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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853Comments
Dec 4, 2012 5:53PM
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sleeps well at night i bet-he in actuality is small potatoes  just look at some of the other corps high paid ceo's then think about it ! when ytou work for someone else you are disposeable and they can find another like you!
Dec 4, 2012 5:52PM
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This CEO thing is out of hand.... No CEO, especially one running a failing company should be paid like that.... Case in point JC Penney.
Dec 4, 2012 5:42PM
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Greedy prick CEOs and executives they are killing American and the worst part is most Americans support and defend them. 125k a month when everyone else is loosing their job is a complete JOKE
Dec 4, 2012 5:41PM
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What a jerk!!!! $125,000 a month, another example of Board of Directors taking care of their own! Someone please help Chase 2300!!!!
Dec 4, 2012 5:41PM
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If you don't like it...become CEO and change it...  All of us sitting in a job employed by someone else accept that they get to call the shots...if we don't like it we are free to go start our own business where we will be King of our own little world.  It pays to be the King...
Dec 4, 2012 5:40PM
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Any company that pays someone 124K in one month need to have their head examined.  I don't care if he's a reincarnation of Steve Jobs, Bill Gates, and Bezos combined.  NO ONE is worth that.
Dec 4, 2012 5:12PM
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Would someone at MSN please ask Hostess when they will release our 401k from Principal and why hasn't it already been released . I have already received  my termination papers why hasn't  Principal been notified ?????
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