Last week, President Barack Obama placed a $500,000 cap on pay for senior executives of the most distressed financial institutions that are receiving federal bailout money.

Thank you, Mr. President.

One needs only a wee bit of exposure to the talk on the street to realize that the common citizenry is sick and tired of hearing about executives leaving failing companies via "golden parachutes" or pulling down unimaginable bonuses and compensation during economic turmoil and enormous taxpayer-funded bailouts.

Of course, an annual sum of $500,000 is still unimaginable to many, but its a much smaller unimaginable number.

"This is America. We don't disparage wealth. We don't begrudge anybody for achieving success," Obama said. "But what gets people upset - and rightly so - are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers."

According to the Associated Press, the caps will apply to senior executives of institutions that negotiate agreements with the Treasury Department for "exceptional assistance" in the future. Unfortunately, the restriction would not apply to such firms as American International Group Inc. (AIG), Bank of American Corp., and Citigroup Inc. that already have received such help.

Generally healthy institutions that receive capital infusions from the Troubled Asset Relief Program (TARP) will have more leeway. While they also face the cap, it can be waived with full public disclosure and a nonbinding shareholder vote.

When the term "bailout" was beginning to become part of everyday discourse in the U.S., some corporations boldly kept up their wasteful ways, even while on the list for federal funding.

How incensed were you when it was recently reported that employees of AIG ran up a $440,000 tab at a lavish California resort, while the government (taxpayers) was bailing out the insurance corporation to the tune of $85 billion?

During that case, about 70 of the company's "top performers" were rewarded with a week-long stay at the luxury St. Regis Resort in Monarch Beach, Calif.

Wells Fargo recently canceled a corporate retreat to Las Vegas' Wynn and Encore hotels - after the planned trip became public.

The opulent AIG retreat prompted Republican Rep. Mark Souder of Indiana to comment that the "unbridled greed" of many Wall Street executives is "so disgusting it's hard to put into words."

That was before revelations that Wall Street firms paid more than $18 billion in bonuses in 2008 even amid the economic downturn and the massive infusion of taxpayer dollars.

The president's action is welcome.

Of course, many horses have already left the barn with overstuffed saddlebags, but the cap is a good move as long as taxpayer money is involved in bailouts.

Compensation experts in the private sector are warning that such an intrusion into the workings of financial institutions could discourage participation and, in turn, slow down a recovery. They also fear that it could set a precedent for government regulation that undermines performance-based pay.

However, these are extraordinary times, and it's become painfully obvious that the honor system isn't working here.

In these cases, the infusion justifies the intrusion.