Obama's policy on bonus cut - a good political move but a counterproductive economic policy

Treasury Restricts Executive Pay for Bailed Out Companies
http://www.thecro.com/node/770
President Barack Obama and the treasury department moved to restrict executive pay packages at financial firms receiving “exceptional financial recovery assistance.”
At such firms:
• The policy limits senior executives to $500,000 in total annual compensation, except for restricted stock awards. The stock could be cashed in when the government has been repaid
• The senior pay structure and strategy at such firms must be fully disclosed and subject to a “say on pay” shareholder resolution
• A clawback provision would permit recovery of bonuses and compensation from top executives found to have knowingly provided inaccurate information or performance
metrics to calculate their own incentive pay
• Top executives would be barred from receiving golden parachute payments
• Boards would have to adopt policies relating to approval of luxury expenditures such as aviation services, office renovations, entertainment and holiday parties
• The administration said it would host a conference on “executive pay reform at financial institutions” to identify best practices and guidelines


I don’t quite understand the motive behind this decision. Is it to punish the executives who have led the economy into the recession or ensure that future executives don’t commit such mistakes again? Some may argue that the answer to both the problems is the same. But I think otherwise.
Economy is already in recession. Time is ripe to develop new leaders. From a political point of view it is understandable that Obama wants to reduce the executive pays and bonuses of executives whose companies are receiving bail-out packages. However, from an economic standpoint I don’t understand the rationale behind the decision to reduce pays and bonuses.
Obama’s policy has its pros and cons-
Pros
1. Less money will go as compensation that means more money towards operations and
investment
2. Executives might think that this is more of a punishment for their bad decision making and might start taking less risk (I am not even sure how relevant this is in the real world)
3. Obviously more votes for the democrats

Cons
1. There will be no incentive for executives to perform better (or even stay in the firm) especially because the pay is less and the stock awards would be allowed to be cashed when the government has been repaid (which will mean much more than 5 years)
2. There will be no incentive for new potential executives to join these companies. Clearly, they will get much more outside of these companies. Hence, these companies are bound to face talent shortage

Obama’s decision is driven more from the point of reducing the inequality.
His rationale- When there are millions unemployed then how can a few enjoy the millions(in compensation)

In my mind- The compensation structure should not be changed much. Only the incentive structure should be tweaked a little bit. Instead of tying the bonuses to stock value and revenue growth a new structure should be designed that ties the bonus incentives to more fundamental things. May be reduction of % of NPAs in the book, etc
I don’t know of anyone who would like to join such firms (bailed-out) as an executive. Do you?