Twinkie maker Hostess pissed off a lot of reasonable people by not only cutting worker pay while leaving the CEO's pay untouched, but also giving executives $1.75 million in bonuses at the same time they are liquidating the company and laying off 15,000 workers. That's some brazen shit. More enraging is how typical such behavior is.
Because executives are the ones who get to decide where a company's money goes, it is always and without fail extremely important that they be rewarded for their hard work and offered many incentives not to go elsewhere; whereas the workers, who do the actual work, should accept pay cuts, and be happy to have a job. The WSJ today looks at the phenomenon of companies paying out bonuses to executives shortly before filing for bankruptcy (a way to ensure that executives get their money without asking for the approval of a bankruptcy judge), and finds that—surprise!—it is common:
More than 1,600 insiders-executives and others controlling a company-received bonuses, salaries, fees and other compensation totaling more than $1.3 billion in the months before their companies filed for Chapter 11, according to a Wall Street Journal analysis of more than 80 bankruptcy cases over the past five years.
If you know that your company is going to go bankrupt, plundering its bank account for bonuses for yourself is essentially taking money from the pockets of creditors. Where is all that conservative pro-business "people should pay their debts" ethic in that action? Furthermore, reaping riches for yourself while cutting the pay of all your workers is prima facie evidence that you are a greedy prick, and a poor leader.
This all appears to be perfectly legal.
[WSJ. Photo: AP]