President Obama is making headlines with his newly imposed limits on executive pay for companies receiving bailout money:

President Barack Obama on Wednesday imposed a salary cap of $500,000 for top executives at companies that receive large amounts of bailout money, saying that some executives were being "rewarded for failure," in part with taxpayer-subsidized money.

This is indeed an improvement over current rules that only restrict the tax-deductibility of executive pay for companies receiving bailout money to $500,000, but don't forget to read the fine print that is not being as well publicized:

Senior executives would be limited to $500,000 in total annual compensation, other than restricted stock. They would be able to cash in such stock only after the government had been repaid.

So, the $500,000 cap does not include stock rewards so long as they are not cashed-out until the government has been repaid and even this $500,000 in-name-only limit applies only to the companies receiving the largest amounts of money, referred to as "exceptional assistance" by the government.

For companies receiving smaller bailouts, the $500,000 compensation limit applies, but it can be waived if they fully disclose compensation terms and adopt a "say on pay" approach.