French Prime Minister François Fillon unveiled a government decree curbing executive bonuses and banning stock options at bailed-out companies until the end of 2010.
Decided after a string of executive pay-offs sparked a public uproar, the decree will ban bonuses at firms that announce "major lay-offs" while receiving public aid - a category that includes leading French car firms and banks.
"These are rules for a time of crisis," Mr Fillon told reporters, saying the measures would give France "the means to be exemplary."
The decree, which came into force yesterday, also curbs bonuses and severance packages at all publicly-owned companies until the end of next year.
It stops short, however, of banning "golden parachutes" at private firms, even those that receive state aid to weather the economic crisis, or of setting across-the-board caps on executive pay.
Several banks and a car parts supplier touched off a furore in France after revealing they had paid millions of euros in perks for executives while accepting taxpayer money.
Mr Fillon lashed out on Monday at the "irresponsible behaviour of a few," saying "the government will not let the behaviour of some cast aspersions" on the wider French business world. The government will also set up a committee of experts to examine the wider issue of pay at firms that lay off staff, he said.
The opposition Socialist Party, which is pressing for a five-year ban on stock options and other benefits on all companies except start-ups, attacked the measure as "entirely insufficient."
"This decree is a token gesture, that does nothing to tackle the roots of the disease," said the Socialists' spokesman on the economy, Michel Sapin.
Union leaders, who were poised Monday to call for a new day of anti-government protests on May 1, attacked the measure's limited scope, with Bernard Thibault, head of France's biggest union the CGT, calling it "very, very limited."
As the economic crisis bites, sending French jobless soaring to nearly 2.4 million, the government fears that anger in the workforce could spill over into social unrest.
President Nicolas Sarkozy's government has sought to channel resentment by talking tough on executive pay after more than a million workers took to the streets for the second time this year to contest his policies.
Investment bank Natixis, which received two billion euros in government funds, is in the eye of the storm after admitting to paying €70 million in bonuses to some 3,000 employees.
Natixis, a subsidiary of Caisse d'Epargne and Banque Populaire, currently being merged, reported a net loss of €2.8 billion for 2008 and is laying off 1,250 workers in France and abroad.