Driving home last night, I could not believe the invective I was hearing on a talk radio show about the recently held AIG incentive, which happened at a posh resort shortly after the company received $85 billion in government loans. I could practically see the host foaming at the mouth as she called for the Attorney General to sue AIG on behalf of the American public to get the money back. Everyone is piling on the get-those-b*()$#@Q bandwagon, it seems–even the President’s spokesperson has weighed in, calling the $440,000 incentive trip despicable.

After getting more heat today, the company canceled another incentive planned for next week. Now another financial institution, Wachovia, is starting to feel some heat too over a planned cruise incentive to the Grecian Islands. (Update: Now AIG’s put the hold on all future offsite meetings, pending further review.)

As a citizen, I can’t help but feel awfully outraged too at all this conspicuous consumption going on at a time when we the people are coughing up a lot of cash just to keep the financial system afloat. As caller after caller said on that radio show last night, why should they get to fiddle with our money while the system burns down around them? And it just feels good to have an actual target of well-spa’d faces for all this outrage and general unhappiness we’re all feeling as we watch our portfolios continue to shrink as markets continue to tumble and the Fed’s actions continue to not seem to do much good in stabilizing things.

And yet…

The AIG meeting was an incentive, folks. Who if not you and I should understand that incentives are not, in fact, junkets for fat cats to roll around in our dough and laugh at us suckers for not being fortunate enough to be them. There’s a reason that sales incentives trips have been a staple in business for, well, just about forever. I even got to cover one once, and while, OK, the biking in the mountains around Banff was definitely not work, the sales people were talking business with each other. I could practically see their competitiveness come out at dinners where they talked about what they were already doing to try to qualify for the next one. And the executives who attended weren’t there for a holiday; they were there to keep those high-producing sales people focused on selling their products, fill them in on how their business works, and give them tools to do their job better. (Update: A colleague just reminded me that incentives generally are considered to be taxable income to the participants. That’s another important piece that has gotten lost in the hoopla.)

Not a junket. Not a boondoggle. An incentive. There is a big difference.

Especially in a lousy fiscal environment, you want the pieces of a financial company that are still doing well to do even better, to pick up the slack for all those billions other pieces are losing. That means incentives.

There’s a lot to be said for perception being reality, and it’s something I’ve seen come increasingly true for pharmaceutical companies, which now are really good at both stripping out the excesses and hiding their sales travel incentives from public view. It was only a matter of time before financial services followed suit. Looks like that time has come.

And while it was, I think, a very poor decision to carry on with the incentive instead of swallowing what I’m sure would have been a roughly equivalent cost in cancellation fees for last week’s event, I can’t fault AIG too much for going through with it. A promise is a promise, and those folks went out and did their jobs specifically knowing this was what they’d get if they did really well. Should they be punished for bad decisions made in areas completely outside their realm?

Bottom line? If I had been planning that trip, I would have tried to postpone it until Q109 or later, like all the other corporate meeting planners appear to be doing with their fall meetings (if at all possible), and I would have tried to trim as much of the fat out as I could. I do believe that those high-producing agents should have gotten the travel rewards for a job well done they were promised, but the timing could not have been worse. I’m sure they would have understood having to wait a few months until things start turning around again.

And now the American public has a whipping boy for all their financial angst: An incentive. This is not good for business, folks–yours, ours, the government’s, or anyone’s.