Obama limits exec pay to $500,000 for bailed-out firms

— -- Responding to criticism and anger over outsize pay and excessive spending at Wall Street banks that have received billions of taxpayer dollars, President Obama on Wednesday put a $500,000 salary cap on top executives at companies that accept large chunks of future government bailout money.

The rules aren't retroactive, so Wall Street executives won't lose the $18 billion they received in year-end bonuses for 2008. However, it could mean big cuts in salaries if any of the banks go back to the well for government help.

For instance, Bank of America CEO Kenneth Lewis, whose bank has received $45 billion in Trouble Asset Relief Program (TARP) funds, had $18.5 million in 2007 compensation. And John Stumpf, CEO of Wells Fargo, which took in $25 billion TARP funds, had a package totaling $12.5 million in 2007.

Obama tried to dispel fears that the government is about to put a clamp on big pay across the board.

"This is America. We don't disparage wealth. We don't begrudge anybody for achieving success. And we certainly believe that success should be rewarded," Obama said.

In the last few weeks, as Americans lost jobs by the tens of thousands, Wall Street's excesses stood out in sharp contrast. Citigroup, which has received $45 billion of bailout money, held fast to its order for a $50 million new private jet despite calls to cancel until being told to do so by the government. Citi is now under pressure to get out of a contract to pay $400 million to the New York Mets for naming rights to the team's new stadium, Citi Field.

"For Wall Street, it's business as usual — big bonuses, big parties and banner names on stadiums. And, meanwhile, the country is in economic turmoil," says Rep. Ted Poe, R-Texas.

This also comes days after former Merrill Lynch CEO John Thain said he would pay back to the company $1.2 million he had spent on decorating his office with a $87,000 rug and a $37,000 commode, among other things.

Under Obama's plan, salaries would be capped at $500,000, but executives can get restricted stock that vests only after taxpayer funds are repaid. Companies that accept relatively little government assistance can get the $500,000 cap waived if they allow shareholders a non-binding vote on CEO pay.