I never said we were. I am, however, always amused by the prevalence of these, "You didn't build it!" threads that creep up, and the rabid attacks on any type of entrepreneurs, as if the people who build businesses are legitimate threats to sanity and freedom.
The big problem people have with these CEO salaries is that they didn't build it.
I get raising pay to try to get CEO's who are competent, but they are few and far between because the ones who are competent are building thier own businesses already.
There are very few turnaround stories where a new outside CEO righted the ship from within (rather than a buyout/spinoff).
Outside CEO's are often voted in by mutual funds or hedge funds who only have one interest, the price of the companies stock. They don't care who rises and falls, just juice the stock prices long enough for us to sell and make a profit.
Private Mod Note
():
Rollback Post to RevisionRollBack
Out of the blackness and stench of the engulfing swamp emerged a shimmering figure. Only the splattered armor and ichor-stained sword hinted at the unfathomable evil the knight had just laid waste.
I never said we were. I am, however, always amused by the prevalence of these, "You didn't build it!" threads that creep up, and the rabid attacks on any type of entrepreneurs, as if the people who build businesses are legitimate threats to sanity and freedom.
The big problem people have with these CEO salaries is that they didn't build it.
I get raising pay to try to get CEO's who are competent, but they are few and far between because the ones who are competent are building thier own businesses already.
There are very few turnaround stories where a new outside CEO righted the ship from within (rather than a buyout/spinoff).
Outside CEO's are often voted in by mutual funds or hedge funds who only have one interest, the price of the companies stock. They don't care who rises and falls, just juice the stock prices long enough for us to sell and make a profit.
There is also something to be said for having some way to get and keep a CEO on a sinking ship. People complain about golden parachutes, and CEO's getting huge salaries on collapsing businesses all the time but they forget about the fact that the CEO's don't have to stay. They can, and by all means should, quit for the sake of their career. Convincing them to stay on and perform the job is a lot harder when the ship is sinking then when it is running good.
There is also something to be said for having some way to get and keep a CEO on a sinking ship. People complain about golden parachutes, and CEO's getting huge salaries on collapsing businesses all the time but they forget about the fact that the CEO's don't have to stay. They can, and by all means should, quit for the sake of their career. Convincing them to stay on and perform the job is a lot harder when the ship is sinking then when it is running good.
This of course sets up the nasty situation that when a company has financial difficulties the workers' pay gets cut and the executives get raises. It gets worse when these same executives are the ones who made the bad decisions that created the financial difficulties.
Reading some of the stuff written on this, it seems that the company already borrowed money from the pension fund and the money will obviously not be repaid. The union considered that 'legal theft' and of course now it looks like the executives were taking that money to pay for their own raises.
The only thing that is really unclear for me is why the union members seemingly preferred losing their jobs rather than capitulating to the company. Did they think the executives were cheating them and the offer could not be trusted? Did they think that their jobs were already gone and the executives were simply trying to milk the company for all it had left?
There is also something to be said for having some way to get and keep a CEO on a sinking ship. People complain about golden parachutes, and CEO's getting huge salaries on collapsing businesses all the time but they forget about the fact that the CEO's don't have to stay. They can, and by all means should, quit for the sake of their career. Convincing them to stay on and perform the job is a lot harder when the ship is sinking then when it is running good.
We must also ask ourselves whether we want those people who only stick around for the money. People buy based on emotion and justify through logic. Not all emotions breed the same sort of loyalty or perspectives necessary to right a wronged ship. The man who gives his pay increase to hurting employees makes for workers who will work longer and more hours to produce goods at a cheaper rate.
The power of faith and belief is strong. Remember that one parenting thread, where people perceived one thing and reality was well in doubt another? That's also having employees stick around to make sure things work well, and many times those are middle managers that are innovators and the future upper management. If they jump ship, but equally have to take a pay cut it's going to be the faith not in themselves but the company. Everyone may "need a job," but you're right that "not everyone has to stay." Shame and tame. "You want to go to hell?" "You want to be *that company*."
