Goldman Sachs ( GS) CEO Lloyd Blankfein on Monday said Wall Street pay and lax regulation of private equity and hedge funds needed to be reevaluated, according to a published report.

Blankfein, speaking at a conference of the Council of Institutional Investors, said Wall Street needs to "apply basic standards to how we compensate people in our industry," according to The Associated Press. He suggested allowing only more junior employees to be paid mostly in cash, while increasing the percentage of company stock as a worker's total compensation grows, AP reported.

Blankfein also said largely unregulated private equity and hedge funds large enough to wreak havoc on financial markets should be put under "some degree" of government oversight, the new service said. Such funds, which include many Goldman clients, have largely resisted such change.

Public outrage over large bonuses paid to executives at bailed-out Wall Street firms like American International Group ( AIG) and Merrill Lynch, bought by Bank of America ( BAC) in January, have made financial sector compensation a hot topic on Capitol Hill and Main Street. The House of Representatives have passed two pieces of legislation aimed at curbing executive bonuses at recipients of federal bailout funds, but the Senate has not yet addressed the topic.

The Obama administration also recently proposed requiring private equity and hedge funds to register with regulators.

This article was written by a staff member of TheStreet.com.

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