By MARCY GORDONWASHINGTON The chief executive of Goldman Sachs Group Inc. on Tuesday called for new standards on how Wall Street executives are compensated and new regulation of large hedge funds and private equity funds. Lloyd Blankfein, who received compensation valued at nearly $43 million last year, said lessons from the financial crisis include the need to "apply basic standards to how we compensate people in our industry." He suggested a handful of guidelines, including only junior employees being paid mostly in cash and that the percentage of pay awarded as company stock increase significantly along with a worker’s total compensation. Blankfein also said unregulated pools of capital that are big enough to potentially burden the financial system in a crisis should be put under "some degree" of government oversight. Those would include large hedge and private equity funds. Public anger over the financial distress and taxpayer bailout of the banking industry spilled over to Blankfein’s appearance as protesters confronted him at a gathering of the Council of Institutional Investors. The organization represents public, corporate and union pension funds that together have an estimated $3 trillion in assets. Throwing regulatory reins around hedge funds _ which largely escape government supervision and draw hundreds of millions of dollars from pension funds, charities, university endowments and wealthy individuals _ is a central notion in efforts to revamp the nation’s financial rule book spurred by the global economic crisis. The Obama administration recently presented a plan to Congress that would require larger hedge funds, and other private pools of capital like private equity and venture capital funds, to register with the Securities and Exchange Commission. Such a move would open their books to federal inspection. "Much of the past year has been deeply humbling for my industry," Blankfein said, acknowledging it could take years to rebuild the investor confidence lost in the crisis caused partly by industry practices that appear "self-serving and greedy in hindsight." Goldman Sachs said recently it hopes to return its $10 billion investment from the government under the financial bailout program as soon as possible. Former executives of the Wall Street powerhouse have populated the White House and Cabinet under both parties, and it casts an influential footprint in Washington. Former Treasury Secretary Henry Paulson _ the primary architect of the government’s bank bailout _ was Blankfein’s predecessor as Goldman Sachs CEO. Blankfein’s remarks in Washington, urging Wall Street to higher standards, were reminiscent of a speech Paulson made in 2002 at the height of corporate scandals. Paulson, then Goldman’s CEO, called for changes in how public companies are run and regulated to help restore battered investor confidence and the limping financial markets. As Blankfein began his address Tuesday to the gathering in a hotel ballroom, two women appeared on the stage with a large purple sign saying, "We want our $$$$$ back." Blankfein asked them to leave and they did. But the women later charged onto the stage and podium yelling protests against the bailout. While criticizing their demeanor, Blankfein acknowledged the legitimacy of the widespread anger they expressed. The protesters reflected a prevailing view that is "real and visceral," he said. "Any money that was given to Wall Street was never intended to be permanent capital," Blankfein said. The standards he proposed for executive compensation in the securities industry should reflect an individual’s ability "to identify and create value," he said. Under other guidelines Blankfein proposed: _Compensation should include an annual salary plus deferred compensation. _For senior employees, most of the compensation should be in deferred equity. _Individual performance should be evaluated over time to avoid excessive risk taking. All awards of stock should be subject to future delivery or a deferred ability to exercise them over at least a three-year period. _Senior company officials should be required to keep the bulk of the stock they receive until they retire. Jim Schnorf, a member of the board of the Eastern Illinois University Foundation, said Blankfein’s remarks were constructive in light of the need to recast the role of stock option awards as incentives to company executives. "There certainly has to be some mechanism to align management’s interests with what’s best for shareholders," Schnorf said. Blankfein received compensation valued at $42.9 million during fiscal 2008, virtually all of it coming from stock and options awarded for his previous year’s performance, according to an Associated Press calculation of data recently disclosed by the company. He got no performance-based pay for his work in fiscal 2008, when Goldman Sachs reported its first quarterly loss since becoming a public company and its stock fell more than 60 percent amid the deepening credit crisis. Though it needed the $10 billion capital injection from the government as well as a $5 billion investment from billionaire Warren Buffett’s Berkshire Hathaway to make it through the financial meltdown, Goldman Sachs remains in business. That wasn’t the case for three of its fellow former investment banks _ Lehman Brothers, Bear Stearns Cos. and Merrill Lynch & Co. _ iconic companies that couldn’t survive as independent firms.