OT, Twinkies Revisited

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Why would anyone bother reading crap like that which starts off with a blatant lie? Romney was NOT a "vulture capitalist". Anyone that says that he is doesn't have a problem with just Romney, they have a problem with all capitalists and entrepeneurs. In other words, they are either totally ignorant or lying commies. I say it's the latter.
Romney helped build Staples, Sports Authority, Steel Dynamics, Dominos Pizza.... and a long list of other companies and all the jobs that go with it. They never made a hostile takeover. Their investments were with the agreement of the companies who were looking for Bain's money and expertise. What Bain did is classic American capitalism. Did some of those investments not work out and the companies wind up failing? Sure. But it's dispicable to try to slander Romney with it. We need MORE of what Bain is doing if this country is to succeed. Instead, we just spent a year distorting and condemning it.

That story is meaningnless without knowing how the salaries at Hostess today compare with those at their COMPETITORS. All the articles I have read say that Hostess has labor costs that are about 33% higher than those of it's competitors. And remember, unions effects are never limited to just wages. They typically have rules that prevent automation, prevent asking a guy who runs the fork lift from temporarily taking another job on the production line, etc. That is EXACTLY what they did at GM, that were a major factor in that bankruptcy as well.
I used to visit AT&T decades ago. When I went in the building with a little roll cart the size of carry-on luggage, I was not allowed to roll it to the room I was having a meeting in. I had to wait for a "porter" to come do it for me. I worked on defense systems at Hughes Aircraft. I'd be working nights, running tests on a microwave circuit board, for example. Maybe once or twice in an 8 hour shift, I'd have to remove one capacitor and replace it. I could do it with a soldering iron myself in 2 mins. Yet per the union rules, I had a union worker sitting there, reading a book all night, just so she could do the 4 mins of soldering. Those are the kind of stupid things that drive up labor costs and that unions thrive on. It's not just actual hourly wages. In the case of AT&T which was a monopoly, or Hughes where the govt paid for it, that kind of wasteful nonsense can exist and the company can survive. In the competitive world of cars or twinkies, not so much.
And the whining union worker in your article, completely omitted the fact that Hostess offered the unions a 25% equity stake in the company. Funny thing that. The guy remembers the salary cuts, but forgets the fact that Hostess was willing to give the workers 25% of the company and two seats on it's nine member board. If the investors were getting rich, as you and the union claim, why then the union should have been piling on that deal.
Answer this simple question. Do you believe the "vulture capitalists" made money on this deal or lost money? If you believe they made money, I'd like to see a reference as to how. So far all I've heard is bitching about how the CEO and executives were paid. And the most outrageous of reports bitch about the CEO getting $1 or $2 mil a year. Let's compare that to the compensation of similar CEOs running a $2bil company. And explain to us how one makes money by investing hundreds of millions in a business, and then paying the CEO $2mil a year.
And finally keep in mind that Hostess could not just do what they wanted. The wage contract they were trying to negotiate had to be approved by a Federal bankruptcy judge. So, why not blame him for trying to get wage and workplace concessions?
Here is a good summary of what happened:
http://management.fortune.cnn.com/2012/11/16/the-end-of-hostess / Late in the summer, the Teamsters and Hostess reached a restructuring deal that included an immediate 8% wage cut, adoption of work rules more favorable to the company, decreased employer contributions for health insurance, and drastic reductions in Hostess contributions to multiemployer pension plans. The plan was endorsed by Hostess's key secured lenders, which are led by two major hedge funds in the New York City area, Silver Point Capital and Monarch Alternative Capital. One estimate put costs savings for Hostess in the neighborhood of $200 million. For their part, the unions would receive two seats on a restructured nine-member board of directors and 25% of equity. That made the unions part of Hostess capital structure for the first time. The federal bankruptcy court approved the deal.
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Isn't to keep their job instead of winding up unemployed in this economy good enough? It used to be, but now we're in a new liberal world order, headed towards Greece and Spain.
{{{
At some point the cost of getting to work plus other work related cost negates the benefit of being 'employed'.
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The problem is that with Obama and the libs running the show, we keep raising the benefit of giving up the paying job. So, you're right. More people are going to conclude that it's just not worth it. And in this case, had the union taken the offer, they would still be averaging more than 2X the min wage, plus benefits and Hostess would have given them 25% equity in the company......
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On 11/18/2012 9:53 AM, snipped-for-privacy@optonline.net wrote:

I get it, all unions are bad ignoring what made unions arise. (disclamer, I have never been a union member) and all management/owners are always good (I have always worked in management).

