Hostess CEO cuts everyone's pay but his

Gregory Rayburn argues that because he isn't on the Hostess payroll, he should still get his full $125,000 a month.

By Kim Peterson Dec 4, 2012 3:50PM
Gregory 'Greg' Rayburn, CEO of Hostess Brands Inc., during a Bloomberg Television interview in New York on Nov. 16, 2012 (Scott Eells/Bloomberg via Getty Images)The CEO of Hostess Brands is getting widely criticized for taking his full salary while cutting everyone else's pay by 8%.

Gregory Rayburn will still get his $125,000 a month, or $1.5 million a year, the company told The Huffington Post. His logic is that because he isn't on the Hostess payroll, he doesn't have to take part in the company-wide pay cut.

Rayburn looks at himself as temporary, telling The New York Post he's more like outside help and therefore entitled to his full salary. He said he will leave Hostess when he's no longer needed, the Post reports.

Rayburn joined Hostess in February as chief restructuring officer, and one month later was named president and CEO. He's also on the board of directors.

To be fair, Rayburn is taking some measures to rein in his pay. He was eligible to get a bonus of between $375,000 and $1.125 million, but decided to give up the money, The Huffington Post reports. And Rayburn and three other top executives are taking $1 for the rest of the year in pay, but their full salaries will be reinstated in January.

That's small comfort to the rank-and-file employees who watched a number of Hostess executives get sweet pay raises and bonuses as the company barreled into bankruptcy. The company wants 19 top managers to stay with Hostess as it moves into the liquidation phase, and got approval from a bankruptcy judge to award up to $1.75 million in retainment bonuses.

The execs only get those bonuses if they perform specific tasks related to easing the operational wind-down, a company spokesman told The Los Angeles Times. Rayburn won't be getting a bonus.

At least 15,000 Hostess employees are losing their jobs in bankruptcy, but Hostess wants to keep about 3,200 to help wind down operations.

Hostess cracked under nearly $1 billion in debt, and blame for its demise can be spread far and wide. Private-equity firms funding the company couldn't get it off the ground. When consumers lost interest in carbs and sugar, the biggest innovation Hostess could come up with was banana-filling Twinkies. Although union members agreed to steep concessions over the years, it still failed to adjust to new realities. The old CEO, Brian Driscoll, suddenly bailed in March without explanation, Fortune reports.

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840Comments
Dec 4, 2012 7:09PM
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As I have said previously on here...

 

Keep it up 1%ers and the French Revolution II won't be far behind.

 

You (1%ers) could have had all the money you could ever spend if you had just kept your normal level of greed.  The majority of people who value their humanity over the 'love of money' would have not cared as long as you let the rest of the 99% able to at least survive and live.  You had to push it though, and now you may very well learn that every person has a breaking point, even otherwise good and decent people. 

Dec 4, 2012 7:06PM
Dec 4, 2012 7:04PM
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if you can't make money selling crappy foods to Americans, you should not only not get paid at all, you should be fired!
Dec 4, 2012 7:03PM
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a painful and early death to all of them and the other greedy CEOs and overpaid thieves like them.  make yours, but give back to those that get you there with hard work and sacrafice everyday.   A HOLES!!! 
Dec 4, 2012 7:03PM
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look at this paumpus prick reminds me of a greedy rich man o wait he is !!!!
Dec 4, 2012 7:03PM
Dec 4, 2012 7:00PM
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I will be willing  to bet there are more journalists on MSNBC making more than Rayburn is....of course they will never admit that.... this article sounds socialist to me.....
Dec 4, 2012 7:00PM
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Dividing it up - and selling it bit by bit as the vulture capitalist do - you're selling AIR.....and anyone who buys will be burnt...buying a pig in a poke....and a dire sickly pig at that.........

TWINKIES WIL NOT RECOVER . . .  an even money bet

Dec 4, 2012 6:59PM
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wow 125,000 dollars a month ....ceos love to point the finger at employees kinda like congress its everyones fault but thiers !!!

