US President Barack Obama has said executives of finance firms taking government bailouts will have their salaries limited to $500,000.
Mr Obama said ‘If these executives receive any additional compensation, it will come in the form of stock that can't be paid up until taxpayers are paid back for their assistance.’
The move is 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.
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 are part of Mr Obama's multi-pronged effort to revamp financial regulation and revive the economy.
Long-term measures are planned to rein in high salaries on Wall Street, including steps to require all public financial institutions to disclose compensation arrangements.
Mr 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,' Mr 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.