Talent retention for a sinking company is difficulty, and you will often only have a limited time to send the right message with politics. The simplest analogy I can come up with would be Jesus asking Paul to come and die for him, rather than Christ after he had died reinforcing Paul to be crucified. "He died for me" is a very strong emotional tie. The same with other forms of sacrifice. "He sacrificed for us and now is asking for us to take up the yoke."
That's why in part Judeo-Christian values are rather capitalistic, because it uses faith, sacrifice, and marketing. But equally the church as similar to the modern corporation has issues with money and greed and wrong forms of incentives. Frankly, fire and brimstone more about bad corporate politics and history, in my own opinion, scares people more than business ethics.
Private Mod Note
():
Rollback Post to RevisionRollBack
Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
I never said we were. I am, however, always amused by the prevalence of these, "You didn't build it!" threads that creep up, and the rabid attacks on any type of entrepreneurs, as if the people who build businesses are legitimate threats to sanity and freedom.
The big problem people have with these CEO salaries is that they didn't build it.
I get raising pay to try to get CEO's who are competent, but they are few and far between because the ones who are competent are building thier own businesses already.
There are very few turnaround stories where a new outside CEO righted the ship from within (rather than a buyout/spinoff).
Outside CEO's are often voted in by mutual funds or hedge funds who only have one interest, the price of the companies stock. They don't care who rises and falls, just juice the stock prices long enough for us to sell and make a profit.
There is also something to be said for having some way to get and keep a CEO on a sinking ship. People complain about golden parachutes, and CEO's getting huge salaries on collapsing businesses all the time but they forget about the fact that the CEO's don't have to stay. They can, and by all means should, quit for the sake of their career. Convincing them to stay on and perform the job is a lot harder when the ship is sinking then when it is running good.
Many of the largest turnarounds done by CEOs have been from those that stuck around through the thick and thin, and in many cases shunted their salary completely - often into just shares of the company and no other value to encourage them to work harder. (Jobs being a huge example - but there's others that followed the lead he pioneered - didn't Ioccoca for a while do the same?)
If I was in the union, and I already saw the trajectory of the company, and the question was "Keep your pension and lose your job" vs. "Lose your pension, and quite possibly lose your job anyway" I would have made the same choice as the union did.
It's really not that complicated why they didn't give in. The company has been mismanaged and on a downward trajectory for years, and they're blaming the workers for it, after they already made concessions. Now they want them to even give up their pensions and thus get nothing if and when the company goes under.
Meanwhile, the management, as was mentioned, needs more money to stay on a sinking ship and it makes sense to offer them big golden parachutes for when the company goes under. As it turns out, regular workers have some similar ideas about how worth it is to work on a sinking ship with fewer benefits and less security.
If I was in the union, and I already saw the trajectory of the company, and the question was "Keep your pension and lose your job" vs. "Lose your pension, and quite possibly lose your job anyway" I would have made the same choice as the union did.
The problem is that's not the choice -- the pension is gone regardless. I can't see any arrangement or agreement that will result in the workers receiving a pension in perpetuity.
It's really not that complicated why they didn't give in. The company has been mismanaged and on a downward trajectory for years, and they're blaming the workers for it, after they already made concessions. Now they want them to even give up their pension and thus get nothing if and when the company goes under.
Meanwhile, the management, as was mentioned, needs more money to stay on a sinking ship and it makes sense to offer them big golden parachutes for when the company goes under. As it turns out, regular workers have some similar ideas about how worth it is to work on a sinking ship with fewer benefits and less security.
The difference is, when a CEO abandons a sinking company he doesn't scuttle the company on the way out (at least, if he did it would be illegal). On the other hand, here, the union workers did that.
If I was in the union, and I already saw the trajectory of the company, and the question was "Keep your pension and lose your job" vs. "Lose your pension, and quite possibly lose your job anyway" I would have made the same choice as the union did.
The problem is that's not the choice -- the pension is gone regardless. I can't see any arrangement or agreement that will result in the workers receiving a pension in perpetuity.
