Stimulus bill's CEO salary caps affect small banks, too

NEW YORK -- The high life for bank CEOs has officially ended. Tuesday, President Obama is expected to sign the economic stimulus bill, which could place a $500,000 limit on salaries and tight caps on how much in bonuses executives can earn if they take in government money.

These tighter provisions were thrown in at the last minute by Sen. Chris Dodd, D-Conn., who was responding to the anger across America over how taxpayers' money was being used in the bank bailout.

"These tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses," Dodd said in a statement.

However, it has become clear that if implemented, these measures will lead to some of the most drastic changes in CEO compensation in the financial industry. It's no secret that CEOs at the top banks with over $100 billion in assets already get millions in compensation.

Dodd's amendment also bans golden parachutes for departing executives. But these have become common. Old National Bancorp CEO Robert Jones, for instance, was paid $1.5 million in 2007 but will get up to $6 million if his job is terminated.

Dodd calls for the tighter limits to be applied to the 359 institutions that have already received government aid, which could be a gargantuan task.