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The company is losing well over 100million a year and you are complaining about the CEO making 2.5million this year and less than a million a year in previous years?
This is the person making the key decisions with enormous impacts on the direction of the company. (In the past they had bad management? How is that working out for them? )
Ever wonder what someone like Ellen Degeneres gets for endorsing make-up, american express etc? Wierd how you always have a problem with the CEOs pay but not a peep when some athlete or entertainer gets even more money for endorsing?
They are just an employee like everyone else. Yes they deserve a good wage but it has gotten out of control. They should not be allowed to own or trade company stock and they should get a salary and a bonus based on the performance of the company. That should be corporate law.
I've been burned by one of these aholes. I don't know if you have or not but we really need to crack down on them. I worked for Enron for 4 years in the mid 80's. I had about 100K work of company stock when Enron went belly up. I still have the letter from Ken Lay telling me that not only should I hang onto my stock, I should buy more if I have some cash as it would be making a big comeback. And I should tell my friends and relatives to buy Enron. He and Fastow were selling their shares when they sent this letter. A couple of months later my stock was worthless.
Hostess fell not because of Union rules, but changing consumer tastes, corporate mismanagement, and what were essence corporate raiders for stockholders to cashout. The union had years ago already negotiated large cut paybacks in order to keep the company from bankruptcy--not that the workers were really making huge amounts anyhow. They then got hit with a unilateral decision by top management that the workers's self-funded pensions was going to be borrowed by the company in order to reach profitability. They then got hit with new contract negotiations where management was going to both further cut 8% in wages with a total of 27% cut in wages over the next 5 years (basically making trained bakers with actual skills now working for essentially minimum wage), double insurance premiums, and keep the self-funded pension system.
Now does this strike sound all that unreasonable? What exactly are they agreeing to anyways? The ability to keep a job that is now going to shank them and give them less than if they tried for other employment? The ability to stomach a complete mismanagment of funds the workers had explicitly set aside themselves (rather than take it in wages)? How did this become an example of a Union being destructive (which certainly does happen, but this is not the case here) rather than completely unethical actions on the part of management, especially as the company has seen managers come and go with fat bonuses and paychecks for doing almost absolutely nothing right in turning the company around? Why is anyone siding with management instead of the workers in this scenario? Because you heard the word "union"? Because Obama's president? Do either of those completely override any ability to look rationally at the situation?
If Hostess's conditions were so dire, as they were, then the correct management decisions would have been significant downsizing and trying to engineer a turnaround--yes, there would be cutting but you wouldn't be cutting to the bone for everyone, making the jobs nearly worthless for your employees, and taking their self-funded pensions unilaterally. There are even pathways to managed bankruptcies less deceitful and more ethical than what's happened. Somehow though, management decided none of those were real options and turned this into a story about union greed knowing that they can get support because there's now a wonderful contingent of people who froth at the mouth when there comes a fight about union anything. It's a wonderful calculation on their part, because it is obviously working.
Hostess Brands is unprofitable under its current cost structure, much of which is determined by union wages and pension costs. The offer to the BCTGM included wage, benefit and work rule concessions but also gave Hostess Brands’ 12 unions a 25 percent ownership stake in the company, representation on its Board of Directors and $100 million in reorganized Hostess Brands’ debt.
Isn't it funny how the Daily Puke and StinkyProgress never mention that? Yeah, maybe it's not all that funny.
Wait, what was the issue with that? The original plan offered to the Union was basically not living wages at all and it was pretty much impossible to push through the original plan. How badly do you think people working in the actual baking industry would do in terms of management given that a long series of MBA management types, many only tangentially familiar with the baking industry, came in, made things worse, got a large check and parting bonus, and then opened the door to the next person to do the same? What's wrong with workers actually receiving the self-funded pension money they SELF-FUNDED?
Anyhow, anyone involved should probably figure on restructuring the brands offered by Hostess and invest in other products since eating habits have been constantly changing and Hostess did not keep up. At least on that account, that isn't squarely on the shoulders of either side--though more arguably on the side of management which is supposed to be on the lookout for these things and steer the company in the right way towards prevailing trends.
