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 5, 2012 2:02PM
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Who cares what he or any CEO makes. In this country any of us have an opportunity to be that CEO and thats the real point. If you dont believe that then you are just making excuses for yourself and others. If you think that CEO doesnt deserve it, go ahead become one. Oh yeah, its not that easy is it. But just because it isnt easy doesnt mean it cant be done.  Instead, the excuse makers and the blamers find it much easier to talk bad about fellow Americans and the President himself is more than happy to pit us against each other. Question for all the complainers : Do you hate athletes and movie stars just as much? They make tens of millions a year. Why is it just the big bad CEO you seem to have a problem with?

Dec 5, 2012 2:01PM
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he is willing to give up at most $1.125 Million in bonus. besides the article did not give us any ideas as to what the other top executives in the company were making. at face value it seems fair to me. i only make 65k per year! obvioulsy, the man is worth that much. nothing is wrong with that. this is america!
Dec 5, 2012 1:53PM
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Not all CEOs are greedy bastards, but those that are really get the liberal media's tits popping out.
Dec 5, 2012 1:49PM
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Give the CEO a reasonable salary and bonus him if, and only if, the company is profitable.  That is the way this should work.  It means that corporate executives have to actually work for their money, just like everyone else.
Dec 5, 2012 1:42PM
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Perfect example of  why more companies need to be unionized. It is **** CEOs like Rayburn that are costing American job loses, this **** expected the workers to make all kinds of sacrifices yet he refused to do the same, what a prick. 
Dec 5, 2012 1:36PM
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hey james hunter just read your comment you forgot one the a hole running sears into the ground eddie the i don t care about anything or anyone lampert he s a real beauty
Dec 5, 2012 1:32PM
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who does this guy think he is he could take a pay cut and still be making a lot of money typical corporate greed the people that do the most and the hardest work suffer thats why i don t work for a corporation, you can have them with all their geek suits and stupid greedy idea s
Dec 5, 2012 1:31PM
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Poor excuse for a man and human being!!
Dec 5, 2012 1:26PM
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Exactly what is wrong with business world today. What a pompous ****!
Dec 5, 2012 1:21PM
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Just kill hostess and sell it to another company and be done with it.  
Dec 5, 2012 1:08PM
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I don't see why anyone is complaining here, they needed to save money and they did.  I mean cutting your workforces pay was a stroke of brillance, who else could have thought of this?  After all so many other options in cost savings were put forth by him first, right???  I mean all other avenues of cost savings were surely explored and cutting your workforces pay or jobs is a last resort...... right?

This guy has clearly earned every penny and why shouldn't he collect his full pay.... Because letting profit drop by 0.5% would be out of the question, think of the board of directors, they may get paid based on profit and if it were to slip they and the CEO may not get their bonuses.... that is BS. Won't someone please think of the poor board?????????  And if the CEO lost 8% he might have to downgrade his plane to the one without (gasp) a full surround sound stereo.  I for one am not willing to ask him to make that kind of sacrifice, it's un-American!!!!!!!!!!!!!

Dec 5, 2012 1:05PM
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the gop fascist of the day . this is what the repuks are defending and it just shows how stupid the gop sheeple are !
Dec 5, 2012 1:05PM
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I will never buy another Hostess product in my life!
Dec 5, 2012 1:03PM
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Its no wonder Hostess went down, the TOP people are making rediculous salaries while the working TAXPAYER is just trying to make ends meet.  This is not the only company doing this, no one is worth a million dollars, sorry they are not.  THE AMERICAN TAXPAYER has always paid for everything and is still doing it.  I like Buffetts idea of term limits, no pay if they do not produce a balanced budget, put them on OBAMACARE since they like it so much and let them pay for their own retirement just like the TAXPAYERS do.  Let the President pay for his wifes travel that is not necessary for the country as well as her clothes, no other President wife has used so much of the TAXPAYERS money for travel and clothes.  She bought $43,000 worth of bracelets and a $7,000 top that the TAXPAYERS paid for, I think we should get reimbursed.  This would go a long way to a balanced budget. 
Dec 5, 2012 1:01PM
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You don't have a CEO problem, you have a board of directors problem that continues to give bonuses, pay, and perks to their CEOs for poor judgement.  
Dec 5, 2012 12:56PM
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Tax the heck out of him.  Should have reduced his salary with no bonus.  What morals we much be teaching our young folks.
Dec 5, 2012 12:54PM
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Why would these people be "retained" and deserve a bonus for driving the company into ruins?
Dec 5, 2012 12:53PM
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The company died due to bad marketing and lousy product development along with high labor costs.  While I agree the execs are overpaid, the unions are very much a big reason Hostess is closing.  40,000 employees @ $15/hr avg @ 8 hours a day @ 5 days a week @ 52 weeks = $1.2 billion.  And that's not including benefit costs.  That is more of a cause for the company closing than the $7 million (guessing) paid to the execs. 

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