Brad_Hawthorne

ki11joy92

http://thinkprogress.org/...for-hostesss-downfall/

I'll just leave this here

I'll just leave this here
Source: thinkprogress.org....Gee, a non-bias source of reason... 

While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.

"Hostess filed for bankruptcy in January, the second time in the last eight years. When the company emerged from bankruptcy the first time, it was able to do so because its union workers agreed to $110 million in concessions and facility closures that cost about half of the unionised workforce their jobs."

After the workers agreed to the concessions, three private equity companies, Ripplewood Holdings, Monarch Alternative Investmenes, and Silver Point Capital, took control of the company and pledged to invest in modernizing the facilities that stayed open and re branding the company's signature products, Wonder Bread, Twinkies, Hostess Cupcakes, etc.

Instead, money that was supposed to be reinvested in the company was diverted to pay private equity fees, interest on the debt that the new owners took on to buy Hostess, and executive salaries and bonuses.

April 4, 201
DJ Creditors Say Hostess May Have 'Manipulated' Executive Pay

By Rachel Feintzeig
Of DOW JONES DAILY BANKRUPTCY REVIEW

Unsecured creditors suspect that Hostess Brands Inc. may have "manipulated" its executives' pay--sending its former chief executive's salary, in particular, skyrocketing- in the months leading up to its Chapter 11 filing, in an effort to dodge the Bankruptcy Code's compensation requirements, according to a redacted court filing reviewed by Dow Jones.

The official committee representing Hostess's unsecured creditors wants to launch a formal investigation in the bankruptcy case, hoping to dig deeper into the bakery company's senior executive compensation. The information the group has already gathered suggests "the possibility" that the company converted a chunk of its top executives' pay from performance-based bonuses to guaranteed salary, "at least in part to sidestep" rules designed to ensure that companies in bankruptcy aren't enticing their employees to stay on board with the promise of cash.

"As such, the debtors' continued payment of the executives' salaries in these increased amounts may violate the Bankruptcy Code," the unsecured creditors said in documents that were filed with the U.S. Bankruptcy Court in White Plains, N.Y., but largely redacted. Dow Jones was able to view those details because when the papers were saved to a word-processing program, the redactions disappeared.

A spokesman for Hostess dismissed the creditors' allegations.

"We do not believe their theory has any basis in law," he said. "Nevertheless, we are working cooperatively with the committee to address their concerns and expect to resolve this amicably."

In court papers, the creditors say testimony from Hostess's executive vice president of human resources indicates that "in the run-up to bankruptcy"--when Hostess had already hired bankruptcy attorneys--it was also working to shift its compensation structure. Hostess slashed bonuses payable only if certain performance goals were met and, on July 26, the company's compensation committee signed off on "substantial salary increases for numerous senior executives," the creditors said, calling the jumps "dramatic."

Hostess's then-CEO, Brian Driscoll, saw his salary rise to $2.55 million from $750,000--a 300% increase.

"Other executives' salaries were increased by from 35% to 80%," the creditors said.

xanderf

Brad_Hawthorne

I'll just leave this here
Source: thinkprogress.org....Gee, a non-bias source of reason... 

Or you could read it.  The facts are not in dispute.

While the company was filing for bankruptcy, for the second time, earlier this year, it actually tripled its CEO’s pay, and increased other executives’ compensation by as much as 80 percent.

But, then, there is plenty more on the topic on pretty much any objective site.

"Hostess filed for bankruptcy in January, the second time in the last eight years. When the company emerged from bankruptcy the first time, it was able to do so because its union workers agreed to $110 million in concessions and facility closures that cost about half of the unionised workforce their jobs."

After the workers agreed to the concessions, three private equity companies, Ripplewood Holdings, Monarch Alternative Investmenes, and Silver Point Capital, took control of the company and pledged to invest in modernizing the facilities that stayed open and re branding the company's signature products, Wonder Bread, Twinkies, Hostess Cupcakes, etc.