We just have a total difference of opinion. You go with the fanciful idea that all management or owners belong to a different subset of the human population that is angelic and pure as the driven snow and incapable of wrong.
I have never been in a union and have held management positions most of my adult life. There are good people and there are rotten people. After lots of actual experience I just don't give everyone in a management or owner position a total pass.
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I never said that all management or owners are pure and angelic. I simply said that a lot of what is being put forth here is nonsense, like:
A - Vulture capitalists suck the life out of companies by paying the executives too much money.
fact - These "vulture capitalists", typically invest hundreds of millions buying a company and trying to make it profitable. You'd have to be a pretty dumb investor to put in a huge amount of money and then try to make it and more back through executive compensateion. If you're lucky enough to make the company successful, then Obama and the libs say you're an evil vulture capitalist. If the company fails, why then it's your fault too. Then we wonder why business is sitting on money, unwilling to hire and invest?
B- The execs at Hostess were overpaid
fact - I have yet to see any comparison of what those execs got versus the pay at similar companies. If you can show that their compensation was out of line, I'm all ears. Maybe it was, but just bitching that without any comparison proves nothing.
And I said it's shows where we're headed when a union will give up jobs that averaged $17/hour instead of taking a pay cut to $15.65 an hour. This while similar workers across the company are apparently getting paid only two thirds of those at Hostess. Now they can collect unemployment for a couple years, food stamps (after all Obama is running ads encouraging MORE people to apply), free healthcare. So, why work?

Neither do I. But regardless of what management did or did not do at Hostess, are you OK with 18,000 people going on unemployment instead of working at $15.65/hr? So that the poor slobs making $9 an hour can help pay for it?
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Pls, where does the $15.65/hr come from?
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Han
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On 11/18/2012 2:46 PM, snipped-for-privacy@optonline.net wrote:

But that is the theme of everything you write. Real life has all shades of gray.

As I said they put themselves in a really stupid bargaining position "lets give the execs a big raise and go ask the union to take concessions"
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I didn't come here and start extolling the virtues of Hostess management. I only responded to correct some of the obvious nonsense that was being posted.
Or are you one of those that think "vulture capitalists" make money on Hostess by investing hundreds of millions in it, then get it back by having a CEO get paid $1.2mil or so a year? The CEO is not even the investor to begin with. Sound like a good way to make money? In truth the investors are going to LOSE substanital money on Hostess, because they failed at turning it around.
Also, I've seen many reports throughout the credible media that show Hostess had labor costs that were significantly higher than it's competitors, most of which were not unionized. I have yet to see a report that compares the pay of the CEO and top management at Hostess to the pay recieved by similar execs at other companies. This is after all, a $2bil company. And a troubled one at that. How do you expect to get top management if you don't pay them the going rate?
Could some other management have done better and saved the company? Possibly. Was the management incompetent? IDK. But I do know that even the Teamsters thought they should make the temporary wage and benefit concessions that management was asking for. And that by refusing to do so, we now have 18,500 more unemployed workers collecting unemployment, food stamps, etc when they could have had jobs that were averaging over 2X the minimum wage.
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wrote:

