Pay Czar to Impose New Rules on Execs

CBS News has learned that the President Obama's so-called pay czar, Ken Feinberg, will be slapping a new set of pay restrictions on top executives Friday, reining in executive compensation at companies that have been rescued by the government bailout. CBS News correspondent Anthony Mason has more:

The pay czar is expected to put a $500,000 limit on the cash compensation to the second tier of executives at six companies. The top executives have already agreed to restrictions that were in part designed to discourage the kind of reckless risk taking that led to the financial crisis:

"I think its completely fair that they should try and figure out a way to reduce the risk in the system to that we don't go through the agony of the past 12 months," said banking industry analyst Dick Bove.

But Feinberg's new pay restrictions will affect only 225 executives at three major financial firms. The British government has been far tougher, announcing this week a 50 percent tax on banker bonuses above $40,000.

"They can use their profits to build up their capital base, but if they insist on paying substantial rewards, i am determined to claw money back for the taxpayer," said Chancellor of the Exchequer Alisatir Darling, the equivalent of the treasury secretary in the United States.

Bonuses at U.S. banks are expected to soar by 40 percent this year. Bowing to a storm of criticism, Goldman Sachs, which has set aside more than $16 billion for compensation, said today it will not pay cash bonuses to its 30 top executives, but instead will award them stock that cannot be sold for five years:

"Goldman is working very hard to change the negative image of that company by, if you will, jumping ahead of what the government might demand of them," Bove said.

The president has called a summit of CEOs from the leading financial companies for next Monday at the White House. At the top of the agenda: reforming financial regulations.
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