MercoPress. South Atlantic News Agency

Salary cap and perks disclosure for US bailed out companies

US President Barack Obama announced Wednesday his government will impose a salary cap of 500,000 US dollars for senior executives at companies receiving federal economic bailout funds.

Obama said the government would also cap "golden parachute" severance payments for executives leaving Wall Street firms receiving government aid. "For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis isn't only in bad taste – it's bad strategy – and I will not tolerate it as president" Obama said at the White House. The administration of George Bush, Obama's predecessor, agreed a 700 billion USD bailout of financial firms in October last year and about 350 billion of the money has been used. Obama has repeatedly criticised Wall Street executives over reports that they accepted billions of dollars in bonuses last year as they received government aid during the global financial crisis. "We all need to take responsibility. 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,'' Obama said. Obama also said that any payments beyond $500,000 to executives would have to be in stock options and could only be made after government aid had been repaid. The US president also announced that limits would be set on severance packages. "We're putting a stop to these kinds of massive severance packages we've all read about with disgust - we're taking the air out of golden parachutes," Obama said with Timothy Geithner, the US treasury secretary, at his side. However, some Wall Street analysts criticised the move, saying it could lead to talented executives leaving to seek better pay elsewhere. The US president also promised a new series of measures to spark economic activity amid what many say is the nation's worst economic crisis since the Great Depression of the 1930s. Two reports by private analysts released on Wednesday said thousands of jobs had been lost in the US in the first month of the year alone. Non-agricultural private jobs fell by 522,000 in January, according to a report by Automatic Data Processing, a payroll firm. A separate report by Challenger, Gray & Christmas, a consultancy firm, said 241,749 planned job cuts were announced in January, the largest monthly total since January 2002, when 248,475 jobs were cut.