Interestingly enough, the $500k salary cap that has been applied to TARP funded banks does not cover bonus options (last I heard), which the banks are free to issue to execs.
Now, if the bad bank/toxic debt plan moves ahead and bad assets are bought by the govt./tax payer (at what price I don't know - I am sure the banks will be attempting to extract as best price they can) from these entities then the big winners in the future could be those very same bank execs. Will have to see how it pans out.
Also, if a bad bank/investment vehicle is made the US govt. is looking at guaranteeing any investments, effectively placing a floor on any potential future losses. Private sector investment in these potentially high yielding/low risk (Govt. guaranteed) investments would most likely be from hedge funds - great if you can get it. Although, the govt. may utilise an auction process, I expect that they still want to encourage private investment (they need it) and therefore will look to make a sweet enough deal.
Generally, I think, if it was a typical distressed private company/individual you would usually be forced to sell your best assets first - not your worst. If they carved out the best of the banks assets and listed them as separate entities you would get a lot of interest from the private sector. Leave the duds and the old management with the banks and take them out the back and put a bullet in them (if needed).
Some people will obviously do quite well from all this, but the average tax-payer may not directly benefit as much as some more worthy.
