$500K Salary Cap For Bailout Firms

The Obama administration is planning to impose a $500K annual salary limit for the executives of companies receiving federal bailout money.

Executives would also be prohibited from receiving any bonuses above their base pay, except for normal stock dividends. President Obama and Treasury Secretary Timothy F. Geithner plan to announce the executive compensation plan on Wednesday morning at the White House. 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. They come amid rising public fury about huge pay packages for executives at financial companies being propped up by federal tax dollars. Executives at companies that have already received money from the Treasury Department would not have to make any changes. But analysts and administration officials are bracing for a huge wave of new losses, largely because of the deepening recession, and many companies that have already received federal money may well be coming back.

That's a pretty dramatic pay cut for these guys and I wonder if some of these companies will be able to hold onto their leaders when non-bailed out firms are offering much more.