Trader, the evidence is plain. The ratio of the wages of CEOs to that of workers has gone from roughly 25 in 1965 to 275 in 2007. No wonder workers are getting annoyed ... Somewhat depicted here. You may not like the source, but that is not my problem: <http://preview.tinyurl.com/b3vykcv <http://thinkprogress.org/wp-content/uploads/2011/11/worker-ceo-pay - comparison.png>
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If you look at the performance based pay issues, you will note that these tax things were put in place in the mid-80s (by strong bipartisan majorities, BTW) because Congress at the time actually wanted to reign in what they THEN viewed as widely outrageous executive pay.
In order to fight this Evil, they effectively capped executive salary (what they are paid to actually run the company) by making nothing more than $1 million deductible. (If you look at the proxy filings for most publicly held companies, a large %age of them still top actual salaries at that point).
Then, in an attempt to "align the interests of the shareholders and the executives", tax-favored performance based things such as stock options, etc. So, instead of paying someone for actually running the company, they paid them to run the books. I don't think it was coincidence that first book-cooking scandal took place within the next two years after passage. Over the long haul, all sorts of things occurred. In no apparent order of importance:
1). Executive pay rose substantially (although interestingly enough if you look at many of the indicators they rise and fall with the stock) and execs were paid orders of magnitude more than even the most captive board would have had the balls to pay them before. 2)> The concentration of wealth starts the spike around the same time. 3). The marker people like to point to, ratio between exec pay and the average on the shop floor, ballooned. After bouncing around 30X or so during the 60s, 70s, and early 80s, it took off cresting north of 300x before falling back with the stock market. So to those clamoring for Congressional action I point to the above and suggest they be damn careful what they wish for.
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wrote:

I agree that this is better done at the level of shareholders and board of directors. Whatever the "reason" for the increase in wealth disparity, and however the "laws" were put in place, the disparity is what is starting to cause labor unrest. It is quite possible that Hostess was doomed anyway, never mind the worker<->exec fights. But whoever was in charge at Hostess (6 CEOs in 8 years, or was it 8 CEOs in 6 years?) surely didn't help keeping the workers happy.
I have no idea whether the CEOs at Hostess were richer or poorer from their stint at the helm of the company, and neither do I know whether the investors who bought and sold the company got richer.
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Trader believes you although have to pay top dollar to get the best CEO's, the people who do the actual work don't much matter, pay-wise. No need to pay them a reasonable wage. That's hard for at some people to swallow when the bosses fatten their paychecks at the same time they ask their workers to take a paycut. Obviously Hostess workers didn't buy it and America isn't buying it. The truth is that a small group of people making up executive compensation committees decides what executives are worth, not the market. I think most people want that changed.
More importantly these huge compensation packages are often at the expense of the business, the workers and the customers of that business because that money could be used better elsewhere.
The CEO of a family run business often puts every dime he makes back into the business. Not true of today's overpaid and interchangeable ruling class CEOs. What gets me is how unspecialized these guys are - the utter reverse of something like the medical profession. They go from heading a computer company one month to an entertainment company the next and finally a soap company. You would expect that a CEO would be a subject matter expert of his industry to command such lofty compensation.
Vulture capitalists are not the princely rescuers of failing businesses as Trader would have us believe. Look below for a detailed review of how vulture capitalists decimated a solid American business by saddling it with debt. Everyone needs to understand that companies like Bain always win just for setting what often amounts to enormous bankruptcy bustouts in motion:
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?pagewanted=all
. . . the seventh time it has been sold in a little more than two decades - all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money . . .
When Trader says these venture capitalists risk their own money, he's not being quite honest. They buy these companies with money raised from investors and not their own cash. Then they squeeze every last ounce of equity and credit from these businesses, convert that into fees and other compensation, extracting it all up front and as quickly as possible so that they end up with no skin in the game at all. A small profit or morely likely a large loss awaits the real investors.
Like any pseudo-Ponzi scheme, it's the last group of investors that gets screwed to the wall. "Zeroed out" as I once heard Hank Paulson say. That $1/4B of Mitt's didn't come from any kind of honest labor, as most working people understand the term. It came from devouring American businesses like cancer, just the way Simmons was looted.
<For many of the company's investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million.>
The last investors in the chain of arbitrage get screwed! But not the dealmakers. Whether Simmons lives or dies, they've already sucked most of the equity out so they don't care.
<But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company's fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.>
If that doesn't sicken people who believe in the American dream of building a successful business, I don't know what will. The tale of Simmons is a tale of corporate rape. The was a time when investing in the American stock market was investing in American business and the future. Now it's just a huge legalized gambling house with the odds tilted strongly against the small investor.
<Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.>
Profits? The reality is that money was the financial health of Simmons, sucked out of a successful company, year after year, deal after deal, until only a debt-laden shell was left. Eventually the vulture capitalists will dump its carcass on the heap of scores of other small, successful companies that have been arbitraged out of business.
Vendors that did business with them will likely get stiffed, too when the company finally succumbs to the effects of vulture capitalism. People like Mitt made enormous profits gutting American businesses, saddling them with crushing debt, stripping workers of benefits, shifting pension obligations to the taxpayers and somehow converting what we would call a salary into a capital gains. Where do people think $225M worth of wealth comes from? Saddling America with debt and selling it for for scrap when business after business died from carrying the burden of borrowed money. Is it any wonder he lost?
<the buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably. But the load weighed down an otherwise healthy company. Today, Simmons owes $1.3 billion, compared with just $164 million in 1991, when it began to become a Wall Street version of "Flip This House."

