Despite the Treasury's plan to cap executive pay at $500,000, banks will always find ways to pay their top execs far more. - Inspired by Kevin J. Murphy, finance professor, University of Southern California

The bailout plan unveiled Tuesday of this week aims to cap executive pay at $500,000. Compensation experts however believe that the plan does not go far enough. While an unstable economy will help place a natural cap on salaries for now, in the long term it is considered unlikely that salary levels will in fact be reined in.

Banks will simply pay higher taxes and will find other creative ways of paying their executives as they see fit. Some say there could even be a sudden surge in compensation as soon as the government program ends, in a few years, leading to eye-popping numbers down the road, writes Reed Abelson of the New York Times.

History offers examples of the futility of a salary cap: previously when Congress passed legislation limiting the tax deductibility of cash salaries to $1 million, this was countered by the far heavier use of stock options as compensation total payouts were even higher.

Experts suggest that banks will largely ignore the $500,000 cap, as their top execs will otherwise leave for more competitive salaries at unregulated institutions. Instead, it is likely that they will choose to face tax penalties.