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
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You will all complain about this man's salary until the day YOU are blessed enough to make that kind of money.  If that day were to ever come upon you all bets are off and then it will be alright, in your eyes.

 

Hypocrites!

Dec 5, 2012 12:46PM
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Lets see...

 

Ursala Burns CEO Xerox - $4.1 M salary

Debra Lee CEO BET - $5.5 M net worth

E. Stanley ONiel CEO Merrill Lynch - $700K salary, $31 M bonus last yr.

Kenneth I. Chenault, CEO of American Express - $18.5 M in salary and bonus last yr

John W. Thompson, CEO of Symantec- $14.8 M in salary and bonus last yr

Richard D. Parsons, CEO of Time Warner- $15 M in salary and bonus last yr.

 

Wow..CEO's are all white and Republican...WRONG ....


Dec 5, 2012 12:43PM
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What a greedy piece of crap. Guys like this is what is ruining this country. Why american CEO's think that they are entitled to make over 500 times the amount than the average worker, is a joke and should be a crime. It's a shame that no political party will level the playing field and go after this type of stealing. This is a perfect example of why the middle class is disappearing. This guy gets richer while everyone else at hostess gets poorer. The real kicker is the reason hostess is going bankrupt in the first place is because of over compensating poor performance. The grossly overpaid  executives that many are no longer working there took this company for every dime, managed it poorly and then left it with giant severance packages while the real people who built this company either lose their jobs or take a major pay cut. What a wonderful corporate society that our elected officials have created for us. Makes me want to puke.
Dec 5, 2012 12:21PM
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He isnt on the payroll, he is outside help.... Hmmmmm seems like he caused more problems than help since Feb. Fix the glitch and stop paying this man. He isnt helping the company.
Dec 5, 2012 12:20PM
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The usual capitalist stooges/union bashers in this board are the ones who have destroyed this country. They want to bring back Slavery by the sweet names of "capitalism", "opportunity", "hard work", "mininum wage", etc. Socialism is only way to punish these greedy, selfish, freeloading, lazy, capitalists. Ted Bundy, the serial killer, would have been a free man today if he had only said, "I am a capitalist. How dare you attack my success?"

Dec 5, 2012 12:20PM
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I agree this guy is getting way too much for a company going down the tube...BUT, it is the gov'ts fault for not protecting our manufacturers from foreign competition via increased tariffs. You would not beleive the amount of food and drink that is imported from foreign countries and isn't required to bear a "product of china" label because it's packaged or "further processed" in the states before it's sold. Imported food tonnage has trippled since 2000 and there is only 2/3rds the USDA inspectors there used to be. Rumor is less than 1% gets checked.

The way it works is when you, your kid, or your pet dies someone will raise an eyebrow and trace it back to whoflungdung who put the melamine in the food and flag their shipments into the US.

Enjoy your next meal.

Dec 5, 2012 12:20PM
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I'm afraid yes some people are worth that.  Example - Apple without Steve Jobs was on the way out. Steve Jobs comes back and the company's profits explode into the positive.
Dec 5, 2012 12:19PM
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this is the type of person and income that the republican party so staunchly protect from a tax increase?
Dec 5, 2012 12:18PM
Dec 5, 2012 12:14PM
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The executives pretty much own the company and can do with the company what they want. No jealousy here. If you want that type of pay to keep for yourself or give to others, then work to achieve it. Why complain...the US is supposed to be a society that rewards hard work when you have a service or product that consumers want.

Dec 5, 2012 12:13PM
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David Craig

This has gone on far too long. Time to limit top pay of everyone except inventors. The President of the US has more responsibilty than any CEO. Time to top theirs out to the same including stock, benefits, bonuses, etc.

Reply by Old Geezer

It's time to limit your existence!!

The president has far less brains than any CEO - in fact - he has far less brains than the most indigent farm worker in this land!!!


Dec 5, 2012 12:13PM
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Classic "do as i say not as i do".
Dec 5, 2012 12:12PM
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I can't believe the number of bigots commenting here!!!  I bet if somebody raised the amount of welfare you all got you wouldn't complain!!!   Or your food stamps!!!   Why don't you all head for the soup line so you can have a fellow morons shoulder to cry on!!!!
Dec 5, 2012 12:10PM
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This article is a little untruthful.  It only hints at the fact that Rayburn is only taking ONE DOLLAR in pay for this year, instead making a big deal out of his full salary being reinstated in January even though that likely won't happen anyway because of the bankruptcy.  Their poorly written propaganda has served its purpose though considering the foaming at the mouth replies by many on here.
Dec 5, 2012 12:05PM
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It is a shame for sure!  My husband is one who lost his job with Hostess in this mess!  It's sickening when the executives want their bonuses while my husband had to tell his staff you are now without a paycheck and benefits without even 24 hours notice!  It was heart wrenching!  On Friday morning, November 16, my husband who was a district manager with Hostess, showed up to work extra early to make sure the customers were taken care of only to learn as of 5pm that day they no longer had jobs!  One family had a baby the week before, another family has a member with serious health issues, and one man had just started with the company that very week.  My husband is that one employee every company wished they had a thousand of!  He gives his heart and soul, works above and beyond is his staff knows he doesn't expect anything of them he won't do himself.   Not only has this devastated our family but the families of 18,500 others.  Because of being short staffed my husband was not able to use his vacation time this year and now doesn't even get compensated for it!  Sad day in America.
Dec 5, 2012 11:59AM
Dec 5, 2012 11:54AM
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the GOP has  to stop praising all the CEO crooks, tax them at 91% on all stock options.
Dec 5, 2012 11:53AM
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What a jerk, but is anyone really surprised?
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