Many people have fond memories Hostess so there was some initial shock to find out that Hostess was going out of business. That shock was magnified when it was revealed that the Bankrupt Hostess will pay nearly 2 million in bonuses.
Bankrupt Hostess will pay nearly 2 million in bonuses!
The bonuses were approved by a federal bankruptcy judge.
What that means is that 19 executives of Hostess will receive their share of $1.8 million.
If you distribute the $1.8 million evenly, that equates to nearly $95,000 on top of their already hefty salaries.
CEO Gregory Rayburn, who makes a whopping $125,000 per month, will not participate in the bonus pool, although it is not known what, if any, his exit package is.
Two of the employees will even be eligible for additional monetary rewards, based on how efficiently they carry out the liquidation operation, reports KSN.com.
Of course this decision has prompted outrage, particularly among the 18,000+ employees who have , or will soon, lose their jobs.
Th official Hostess stance is that they need to retain those employees to successfully transition the company, since, they claim, there are over 100 potential buyers who want to purchase pieces of the company.
It is not uncommon for companies to pay bonuses for these types of situations, however it certainly is frustrating for the employees who will soon be standing on the unemployment line.
While they are scraping to get by, in a not too terrific economy, the chosen 19 will receive, on top of their salaries, a bonus of approximately $50,000 apiece, for the next 2 years.
In an economy where jobs are not too plentiful, was it really necessary to pay out all that money? Would there really be a mass exodus?
Do they all have high paying jobs waiting for them?
If they are so valuable to the company, they would likely already have a contract in place.
Even if there was mass exodus, there are plenty of people out of work – executive level people, who would gladly take on the two-year transition task at a decent salary.
Why not pay each Manager/Executive who stayed on $10,000 after the successful transition?
That would cost less that $200,000.
The current team is partly to blame for the demise of Hostess so why reward them?
Some will say that this is exactly what is wrong with our economy – greed!