Obama Should Have Overpaid CEOs Shaking

Some industry observers are against sweeping changes on executive compensation.

"I suspect [the Obama administration] will be dealing very harshly with the issue," says Chip Hanlon, president of Delta Global Advisors and a contributor to RealMoney.com, a sister site to TheStreet.com.

Yet "[i]f they try to create rules for executive compensation for publicly traded companies that had nothing to do with the bailout, that would be an outrage and the markets would react very poorly to that," Hanlon says, who says he leans right politically and is a free market advocate.

"That being said -- it's perfectly reasonable if you run into the arms of government then you play by its rules," he adds.

Across-the-board executive comp reforms could have some "unintended consequences," says Jim Allen, CFA Institute's Capital Markets Policy director.

Allen likened the concerns to Congress' reforms to executive compensation packages in the early 1990s, in which companies began using more performance-based options.

"It wasn't very well thought out when they did it," he says, because the options were tied to overall market performance rather than companies' peers. Thus, compensation rewarded senior executives for performance of the market as opposed to their own company.

The American Bankers Association also has concerns about implementing across-the-board executive compensation limits.

"Restrictions on compensation would be impossible to administer across banks of all sizes and types and would cost the participating banks good employees in a competitive employment market," according to a letter sent to Treasury Secretary Henry Paulson last week by Edward Yingling, the president and CEO of the American Bankers Association.