Obama sets $500,000 exec pay cap for banks getting taxpayer bailouts

WASHINGTON: President Barack Obama and Treasury Secretary Timothy Geithner have announced the government will require financial companies getting rescue funds in the future to cap compensation of top officials at $500,000 a year.

���In order to restore our financial system, we���ve got to restore trust,��� the president said, as the administration rolled out new rules for companies that seek ���exceptional��� assistance from the Treasury. ���And in order to restore trust, we���ve got to make certain that taxpayer funds are not subsidizing excessive compensation packages on Wall Street.���

Obama also urged Congress to finish work on economic stimulus legislation, saying in remarks released by the White House that a failure to act ���will turn a crisis into a catastrophe and guarantee a longer recession.���

Reacting to public outcry over bonuses paid to bankers getting government bailout money, the administration is imposing conditions that would force greater transparency for expenses such as corporate jets, office renovations, entertainment and holiday parties, and restrict severance pay when executives leave the company.

While pay would be limited, there are provisions that would allow additional compensation in the form of restricted stock that can���t be sold or liquidated until taxpayers have been paid back.