Judge Okays $1.8 Million Bonuses For Hostess Executives
A bankruptcy judge has granted Hostess the ability to give $1.8 million in bonuses to its executives as part of its liquidation process. The bonuses are intended to be an incentive for 19 top-level managers to stay with the Twinkies maker to oversee the remaining liquidation.
Hostess spokesman Lance Ignon stated that the payouts will only be granted if the managers “achieve a set of specific tasks and goals within a specified time frame that are designed to speed and lower the cost of the wind-down,” notes CNN.
Ignon added that the maximum bonus amount represents about 0.07 percent of Hostess’ revenue and about 0.17 percent of the value of its assets. It is also below average for bonuses in similar bankruptcy cases.
US Bankruptcy Judge Robert Drain approved the bonuses for executives on Thursday, along with granting final approval for the baking company to sell its cult-favorite brands and shut down operations permanently.
Hostess originally filed for bankruptcy the latest time after a fight with the Bakery, Confectionery, Tobacco Workers, and Grain Millers International Union. The union has accused the company of slashing workers’ wages while increasing the salaries of executives.
The Wall Street Journal notes that, in granting the bonuses, Judge Drain cautioned those in the courtroom about the bonuses. Drain stated that they should not be seen as management “feathering its next.” Instead, he stated, “That is clearly not the case. This is difficult work that is well compensated, not as a handout.”
While the bonuses will be available for executives who meet their goals during Hostess’ liquidation, Chief Executive Officer Gregory Rayburn will not be eligible to receive one.