U.S. President Barack Obama will set a $500,000 annual compensation cap on Wednesday for executives at companies getting taxpayer bailouts as part of a wider process to clamp down on excessive corporate pay.
An Obama administration official said the new rules would require banks and other companies that get government funds in the future to abide by the new cap going forward, with any additional compensation being limited to restricted stock that does not vest until government funds are paid back.
Companies that have previously received bailout money would have to agree to stricter oversight and prove that they have followed already established restrictions on executive compensation.
The rules, part of Obama's multi-pronged effort to revamp financial regulation and revive the economy, would kick off long-term measures to rein in high salaries on Wall Street, including steps to require all public financial institutions to disclose compensation arrangements.
Obama and Treasury Secretary Timothy Geithner were scheduled to make the announcement at the White House at 11:00 a.m. (1600 GMT).
Obama last week branded Wall Street bankers as "shameful" for giving themselves billions of dollars in bonuses even after the financial crisis and government bail-out had unfolded.
"We're going to be laying down some very clear conditions," Obama said during an interview on Tuesday with CNN.
"This is a reasonable approach. It's not a government takeover. Private enterprise will still be taking place, but people will be accountable and responsible and that's what we have to restore in the financial system in general."
Banks that have received bailout funds already are subject to limits on compensation, but they are widely viewed as lax.
The new rules, according to information provided by the official, will require banks to give shareholders greater say over the money paid to company chiefs. They will also put restrictions on golden parachutes and require more transparency for costs such as aviation services, big parties, office renovations and conferences.
Last Mod: 04 Şubat 2009, 15:56