It's not just the top 25 highest paid executives working at the charter members of the bailout club who are going to be hurting from the pay czar's decision to slash salaries by 90% and reduce total comp by 50%. There will be some collateral damage and for those at Citi and AIG, all you have to do is look out the window to see it. As it stands now, the State of New York will likely not have enough money to pay its bills come December. With six weeks to go, the state is about $3 billion short of being able to pay for such luxuries as "property tax rebates, aid to school districts, counties and cities."
While the tax revenue the state would have earned from chosen few probably wouldn't have wiped out the entire balance, every $100 million helps. Rewarding failure clearly doesn't make much sense. But when you forgo the opportunity to tax your message across to the intended recipients and help avoid turning NY into an IOU state, the decision to penalize an innocent bystander doesn't make much sense either.
New York Faces Cash Squeeze in December, Governor Paterson Says [Bloomberg]