Instead, money that was supposed to be reinvested in the company was diverted to pay private equity fees, interest on the debt that the new owners took on to buy Hostess, and executive salaries and bonuses.

I mean, seriously, when your companies CREDITORS (read, in this case, 'owners') are accusing the board and executives of intentionally lining their pockets instead of trying to save the company...

April 4, 201
DJ Creditors Say Hostess May Have 'Manipulated' Executive Pay

By Rachel Feintzeig
Of DOW JONES DAILY BANKRUPTCY REVIEW

Unsecured creditors suspect that Hostess Brands Inc. may have "manipulated" its executives' pay--sending its former chief executive's salary, in particular, skyrocketing- in the months leading up to its Chapter 11 filing, in an effort to dodge the Bankruptcy Code's compensation requirements, according to a redacted court filing reviewed by Dow Jones.

The official committee representing Hostess's unsecured creditors wants to launch a formal investigation in the bankruptcy case, hoping to dig deeper into the bakery company's senior executive compensation. The information the group has already gathered suggests "the possibility" that the company converted a chunk of its top executives' pay from performance-based bonuses to guaranteed salary, "at least in part to sidestep" rules designed to ensure that companies in bankruptcy aren't enticing their employees to stay on board with the promise of cash.

"As such, the debtors' continued payment of the executives' salaries in these increased amounts may violate the Bankruptcy Code," the unsecured creditors said in documents that were filed with the U.S. Bankruptcy Court in White Plains, N.Y., but largely redacted. Dow Jones was able to view those details because when the papers were saved to a word-processing program, the redactions disappeared.

A spokesman for Hostess dismissed the creditors' allegations.

"We do not believe their theory has any basis in law," he said. "Nevertheless, we are working cooperatively with the committee to address their concerns and expect to resolve this amicably."

In court papers, the creditors say testimony from Hostess's executive vice president of human resources indicates that "in the run-up to bankruptcy"--when Hostess had already hired bankruptcy attorneys--it was also working to shift its compensation structure. Hostess slashed bonuses payable only if certain performance goals were met and, on July 26, the company's compensation committee signed off on "substantial salary increases for numerous senior executives," the creditors said, calling the jumps "dramatic."

Hostess's then-CEO, Brian Driscoll, saw his salary rise to $2.55 million from $750,000--a 300% increase.

"Other executives' salaries were increased by from 35% to 80%," the creditors said.

But, sure, this is 'all the fault of the unions', not the executives intentionally trying to sabotage the company so they can sail away with their golden parachutes...

xanderf

It's worth pointing out that there are many, many bakeries in this country running profitable businesses.  Even some large companies.

And they have unions, and have no problems with them.

What will happen, here, is that Hostess will dissolve, and in liquidation their valuable assets (brands, recipes, etc - Twinkies, Ho-Hos, whatever) will be snapped up by other, better run businesses.

This is exactly the thing everyone was clamoring for when the bank bailouts were happening and everyone was screaming 'what the heck does "too big to fail" even mean? Let them fail!'

So why are all of y'all suddenly against that idea now?

Chemceb

Too many people out there need jobs right now. To do this, and leave anyone willing to work for what this company is offering out of work, is insane in my eyes. The cakes are OK, maybe a little too much of a processed taste for me though.  

xanderf

You understand how meaningless the average number is to use when multiple executives make millions of dollars?

For example, did you know that the average income in America is over $150,000 a year per household?

Wonder why nobody talks about that?

Because the average is meaningless when the top-compensated skew the numbers massively higher.  (The medium household income in the United States is more like $50k - 1/3 of the average)

minger66

rjohnson11

The true loss involved is not just the loss of the products that many of use grew up with, but also the pensions of the employees. 

The employess should have though about that before going on strike.  Hard to feel sorry for a person that willingly bites the hand that feeds them.    

