According to the Associated Press, the bonuses are intended to retain 19 members of the top brass through the coming months of liquidation. These executives would continue to receive their regular pay — and two of them could earn even bigger bonuses if the liquidation goes swimmingly.
CEO Gregory Rayburn is not among those who would receive a bonus, but he is already earning $125,000 a month, which buys an awful lot of Twinkies… in Canada, where they are still available.
Hostess management has blamed the company’s inability to get out of bankruptcy on the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union’s refusal to accept pay cuts, and the subsequent strikes that caused the shuttering of several plants. The union has pointed the finger back at management, saying it never invested in the company since coming out of a previous bankruptcy and alleging that the entire goal has been eventual liquidation.
In a recent column, the L.A. Times’ Michael Hiltzik ripped Hostess leadership for its poor decisions:
Example: Just before declaring bankruptcy for the second time in eight years Jan. 11, Hostess trebled the compensation of then-Chief Executive Brian Driscoll and raised other executives’ pay up to twofold. At the same time, the company was demanding lower wages from workers and stiffing employee pension funds of $8 million a month in payment obligations.