almost impossible to untangle. However if they are sucking on the public tit and receive protection there should be a firm clamp on their comp. What about someone like Chaney the Ex-ceo at Westfarmers a firm which would never receive government support and did an excellent job of building a terrific firm? How would another firm be able to attract someone of his calibre if they wanted to poach him while there are all sorts of restrictions on comp? Dunno. the problem of one-sided risks in banks has been talked about for decades in economics, i.e. the virtual certainty that states cant let big banks go bankrupt. This is an important reason to put such high collateral demands on their loans. This is also an important part of Basel 1 and Basel 2 (the accords regulating bank reserves in much of Europe) and to a certain extent entitles the governments to some level of interference with bank CEO pay. However, there is actually a direct way the goverment can do something about these payments: governments can legislate emergency laws to tax these specific individuals for specific reasons. I think you can actually do that: you can simply come up with a law saying 'John has in our opinion given himself money to which he is not entitled hence I am going to define a new tax John has to pay'. Such arrangements are quite normal historically and I can see no really good reason why we shouldnt re-invent them now.