashed the pay of top earners, said he is not throwing a party for his staff.
Some hotels and restaurants are capitalizing on this year’s spendthrift mood by offering companies a chance to share the costs by holding a party with several other businesses.
Recent surveys show fewer companies are having parties.
A poll by global outplacement consultancy Challenger, Gray and Christmas found 62 percent of companies are planning parties, down from 77 percent a year ago and 90 percent in 2007. One in three companies said they were spending less.
“Departments will have Christmas parties. They will not be excessive Christmas parties by historic standards in any way. But we will have a holiday party,” said Lee Fensterstock, chief executive of investment bank Broadpoint Gleacher.
“They were always very tasteful events and reasonable. We never had any dwarf tossing or people jumping out of cakes or anything like that,” he said.
Nomura Chief Operating Officer for the Americas Takeo Sumino said his firm would hold a two-hour holiday reception in mid-December mainly to welcome new employees.
Some companies say it is important to reward employees, especially as the United States struggles to shake off its worst economic downturn in 70 years.
“I am not canceling Christmas parties for staff,” HSBC North America Chief Executive Brendan McDonagh said. “Employees work hard.”
“At the end of the day I need to keep 40,000 employees engaged, motivated and rewarded, and they’re not earning millions of dollars each,” said McDonagh, adding that each department would be given money to plan a party.
Additional reporting by Steve Eder; Writing by Michelle Nichols; Editing by Ellen Wulfhorst and Eric Beech
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