CHICAGO -- Northern Trust Corp. has responded to harsh criticism of its lavish sponsorship of a professional golf tournament by announcing that it'll pay back $1.6 billion in federal bailout money "as quickly as prudently possible."
Waddell said the Chicago-based company will also make sure future entertainment activities are "appropriate given the current environment."
"We understand this is a time of great anxiety and financial distress, and your question regarding our support of an event such as the Northern Trust Open is legitimate," Waddell wrote in a statement released Friday. "We deeply regret that some of the events associated with the Northern Trust Open have distracted from the positive nature of an event that has raised more than $50 million for charity since its inception."
Northern Trust hosted dinners and concerts for hundreds of clients and employees earlier this month at the PGA Tour's Northern Trust Open in California. Lawmakers said in a letter to the company this week that the spending was irresponsible and arrogant.
Senior VP Douglas Holt explained that the "Northern Trust Open is an integral part of Northern Trust’s global marketing activities, focusing on retaining and growing business with existing clients, and attracting new clients."
Northern Trust said the Open was in the second year of a 5-year sponsorship contract that started a year before the bailout was enacted.
One big shareholder was supportive, saying the bank is right to exit the federal program if it means no more second-guessing of actions meant to generate business, Crain's Chicago Business reported.
“As a long-term shareholder, we were very supportive of Northern following through on its plan to sponsor the tournament,” said Jason Tyler, portfolio manager with Ariel Investments in Chicago. “We think this is a fantastic opportunity for the company to continue to gain market share, and the capital levels at the company are without a debt best in class. … It’s the smart decision.”
Despite the terrible economic backdrop last year, Northern posted net income of $795 million, up 9% from 2007, Waddell pointed out in his letter.