Kanti

I'll take a 25% cut over a 100% cut any day. 

thorimmortal

Yeah I hate Unions too. I hate the way they fight for fair wadges and benefits for the working man, Big business should have all the power and money not the common working man, I want employees that will give 100% and invest their lives to my soulless company with a minimal return. As long as my pockets are fat I could care less about those sycophantic peasants, they will do as they are told and be happy to have a job! They are disposable why should I care about employees? It's not like they are equal to me in any way.

Unions provide safe work environments, Health and welfare benefits to a working class that don't normally have them, Apprenticeship programs, A skilled workforce, Formal training and continuing education, Pension and annuity plans. Why on earth would any one support this nonsense? No one wants quality and craftsmanship from a professional in their respective field, they want poorly made goods that are produced by slaves from out sourced lands, no warranties, no pride just my 5000% markup. I defiantly don't need a Union who stands in my way of treating human beings like animals it cuts into my bottom line. 

xanderf

Brad_Hawthorne

Kanti

I'll take a 25% cut over a 100% cut any day. 

Agreed. The way I've always been was to be on the hunt for the better job. Taking a 25% pay hit just means that much more incentive to take the hit and double time looking for better while keeping that paycheck coming in every two weeks. For far too many it instead means to sabotage themselves and get on unemployment.

Orrrrr...the poorly managed, employee-hostile, executive-wallet-lining company could dry up and blow away, freeing up space in the market for many new, smaller, entrepreneurial businesses to start up and fill the void - providing a better work environment for these same employees.

Which seems perfectly sensible.  THAT is the thing I never understood about...if I may so so..."your position".

Why, when groups of humans work together to collectively bargain and strengthen their position in negotiations and call it a "corporation"...is it no-holds-barred, anything-they-do-is-okay-why-here's-my-daughter?  Yet, when groups of humans work together to collectively bargain and strengthen their position in negotiations and call it a "union", suddenly it's Satan-manifest-on-Earth??

The mind boggles.

Small businesses don't have to deal with unions, it's individual owners working with individual employees to find the right balance of pay vs work.

When businesses get big and get organized with a lot of money behind them...it's only natural that employees should be expected to get organized in response, to keep that same relationship in place that small businesses have with their employees.

Unions are exactly as 'evil' as corporations - no more, and no less.  I'd gladly do without them...both.  But not one or the other.  Either both, or neither.  The balance is important.

Brad_Hawthorne

xanderf

Brad_Hawthorne

Kanti

I'll take a 25% cut over a 100% cut any day. 

Agreed. The way I've always been was to be on the hunt for the better job. Taking a 25% pay hit just means that much more incentive to take the hit and double time looking for better while keeping that paycheck coming in every two weeks. For far too many it instead means to sabotage themselves and get on unemployment.

Orrrrr...the poorly managed, employee-hostile, executive-wallet-lining company could dry up and blow away, freeing up space in the market for many new, smaller, entrepreneurial businesses to start up and fill the void - providing a better work environment for these same employees.

Which seems perfectly sensible.  THAT is the thing I never understood about...if I may so so..."your position".

Why, when groups of humans work together to collectively bargain and strengthen their position in negotiations and call it a "corporation"...is it no-holds-barred, anything-they-do-is-okay-why-here's-my-daughter?  Yet, when groups of humans work together to collectively bargain and strengthen their position in negotiations and call it a "union", suddenly it's Satan-manifest-on-Earth??

The mind boggles.

Small businesses don't have to deal with unions, it's individual owners working with individual employees to find the right balance of pay vs work.

When businesses get big and get organized with a lot of money behind them...it's only natural that employees should be expected to get organized in response, to keep that same relationship in place that small businesses have with their employees.

Unions are exactly as 'evil' as corporations - no more, and no less.  I'd gladly do without them...both.  But not one or the other.  Either both, or neither.  The balance is important.

In recent memory have you ever heard any example of collective union bargaining ever saving a company from folding?