The Obama administration is expected to impose a cap of $500,000 for top executives at companies that receive large amounts of bailout money, a media report said today, citing people familiar with the plan.
Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends, the New York Times said.
The new rules would be far tougher than any restrictions imposed during the Bush administration, and they could force executives to accept deep reductions in their current pay, the paper said.
They come amid rising public fury about huge pay packages for executives at financial companies being propped up by federal tax dollars, the Times noted.
Executives at companies that have already received money from the Treasury Department would not have to make any changes, it said, adding that analysts and administration officials are bracing for a huge wave of new losses, largely because of the deepening recession, and many firms that have already received federal money may well be coming back.
Crucial details, the paper said, remained unclear, including whether the restrictions would apply to all companies that receive money under the so-called Troubled Assets Relief Programme or whether they would apply only to the "exceptional" firms that were being rescued from collapse.
Under the Treasury's $700 billion rescue programme, most companies that have received money so far have been considered "healthy" rather than on the brink of collapse, the paper said.
But five of the biggest companies to get help -- Citigroup, Bank of America, the American International Group, General Motors and Chrysler -- were all facing acute problems. And top executives at those companies made far more than $500,000 in recent years.
