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 9:20AM
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good old double standards, a lot of people were blaming the unions. Now maybe you can see the truth.
Dec 5, 2012 9:19AM
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Hey Dave think about what your Pres and Congress make , and thier retirement.
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The paying of exorbitant salaries to executives of companies has been ludicrous for many years. Just what do they do to earn this pay? They don't add to the value of the products like the hourly workers do, they don't come up with fresh ideas for new products like the marketing gurus do, they don't make the company any better at all. 
The difference in pay between men like Rayburn and the hourly workers has gotten to be such a chasm that  it is ridiculous. Hostess has not kept up with the changing trends, tastes and health issues and that is the problem. To pay this man that kind of money for doing practically nothing is terrible. Now, if he rolled up his sleeves and helped out on the line that is one thing, but he doesn't do that at all. Nice perks, and even nicer in January when they will be making the outrageous money again. 
They are contributing to the death knell of Hostess.  
Dec 5, 2012 9:17AM
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Yeah, a republican would do something exactly like that:  In flick pain on everyone else to get their way.  It the same thing/concept as them not wanting to pay their fare share of the tax burden, huh?
Dec 5, 2012 9:17AM
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WOW , you people blame the CEO when they get paid well, you seem too forget that they run a company you also seem too forget the fact that his resume take huge hit.

Put the blame where it is due,The Union did and you don't here them attacking the Union President who makes a good sum and still get paid with all union dues collected from workers that no longer have a job.

Dec 5, 2012 9:11AM
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And that in a nutshell, is why America is failing. Most people don't see why and continue to blame the workers and not the greedy leaders.
Dec 5, 2012 9:11AM
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This amazes me.  My wife and I are currently in graduate school, having open discussion with professors and class mates about the last five years.  It is shameless in the extent to which individuals will destroy a company for personal greed.

And this isn't the worse of it.  There are CEO's making 100's of millions each year in bonuses and stock incentives.  

People need to take a stand against these ****s.

I'm not saying individuals who barely passed the seventh grade should make $25/hr with union backing, but those with 10 yrs work experience or college degrees need to stand up for themselves without unions pulling the strings.

Dec 5, 2012 9:09AM
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Every major civilization in history destroyed itself this same way! From within! WE need only to look at democratic Roman Empire whom we are modeled after to know what fate awaits us!
Dec 5, 2012 9:08AM
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His salary may be too much but take a look at Union officials salary before you criticize CEOs.  Any company that has to deal with a union deserves it.
Dec 5, 2012 9:06AM
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Here's another Republican getting all he can.  Republicans' are for big business and the rich.  This guy is both.  He looks like a real jerk. Where is Hostess getting this money to pay him????????
Dec 5, 2012 8:58AM
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Epic Fail.  No pay if you can;t do the job expected of you.
Dec 5, 2012 8:57AM
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This is all about labor and greediness of unions.  Hopefully, BO will continue to take money from others and give to me. 
Dec 5, 2012 8:50AM
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You bunch of whining socialists. Your redistribution ideology and the notion that anyone who earns more than you is a villain just don't wash. Life isn't fair and we are not all equal. Educate yourself and aspire. Might even n surprise yourself. Losers all. Obamas army. Sorry **** USA.
Dec 5, 2012 8:42AM
Dec 5, 2012 8:37AM
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does that surprize us !    my only comment
Dec 5, 2012 8:35AM
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What a shame!   Why doesn't his pay reflect the company's "performance"?   It is a joke. What boggles the mind is after the exposure of the investment company and insurance company executives ridiculous spending and salaries that led to the  bail outs  we atill allow these blood suckers to get away with it...............   There is no pressure on the companies to do what is right and there certainly is no accountability to the shareholders.  I am against big government and regulation but had always hoped that we would learn from experience and the companies would smarten up, but I guess not.

Dec 5, 2012 8:33AM
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$125,000 a month??? Where's my &#%*ing Twinkies???
Dec 5, 2012 8:31AM
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Of course he did. He like every other CEO in this country have been given the green light by Federal regulators to steel the entire wealth of a company, run it to the ground, and then jump out of it with a golden parachute only to land in another company to do the same thing. As long as the CEO is smart enough to send out the right amount of "donations" to the right people in our government, he will be able to get away with it, keep the money, without even the threat of being prosecuted. That is now the American way of life, this is the new normal.
Dec 5, 2012 8:23AM
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Gee sounds like the Delphi debacle 8 yrs ago. Union memebers got blamed for bankruptcy because of high wages , after SEC investigation CEO and others cold not account for 235 million dollars.

This almost sounds like our millionaire congressman;

Dec 5, 2012 8:22AM
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If he is only taking $1 pay for the rest of the year, he is effectively giving up one months pay. This means he is taking an 8.3% pay decrease for the year, not including the bonus money he is forgoing.  Is this not in line with what they are asking the rest of the company to do?
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