If you want examples of unions screwing things up and being greedy, those do exist so concentrate on those. This one though is one of workers getting screwed and management trying to harness current popular anger to push their side of the story.
They are just an employee like everyone else. Yes they deserve a good wage but it has gotten out of control. They should not be allowed to own or trade company stock and they should get a salary and a bonus based on the performance of the company. That should be corporate law.
I've been burned by one of these aholes. I don't know if you have or not but we really need to crack down on them. I worked for Enron for 4 years in the mid 80's. I had about 100K work of company stock when Enron went belly up. I still have the letter from Ken Lay telling me that not only should I hang onto my stock, I should buy more if I have some cash as it would be making a big comeback. And I should tell my friends and relatives to buy Enron. He and Fastow were selling their shares when they sent this letter. A couple of months later my stock was worthless.
Well Ken Lay etc. got sentenced to jail for what they did. I think you and I completely agree on that topic.
In terms of the head person running the company, I consider what impact they can have on the company with their decisions and just like a major celebrity endorsement that can be considerable.
I guess that I'm willing to chip in a penny a year from my dividend to pay a guy $20million I'm ok with that as a stockholder, I do agree that the pay should be merit based which means that yes they should be paid iwth stock so their goals are aligned with mine. I've seen some godawful CEO's and some great ones, I'm willing to reward a great one handsomely for essentially guiding my stock value higher.
Keep in mind, you never hear the story about the CEO that lost 80% of their pay because the economy hurt their stock prices etc. it's just not as sexy.
There have been issues in the past, large CEO pay packages have largely been reined in by complaints from large institutional investors. (ie. big pension funds and so forth).
Hostess fell not because of Union rules, but changing consumer tastes, corporate mismanagement, and what were essence corporate raiders for stockholders to cashout. The union had years ago already negotiated large cut paybacks in order to keep the company from bankruptcy--not that the workers were really making huge amounts anyhow. They then got hit with a unilateral decision by top management that the workers's self-funded pensions was going to be borrowed by the company in order to reach profitability. They then got hit with new contract negotiations where management was going to both further cut 8% in wages with a total of 27% cut in wages over the next 5 years (basically making trained bakers with actual skills now working for essentially minimum wage), double insurance premiums, and keep the self-funded pension system.
Now does this strike sound all that unreasonable? What exactly are they agreeing to anyways? The ability to keep a job that is now going to shank them and give them less than if they tried for other employment? The ability to stomach a complete mismanagment of funds the workers had explicitly set aside themselves (rather than take it in wages)? How did this become an example of a Union being destructive (which certainly does happen, but this is not the case here) rather than completely unethical actions on the part of management, especially as the company has seen managers come and go with fat bonuses and paychecks for doing almost absolutely nothing right in turning the company around? Why is anyone siding with management instead of the workers in this scenario? Because you heard the word "union"? Because Obama's president? Do either of those completely override any ability to look rationally at the situation?
If Hostess's conditions were so dire, as they were, then the correct management decisions would have been significant downsizing and trying to engineer a turnaround--yes, there would be cutting but you wouldn't be cutting to the bone for everyone, making the jobs nearly worthless for your employees, and taking their self-funded pensions unilaterally. There are even pathways to managed bankruptcies less deceitful and more ethical than what's happened. Somehow though, management decided none of those were real options and turned this into a story about union greed knowing that they can get support because there's now a wonderful contingent of people who froth at the mouth when there comes a fight about union anything. It's a wonderful calculation on their part, because it is obviously working.
Um, how exactly was Hostess going to start significant downsizing?
I've specifically pointed out that neither the union nor management is completely to blame.
I've stated that I can understand why for some, unemployment was better than a 2nd major wage reduction.
I have no problem with PRIVATE unions. It's politically entrenched PUBLIC unions that help bleed the public dry through cronyism etc. and there is no way to shake them up.
To be honest I'm surprised that this was a unionized company. Doesn't seem to be enough money in Twinkies and HoHo's to make it worthwhile.
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