"Flip this country" is more like it.
-- Bobby G.
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Nonsense. For the most part the market (as in stock market) is making those decisions, at least in public companies. In public companies a very small (and if you look at the K-1s fairly consistent) amount of money is paid in actual salaries. The overwhelming majority is paid by what happens with their stock options. Total compensation maxed out in 2000, fell to 2004 (dropping a little less than half), started back up in 2004, and dropped again in 2008. As you can see, well over half of the biggest compensation packages were where the stock part grew, the stock contribution during the downturns was much less. http://www.forbes.com/2008/04/30/ceo-pay-historic-lead-bestbosses08-cx_sd _0430flash.html

Most of compensation packages are stock and come at the expense of the stockholders through dilution.

Why? They are being paid to run a company, not make soap. Different skills sets. Although the Peter Principle obviously applies.

And there are others like a steel company in Indiana that is alive because of Bain and recently added staff. You can cherrypick on both sides.

These, by the way, are not venture capitalists. By definition, venture capitalists only invest in new companies.

Bain was actually successful about half the time. The others, at worst, kept people employed a few years longer. From Wiki:
Much of the firm's profits was earned from a relatively small number of deals, with Bain Capital's overall success and failure rate being about even. One study of 68 deals that Bain Capital made up through the 1990s found that the firm lost money or broke even on 33 of them. Another study that looked at the eight-year period following 77 deals during the same time found that in 17 cases the company went bankrupt or out of business, and in 6 cases Bain Capital lost all its investment. But 10 deals were very successful and represented 70 percent of the total profits.

Nonsense, just those who don't pay attention to the world around them or chase the newest and shiniest object. I have stayed fully invested since the late 70s and have made total returns north of 7% annual on average, some more and some left.

You overlook the winners such as ToyRUs, Domnios Pizza, AMPad flourished for awhile, but interesting went bankrupt more 4 years after Bain got out, Staples. When Bain Capital scooped up a substantial share in Burger King in 2003, the nation's No. 2 fast food restaurant was languishing. But within three years the fast food chain boosted record revenue of $2.05 billion, according to its 2006 annual report. They won some and they lost some and had nothing to do with Simmons.
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wrote:

CEO's,
to
when
workers to

market.
Utter nonsense. As hard as stockholders have tried to limit runaway executive pay, they've never gotten very far. Somewhere along the line, CEO's decided they had to get the big money contracts that basketball stars got even though there's no real comparison. Sports stars get their pay because very, very few people can play at their level. CEO's like to *think* they play at that level, but the truth is they are not ranked by games won, RBI's, etc.
If the market, as you falsely claim, is making those decisions then shareholder outrage might have some effect on lowering the skyrocketing compensations packages that are plaguing American business. It hasn't.
<<Among the nation's top firms, the S&P 500, CEO pay last year averaged $10,762,304, up 27.8 percent over 2009. Average worker pay in 2010? That finished up at $33,121, up just 3.3 percent over the year before.>> http://www.ips-dc.org/reports/executive_excess_2011_the_massive_ceo_rewards_for_tax_dodging /
Are you going to try to get us to believe that there's only a small class of people capable of running a major corporation? That's utter nonsense, too. Each major CEO has at least 10 executive VP's that are doing the real work and could move right into a leadership role - they often do when a "star" CEO shipwrecks and abandons his job.
<<What are America's CEOs doing to deserve their latest bountiful rewards? We have no evidence that CEOs are fashioning, with their executive leadership, more effective and efficient enterprises. On the other hand, ample evidence suggests that CEOs and their corporations are expending considerably more energy on avoiding taxes than perhaps ever before - at a time when the federal government desperately needs more revenue to maintain basic services for the American people. This disinvestment also undermines the infrastructure and services that small and large businesses also depend upon.>>

