EXHIBIT 10.28


EXECUTIVE OFFICER
COMPENSATION


1) Base Salary


The Board of
Directors annually reviews each executive officer’s salary. The Board considers
the following with respect to the determination of an individual executive
officer’s base salary:  performance and
contribution to the Company, including length of service in the position,
comparative compensation levels of other companies, including periodic
compensation studies performed by independent compensation and benefit
consultants, overall competitive environment for executives and the level of
compensation considered necessary to attract and retain executive talent,
historical compensation and performance levels for the Company; and a desire to
adhere to Internal Revenue Code Section 162(m) regulations on deductible
compensation, thus maximizing the Company’s ability to receive federal income
tax deductions.


Companies used in
comparative analyses for the purpose of determining each executive officer’s
salary are selected periodically with the assistance of professional
compensation consultants. Selection of such companies is based on a variety of
factors, including market capitalization, revenue size and industry
classification.  The Board of Directors
believes that the Company’s primary competitors for executive talent are
companies with a similar market capitalization and, accordingly, relies on a
broad array of companies in various industries for comparative analyses. 2007
base salary for the named executive officers is $999,000, each, for Melvin J.
Gordon, Ellen R. Gordon and John W. Newlin, $952,000  for Thomas E. Corr, and $722,000 for G.
Howard Ember.


2) Annual Incentives and Other
Awards


Effective
January 1, 1997, the Compensation Committee established the Tootsie Roll
Industries, Inc. Bonus Incentive Plan. 
In 2006, the shareholders approved the Management Incentive Plan to
replace the previous Bonus Incentive Plan for 2007 and future years.  The Management Incentive Plan was adopted to
ensure the tax deductibility of the annual bonus that may be earned by
executive officers of the Company.  Under
the Plan, certain key employees (including employees who are also directors)
designated by the Compensation Committee may receive annual incentive
compensation determined by pre-established objective performance
goals.  This year, all executive officers
named in the summary compensation table included in the proxy statement were
eligible for the Management Incentive Plan. 
Performance goals were based on the measures, objectives and financial
criteria discussed below.


Annual incentive
bonuses to executive officers and/or CAP and split dollar insurance awards for
all executive officers are made at the discretion of the Board of Directors in
order to recognize and reward each executive officer’s contribution to the
Company’s overall performance in terms of both financial results and attainment
of individual and Company goals.  The
annual cash incentive bonus is designed to reward executives, as well as other
management personnel, for their contributions to the Company’s financial
performance during the recently completed year.













The annual CAP
award and/or split dollar life insurance program is principally designed to
provide an incentive to executive officers to achieve both short-term and
long-term financial and other goals, including strategic objectives.  These programs are also designed to provide
an incentive for the executive to remain with the Company on a long-term
basis. These awards are determined by the Board of Directors based on the
performance of the Company and the executive’s contribution to the growth and
success of the Company.


The Board of
Directors considers both achievement of strategic objectives and financial
performance measures in determining compensation levels. The following measures
of Company performance are considered in the determination of bonuses and
awards:  earnings per share, increase in
sales of core brands and total sales, return on assets, return on equity; and
net earnings as a percentage of sales.


3)
Other


Each named executive
officer is provided an automobile except for Mr. and Mrs. Gordon who share an
automobile and are provided with the services of a driver.  As disclosed in the proxy, Mr. and Mrs.
Gordon also share the use of a corporate apartment in connection with travel to
their Chicago offices and share the use of a corporate aircraft in connection
with such travel and other business and personal purposes.