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 2:51PM
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Hey I am glad he is getting his money. It was a contract to pay him this amount! I am glad someone had the BALLS to stand up the crappy union. I hope everybody that is part of a union loses there job!!!! If it was a union top brass getting this money everybody would be OK with it. Just goes to show how fickle people are.
Dec 5, 2012 2:45PM
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Beyond sick of all the top brass and the money they get is the world better off?  No !! None of these fools are leaders all the greats are gone done with it get a base salary like the rest of us and get paid for doing better once a year in some low level bonus plan get over yourselves what really do you do other than golf and chat with other overpaid baffoons.  Reason shows like undercover boss were able to do what they do is cause they are so far removed from the actual work it's easy to blend in who would know them they provide nothing that people would notice or recognize their faces from.
Dec 5, 2012 2:45PM
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Personally, I think he should get his money.  Maybe if the world is lucky, he'll get a 9mm bonus as well.  And people wonder why this country is in decline.  Hint.  Its not the low waged workers struggling to make ends meet folks.
Dec 5, 2012 2:45PM
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You get bonuses for outperforming not under performing the competition.
Dec 5, 2012 2:44PM
Dec 5, 2012 2:40PM
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So the fact that this guy was brought in to restructure the company, the union wasn't willing to deal. (I'm still dumbfounded by the whole different products have to be delivered in different trucks requirement.) So the companies going under. He being asked to stay during the shut down, "but please take a pay cut."  I gross less than $23,000 a year and I say the guy should tell them to take a hike.
Dec 5, 2012 2:36PM
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LEECHES, him and thousands like him.  They suck the blood of a company, and employees and move on to other companies and do the same.  They make society the sick thing it is.
Dec 5, 2012 2:34PM
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Yeah, let's save that money for the union fools that put it out of business. Perhaps this CEO is the only one actually doing a good job.
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While I agree he makes a lot of money, it is realative to many other CEOs. With that in mind why aren't we all up in arms about the exorbitant amounts of money that professional athletes make? This guys $1.5M a year is peanuts compared to almost every pro athlete in America. Who can afford to go to an NBA game any more? When top athletes make $10-$20M a season not counting endorsements that is outrageous! The owners are often making more than that, again outrageous! Then there are actors who make up to $20M for one movie. Outrageous!

 

Well I guess if I don't have a marketable skill that will pay me that kind of money then no one else should be able to make that much either. Let's set all wages the same no matter what you do or what skill you have everyone should make the same. The government should set the wages we make and then we'd all have the same. Wealth redistribution determined by the federal government that is what we need. That will solve all our financial problems. Good Luck with that!

Dec 5, 2012 2:31PM
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His pay isn't outrageous for a CEO.  Most of you guys couldn't do his job but anyone with half a brain could do the job the factory workers are doing.  They're overpaid, he is not. 
Dec 5, 2012 2:26PM
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"Let Them Eat Cake", I mean Twinkies.

Dec 5, 2012 2:24PM
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Does Barack obama cut his Salary because the rest of the Country is taking pay-cuts?  Nope.   So why criticize this guy?   Think, people, before talking ****
Dec 5, 2012 2:22PM
Dec 5, 2012 2:18PM
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I suppose Hostess wants a 1 billion dollar bailout from the government.  Not a chance Twinky.  A lead by example solution would have been the CEO cutting his pay by 10%.  He should have went up and above what he was asking everyone else to do.  As CEO he has done a fine job of keeping Hostess going.  Why hasn't Hostess' board fired him.  They need a CEO that will perform salvage control at this point.
Dec 5, 2012 2:14PM
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in the 1%.....can you tell by his arrogance.....he voted for romney....another greedy as- hole....

 

Dec 5, 2012 2:14PM
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The rich and powerful have an OBLIGATION to help others, if you are Blessed by God and He has given you much, much is expected in return. In this case this man won't even give a little, what a man, what a legacy!

Dec 5, 2012 2:09PM
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Another example of the way those at the top have such little connection with the reality of the current economy, or what is happening in their own company.  No one needs that much money.  Does anyone really deserves that much money, especially if the company or organization he or she is running is going under? 

I'd bet dollars to donuts that he's all for keeping the Bush tax cuts, too, which is no more than an ENTITLEMENT program for the rich!  Hippocrites, all of them.

How much longer will the "peasant class" (aka the 99%) of the United States take it before they storm the "Bastille," and remove these kinds of people from power?

Dec 5, 2012 2:09PM
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Welcome to america. That is what ceos do. Some one should stick 124 ,000 twinkies up his selfish A>>

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