[/QUOTE]
I never quite understood how those pension setups work. Isn't the pension fund independent of the company? So any money that was already paid in would not be lost?
It's really not that complicated why they didn't give in. The company has been mismanaged and on a downward trajectory for years, and they're blaming the workers for it, after they already made concessions. Now they want them to even give up their pension and thus get nothing if and when the company goes under.
Meanwhile, the management, as was mentioned, needs more money to stay on a sinking ship and it makes sense to offer them big golden parachutes for when the company goes under. As it turns out, regular workers have some similar ideas about how worth it is to work on a sinking ship with fewer benefits and less security.
The difference is, when a CEO abandons a sinking company he doesn't scuttle the company on the way out (at least, if he did it would be illegal). On the other hand, here, the union workers did that.
I really do not see how you can say that the union 'scuttled' the company. They simply were not willing to keep bailing the water while the executives who run the company into an iceberg were on the deck trying to fit as much of the good china into the lifeboats as possible.
The CEO of the company quit some time back after his new generous contract fell through. Instead of taking a lesser deal he decided to leave the sinking ship ratter than try to save it. The union did the exact same thing.
If I was in the union, and I already saw the trajectory of the company, and the question was "Keep your pension and lose your job" vs. "Lose your pension, and quite possibly lose your job anyway" I would have made the same choice as the union did.
The problem is that's not the choice -- the pension is gone regardless. I can't see any arrangement or agreement that will result in the workers receiving a pension in perpetuity.
Unless the pension has a specific odd clause that allows that, that's not normal - pensions continue after the existence of a company in one that's written under the normal legal guidelines - unless there's some bizarre corner case that can be abused for such.
They are quite often REDUCED because of the pension having some challenges keeping up the pace they need to, but that is not always the case since most have an insurance policy tied to the pension to help guarantee it.
But assuming funds are too low after the loss of the company and the insurance benefit the pension still continues, but at a scaled back amount.
Unless you're referencing future retirees, they may lose theirs depending on how far along they were on qualifying (bankruptcy accelerates it generally, but it's variable in the final court determinations from what I understand) - but the union represents both current and retired employees under their umbrella. And retired employees absolutely continue their pensions, although potentially with a reduction.
And any allowed to get their pension early because of the bankruptcy are usually allowed it at a penalty. (25% per 5 years is a rule of thumb in my ancient HR texts - although it does say it generally goes through legal channels - you likely know better, mine is more of a "if an employee asks a rough number" kind of thing)
They went before the bankruptcy judge today to finalize the closing down - and they're not closing down (at least yet) - he sent them to private mediation instead.
As I understand it, there are numerous chinese companies lined up to purchase the twinkie name at least. What's in that cream filling after that is anyone's guess.
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Out of the blackness and stench of the engulfing swamp emerged a shimmering figure. Only the splattered armor and ichor-stained sword hinted at the unfathomable evil the knight had just laid waste.
As I understand it, there are numerous chinese companies lined up to purchase the twinkie name at least. What's in that cream filling after that is anyone's guess.
Not if court ordered mediation talks salvage the negotiations.
As I understand it, there are numerous chinese companies lined up to purchase the twinkie name at least. What's in that cream filling after that is anyone's guess.
So is Bimbos and Little Debbie. I dont expect single names/recipes to be sold off. I think it will be a bundle deal. The problem is, competitors only want certain names and recipes. It could get ugly.
The difference is, when a CEO abandons a sinking company he doesn't scuttle the company on the way out (at least, if he did it would be illegal). On the other hand, here, the union workers did that.
Not quite true. Golden parachutes are extracted from the pension fund. This is entirely legal.
Are they? Got anything to demonstrate that? I don't doubt you, but it's in my wheelhouse and first time I've heard of it. (Although my company did not have a CEO since it was privately held...)
So apparently according to an article here the Twinkie thing was the Hostess employees being saddled with pay and benefits cuts, while the company DURING BANKRUPTCY is giving it's CEO 300% raises and most of the board very substantial raises as well....
