The Wall Street Journal reports (subscription required) that "General Motors Co.'s search for an outsider to replace its chief financial officer is being complicated by the pay restrictions the Treasury Department is imposing on companies that received large bailouts from the federal government, according to people familiar with the matter."

GM is expected to be able to offer its CFO a pay package consisting of a significant amount of stock (Hah!) but a salary of only about $1 million per year -- not much for a company of GM's size and problems. Plus, ya gotta live in Detroit and work with Fritz Henderson.

A study by the Washington-based Institute for Policy Studies found that executives from our top 10 financial firms earned about $90 million in the value of stock options in recent months.

This is how the game was played. Bankers took stock options on their companies when their stock prices were low during the financial meltdown. Now, with the price of bank stocks shooting up, the value of these options also skyrocketed, helping them to pocket a neat $90 million if they choose to exercise them.

The Wall Street Journal reports (subscription required) that "A top Citigroup Inc. (NYSE: C) trader is pressing the financial giant to honor a 2009 pay package that could total $100 million, setting the stage for a potential showdown between Citi and the government's new pay czar."

The trader involved is Andrew J. Hall, who heads Phibro LLC, a Citi-owned energy trading division. But here's the kicker: His compensation is determined by the profitability of his unit so if he is to receive a $100 million payout, it will be because he generated far more than that in profits for Citigroup.

The Obama administration proposed legislation yesterday that would require fully-reporting publicly traded companies to give their shareholders a non-binding vote on executive compensation. Under the proposal, directors would have to ask shareholders what they think before going ahead and doing what they were going to do anyway.

Administration insiders predicted that the measure would pass Congress easily, but that isn't stopping the Chamber of Commerce and the even more infamous Business Roundtable from opposing the measure.

Why would anyone what oppose a non-binding vote is beyond me. Why are they so opposed to taking a straw poll of their shareholders to find out what they think about their pay practices? Why are they so opposed to companies soliciting the opinions of their shareholders?

If anything, this measure doesn't go far enough. What's needed in the boardrooms of America is a revolution -- where shareholders take back their company from lazy, incompetent and just plain crooked directors who bankrupted General Motors, sent Bank of America (NYSE: BAC) onto the welfare rolls, and turned American International Group (NYSE: AIG) into America's most degenerate gambling addict. And non-binding resolutions will lead to a non-binding revolution, which is really no revolution at all.

What are the new changes in financial regulation? First and foremost, President Obama wants to expand the powers of the Federal Reserve to assume primary responsibility for averting an new financial crisis.

Secondly, he wants to create a "council of financial regulators" who would improve coordination among agencies. The council would discuss systemic risks, but the Fed could at alone without its approval.

The administration has decided not to consolidate regulatory agencies due to the political fallout involved.

President Obama and Treasury Secretary Tim Geithner have selected Washington lawyer Kenneth R. Feinberg to serve as the executive pay czar. Feinberg will be charged with setting pay standards for top executives at the seven companies that received the most bailout money.

The New York Times reports that "For 80 other financial institutions that have received federal assistance, Mr. Feinberg will develop the overall compensation structure, but without setting the exact level of pay. For these 80 companies, the goal is to reduce excessive risk-taking by executives whose compensation is tied to company performance. Mr. Feinberg will also determine whether it would be in the public interest to force any executives at companies receiving assistance who might have been overpaid to return some pay."

The Securities & Exchange Commission may force public companies to disclose more information about how they compensate their lower-ranking employees, but there's a catch: They still wouldn't have to say how much they're paid.

The Wall Street Journal reports (subscription required) that "The Securities and Exchange Commission plans to propose that companies disclose in general terms how they compensate lower-ranking employees, expanding disclosures for the first time beyond the executive suite."

Widespread outrage over abusive executive pay practices has some companies going to unusual lengths to gain shareholder support for the way they compensate their top earners.

Amgen, Inc. (NASDAQ: AMGN) has invited its shareholders (subscription required) to fill out a ten question online survey assessing the level of executive pay, the clarity of proxy statement disclosures related to compensation, and how well pay practices are aligned with performance and shareholder value. Other companies are instituting similar programs, and more are expected to follow.

