Hostess Twinkies CEO tripled salary to $2.5m while preparing to file bankruptcy

Hostess Twinkies’ CEO tripled his salary to $2.55 million while the company was preparing to go into bankruptcy.And nine top executives saw massive pay raises, some nearly doubling their salary.
Ah, another greedy CEO who courageously blamed the union for his failure, while omitting the part about tripling his own pay while preparing to go under. Damn unions, indeed.
Is this what they teach in business school these days? As popular as “peer group compensation benchmarking” is in the corporate world, there’s a distinct lack of evidence that higher compensation delivers results. (Case in point: Hostess. Second case in point: Wall Street.)
There’s an odd myth in the corporate world that paying more for a CEO and executive team will mean Steve Jobs-like earnings results. In reality, that’s not the case. Just ask the US airline industry how that worked out for them as they went through bankruptcy after bankruptcy. The rate of executive pay keeps going up, and according to one study, it’s even higher than many of us realize.

These horror stories are striking a nerve with many Americans these days because they’re so much more common than they were in the past. The media loves to idolize these CEOs (think about CNBC and their regular slobbering over the loony Jack Welch), yet more and more of us have been on the losing end of these deals.
I’ve mentioned before that I had the opportunity to work with a tea party crazy who sold the company, just in case his taxes would increase after Obama was elected. Many of us lost our jobs almost immediately so that he might save a few percentage points on taxes, which of course, never happened.
I don’t expect the government to get involved much in these obscene salary cases, but I still hope that public opinion might build enough to start making this less acceptable. The high pay is still acceptable enough to investors who are asking for more voting rights, though still go along with the game.

Mitt Romney with someone’s cash

Something needs to give, and hopefully it will happen soon. We’re all tired of the 1% living by one set of rules. and then blaming the rest of us for their problems, when we keep giving and they keep taking. Whether it’s Faux News’ O’Reilly accusing non-white voters of “wanting things,” or the failed Hostess CEO blaming his own failings on “the unions,” I’m tired of it, and I know that I’m not alone.
Is the guy who tripled his pay seriously suggesting the collapse is the fault of union workers?

Over the past eight years since the first Hostess bankruptcy, BCTGM members have watched as money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.
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.
Over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. Despite saving more than $160 million with this action, the company continues to fall deeper and deeper into debt. A mountain of debt and gross mismanagement by a string of failed CEO’s with no true experience in the wholesale baking business have left this company unable to compete or survive.

So remember, in his bizarre world, the people who produce the products that the management team created are all to blame. Forget about failed market research, or high executive pay, or poorly financing the company — it’s completely the fault of the union workers. Got it?