Hostess Executives Teach Us All A Little Lesson About Personal Responsibility
Today is really a red-letter day for corporate malfeasance and incompetence here at Wonkette, isn't it? It is! And such a day wouldn't be complete without a discussion of the Hostess CEO, whose corporate"maneuvers" might "deprive" workers of some of their pension money by using it for "operations." (This is corporate speak for saying that the CEOs padded executive pay by stealing money from worker pensions.)
According to a report by the Wall Street Journal, Hostess’ CEO, Gregory Rayburn, essentially admitted that his company stole employee pension money and put it toward CEO and senior executive pay (aka “operations”). While this isn't technically illegal, it's another sleazy theft by Hostess executives - who've paid themselves handsomely while running their company into the ground. Just last month, a judge agreed to let Hostess executives suck another $1.8 million out of the bankrupt company to pay bonuses to CEOs.
Let us pause for a moment to note that this is not technically illegal. It seems like something that SHOULD be illegal, probably, and something that WOULD be illegal if done in reverse (i.e. workers taking executive pay in order to subsidize their own pensions) but then again, that would be Class Warfare so maybe it shouldn't be illegal. Also too, it was because of an accounting mistake. Everyone makes mistakes right? Of course they do. Just a little mistake involving a couple zeros, nothing to get too pissy about.
...Back in 2005 Hostess sent out a letter saying they’d just had a very, very profitable quarter. Their stock jumped up. The CEO, Charles Sullivan, and many of the senior executives sold chunks of their stock.
Then, a few weeks later in 2005, came the letter saying that, oops, all of that profit had really been just an accounting error – the company was actually in trouble. Although the CEO and the top guys had all made a nice killing selling the stock when it was high, and paying a maximum income tax on it of 15 percent because they used the Capital Gains loophole that Mitt Romney used to become a multimillionaire, they now wanted the workers to take a big pay cut.
And they DID take a big paycut, while executive pay soared, and while executives "borrowed" from the workers' self-funded pensions.
Also, if the CEOs shorted the stock in anticipation of that second letter, they made an EVEN BIGGER KILLING, which again, is probably technically not illegal. Or maybe is illegal, but without any real consequences, making it de facto not illegal, because these are JOB CREATORS we are talking about. Also the CEO wasn't there when it happened, so it's not his fault probably, he says.
You know, when we were young and naive, we thought that the people got paid lots of money -- like CEOs, for example -- got paid lots of money because they were ultimately responsible for everything. Apparently it is the total opposite, and they are responsible for and beholden to nothing. After all, they have the gold so they make the rules.