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Pay Czar Kenneth Feinberg announced cuts of 50 percent to the compensation for top employees at seven firms receiving government money, meaning most cash salaries will come under $500,000.

Meanwhile, reports The Wall Street Journal:

The Fed is proposing that it more aggressively regulate compensation practices at banks under its control, including thousands of U.S. banks as well as the American subsidiaries of overseas firms.

Feinberg's policy will be in effect only for November and December this year, thus avoiding the need for employees to repay salary they'd already. However, the policy "will be the base point for salaries in 2010, and for as long as the companies hold on to their government bailout funds," the Journal says.

Earlier, the newspaper said the largest package Feinberg would allow would be less than $10 million, going to someone at Bank of America. Although that's far below standard Wall Street payouts for top performers, Citigroup "is telling employees the net impact of Mr. Feinberg's rulings will be minimal because the cut salary will be shifted from cash to longer-term stock grants."

Some of the toughest pay restrictions Feinberg will impose will be at the financial-products unit of American International Group. No employee there will receive more than $200,000, the Journal said.

Feinberg's moves will be no direct impact on companies that either haven't received government money, or have repaid any Federal loans they received in the wake of last year's financial crisis. However other firms - like Goldman Sachs and JPMorgan Chase - are changing their compensation formulas to include less cash and more stock.