consistent) amount of

You keep harping on that. So effing what? What stockholders care about is "What is this guy costing us?" Very, very few of the stockholders that actually fund these companies through stock purchases approve of these massive compensation packages, yet they climb ever higher. Yet you continue to falsely claim the market, and not compensation committees, are setting compensation packages. That's as funny as the claim that cutting taxes on the rich helps everyone. Study after study has put the sword to that lie.
http://graphics8.nytimes.com/news/business/0915taxesandeconomy.pdf
<<Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession.>>
What did the Republicans do with this data? The supressed it because it's at odds with the BS philsophy that tax cuts for the rich benefit everyone.
http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html

No one but you appeats to care whether they get their money from stocks, salary or company product. When the ratios of compensation that Han pointed out grow from 25X to 360X something's wrong. Your average CEO hasn't been able to become 360X more efficient than the lowest worker. He's learned, with the help of compensation committees, how to game the system.
There's an implication when you pay someone 100's of times what they *used* to earn that they really are worth that much to the company. Look at Hostess. How many hot shots CEOs (7?)came and went and didn't do a damn thing to improve the company? Instead they drained it of critical capital at a time when an owner CEO might decide to take a pay cut to help his business survive. If the magical CEOs are so damn good, why did each one fail so miserably?

expense
that
"At the expense of stockholders" That's the key - it doesn't matter whether it's salary, stock or all the company office supplies they can steal. CEOs are getting paid far more than most every stockholder I know thinks the should get. They feel, as I do, that the money wasted on "star" CEO's could and should be put into hiring real workers who would pay real taxes on the salaries that they would then spend, boosting the economy. CEO's are just going to stash their cash in the Caymans.
In all of your response, you someone seem to have overlooked discussing how the free market setting of salaries you allege actually works? When we start to examine how CEO compensation packages are set, we're going to find a fascinating web of back-scratching of do-nothing board members, "in the bag" compensation committees and CEO's who reward those heaping rewards upon them. Each time, they look at the overinflated salaries of other CEO's and cry "Me Too!" thus ratcheting up compensation packages to obscene levels as if there really was a shortage of competent managers.

into
utter
a
finally
expert
Good golly. If you don't understand why the head of a PC company should be pretty damn familiar with PCs, then there's not much hope, but I'll try. CEO's were jealous of the sports stars that were bringing home huge compensation packages. Those sports stars have track records that show, in game after game, year after year, they are the best at what they do.
However, you can't take a Stanley Cup winner and stick him in pro baseball team and expect him to flourish. Yet we do that with CEOs. They command the top compensation deals and yet they are strangely fungible. It defies common sense as does so much conservative crapola.

as
with
http://www.nytimes.com/2009/10/05/business/economy/05simmons.html?pagewanted=a
It they were so proud of their records they'd be open about all their deals, not just the ones that appear to be successful. The truth is they kill far more than they save and they leave taxpayers and creditors on the hook for much of their "streamlining" - that's why the Feds are on the hook for more and more pension failures each year. Vulture capitalists socialize the losses and privatize the gains.

not
other
that
By your definition. There are plenty of other ones.
https://vcexperts.com/encyclopedia/chapters/15
But I'll agree to just change that to "vulture capitalists" that look around for business that they can saddle with unconscionable debt before kicking their cash-squeezed carcasses to the curb. That's their modus operandi, for the most part.

