President Barack Obama will announce later Wednesday a pay limit of $500,000 a year for top executives from companies that receive federal aid funds, according to several media reports.
Additional compensation for executives is still possible but only in restricted stock that will not vest until taxpayers have been paid back with interest, an administration official said.
People will say this is a reasonable approach, Obama said in reference to pay cuts in a Tuesday interview on CNN Tuesday. People will be accountable and responsible and that's what we have to restore in the financial system in general.
The new regulations come in respnose to disagreement and protests on how institutions are using the taxpayer money given to them as rescue funds. In January a report revealed $18.4 billion was paid in compensation bonuses to Wall St. executives in 2008.
The restrictions for the aid funds also include corporate jets, office renovations and holiday parties.
Companies that already received TARP funds, under the new rules, will need to demonstrate they have complied with the previously given restrictions and must agree to strict monitoring and oversight, according to the official.