Not specifically about hostess, but this has been an on going problem. Even as the banks were failing their upper management kept getting wage increases. I read somewhere that one of the banks CEO's got like a million dollar bonus right after the bailout.
In my opinion this shows the growing trend companies paying management more than they should while being super cheap towards the ones who actually make the company money.(the people at the bottom)
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"And the day will come when the mystical generation of Jesus, by the supreme being as his father in the womb of a virgin will be classed with the fable of the generation of Minerva in the brain of Jupiter."
Not sure if Hostess was set up similarly, with the banks (your correlation) the bonuses they were receiving were scheduled based upon how much revenue passed through the banks or something along that lines.
So that with the way their bonus agreements were worded, that bailout money ended up being considered "revenue" for the banks even though it wasn't - a lawyer like bLatch could likely explain that weirdness better.
However, I'm not sure if that's a normal CEO bonus thing for many, or it was unique to the financial markets.
Not sure if Hostess was set up similarly, with the banks (your correlation) the bonuses they were receiving were scheduled based upon how much revenue passed through the banks or something along that lines.
So that with the way their bonus agreements were worded, that bailout money ended up being considered "revenue" for the banks even though it wasn't - a lawyer like bLatch could likely explain that weirdness better.
I don't know all the details, because my area of law is patent law, but one of the main things that it comes down to is that the wage increases were previously earned wage increases.
Back when the whole auto-industry bailout and the banking stuff was just going down my mom asked me why they couldn't just change the Banking peoples contracts like they did the union employees and thus stop them from getting the huge bonuses. The answer then was deceptively simple. They can change the contracts, but it won't stop them from getting the bonuses. Because the bonuses were already earned*.
The key difference was that the union contracts were changed going forward. Pay scales for work already done were not (and indeed, could not be) altered. The bonuses, however, fall into the second category.
In reality the term "bonus" is a bit of a misnomer. They aren't bonuses by any means. They are pay. As an example -- I make a set percent of my billings each month in pay, with a minimum floor that I won't make less then (so if I have a bad month I still make the minimum). Everything over the floor is classified as a "bonus" even though it is something that my firm is contractually obligated to pay me.
I would imagine hostess top brass compensation is set up similarly, where the bonuses are determined by a contractual formula, in which case they could be altered going forward, but not retrospectively.
Make sense?
*earned meaning the firm/company/whatever was already contractually obligated to pay them, I don't mean to imply they deserved the bonuses.
However, I'm not sure if that's a normal CEO bonus thing for many, or it was unique to the financial markets.
The revenue deal would be unique to financial markets, but having (what appears to outsiders like us as) weird metrics to determine bonuses is pretty common. I wouldn't be at all surprised to find out that the "bonus" metric was something like the company losing les than X dollars in revenue, or stuff like that. It all depends on what the goal is.
I've never even eaten a Twinkie before, and now I never will
The profitable brands will be sold off to other companies and will continue to be produced. I would imagine Twinkies are popular enough to still be a profitable brand.
I'll summarize Hostess' bankruptcy as this: We live in an artisanal, organic world now, with everyone belonging to a niche market. The only niche market Hostess could potentially get is vegans (by replacing eggs with soy lecithin or something and milk with palm oil and flavoring). In capitalism, if you don't keep up with trends, you're dead.
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Card advantage is not the same thing as card draw. Something for 2B cannot be strictly worse than something for BBB or 3BB. If you're taking out Swords to Plowshares for Plummet, you're a fool. Stop doing these things!
I'll summarize Hostess' bankruptcy as this: We live in an artisanal, organic world now, with everyone belonging to a niche market. The only niche market Hostess could potentially get is vegans (by replacing eggs with soy lecithin or something and milk with palm oil and flavoring). In capitalism, if you don't keep up with trends, you're dead.
In addition, major grocery chains have been producing their own versions at a fraction of Hostess' price for quite some time. As someone who has partaken of the occasional horribly unhealthy "pie" and Chocolate Donettes over many years, the quality (using the term loosely) of the Hostess brand dropped off significantly years ago. Given higher prices and similar low quality, knockoffs will always win, end of story.