That
working
like
From the same Wiki article:
<<1994, Bain invested in Steel Dynamics, based in Fort Wayne, Indiana, a prosperous steel company that has grown to the fifth largest in the U.S.A, employs about 6,100 people, and produces carbon steel products with 2010 revenues of $6.3 billion on steel shipments of 5.3 million tons. In 1993, Bain acquired the Armco Worldwide Grinding System steel plant in Kansas City, Missouri and merged it with its steel plant in Georgetown, South Carolina to form GST Steel. The Kansas City plant had a strike in 1997 and Bain closed the plant in 2001 laying off 750 workers when it went into bankruptcy. The South Carolina plant closed in 2003 but subsequently reopened under a different owner. At the time of its bankruptcy it reported $553.9 million in debts against $395.2 in assets. Bain reported $58.4 million in profits, the employee pension fund had a liability of $44 million
Skim the cash, socialize the losses (Uncle Sam will take over those pension liabilities!) and privatize the gains. Who do you think got to pocket the shortfall of $150M+?

building
stock
a
OK - since your situation worked out, everyone else must by extension, mirror your results.

the
like
with
obligations
a
after
wonder
One has to look at how they achieve those results. It's usually by slashing benefits and wages. Great for the rich investors, not so good for the people working there. So when those workers end up on tax-payer funded Medicaid or going to ER's and all that money Bain et al. make tends to come from the pockets of workers and taxpayers.

They worked closely with one of the outfits that did. More from Wiki:
<<Bain led a consortium, together with The Carlyle Group and Thomas H. Lee Partners to acquire Dunkin' Brands. The private equity firms paid $2.425 billion in cash for the parent company of Dunkin' Donuts and Baskin-Robbins in December 2005.>>
The tale of Simmons and Hostess just happen to illustrate in brutal detail how many of these vulture capital operations *really* work. Saddle 'em up with debt, convert assets into fees, force huge concessions from workers and then stick the government, investors and creditors with huge bills post-bankruptcy and laugh all the way to the bank. But not, thank God, the Presidency.
-- Bobby G.
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Economics 101 tells us that it's the free market that sets the wages for both the CEO and the workers.
That's hard for at some people to swallow when

I think this story is pretty much bogus. The union made some outrageous claim about CEO compensation and a lot of the press just ran with it, without fact checking it. In particular, they claimed that the CEO tripled his pay. To arrive at that, as far as I can tell, they took the pay of one CEO who was there as the company entered bankruptcy and compared it to the new CEO who replaced him as the company emerged from bankruptcy. That CEO was paid $1.5mil a year to try to turn-around a failing $2bil company. He also had some potential long term incentive of another $2mil. Now, if you can show us that pay is out of line for a CEO running a $2bil company, I'm sure we'd all like to see it. Particularly a risky $2bil company, where it could easily still fail.

One small group sets the pay for all executive compensation in the USA? The world? There are countless groups that determine that pay, just like there are countless boss's that set the pay at all the small businesses around the country.

Maybe so, no market is prefectly efficient.

Yet Obama and you want to raise their taxes and say it will have no effect. Thanks for finally owning up to that lie.
>Not true of today's overpaid and interchangeable ruling

It's never been true. You're comparing a small business to the Fortune 500. And even if they did, their earnings would be insignificant. Take the Hostess example. The CEO was paid $1.5mil. It's a $2.5bil company.

Clearly what investors value is the management skill. Most of the same rules apply across all businesses. And there is something to be said for a breath of fresh air, someone who isn't tied to the current ideas of the company or the industry. The guy who built Paypal just sent a rocket to the space station. I guess that proves something.

I never said there are not some vulture capitalists out there. I said that is not the general case and it's not the case specifically with Bain Capital. Bain helped build Sports Authority, Staples, Dominos, Steel Dynamics, etc.
And I still have not seen evidence that the current venture capitalists have made profits at Hostess. If you have the specifics that show that, I'm sure we'd all be happy to see it. So far, all I've seen is bitching because the CEO got paid $1 or $2mil. The venture firm evidently put hundreds of millions into it.

And there we have the lie repeated. Staples, Sports Authority, Steel Dynamics, Dominos are all evil failures. It's not "vulture capitalism" you despise. It's all capitalism because you're a commie pinko bedwetter.

