Many on the right were quick to condemn the unions for running hostess into bankruptcy. Of course, like most issues, there is another side to the story. It seems that the union in question actually agreed to take a pay cut in order to help stave off bankruptcy the time the union contract came up for renewal in 2004. Shortly thereafter, the executives of Hostess received substantial performance bonuses and large raises.
Fast forward to 2012, the union refused to take a pay cut, fearing that the money that they surrendered would simply be used again to reward executives. It seems that the fears were not totally misplaced, with executives getting a bonus equal to 75% of their annual pay:
The update on the sale process came as
Hostess also received approval to give its top executives bonuses
totaling up to $1.8 million for meeting certain budget goals during the
liquidation. The company says the incentive pay is needed to retain the
19 corporate officers and “high-level managers” for the wind down
process, which could take about a year.
In fact, earlier this year, the CEO of the company saw his own pay rate TRIPLE to $2.5 million per year, and other executives received 80% pay raises. Blaming the union because they won’t take a pay cut, but holding the executives who gave themselves huge pay raises harmless, is the epitome of cluelessness.
Anyone want to take bets as to how many of those corporate officers will receive high paying jobs at the new companies?