While American politicians whine self-righteously about corporate governance travesties at bailed out companies they had every opportunity to extract concessions from, Australia's government is actually taking steps toward long-term improvements in executive pay practices.

The Wall Street Journal reports that "Treasurer Wayne Swan said the center-left Labor government will amend the Corporations Act to require shareholder approval for any termination payments that exceed average annual base salary, which excludes additional compensation such as shares or stock options."

One of our reader's who blesses us with frequent comment's, B. Harrison, left the following tidbit for us recently (responding to: Buffett suffers big losses at Berkshire Hathaway) and I thought I would share it because this sentiment comes to us frequently.

• "And the American people are simply apathetically sitting back while our CORRUPT Congress who enabled and allowed all of the corporate FRAUDS, continues to allow the CORRUPT CEOs and Boards of Directors run those corporations, and to keep their ill gotten "weath" that they amassed while mismanaging the corporations, and orchestrating and perpetuating all of those FRAUDS."

I do not agree that the American people are "apathetically sitting back".... They are voicing their opinions on the web, in letters and emails to their representatives, they take to the streets and protest, they sell the stock of poorly run companies and file class action suits. The truth is that they are frustrated because our representatives have an unwavering singular focus, and that is to sustain themselves in office. Nothing takes a higher priority then that; it's called political self preservation.

The Wall Street Journal reports (subscription required) that "More than 40 financial firms have been hit with pay-related proposals, including Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), J.P. Morgan Chase & Co. (NYSE: JPM) and Morgan Stanley (NYSE: MS). Most of the targets are recipients of government capital from the Troubled Asset Relief Program."

This is great news and represents an increase of more than 60% over last year, according to RiskMetrics. Of course, it doesn't matter nearly as much as it should: The "say on pay" votes are really just advisory: All that they do is put a little box on the proxy ballot where shareholders can say how they feel about their company's egregious executive pay practices.

With the Obama administration's $500,000 executive pay cap for bailed out companies imposed, the more important and more determining question concerns how the American people respond.

Ironically, the public's reaction may hinge on how Wall Street and the broader financial community reacts.

Historically, Americans have opposed pay caps and generally looked unfavorably on government -- particularly federal government -- efforts to interfere with market-based valuations of talent / labor. In a nutshell, the public favors a minimum wage but believes "the sky's the limit" regarding compensation; if a board of directors, business partner or negotiated contract says you're worth $10 million a year in salary and bonus, then you deserve $10 million year.

President Barack Obama is planning to cap executive compensation at companies receive large amounts of TARP money at $500,000 per year.

"Tomorrow, I'm going to be talking about executive compensation and changes we're going to be making there," he told Anderson Cooper. "We've now learned that people are still getting huge bonuses despite the fact that they're getting taxpayer money, which I think infuriates the public."

President Obama announced that he wants to impose compensation limits on executives that receive government financial rescue funds. These proposals are said to include the following provisions:

• A $500,000 cash cap on annual compensation for senior executives
• Requiring top executives at financial institutions to hold stock for several years before they cash out
• Requiring nonbinding "say on pay" resolutions giving shareholders more say on compensation

These provisions would only apply to firms receiving government funds and would be applicable until they are repaid to the government.

This is a dramatic intervention into corporate governance, but then again the government bailouts are also unprecedented as well. Several are claiming that this is another step into more socialist America.

Can President Obama force CEOs to take a massive pay cut? While many others in the economy -- particularly the millions of regular Joes and Janes who have lost their jobs -- are helping to push down wages, CEOs have been immune from the pay cuts. But if Obama forces CEOs who take government money to limit their pay to $500,000 -- 25% more than Obama takes in -- will that cause all CEO pay to tumble? I think the answer is "no."

Why? Many reasons. First, no CEO in his or her right mind would volunteer to take government money given the ensuing pay cut. For example, if the CEO of a car company made $14 million in 2008, why would that same CEO volunteer to make $500,000 in 2009? Instead, the CEO would seek a position with a company that did not take government money and therefore did not limit the CEO's pay.