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 5, 2012 4:08PM
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There are NO CEOs worth what they get paid!

 

That said, this guy is getting a bum rap in the typical MSN shoot-first-analyze-later headline.

 

He was hired to try and restructure the company THIS year.  The guy who had f'ed it all up bailed the next month.  The Board, who also f'ed it all up, needed someone quick who wasn't a company inbreed... they asked this guy.  I'm sure he made his demands and they agreed... plus he was originally hired THIS year as a sort of consultant to pull them out of the mud.. and he definitely is due that money.

 

Now he gives up his (basically automatic) executive bonus (worth much more than 8%) and he doesnt take a salary the rest of the year (worth 8%)... but MSN buries those facts well below the catchy headline, "CEO cuts everyone's pay but his".

 

Extremely sleazy journalism... but not surprising unfortunately.

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THE RICH GET RICHER AND THE POOR GET POORER ............. can ANYONE truthfully say that this has even started to slow down, or is the truth that the rich have gotten FAR RICHER specifically from policies that have been put into place since the election of the retarded messiah, and conversely, the poor, especially the black poor have made leaps and bounds in "spreading the lack of wealth"?

These next 4 years will be the most laugh filled years of my life, thank you for the well deserved lavish retirement!
Dec 5, 2012 3:57PM
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I don't think he is needed any longer, what a joke.

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someone should tatoo a red target on his forehead
Dec 5, 2012 3:47PM
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Board of Directors dictate and set CEO pay and packages.  The Board of Directors are hand picked by the CEO's...conflict of interest?

When will this be addressed and discussed as a topic.  There is a vacuum of the middle class wages being sucked up by CEO's and board of directors throughout corporate America.  This is an ideal example of this unfortunate truth.  CEO's are earning 300-400x's what average Americans are earning vs. 30-40x's one or two decades ago, which was still a healthy ratio for the CEO's of course.

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LOL, Surprise, CEO's don't work for the employees, they work for the stockholders, which include the CEO!

Boy, you have to hand it to those unions for having a firm grasp on the true power that they wield....... LOL!

You guys do have industry and the workplace by the short hairs, huh? Guess you just got shown the extent of your "power"!

Next up, CITI group and 11000 freshly unemployed crybabies wondering why the recession is so strong, when the duffus messiah told them it was improving............. hysterical!

Free clue, we really don't understand why the average American thinks that they can control the monied Americans, and dispite what you think, we find it hilarious that you hate us, while the real punchline is that your heroes in government continue to get your votes while repeatedly putting laws in to effect that allow us to pay less taxes than you! ......... LOL
Dec 5, 2012 3:46PM
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These guys are just as bad as the union thugs.  Their arrogance of "entitlement" does nothing to help the relations with management and labor.  When everyone thinks they are entitled we are a lost country.  I would like to make $125,000 for 1 year much less a month.  Everyone needs to make sacrifices in this case. 

 

His justification is ludicrous!

Dec 5, 2012 3:41PM
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And the likes of Mitt the Twit still wonder why the 47% do not like him and the other 1%. 
Dec 5, 2012 3:40PM
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He Didn't make the Rules. He is just going by them.  It is just like Mitt Romney and paying 15% on his money, The Congress and Senate made that Rule way back When, When you file your  Tax's don't you deduct what your aloud and Take the Credits that the Gov. gives you. When they tell you that you have to pay 15% that's what you pay, If it is 25% than that is what you pay, Unless your a Charlie Rangel, or a Tim Geithner Both Demorats.

If you want to punish people for a Failing Business , Than  You  should look at our Government, All the States Run By Liberal Democrats are in The Red. California, New York, Michigan, Mass, Rhode Island, Washington DC, Illinois, Plus our Federal Government run by the Democrats.

Liberals are Brain Washed Morons.

 

Dec 5, 2012 3:38PM
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See, I told you it wasn't the unions.  It's management CEO attitudes like this that do our finances in.  You actually expected this idiot to practice the "Trickle Down Effect".  He's too busy trying to screw the little guy and the GOP protects greedy hoarders like this.  This is why Hostess is in the toilet.  What goes on in the dark, comes to the light.  No wonder the company was struggling.  He wanted you to think it was the unions.  1.5 M - Do you know how many more jobs or new equipment that could have bought?  I don't want one of these yahoos to threaten layoffs when they have to start paying for health care.  He should be ashamed.  Chief Restructuring Officer - yeah right into the poor house!  Hell, I could have done that and for way less too!

Dec 5, 2012 3:34PM
Dec 5, 2012 3:18PM
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Somebody shove a stick up this aholes hole. This is whats wrong with American corporations in todays 'republiclan' buisiness climate. Screw the worker..i got mine and a lot of it...This idiot should be fired and forfit ANY compensation for his disasterous performance.
Dec 5, 2012 3:15PM
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How can anyone even get a bonus or retainment fees when the company is in debt?  That money should go towards the debt and not in the CEO;s bank account.  There needs to be a cap on what CEO's can make so that they cannot bankrupt a company and continue to hand out bonuses or say they are entitled to their full wages.
Dec 5, 2012 3:04PM
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These are the people that are running our country into the ground.  There is a long history of this kind of greed and behavior, looking at the real estate crisis, the dot com bubble.  And take a good look at current companys that are going down the tube.....United Airlines anyone? 

Dec 5, 2012 3:01PM
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This is a common practice period. College football Coaches making 3 mill plus a year? Really. Having contracts that if they're fired, they get the remaining payout? Who gets fired for under performing and you pay to get rid of them?

 

Who at an "institute of higher learning" would sign off on a contract like that?

 

Greed has run amuck and its everybody for themselves. These guys want to get paid regardless of performance and cash out if they fail. Most of the time leaving everyone in ruins.

Dec 5, 2012 2:58PM
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OK   Show of hands - how many of the posters here have actually read the article and not just the headline?
Dec 5, 2012 2:58PM
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I find it interesting that everyone was blaming the union but the upper management still get their's It is easy to blame the union if you don't receive the compensation packages that they can get for employees.
Case in point the teachers in WI. Sure it's easy to blame them for the problems the state is having, you pay your taxes but you don't get benefits at you job so why should they. You tax dollars pay their salary!!! I am a city employee and I have a great benefit package with a guaranteed retirement. I pay into my retirement, it's a mandatory 8% deduction every paycheck. Don't blame us or the unions because you are in the private sector and your company decides to screw it's employees over. A strong union can help prevent that.
A certain party whats us to accept fiscal responsibility  for ourselves. Well I did when I accepted my job. I chose to work for an employer that actually cares about its employees. If you are one of those playing the blame game, then I say look to your own house.
Dec 5, 2012 2:56PM
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The ex president and congress need to have there pay stop. what a waste of money..
Dec 5, 2012 2:54PM
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we cant even get severance or our 401k to try and live or make it through this..
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once again we see the greedy corporate ceo's walk away with a sweet deal that they help set up for themselves, meanwhile claiming they are not really part of the company- but outside help !  "Maybe that's part of they problem that they are not invested in the company or the future of it for the workers to keep their jobs. Seems like a conflict of interest as he and his cronies- other executives get big a big fat bonus while the hard working people of hostess don't even get paid their vacation pay or benefits owed to them since it is liquidated !!!! How can he even sleep at night !! !Sorry i'm not worried about his health insurance benefits - i'm sure he has that hidden somewhere and is taken care of.  Meanwhile my husband has taken 2yrs of pay cuts for working 50+ hrs a week - of course with no overtime !!!  Choke on a twinkie Rayburn !!!

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