I wonder if it would have made things better or worse if they had expanded more to other countries. I'm living in Australia, and I haven't even seen a Twinkie, or any of their other products before, nor any knockoffs.
I'll summarize Hostess' bankruptcy as this: We live in an artisanal, organic world now, with everyone belonging to a niche market. The only niche market Hostess could potentially get is vegans (by replacing eggs with soy lecithin or something and milk with palm oil and flavoring). In capitalism, if you don't keep up with trends, you're dead.
In addition, major grocery chains have been producing their own versions at a fraction of Hostess' price for quite some time. As someone who has partaken of the occasional horribly unhealthy "pie" and Chocolate Donettes over many years, the quality (using the term loosely) of the Hostess brand dropped off significantly years ago. Given higher prices and similar low quality, knockoffs will always win, end of story.
Plus, Scumbag Hostess would have something like:
FILES CHAPTER 11
RAISES CEO SALARIES
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Card advantage is not the same thing as card draw. Something for 2B cannot be strictly worse than something for BBB or 3BB. If you're taking out Swords to Plowshares for Plummet, you're a fool. Stop doing these things!
I wonder if it would have made things better or worse if they had expanded more to other countries. I'm living in Australia, and I haven't even seen a Twinkie, or any of their other products before, nor any knockoffs.
A lot of non-americans say stuff like this, but the funny thing is that when you actually get to try one, in most cases people aren't impressed, or they get sick from all the artificial stuff.
Twinkies are basically cream filled edible plastic like cakeish stuff.
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Out of the blackness and stench of the engulfing swamp emerged a shimmering figure. Only the splattered armor and ichor-stained sword hinted at the unfathomable evil the knight had just laid waste.
Most Hostess products are crap if you ask me. They don't taste very good and they're not healthy. If I want to each some unhealthy pastry or cake, I have much better options anyway.
So if it were based on my tastes, they would've gone out of business a long time ago. A lot of Americans like crappy food though. But I dunno if they all like crap THAT much. Why the low quality of their product (in both taste and healthfulness) and changing tastes isn't looked at as the first potential explanation for their failure, I don't know.
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The big problem people have with these CEO salaries is that they didn't build it.
I get raising pay to try to get CEO's who are competent, but they are few and far between because the ones who are competent are building thier own businesses already.
There are very few turnaround stories where a new outside CEO righted the ship from within (rather than a buyout/spinoff).
Outside CEO's are often voted in by mutual funds or hedge funds who only have one interest, the price of the companies stock. They don't care who rises and falls, just juice the stock prices long enough for us to sell and make a profit.
There is also something to be said for having some way to get and keep a CEO on a sinking ship. People complain about golden parachutes, and CEO's getting huge salaries on collapsing businesses all the time but they forget about the fact that the CEO's don't have to stay. They can, and by all means should, quit for the sake of their career. Convincing them to stay on and perform the job is a lot harder when the ship is sinking then when it is running good.
This of course sets up the nasty situation that when a company has financial difficulties the workers' pay gets cut and the executives get raises. It gets worse when these same executives are the ones who made the bad decisions that created the financial difficulties.
Reading some of the stuff written on this, it seems that the company already borrowed money from the pension fund and the money will obviously not be repaid. The union considered that 'legal theft' and of course now it looks like the executives were taking that money to pay for their own raises.
The only thing that is really unclear for me is why the union members seemingly preferred losing their jobs rather than capitulating to the company. Did they think the executives were cheating them and the offer could not be trusted? Did they think that their jobs were already gone and the executives were simply trying to milk the company for all it had left?
We must also ask ourselves whether we want those people who only stick around for the money. People buy based on emotion and justify through logic. Not all emotions breed the same sort of loyalty or perspectives necessary to right a wronged ship. The man who gives his pay increase to hurting employees makes for workers who will work longer and more hours to produce goods at a cheaper rate.
