Twinkies – we can all safely say – are pretty damn terrible for you. Coincidentally, so are the financial practices of the execs of Hostess, the company that makes them. From the Sacramento Bee:
[Union] members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.
Fox News (duh) has been quick to cast the blame onto the unions themselves (double duh), leaving out the fact that the multi-million dollar C-suite raises are a direct cause of the unions striking on November 9th, apparently over pension plans.
While many on the right are blaming unions, this once again comes down to human beings taking advantage of other human beings just to line their pockets. 18,000 jobs are about to be lost because of the mismanagement of 17 or so Hostess executives and board members.
November 19, 2012 at 8:10 pm, Lisa Liel said:
Is there any source for this other than the union's own press release, which you linked to?
November 19, 2012 at 9:15 pm, Jonathan Baker said:
Try the court documents that are part of the bankruptcy, filed in the last few days. Here's a good one: http://www.kccllc.net/documents/1222052/1222052121116000000000002.pdf
$1.5 million for the top few execs as incentive payments on top of the base incentive payments of $221,000 during the period of the Winddown, none to be paid out during the first 13 weeks.
November 19, 2012 at 9:51 pm, Jonathan Baker said:
Looking into it a bit more, the 300% raise for the CEO was in 2002, while several sources report that just before the current bankruptcy round, 9 top execs got raises between 35-80%, although in January they all dropped down to $1 salary for a year. So somebody is confusing events that took place over the past 10 years.
November 19, 2012 at 11:35 pm, Lisa Liel said:
Not surprising. The fact that there were no sources given (the link you gave only shows what it says in the union's suit, and they could have claimed that the CEO was a lizard person from Vega) suggested that something was fishy.
November 20, 2012 at 12:00 am, Jillian Gustafson said:
Jonathon – those sound like retention bonuses. It's the money given for getting people to stick around when a business is winding down, so that the business is properly closed up. This means that those people cannot get paid that extra lump sum if they do not stay at least those 13 weeks and beyond, and probably means the longer they stay the more they will get.
It's not a kosher practice in a scenario like this, but that's what it sounds like they are doing. Hostess' fault is a crappy product line and general stupidity in strategy. The fact that they ignored the dietary change in the consumer base is willful stupidity that should get them a plaque on the Commerce Darwinism's All Star wall.
November 20, 2012 at 4:23 am, Pam Channel said:
I knew it! I just knew when they announced that Hostess was going down that the upper crust execs wouldn't be leaving with empty pockets! One parting shot at the people that were responsible for their good fortune – the worker bees…
November 20, 2012 at 4:33 am, Lauren M Terk said:
300% raises for the executives so they can milk the company on the way out is insane. I heard today that they might still save the company, lets hope these "well compensated" executives lose their jobs (and retrospectively lose their "raises") as part of the package.
November 23, 2012 at 4:02 am, Margaret Hedlund said:
all part of a union busting effort. This is just how Bain would handle companies like this.
November 20, 2012 at 3:29 pm, Karen Galik said:
Greed! The American Way.
November 30, 2012 at 9:26 am, Hostess execs to share almost $2 million in bonuses | Death and Taxes said:
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December 17, 2012 at 4:13 pm, America’s highest-paid cop earns $484,000 | Death and Taxes said:
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