President Barack Obama on Wednesday imposed a $500,000 cap on executive pay for financial firms that get federal bailout money.
Obama and Treasury Secretary Timothy Geithner planned to announce the restrictions at the White House on Wednesday. Congress is weighing similar proposals.
Obama signaled the pay caps during an interview Tuesday. He said on “NBC Nightly News” that executives at the financially strapped firms should not be “living high on the hog.”
An administration official said the most restrictive limits would apply only to struggling large firms that receive “exceptional assistance” in the future. Healthy banks that receive government infusions of capital would have more leeway.
The official also said that affected companies that want to pay more would have to compensate executives with stock that could not be sold or liquidated until the firms pay back the government funds.
Last week, Obama called a report that Wall Street employees got more than $18 billion in bonuses last year “outrageous.”
The $18 billion-plus figure came from a report by the New York state comptroller about bonuses paid by the securities industry to its New York City employees last year.
Obama has said financial companies that have accepted federal bailout money should limit bonus pay.