WASHINGTON ( CNN ) -- Pledging to take `` the air out of golden parachutes , '' President Obama announced Wednesday that executives of companies receiving federal bailout money will have their pay capped at $ 500,000 under a revised financial compensation plan . $ 500,000 will be the limit on executive salaries at companies receiving tax dollars , President Obama says . Last year 's `` shameful '' handout of $ 18 billion in Wall Street bonuses `` is exactly the kind of disregard for the costs and consequences of their actions that brought about this crisis : a culture of narrow self-interest and short-term gain at the expense of everything else , '' Obama said to reporters at the White House . `` For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is n't just bad taste -- it 's a bad strategy -- and I will not tolerate it . We 're going to be demanding some restraint in exchange for federal aid -- so that when firms seek new federal dollars , we wo n't find them up to the same old tricks , '' the president added . Under Obama 's plan , companies that want to pay their executives more than $ 500,000 will have to do so through stocks that can not be sold until the companies pay back the money they borrow from the government . The rules will be implemented by the Treasury Department and do not need to be approved by Congress . The restrictions will most affect large companies that receive `` exceptional assistance , '' such as Citigroup . The struggling banking giant has taken about $ 45 billion from the government 's Troubled Asset Relief Program . The new rules also will mandate that shareholders of banks have a greater say about the salaries paid to company heads . The measures will put in place greater transparency for costs such as holiday parties and office renovations . Obama also pledged further reforms in the future , promising that the administration will `` examine the ways in which the means and manner of executive compensation have contributed to a reckless culture and quarter-by-quarter mentality that in turn have wrought havoc in our financial system . '' Watch Obama talk about limiting executive salaries » . `` We 're going to be taking a look at broader reforms so that executives are compensated for sound risk management and rewarded for growth measured over years , not just days or weeks , '' Obama said . CNN 's Suzanne Malveaux contributed to this report .
NEW : Pay for executives at companies that take bailout money capped at $ 500,000 . NEW : Cut the deficit by cutting spending on military, health care and social programs. Compensation over $ 500,000 will have to be in stocks with sales limit . The plan will affect companies getting `` exceptional assistance , '' like Citigroup .