I don’t think government should be telling companies how much to pay their CEOs. But if taxpayer dollars are the companies bad asset, then all bets are off. Looking through the Senate Bailout Bill, the provision governing CEO pay was completely inscrutable. I can’t tell if there are any real restrictions or only the authorization for teh Sec. of Treasury to apply such restrictions. But I found the definition of “applicable employer” pretty interesting:

“IN GENERAL.–Except as provided in clause (ii), the term `applicable employer’ means any employer from whom 1 or more troubled assets are acquired under a program established by the Secretary under section 101(a) of the Emergency Economic Stabilization Act of 2008 if the aggregate amount of the assets so acquired for all taxable years exceeds $300,000,000.”