When Hartford Financial Services Group Inc. (HIG) takes possession of its $3.4 billion in funding from the U.S. Treasury in the coming weeks, its hunt for a new chief executive may get a little more complicated.

Along with the capital come a host of restrictions on executive compensation that could put Hartford in a unique spot among its competitors.

Typically, salaries for new executives are based on a "comparative analysis" of what executives at competing companies make, said Andrew Barile, a reinsurance consultant based in Rancho Santa Fe, Calif., who has served on insurance company board compensation committees. Hartford's unique status as an insurance company in the Troubled Asset Relief Program, or TARP, puts it into "new territory," he said.

On Thursday, Hartford announced that embattled Chairman and CEO Ramani Ayer will retire by the end of this year, once an external replacement is selected. In 2008, Ayer received a base salary of $1.15 million, $1.1 million in stock awards, and $2.1 million in option awards.

But proposed compensation guidelines issued by the Treasury in February would limit senior executives at TARP-recipient companies to $500,000 in total annual compensation plus restricted stock, unless the company discloses the compensation and shareholders are allowed to vote on the issue.

The proposed guidelines also impose clawback clauses on the top 20 senior executives, put bans on so-called golden parachutes, and put restrictions on "luxury expenditures" that could affect how executives are compensated.

A spokeswoman with the Treasury Department said she hadn't heard that companies had difficulty recruiting under the compensation restrictions and the issue hadn't come up frequently.

American International Group Inc. (AIG) is under perhaps even more stringent restrictions on what it can pay its top executive, given the more than $140 billion the government has invested in its rescue. In May, Edward Liddy, AIG's chairman and CEO, said he would resign once the company selected a successor.

The subject of executive bonuses at AIG's troubled financial-products unit came under congressional scrutiny earlier this year, and some lawmakers threatened to pass legislation imposing a 100% tax on AIG employee bonuses of more than $250,000. Many of the executives ended up returning the money and several resigned in protest.

In an interview, Ayer said Hartford has received preliminary terms and conditions of its Treasury investment, but the deal had yet to be finalized.

As to who might take over his role, Ayer said the company will be looking for "a strong, experienced leader to take the company into its third century," and that the company's strong culture and trusted brand made the company attractive to customers and potential leaders.

Only external candidates are being considered, he said.

German insurer Allianz SA (AZ) made a $2.5 billion investment in October, but isn't interested in running the company, Ayer said in an interview Thursday.

A spokeswoman with Allianz declined to comment on Hartford's search for a new leader.

Shares of Hartford closed Thursday at $14.93, up 5 cents.

-By Lavonne Kuykendall, Dow Jones Newswires; 312-750 4141; lavonne.kuykendall@dowjones.com