Dec 4, 2012 6:54PM
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So he gave up $375,000 minimum bonus on a $1.5 million salary (25% and he is only taking $1 for the rest of the year = 1 month / 12 months in a year = 8.33%.

He should get $1.875 million this year minimum and instead is going to get $0 bonus and 11 months of his $125,000 monthly salary + $1. That means he will take in $1,375,001. That means he is giving up $499,999 MINIMUM. $499,999 / $1.875 million = 26.67% pay cut.

Ok so he is maintaining his salary but this year he is taking a 26.67% cut in compensation. It is amazing how a story can be written to spend the numbers and the mindless idiots (see comments below) follow the words instead of doing the numbers themselves. If I were him, I would say fine. Reinstate my salary and bonus and then cut it all 8%. Let the idiots be happy thinking they "won" while he laughs all the way to the bank.
Dec 4, 2012 6:50PM
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i say hes no longer needed now !!!!
Dec 4, 2012 6:47PM
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Fire his butt, He is President and CEO and the board but only temp....I say he should be cut lose to ride the waves of unemployment. NOW!
Dec 4, 2012 6:43PM
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Big CEOs that smile every time they eliminate someone's job and livelihood so they [ the CEO ] can line their pocketbook just a little more and bring America down just one more step should think about their after life. these people will have their final judgment just like you and I.
Dec 4, 2012 6:42PM
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Love our top down dictatorships.  Power should never be in the hands of one person or even an oligarchy of the few.  Democratic running of organizations is preferable if done using facts and research, not whim.  Unions, you may not like them, but they help to decentralize power.  If not for unions, or a free press that exposes these money worshipping corporate users, we would have corruption on a vast scale.  Why, one man could try to buy a puppet like Gingrich or Romney by "contributing" one hundred and fifty million dollars, all so our government couldn't prevent checks on corporate power and greed.  I think I like democracy.  More worker owned companies please.
Dec 4, 2012 6:37PM
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Do any of the rich people really know how to spend their money?  If they did they would be donating what they have to the ones they are abusing.  If they(the bosses') were to visit some of the people who lost their income, they might see what they are doing to families.  The USA is not going to have any families left if the money stays with the rich and never trickles down to the middle and lower people.  I've heard it is lonely at the top, I would not know since I've never been there.  i feel rich in so many ways without the money.  I have several friends and wonder just how many you rich people truly have without money!
Dec 4, 2012 6:33PM
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This company is failing because of a history of over paying the under achieving executives.  Rayburn was hired to save the place and has beautifully proven he isn't capable of doing so.  Other than setting his own shorts on fire for the entertainment value, there is nothing he can do that is worth the pay he is receiving.  He needs to receive exactly the same pay the 18,000 employees his ineptitude has caused to be unemployed--nothing.

Dec 4, 2012 6:28PM
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Honestly, for a CEO of a major brand, who's there to handle the bankruptcy proceedings, $1.5 million is a negligible amount of money... Similar CEO's are getting paid 10 times that.

 

Give him credit for taking a $1 salary for most of the year and passing up a potential $1.5 million bonus...

 

So, for taking $1 for 6 months and passing up, say $1 million in bonus, he's passed on $1.75 Million. 

 

That's around a 115% paycut.

 

Props to him for passing up that much cash when he could have taken his talent to another corporation and gotten paid many more millions.  


Remember, he's not the CEO that got the company into that mess.

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That man needs to be fired, let go whatever. You can find plenty of intelligent, well educated, better people for the job who would work for ten percent of what he is paid and do a better job to boot.
Dec 4, 2012 6:19PM
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Gosh

It appears many of the envious forgot what idiotic union actions led to this. To be fair--All of the other unions got it right. One was greedy and stupid costing 18,000 people their job.

 

This is a clear case of union greed.

 

Were there business issues---you bet--- many union based.

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