Sen. Claire McCaskill, D-Mo., introduced legislation Friday that would impose salary caps on executives at financial companies getting bailout funds from the federal government.

The legislation would cap any employee compensation at the level of President Obama's salary. The president earns $400,000 a year, not including benefits.

The private-sector limit would include salary, bonuses, and stock options and would last as long as the company relies on federal government assistance.

President Obama has pledged to limit executive compensation as a condition for financial services companies to get federal assistance through the second $350 billion tranche of the Troubled Asset Relief Program.

This commitment was outlined in a letter sent to Congress by White House economic adviser Lawrence Summers shortly before the Senate voted to release the Tarp money to the Treasury last month.

Mr. Summers, who heads the National Economic Council, said that any compensation above a "specified threshold" would have to be paid in stock that could not be liquidated by the executive until any infusion of public money was repaid.

The administration has not said what the threshold would be.

A spokeswoman for the Treasury was not immediately available to comment.

Maria Speiser, Sen. McCaskill's press secretary, said the senator does not believe the pledge from the Obama administration goes far enough.

News that banks getting the lion's share of the first $350 billion of Tarp money paid out billions in bonuses to executives at the end of last year provoked outrage among lawmakers in both parties.

"Right now, they're on the hook to us," Sen. McCaskill said on the Senate floor while introducing her bill. "And they owe us something other than a fancy waste basket and $50 million jet."

The senator was referring to a since-abandoned plan by Citigroup Inc. to buy a new, $50 million corporate jet and the $1.2 million spent by former Merrill Lynch & Co. Inc. chief executive John Thain to redecorate his office in late 2007. The redecoration included a $1,400 waste basket.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.