Salary Increases at Hostess
Some creditors question Hostess pay raises approved in late July.
- Brian Driscoll, CEO, around $750,000 to $2,550,000
- Gary Wandschneider, EVP, $500,000 to $900,000
- John Stewart, EVP, $400,000 to $700,000
- David Loeser, EVP, $375,000 to $656,256
- Kent Magill, EVP, $375,000 to $656,256
- Richard Seban, EVP, $375,000 to $656,256
- John Akeson, SVP, $300,000 to $480,000
- Steven Birgfeld, SVP, $240,000 to $360,000
- Martha Ross, SVP, $240,000 to $360,000
- Rob Kissick, SVP, $182,000 to $273,008
NOTE: Some executives didn’t take full raise.Source: Creditors’ Committee court filings
Read more on the creditors questioning Hostess in court filings in April WSJ article. Click here.
KENSINGTON, Md., Nov. 13, 2012 –/PRNewswire-USNewswire/ — In a desperate attempt to break the solidarity and resolve of striking BCTGM members across the country, Hostess Brands is falsely claiming that its decision to close three of its bakeries — St. Louis, Cincinnati and Seattle — is the result of the nationwide strike against the company by BCTGM members.
In fact, according to the company’s 1113 filing with the bankruptcy court earlier this year as well as its last/best/final and non-negotiable proposal to its BCTGM-represented workers, the company was planning to close at least nine bakeries as part of its reorganization plan, although the company refused to disclose which bakeries it intended to close. This is in addition to the three bakeries that were to be closed as a result of the company’s planned sale of its Merita division.
Moreover, St. Louis Mayor Francis Slay was quoted in a November 13 KMOX-CBS St. Louis article stating, “I was told months ago they were planning on closing the site in St. Louis… And there was no indication at that time it had anything to do with the strike the workers were waging.”
BCTGM International Union President Frank Hurt stated, “The recent claim by Hostess CEO Greg Rayburn that our strike is the reason for the closure of the three bakeries is simply not true. That statement is a continuation of a disturbing pattern by the company of issuing public statements that are erroneous at best and disingenuous at worst.
“Our members rejected the company’s outrageous proposal by 92 percent in September. Rejection came from every corner of the country. They were being asked to vote on a proposal with massive concessions, knowing that their plant could very well be one of those to be closed.
“Our members are on strike because they have had enough. They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars.”
Over the past eight years since the first Hostess bankruptcy, BCTGM members have watched as money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants.
On contrary, the downfall of Hostess was unions vs. hedge funds: Two hedge funds that control hundreds of millions of Hostess debt. More from CNBC John Carney
The funds, Silver Point and Monarch, are what are known as distressed debt investors. They buy the debt of troubled companies—usually at steep discounts. Some consider them white knights who are willing to take make risky investments in companies on the verge of failure. Others say they are “vulture funds.”
Only Silver Point and Monarch could have kept Hostess out of liquidation and kept the Twinkie bakery ovens firing. But they were, ultimately, unable to reach a deal with the unions that represents the workers who make and deliver products like Twinkies, Wonderbread and Ding Dongs. Without large union concessions—what some would say, total union capitulation—the hedge funds decided Hostess would have to die.