Well, no one forced them to buy the bonds, did they? And again, maybe the venture capitalists that control Hostess are going to make out like bandits. But so far, other than your flapping gums, I don't see any data that says that.

Numbers please.

Simmons makes Twinkies?

If that NY Times story is true, then yes the Simmons story is a bad one. But does Simmons make Twinkies? Why are we talking about it, instead of all the great venture capitalist success stories? Oh, I know, because you have a jaundiced view of capitalism period.
And wishing for the days of old is a real joke. Throughout history the stock market, venture capitalism has been a phenomenal success. It's what built this country. But if you go back in time, you'll find just as many, if not more examples like Simmons, where investors got screwed, one way or another. And it's not limited to this country. Go back and there have been bucket shops, bubbles, everywhere. How about Tulips in the 1600s in Holland? The South Seas scam in England in the 1700's? All the bucket shops in the USA in the late 1800's, early 1900's?

Does Simmons make Twinkies? Why is it that guys like you want to find the exceptions that are the bad cases and then smear all with it?
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This is Hostess' second bankruptcy, so I don't know if that qualifies as "several". The interesting thing is that they came out of the initial bankruptcy with more debt than they went in with. Much of this was because they did not shed (as most do) the pension requirements.

Liquidation, they'll be lucky to get cents on the dollar for their investment.
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wrote:

So, a contract isn't a contract when it is "inconvenient"?

I like capitalism when it means risking your stash to make something, like a company, striving for the best. But ... Top management salaries at Hostess were increased 3-fold around the time of that second bankruptcy. That is an unconscionable increase. I am sure some will say that it is compensation for the risk they take, but increasing compensation like that removes the incentive for doing a good job (unless it is really deferred and conditional on doing a good job). In addition, in these cases of venture or vulture capitalism, the active partners invest a small fraction of the total money, stand to gain tremendously if successful, and make the other investors lose if not. That is one of the ugly faces of capitalism. And maybe wwe have to take that for the system to work well. But we have to realize that ther very well could be "collateral damage". And that is why we have a safety net.
Staples is an example of a successful company "rescued" by one of the Bain firms. Wages for employees are definitely not high. A cashier is at the low end for this kind of job (~$8/hr in the NY city area). No wonder there is no one but school kids there. Try to really live on $8/hr. I'd bet (but I don't know) that many employees are part time, so they also don't get benefits ...
I am not saying that simple jobs should be remunerated wildly, just that the bad side of capitalism is that some people are being taken advantage of. With the current state of education, where occasionally neither parent(s) nor teacher(s) take an interest, it is no wonder we are generating an underclass of people unable to take care of themselves in a more and more sophisticated world.
Sorry, have to go celebrate a grandkid's birthday. Bright, kind, funny, just like her parents, one a reformed Republican ...
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A contract isn't a contract when in bankruptcy. This pretty much stems from the very beginnings of bankruptcy law around the time they stopped putting people in debtor's prison. They also use it to get out of bonds and other responsibilities. \
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Just a guess here. They looked at the situation and figured it is time to call it quits. Buy hey, we still have a pile of cash in the piggy bank so lets grab it so it is not just given away to the creditors.
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A contract isn't a contract when the company winds up bankrupt and unable to fulfill it any longer. Then a bankruptcy court decides who gets what. Unless you let the govt take it over, as was done with GM, screwing the bond holders in one of the most unconstitutional acts ever.

What exactly is ugly about that? Like all libs, you assume these "other investors" are some dumb buffoons. Typically, they aren not Joe Sixpack. They are well heeled, successful investors who know what they are getting into. Sometimes it works out. Then guys like Obama call you a vulture. Sometimes it doesn't and you lose some or all of your money.

Yes, safety nets for unions who rather than take a cut from $17 an hour to $15.65, go out on strike, putting the company' out of business. Now the folks making $10 an hour will be helping support them.

According to you, who again figures that the employees at Staples are too stupid to know what the deal is.
>With the current state of education, where occasionally neither

With the current state of govt, we're rapidly creating a situation where if you don't feel like working for $15 an hour, the govt will take care of you....
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