The U.S. pay czar will slash compensation for the 25 highest-paid employees at seven companies that got large sums of government aid and demand a host of corporate governance changes at those companies, according to people familiar with the matter.

Kenneth Feinberg, the Treasury Department's special master for compensation, will cut total compensation for 175 employees by an average of 50%, these people said. As expected, the biggest cuts will be in salaries, which will drop 90% on average.

Though overall levels will fall, however, some executives will still walk away with big paychecks. For instance, several Bank of America Corp. employees will still get compensation totaling millions of dollars.

At the same time, Feinberg will demand a series of corporate governance changes, including splitting the positions of chairman and chief executive, requiring boards of directors to create a "risk" committee and eliminating staggered terms for directors.

Though overall pay for the 175 employees will fall, the averages are somewhat skewed by a handful of steep reductions.

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