Cancellation Consequences?

AIG's recent decision to cancel 160 meetings and conferences, including recognition events, begs the question: What are a company's legal obligations to the qualifiers of a canceled incentive trip?

Not much, say the meetings industry attorneys we talked to. “In my opinion, an incentive trip is not ‘compensation earned’ in the same way that salary is,” says Jim Goldberg, Goldberg & Associates, Washington, D.C. “Rather [it] is a discretionary corporate award, which can be changed or canceled at any time.”

Jonathan Howe, president and senior partner, Howe & Hutton Ltd., Chicago, adds that the terms of an incentive contract “generally contain some kind of out that will allow a company to cancel.” The situation could be different if the incentive program is specifically described as a bonus, he says. “That's another story — [then] it's a contractual obligation.”