During a speech on Wall Street, President Bush said companies should tie the compensation of chief executive officers to performance.
"Government should not decide the compensation for America's corporate executives, but the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders," President Bush said during his State of the Economy Report in New York's Federal Hall.
He called on boards to look at CEO pay packages more closely.
"America's corporate boardrooms must step up to their responsibilities," he said. "You need to pay attention to the executive compensation packages that you approve. You need to show the world that American businesses are a model of transparency and good corporate governance."
Bush also touted new rules from the Securities and Exchange Commission that require clearer disclosure of executive compensation.
"Shareholders should know what executive compensation packages look like," Bush said. "I appreciate the fact that the SEC has issued new rules to ensure that there is transparency when it comes to executive pay packages. The print ought to be big and understandable. When people analyze their investment, they ought to see loud and clear--they ought to be able to see with certainty the nature of the compensation packages for the people entrusted to run the companies in which they've got an investment."