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Tue Dec 4, 2012, 11:08 AM

Hostess CEO Cuts Worker Pay, But Leaves Own Salary Untouched

After failed Twinkies-maker Hostess filed for bankruptcy in November, acting chief executive Gregory Rayburn imposed an 8 percent across-the-board pay cut on the companyís workers. Despite those cuts, Rayburn, who took the company over after its second bankruptcy filing in March, will not be subject to the pay cut because he is not technically a company employee, the Huffington Postís Bonnie Kavoussi reports:

Though he imposed an 8 percent pay cut for all Hostess workers, Gregory Rayburnís monthly $125,000 pay ó or $1.5 million a year ó will remain unchanged, a company spokesman told The Huffington Post on Monday. Rayburn is not on the Hostess payroll and therefore isnít subject to the imposed pay cut, the spokesman explained.

Earlier this year, Hostessí former CEO received a pay increase from $750,000 to nearly $2.5 million even as the company was struggling. The pay package was later reduced to $1.5 million, and Rayburn reduced the salaries of four other senior executives who received bonuses to just $1 until the company emerges from bankruptcy, according to a company spokesperson. Four other executives who received raises, the spokesperson said, had their salaries reduced to pre-raise levels.

Still, the company asked a judge to approve $1.75 million in bonuses for 19 executives after it filed for bankruptcy in November. The judge approved the bonuses this week, making Hostess the latest company to dole out big pay packages to executives even as their firms were failing.

http://thinkprogress.org/economy/2012/12/04/1278131/hostess-ceo-cuts-worker-pay-but-leaves-own-salary-untouched/

6 replies, 715 views

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Reply Hostess CEO Cuts Worker Pay, But Leaves Own Salary Untouched (Original post)
The Straight Story Dec 2012 OP
midnight Dec 2012 #1
The Straight Story Dec 2012 #3
LisaLynne Dec 2012 #2
Turbineguy Dec 2012 #4
rock Dec 2012 #5
Bake Dec 2012 #6

Response to The Straight Story (Original post)

Tue Dec 4, 2012, 11:11 AM

1. Taking a pay increase while company is floundering doesn't make good business sense....

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Response to midnight (Reply #1)

Tue Dec 4, 2012, 11:12 AM

3. The view at the top is, if you pay more, people are more productive

Unless those people are blue collar, then paying less is good for the company...

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Response to The Straight Story (Original post)

Tue Dec 4, 2012, 11:12 AM

2. They like to justify the huge salaries of executives on the idea that they are making the ...

company succeed. So, when a company is failing, how exactly does it make sense that these guys deserve MORE money? And THAT much more?

Because they know it's not about helping the company, but getting rich white guys into positions where they can absorb the money back into the rich elite class.

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Response to The Straight Story (Original post)

Tue Dec 4, 2012, 11:15 AM

4. Ah yes, but you see, there is a rationale behind this.

Allow me to explain. The "ordinary" Workers are notorious supporters of the concept of keeping the company in business and profitable. Managemenent is not. Therefore management has to work extra hard to overcome the Workers and destroy the company. Don't you think they should be well-paid for that? Of course you do. Hard work deserves a big paycheck. And Workers who do not tow the party line deserve to get their pay cut.

I hope that's clear now.

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Response to The Straight Story (Original post)

Tue Dec 4, 2012, 01:28 PM

5. Or a slightly more accurrate way of stating it is

Rayburn is a Hostess asshole and therefore isnít subject to the imposed pay cut.

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Response to The Straight Story (Original post)

Tue Dec 4, 2012, 02:03 PM

6. Actually, there is a "rationale" of sorts for the exec pay.

The company is failing, soon to be liquidated. If you want to keep the current managers in their jobs until the end, as opposed to them jumping ship now, you have to pay them more money to entice them to stay.

That's the rationale. My response would be that hey, since they did such a bang-up job of running the company into the ground, why encourage them to stay now?

Bake

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