(LUXEMBOURG) - EU finance ministers reserved the right on Tuesday to kick out executives of failing banks that get state bailouts without their 'golden parachutes' -- fat payoffs at the end of their contracts.

In emergency measures to respond to the financial crisis, the ministers agreed at a meeting in Luxembourg to prop up "vulnerable, systemically relevant financial institutions."

Staking out the moral high ground, they said that executives, as well as shareholders to a lesser extent, would have to bear a heavy price when banks are bailed out.

"Our imperative is to protect depositors and naturally not executives of financial companies, especially those that took excessive risks or bad decisions," French Finance Minister Christine Lagarde said after chairing the meeting.

According to an agreed text, each "government should be in a position to bring about a change of management" when the state has to intervene to prop up a bank.

The ministers also determined that corporate fat cats that drive their banks into the ground "should not retain" the right to 'golden parachutes' -- large payoffs when they leave -- and governments would be able to set executive remuneration.

The bosses of Fortis and Dexia turned down their golden parachutes after both banks required massive state bailouts in recent days as the financial crisis whipped through Europe.

With an increasing number of banks requiring state rescues, EU governments are eager to avoid creating the image of top executives walking away from wrecked banks with huge bonuses after their institutions get massive injections of taxpayers' cash.

Ministers also agreed that "existing shareholders should bear the due consequences" of government bailouts, ruling out the prospect of state compensation when their investments are wiped out in a rescue.

More generally, the ministers adopted recommendations that would allow governments to limit golden parachutes even at companies that do not get state bailouts, particularly in the financial sector.

Economic and Financial Affairs Council (ECOFIN)

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