The (H.R. 1424) states that limits on executive pay apply to the top five highest-paid executives at financial institutions that sell their "troubled assets" (e.g. bad loans and mortgage-backed securities) to the Treasury Secretary.

When the Treasury Secretary buys a financial institution's assets directly from the institution (as opposed to purchasing the assets through an auction), and the Secretary receives "a meaningful equity or debt position" in the company as a result of the sale, the company has to adhere to "appropriate" limits on executive compensation, according to the bill. But the bill doesn't define what a "meaningful" stake is for those firms that negotiate directly with the Secretary, nor does it specifically state what is an appropriate limit for executive compensation.

"It's up to the Secretary to decide what is meaningful," says the Institute for Policy Studies' Anderson. "We have heard that after the votes, when the bill is enacted, Congress might put in guidelines as to what this means, but they were under pressure to keep the bill as flexible as possible for the Treasury Secretary."

When the Treasury Secretary buys a troubled company's assets through an auction, the executive pay provisions only apply if the assets held by the Treasury Secretary exceed $300 million, says Anderson. So not all executives at firms participating in the bailout will be bound by these restrictions on executive compensation.

The bill does establish some loose restrictions on executive compensation. For one, the bill states that companies can't reward executives for taking "unnecessary and excessive risks" that might threaten the value of the company while the Secretary holds the company's debt or equity. This restriction is designed to prevent the risky behavior that some economists and legislators say led to the financial crisis. But Anderson says it doesn't go far enough because it doesn't define "unnecessary and excessive."