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Fact Checker: Reynolds ad claims Hubbell closed Younkers stores, got a raise
Jul. 27, 2018 6:45 pm, Updated: Jul. 27, 2018 8:14 pm
'He (Fred Hubbell) closed (Younkers) stores in Spencer, Ottumwa and Newton” and 'after everyone was fired, Hubbell got a $90,000 raise.”
Source of claim
Republican Kim Reynolds' campaign made these claims in its 'Younkers” ad released last week. The ad targets Democrat Fred Hubbell, her opponent in this year's gubernatorial race. The ad focuses on Hubbell's record in executive roles for Younkers and for its Des Moines-based parent company.
First, we'll review Reynolds' claim that Hubbell shuttered stores in Spencer, Ottumwa and Newton. When the Fact Checker team requested sourcing information from Reynolds' campaign, officials pointed to multiple Des Moines Register articles published in the 1980s and early 1990s.
On Jan. 4, 1985, the Register reported the ousting of Younkers Inc.'s president and chief executive officer. Fred Hubbell was picked to oversee Younkers' operations while the company sought a replacement.
That same article, notably, reported that 'Younkers officials announced just last week” - before Hubbell began his interim role - they would close the Younkers store in Ottumwa. The store closed Jan. 31, 1985, after Hubbell moved into his new role.
Nearly six years later, the Register reported Dec. 28, 1990, that Younkers had announced plans to close its three smallest stores, including those in Spencer and in Newton.
Salary information for Hubbell published in the Register described him as president and chief executive officer of Equitable of Iowa Companies, Younkers' parent company, during 1990 and 1991.
In that role, Hubbell campaign officials say, he was not involved in day-to-day decision-making at Younkers. The decision to close the Spencer and Newton stores was announced by then-Younkers President Tom Gould.
As interim leader of Younkers in 1985, Hubbell inherited a decision made earlier to close the Ottumwa store. The decisions to close the locations in Spencer and Newton came under his watch as the top executive with Younkers' parent company. Those nuances earn this claim a C.
The ad goes on to say 'The worst thing, after everyone was fired,” was 'Hubbell got a $90,000 raise.”
In fiscal year 1985, Hubbell was paid $145,833 for his role as Younkers CEO and chairman, according to salary records published in the Register. By 1986, after the Ottumwa store had closed, he was being paid $234,458 - $88,625 more.
Hubbell's campaign, in a news release, disputed the implication he received a raise. Campaign officials pointed to a promotion Hubbell received in 1987 - to president and chief operating officer of Younkers' parent company, Equitable of Iowa Companies, and to chairman of Equitable Life Insurance Company of Iowa - as the reason for his pay increase.
But Hubbell's nearly $90,000 pay increase came before that promotion, salary records show. It did not, however, come 'after everyone was fired,” as the ad claims. In 1986, the Spencer and Newton stores still were open.
But in 1991, the year those two stores were shuttered, Hubbell's total pay again increased - by $93,645 - compared with his salary in 1990. Salary records from both 1990 and 1991 describe Hubbell as the president and CEO of Equitable of Iowa Companies. In 1990, his total pay was listed as $609,351. In 1991, it was $702,996. The amounts include total salary, bonus, options and dividends.
Reynolds' ad could have been more clear about the timeline of store closures and Hubbell's pay increases. But, ultimately, he did receive a $88,625 raise following the Ottumwa store closure and a $93,645 raise after the shuttering of Younkers stories in Spencer and Newton. We rate this claim an A.
Fred Hubbell's campaign is right to point out these store closures came as Hubbell was steering Younkers through repercussions of the farm crisis of the 1980s.
But while the timeline presented in Reynolds' ad is muddy at points, Hubbell was in fact in a position of power during the 1991 closures of the Newton and Spencer stores, and he oversaw the 1985 closure of the Ottumwa location.
The ad's suggestion that Younkers' parent company CEO - Hubbell - personally closed these stores is a reach. Hubbell did, however, receive two pay increases of about $90,000 in the years following both waves of closures. Overall, we give this ad a B.