"Firms that want to pay executives above the $500,000 threshold would have to use stock that could not be sold or liquidated until they pay back the government funds."
To me, if this applies to BAC, this implies that shareholders will not be wiped out. How else could the CEO's get liquid stock options of any determinable value that would create an incentive to turn things around?
Most posters are missing that the new pay rules "Do Not" apply to banks who have already received their TARP funds or have negotiated agreements such as BAC did to cover 90% of losses on $118B in losses on their portfolio.
It will only impact BAC, C, and AIG "if" they go back to the Govt. for additional funds.