Stimulus could mean top execs may have to return parts of pay

— -- Wall Street executives have a new worry: Some may have to return part of their bonuses to taxpayers.

An amendment in the $787 billion economic stimulus bill to be signed into law by President Obama on Tuesday goes far beyond the $500,000 executive pay cap restriction announced by the White House for companies that receive government money.

Authored by Sen. Chris Dodd, D-Conn., it caps bonuses and bans golden parachutes that reward departing executives. It also seeks a review of past compensation to "negotiate for reimbursements if those payments were contrary to the public interest."

The provision was introduced after public furor over Wall Street's hefty payouts. Lawmakers' anger came to a head last week, when New York Attorney General Andrew Cuomo revealed that Merrill Lynch paid bonuses of more than $1 million each to 696 employees in December, just days before Bank of America completed its purchase of Merrill with the help of $20 billion from the government.

Dodd's bonus cap applies to a range of executives — from just one highest-paid employee at firms that receive less than $25 million to as many as the top 20 highest-paid workers in addition to top executives if a company takes in over $500 million.

Executive bonuses couldn't exceed one-third of their salary; for instance, Goldman Sachs' CEO Lloyd Blankfein's $67 million bonus for 2007 over a base salary of $600,000 would not be possible.

Scott Talbott at the Financial Services Roundtable, which represents large banks, said such restrictions will weaken the program. "Once you go beyond top execs to restrict commissions, you undermine the strengths of the institutions." Senior White House aide David Axelrod, in a Fox News Sunday interview, indicated that the president might take a second look at the provision and work with Congress on "an appropriate approach."