US President Barack Obama is poised to reveal details of new rules limiting executive pay to $500,000 a year for firms getting a US taxpayer bail-out.
US President Barack Obama has announced a $500,000 (£355,000) limit on executive pay at US firms that need substantial fresh government aid.
His administration is also looking at other potential caps on items such as golden parachutes to executives.
The move follows widespread public anger over the levels of pay on Wall Street, but is not expected to be applied retrospectively.
The president is tapping into outrage at Wall Street bonuses paid in 2008 when taxpayers propped up many firms.
President Obama said it was "shameful" that top bankers had awarded themselves giant bonuses last year.
He told NBC TV that taxpayer-backed executives had "responsibilities to not be living high on the hog".
He added that taxpayers should not be "subsidizing excessive compensation".
Last week, President Obama said that the multi-billion dollar bonuses taken by Wall Street bankers - while taxpayers bailed out their industry - had been "shameful".
'Justify expenses'
And he criticised Citigroup for trying to buy a new $50m executive jet after receiving $45bn in taxpayer bail-out cash.
In addition to the limit on basic pay, Mr Obama said if affected executives receive any bonuses, it "will come in the form of stock that can't be paid up until taxpayers are paid back for their assistance".
Reining in
Firms will also have to publicly disclose "all the perks and luxuries bestowed upon senior executives, and provide an explanation to taxpayers and to shareholders as to why these expenses are justified".
The move is an initial step in a wider attempt to overhaul executive pay practices.
"We're asking these firms to take responsibility, to recognize the nature of this crisis and their role in it," said the president.
WALL STREET BONUSES 2008 Total bonuses paid in 2008 - $18.4bnThis is a 44% fall on the $32.9bn bonuses paid in 2007Average payout in 2008 of $112,000The fall in the bonus pool is expected to cut the tax income for New York city and state by $1.27bn Source: New York State
Analysts said the plan could raise the likelihood of senior executives moving from firms who need government aid to those that don't.
President Obama and Congress have been considering different options to rein in the pay and other benefits enjoyed by top bosses.
"There is certainly a possiblity of talent flight from the big firms to the smaller investment banks," said Lauren Smith, analyst at Keefe, Bruyette & Woods.
They want the measures to be part of the conditions of receiving help under the Treasury's "Troubled Assets Relief Program" (TARP) $700bn financial bailout fund.
'Take responsibility'
The new proposal is being presented as being in the interest of shareholders and taxpayers alike.
"We all need to take responsibility," said President Obama.
'Accountable and responsible'
"And this includes executives at major financial firms who turned to the American people, hat in hand, when they were in trouble, even as they paid themselves their customary lavish bonuses."
"This is a reasonable approach," President Obama said when describing the restrictions in an interview with CNN television on Tuesday.
According to the available figures, US banking bosses received bonuses of more than $18.4bn last year.
Some, such as those at Citigroup, also tried to continue to spend on executive luxuries despite receiving government aid.
"There are mechanisms in place to make sure that institutions that are taking taxpayer money are not using that money for excessive executive compensation," he said.
Citigroup was criticised for attempting to buy a new $50m executive jet after receiving $45bn in taxpayer bail-out cash under the Treasury's Troubled Assets Relief Program (TARP) $700bn financial bailout fund.
"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."
Republicans have supported the move to limit the pay of executives at firms that secure fresh government money.
There was public outcry over $18.4bn in bonuses paid out in 2008 at a time when taxpayer money was propping up the financial system.
'Close to criminal'
The president and Treasury Secretary Timothy Geithner are scheduled to discuss details during an announcement later on Wednesday.
And many Republicans are also angry about company decisions to pay bonuses, buy airplanes, and take lavish breaks.
"In ordinary situations where the taxpayers money is not involved, we shouldn't set executive pay," said Senator Richard Shelby of Alabama, the top Republican in the Senate Banking Committee.
"But where you've got federal money involved, taxpayers' money involved, TARP money involved, and the way they have spent it, with no accountability, is getting close to being criminal."
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