The power of faith and belief is strong. Remember that one parenting thread, where people perceived one thing and reality was well in doubt another? That's also having employees stick around to make sure things work well, and many times those are middle managers that are innovators and the future upper management. If they jump ship, but equally have to take a pay cut it's going to be the faith not in themselves but the company. Everyone may "need a job," but you're right that "not everyone has to stay." Shame and tame. "You want to go to hell?" "You want to be *that company*."
Talent retention for a sinking company is difficulty, and you will often only have a limited time to send the right message with politics. The simplest analogy I can come up with would be Jesus asking Paul to come and die for him, rather than Christ after he had died reinforcing Paul to be crucified. "He died for me" is a very strong emotional tie. The same with other forms of sacrifice. "He sacrificed for us and now is asking for us to take up the yoke."
That's why in part Judeo-Christian values are rather capitalistic, because it uses faith, sacrifice, and marketing. But equally the church as similar to the modern corporation has issues with money and greed and wrong forms of incentives. Frankly, fire and brimstone more about bad corporate politics and history, in my own opinion, scares people more than business ethics.
Ambition must be made to counteract ambition.
Individualities may form communities, but it is institutions alone that can create a nation.
Nothing succeeds like the appearance of success.
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
Many of the largest turnarounds done by CEOs have been from those that stuck around through the thick and thin, and in many cases shunted their salary completely - often into just shares of the company and no other value to encourage them to work harder. (Jobs being a huge example - but there's others that followed the lead he pioneered - didn't Ioccoca for a while do the same?)
BTW - Amidst all this, and from a "less biased source" as requested - apparently during the CLOSING PROCEDURES the 19 execs are pushing for $1.75 million in bonuses during the same proceedings that they're asking to be allowed to close the doors officially. http://money.cnn.com/2012/11/19/news/companies/hostess-bankruptcy-bonuses/index.html?iid=Popular
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
It's really not that complicated why they didn't give in. The company has been mismanaged and on a downward trajectory for years, and they're blaming the workers for it, after they already made concessions. Now they want them to even give up their pensions and thus get nothing if and when the company goes under.
Meanwhile, the management, as was mentioned, needs more money to stay on a sinking ship and it makes sense to offer them big golden parachutes for when the company goes under. As it turns out, regular workers have some similar ideas about how worth it is to work on a sinking ship with fewer benefits and less security.
The problem is that's not the choice -- the pension is gone regardless. I can't see any arrangement or agreement that will result in the workers receiving a pension in perpetuity.
The difference is, when a CEO abandons a sinking company he doesn't scuttle the company on the way out (at least, if he did it would be illegal). On the other hand, here, the union workers did that.
[/QUOTE]
I never quite understood how those pension setups work. Isn't the pension fund independent of the company? So any money that was already paid in would not be lost?
I really do not see how you can say that the union 'scuttled' the company. They simply were not willing to keep bailing the water while the executives who run the company into an iceberg were on the deck trying to fit as much of the good china into the lifeboats as possible.
The CEO of the company quit some time back after his new generous contract fell through. Instead of taking a lesser deal he decided to leave the sinking ship ratter than try to save it. The union did the exact same thing.
Unless the pension has a specific odd clause that allows that, that's not normal - pensions continue after the existence of a company in one that's written under the normal legal guidelines - unless there's some bizarre corner case that can be abused for such.
They are quite often REDUCED because of the pension having some challenges keeping up the pace they need to, but that is not always the case since most have an insurance policy tied to the pension to help guarantee it.
But assuming funds are too low after the loss of the company and the insurance benefit the pension still continues, but at a scaled back amount.
Unless you're referencing future retirees, they may lose theirs depending on how far along they were on qualifying (bankruptcy accelerates it generally, but it's variable in the final court determinations from what I understand) - but the union represents both current and retired employees under their umbrella. And retired employees absolutely continue their pensions, although potentially with a reduction.
