Hostess seeks approval to pay $1.8M in bonuses

Justin Sullivan/Getty Images

NEW YORK Hostess Brands is seeking approval from a federal judge to give its top executives bonuses totaling up to $1.8 million as it winds down its business and moves to sell all of its assets.

• Hostess says it has over 100 interested buyers
  

The company claimed in U.S. Bankruptcy Court in the Southern District of New York on Thursday that the incentive pay is needed to retain the 19 corporate officers and "high-level managers" during the liquidation process, which could take about a year.

9 Photos

Twinkies maker Hostess to close

Two of those executives would be eligible for additional rewards depending on how efficiently they carry out the liquidation. The bonuses would be in addition to their regular pay.

The bonuses do not include pay for CEO Gregory Rayburn, who was brought on as a restructuring expert earlier this year. Rayburn is being paid $125,000 a month.

Hostess' second-largest union is asking the judge to appoint an independent trustee to oversee the liquidation, saying that the current management "has been woefully unsuccessful in its reorganization attempts."

In court Thursday, the company received final approval for its wind-down, which was approved on an interim basis last week. An attorney for Hostess noted that the company is no longer able to pay retiree benefits, which come to about $1.1 million a month. Hostess stopped contributing to its union pension plans more than a year ago.

The company's shuttering means loss of about 18,000 jobs.

[hypnotoad72]

Yup. Wreck the company with poor "management" decisions and get a big bonus anyhow.

But keep scapegoating unions, folks. Those taking these highly undeserved bonuses are laughing in YOUR faces.

[hg2008-2009]

They should pay the workers first along with those on pension. I am sick of the corporate big-wigs getting it instead.

[hypnotoad72]

Especially when they drove the companies into the ground.

A bonus given to someone whose decisions directly ruined the company is a little bizarre... yet not an atypical event.

Carly Fiorina, Ken Lay, and other parasites are the ultimate examples of this sort of redistribution of wealth.

[rtavis]

I wonder when the shareholder lawsuits will start. The entire Board of Directors of this company should be strung up for allowing contracts granting these bonuses. It does go to show that before you buy stock in a company, you better do your research.

I hope the judge turns this outrageous request down flat.

[hypnotoad72]

Most of us go through big posh businesses to look at stocks, make portfolios, etc, accordingly.

Never mind all our 401ks are in this stock system. The same stock system where we're also told "Don't afford to invest what you can't afford to lose". Don't blame me; that's our system and it's utterly bonkers (and not in a good way).

[stopkillingourwilderness]

hey hostess - there's a thing called an employment agreement you should try - it means that the employee has to stay and work without extorting extra money out of you for the entire term of the agreement. i know, it's a totally revolutionary, kooky idea, but somehow all of the rest of us have managed to do it for decades.

[jnostromo]

Bonuses for what? Running a business into the ground? Typical of the corporate elite and their view of life.

[hypnotoad72]

Agreed, to both of you MojitoMamma and jnostromo.

And a quick web search has plenty of articles telling more detail on how management screwed up as opposed to "blaming high costs" forgetting that it's our wages that determine our ability to buy things, get ahead, etc, etc, etc... it is corporate elitism, followed by projecting blame onto everyone else.

Ford wasn't a perfect person, but he definitely knew enough and acknowledged that one has to pay living wages so that the employees can buy what they make and feel good about it... and in doing so, he didn't get hurt either.

And Lincoln knew that all labor creates wealth... have we devolved since the days of those men?

Yup. It seems so.

But I'm preaching to the choir...