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The issue of executive compensation has been a considerable part of ongoing efforts to understand the problems within the financial sector. Many believe that the ways in which top managers’ salaries grew excessively during the good times had considerable repercussions during the bad.

Obama’s $500,000 salary cap for top executives seeking bailout money sent a clear signal that the days of excess are over for large companies, whose chiefs averaged $11 million in compensation during 2007. To put it into perspective, the average CEO of a top U.S. company earned 344 times more than the average worker in this country.

The new disclosure rules of the past few years were clearly not enough to stop certain practices, and Human Resource Executive reports that much of this year’s corporate focus—among large firms and small—will be on adjusting executive compensation and inappropriate perks to prevent pay-for-performance disconnects.

But measuring poor performance just got more difficult, with many companies’ shares sluggish or heavily devalued as a result of the downturn. After all, how can a company determine its progress when most everyone is doing poorly?

To consider this, risk-management provider RGM has adopted a relative approach. It now looks at one-year and three-year shareholder returns to see whether executives have created value or stopped erosion compared to their peers.

And many companies are redesigning pay packages in an attempt to boost share performance. Yahoo Inc. has offered its new chief Carol Bartz an annual salary of $1 million and tied her pay package closely to her ability to revitalize its stock. Bartz will receive stock options of 5 million Yahoo shares and can only begin to exercise the options if the company’s share price rises 50% by 2013.

Technology giant Hewlett-Packard will give its shareholders a vote on the matter. Their opinions will hold no legal weight but will allow them to send a message to the board. They’ll be able to vote on issues of compensation by 2010.

The Obama administration is likely to impose even more guidelines for executive compensation within the Wall Street firms and banks receiving government money. The institutions that received the first installment of TARP money did so without having to make concessions about pay. The second $350 billion bailout under consideration will come with strings attached.

Under consideration are so-called clawback provisions, where executives will have to return incentive compensation in cases of fraud, give up excessive exit packages, or forgo bonuses for a certain amount of time. The big banks have said they will comply with rules on executive pay, but the rules remain somewhat unclear. The U.S. Chamber of Commerce has said it wants new executive pay provisions to explain exactly what would trigger a clawback.

Morgan Stanley has attached new rules to its annual bonus structure. The company will withhold a portion of employee bonuses for three years and leave bonuses partially unpaid if an employee makes poor decisions. It has said that this is an attempt to discourage employees from making short-term decisions by tying their compensation to the bank’s long-term performance.