President Obama announced on Wednesday a $500,000 cap on senior executive pay for companies receiving substantial federal bailout money. In one of the more aggressive moves to rein in executive compensation, which has been heavily scrutinized in recent years, Obama called excessive bonuses paid to executives of firms that are being propped up with taxpayer funds the “height of irresponsibility.”
Obama said companies that want to pay their executives more than $500,000 must use restricted stock that cannot be liquidated or sold until government funds are repaid. Bonuses would not be allowed, nor would golden parachutes and other large severance packages.
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