By MICHAEL R. CRITTENDEN

WASHINGTON
-- U.S. lawmakers, responding to public outrage about outsize Wall
Street pay packages, took the first steps on Tuesday toward setting new
compensation standards for U.S. companies.

The vote in favor of executive compensation legislation by the House
Financial Services Committee gives lawmakers the chance to partially
advance at least a portion of President Barack Obama's ambitious
financial regulatory revamp before adjourning for the August recess.
The House of Representatives is scheduled to vote on the measure on
Friday.

The
bill, approved in a 40-28 vote, authorizes federal regulators to
restrict "inappropriate or imprudently risky" pay packages at financial
companies, though firms with under $1 billion in assets would be
exempted.

The legislation also gives shareholders a greater ability to weigh
in on executive compensation packages and ensures that board
compensation committees are made up of independent directors.

In a nod to public frustration with the bailout of Wall Street's
biggest companies, the bill also singles out banks, Fannie Mae, Freddie
Mac and other financial companies for additional disclosures of
incentive-based compensation structures.

Panel Republicans, led by Rep. Scott Garrett (R., N.J.), opposed the
measure and offered a raft of amendments that would have limited or
eliminated large portions of the legislation. The raised the specter
that "federal bureaucrats" would be setting pay levels for employees
and warned that it could discourage recruitment efforts for companies.

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