And any allowed to get their pension early because of the bankruptcy are usually allowed it at a penalty. (25% per 5 years is a rule of thumb in my ancient HR texts - although it does say it generally goes through legal channels - you likely know better, mine is more of a "if an employee asks a rough number" kind of thing)
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
They went before the bankruptcy judge today to finalize the closing down - and they're not closing down (at least yet) - he sent them to private mediation instead.
http://www.cnbc.com/id/49889974/
So Hostess might yet live!
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
Not if court ordered mediation talks salvage the negotiations.
So is Bimbos and Little Debbie. I dont expect single names/recipes to be sold off. I think it will be a bundle deal. The problem is, competitors only want certain names and recipes. It could get ugly.
Are they? Got anything to demonstrate that? I don't doubt you, but it's in my wheelhouse and first time I've heard of it. (Although my company did not have a CEO since it was privately held...)
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
Not specifically about hostess, but this has been an on going problem. Even as the banks were failing their upper management kept getting wage increases. I read somewhere that one of the banks CEO's got like a million dollar bonus right after the bailout.
In my opinion this shows the growing trend companies paying management more than they should while being super cheap towards the ones who actually make the company money.(the people at the bottom)
Thomas Jefferson
Jefferson's letter to John Adams, April 11 1823
So that with the way their bonus agreements were worded, that bailout money ended up being considered "revenue" for the banks even though it wasn't - a lawyer like bLatch could likely explain that weirdness better.
However, I'm not sure if that's a normal CEO bonus thing for many, or it was unique to the financial markets.
Re: People misusing the term Vanilla to describe a flying, unleash (sometimes trample) critter.
I don't know all the details, because my area of law is patent law, but one of the main things that it comes down to is that the wage increases were previously earned wage increases.
Back when the whole auto-industry bailout and the banking stuff was just going down my mom asked me why they couldn't just change the Banking peoples contracts like they did the union employees and thus stop them from getting the huge bonuses. The answer then was deceptively simple. They can change the contracts, but it won't stop them from getting the bonuses. Because the bonuses were already earned*.
The key difference was that the union contracts were changed going forward. Pay scales for work already done were not (and indeed, could not be) altered. The bonuses, however, fall into the second category.
In reality the term "bonus" is a bit of a misnomer. They aren't bonuses by any means. They are pay. As an example -- I make a set percent of my billings each month in pay, with a minimum floor that I won't make less then (so if I have a bad month I still make the minimum). Everything over the floor is classified as a "bonus" even though it is something that my firm is contractually obligated to pay me.
I would imagine hostess top brass compensation is set up similarly, where the bonuses are determined by a contractual formula, in which case they could be altered going forward, but not retrospectively.
Make sense?
*earned meaning the firm/company/whatever was already contractually obligated to pay them, I don't mean to imply they deserved the bonuses.
The revenue deal would be unique to financial markets, but having (what appears to outsiders like us as) weird metrics to determine bonuses is pretty common. I wouldn't be at all surprised to find out that the "bonus" metric was something like the company losing les than X dollars in revenue, or stuff like that. It all depends on what the goal is.
The profitable brands will be sold off to other companies and will continue to be produced. I would imagine Twinkies are popular enough to still be a profitable brand.
On phasing:
In addition, major grocery chains have been producing their own versions at a fraction of Hostess' price for quite some time. As someone who has partaken of the occasional horribly unhealthy "pie" and Chocolate Donettes over many years, the quality (using the term loosely) of the Hostess brand dropped off significantly years ago. Given higher prices and similar low quality, knockoffs will always win, end of story.
Plus, Scumbag Hostess would have something like:
FILES CHAPTER 11
RAISES CEO SALARIES
On phasing:
A lot of non-americans say stuff like this, but the funny thing is that when you actually get to try one, in most cases people aren't impressed, or they get sick from all the artificial stuff.
Twinkies are basically cream filled edible plastic like cakeish stuff.
So if it were based on my tastes, they would've gone out of business a long time ago. A lot of Americans like crappy food though. But I dunno if they all like crap THAT much. Why the low quality of their product (in both taste and healthfulness) and changing tastes isn't looked at as the first potential explanation for their failure, I don't know.