Photo Credit: iOwnTheWorld

Union apologist Mark E Andersen in a Daily Kos article (1) alleges that the idea that the unions killed Hostess is just another right wing myth and that it is the obscene executive salaries that are to blame.

This ridiculous assertion is based on a press release posted by the Confectionery, Tobacco Workers & Grain Millers International Union:

The Sacramento Bee, 13 Nov 2012, Hostess Continues Pattern Of Misinformation

BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256.

So the question is, did increased executive salaries cause the downfall of Hostess? If you hurry to say Yes, you will be overlooking two things:

1. The total compensation for these ten executives, even after the salary increases, amount to less than $7.6 million dollars (from an April 2012 Wall Street Journal Report:

   Salary Increases at Hostess

   Brian Driscoll, CEO, around $750,000 to $2,550,000
   Gary Wandschneider, EVP, $500,000 to $900,000
   John Stewart, EVP, $400,000 to $700,000
   David Loeser, EVP, $375,000 to $656,256
   Kent Magill, EVP, $375,000 to $656,256
   Richard Seban, EVP, $375,000 to $656,256
   John Akeson, SVP, $300,000 to $480,000
   Steven Birgfeld, SVP, $240,000 to $360,000
   Martha Ross, SVP, $240,000 to $360,000
   Rob Kissick, SVP, $182,000 to $273,008

   while the total pay and benefits for workers amounted to more than a billion dollars (average salary $43,000 plus benefits (2)). We see, therefor, that executive salaries are insignificant compared to those of the workers. The executives could have paid themselves ten million bucks each and it still would have had a piddling affect on the company's bottom line.



2. More importantly, the purported executives increases were not only rescinded, the total executive compensation in some cases went down to $1 per year (3), (4).

So yes, the executives tried to give themselves big raises but after the dust settled, the big issue that leftist bloggers tried to raise about those attempted salary increases was not only overblown, but is now moot as well.

Since the increases never came about and even if they had, the effect would have been negligible anyway, only a liberal idiot would still maintain that the unions and their work rules and thuggery were not the real reason Hostess closed down.