A lot will depend on the details, but I think you can structure it so that it leads to good incentives. The system that Obama seems to have in mind right now is if you take government money, you get punished for it. If you are a CEO and you get your company in a situation where you have to take government money, then your salary gets cut to $500K. I think this will work if there is a flip side which is that if you are a company in a situation were you *don’t* take government money, then you can pay yourself whatever you want.
If you have a situation in which a CEO that takes government money is limited to $500K, but one that pays back any loans can pay themselves $10M, you have a CEO that is very strongly incentivized to make a profit, pay back the government, and then two seconds later pay themselves $10M.