Hostess Blames Union For Bankruptcy After Tripling CEO’s Pay

Posted in the Minneapolis Forum

Smart Liberal

Minneapolis, MN

#1 Nov 16, 2012
Today, Hostess Brands inc.— the company famed for its sickly sweet desert snacks like Twinkies and Sno Balls — announced they’d be shuttering after more than eighty years of production.

But while headlines have been quick to blame unions for the downfall of the company there’s actually more to the story: While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.

At the time, creditors warned that the decision signaled an attempt to “sidestep” bankruptcy rules, potentially as a means for trying to keep the executive at a failing company. The Confectionery, Tobacco Workers & Grain Millers International Union pointed this out in their written reaction to the news that the business is closing:

BCTGM 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.

Certainly, the company agreed to an out-sized pension debt, but the decision to pay executives more while scorning employee contracts during a bankruptcy reflects a lack of good managerial judgement.

It also follows a trend of rising CEO pay in times of economic difficulty. At the manufacturing company Caterpillar, for example, they froze workers’ pay while boosting their CEO’s pay to $17 million. And at Citigroup, CEO Vikram Pandit received $6.7 million for crashing his company, walking off with $260 million after the business lost 88 percent of its value.

“We have 545 traitors.”

Since: May 11

Parts Unknown

#4 Nov 16, 2012
I assume you have a reliable source to quote from? Or was this posted directly from the union website?
Amused Slew

Seattle, WA

#5 Nov 16, 2012
Blern wrote:
I assume you have a reliable source to quote from? Or was this posted directly from the union website?
Do a web search, you'd be done now, if you had a brain....
Capt Crunch

Cottonwood, AZ

#6 Nov 16, 2012
Amused Slew wrote:
<quoted text>Do a web search, you'd be done now, if you had a brain....
When you dance to the Pipers tune, you have to pay the Piper. Put down your trumpet Trumka, the dance is about over and the fat lady is warming up.
Fred

Minneapolis, MN

#7 Nov 16, 2012
Amused Slew wrote:
<quoted text>Do a web search, you'd be done now, if you had a brain....
Lazy Slew is unable to provide a source for the lies he posts.

“We have 545 traitors.”

Since: May 11

Parts Unknown

#8 Nov 17, 2012
I don't count left wing blogs as credible news sources like some of you do. Please give a real credible source for this marerial. All I see is biased heresay.
Amused Slew

Seattle, WA

#9 Nov 17, 2012
marerial ??

Too bad, "left wing blogs" were the accurate sources in the last election, so you're citing loser stupidity....

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