Bankruptcy Court Approves Fat Bonuses For Greedy Hostess Executives
Hey, union workers, get an MBA: Working’s for suckers.
Hostess Brands, Inc. — maker of beloved carb and sugar-laden treats like Twinkies, Donettes, CupCakes, Ding Dongs, and Wonder Bread — received final approval today from the bankruptcy court in White Plains, NY to move forward with plans for wrapping up operations and selling the company. These plans include paying 19 executives $1.8 million in bonuses — and two of these higher-ups additional incentives — for meeting specified goals during the liquidation process, which will take up to a year.
Candice Choi’s article in Boston.Com reports, “The company says the incentive pay is needed to retain the 19 corporate officers and ‘high-level managers’ for the wind down process,” and adds that “restructuring expert” Gregory Rayburn — Hostess’ sixth CEO in as many years — won’t be participating in this bonus plan. The poor guy will have to make do on his meager salary of $125,000 per month. Apparently, Judge Robert Drain (seriously, that’s his name) never bothered to ask why anyone would want to retain this gang of incompetents; nor did he see the necessity of appointing an independent trustee, as requested by Hostesses Bakers Union, even though it seems like a total no-brainer to anyone with any common sense whatsoever.
The sheer audaciousness of these swaggering Leeches of the Universe has raised many eyebrows, including those of Susan Adams from Forbes Magazine — a conservative, pro-business publication (!) — who bluntly writes:
“It’s tough to see why managers should get bonuses for driving a company into the ground and sacrificing some 18,000 jobs. Hostess had become horribly insolvent, with a net loss of $1.1 billion in fiscal 2012 on revenues of $2.5 billion. The company also reportedly has $111 million in unfunded pension obligations.”
Adams’ Forbes colleague, Adam Hartung also places the blame on management — not on their unionized scapegoats — and wrote earlier this month that Hostess’ troubles began in the early 1980′s, when upper management repeatedly failed to address the changing tastes and increasing health-consciousness of their customers. Instead of focusing on new product development, they kept adding debt. In the end — according to a Hostess baker’s article in Daily Kos, written under the pseudonym “Blue Barn Stormer” — management exacted draconian cuts in workers’ pay and benefits; stole a years’ worth of workers’ pension fund contributions by “borrowing” them without permission and cancelling the debt through bankruptcy; reneged on its pension obligations; laying off 18,500 workers; and adding insult to injury by claiming that the workers are to blame.
If top managers had done their jobs and taken the necessary steps to update its brand and revamp its product line to keep up with the times, liquidating a much-loved company and cutting thousands of devoted workers loose into a barely-recovering job market shouldn’t have been necessary. According to Choi’s article in Boston.Com, 110 companies want to buy Hostess — or at least some of its product lines — and are offering hefty sums for the privilege. Obviously, they know the value of the brand — along with the tasty products produced by Hostess’ workers — even as its current managers keep dragging it through the mud.
Elisabeth Parker is a writer, Web designer, mom, political junkie, and dilettante. Come visit her at ElisabethParker.Com, friend her on facebook, or follow her on Twitter.