The French government plans to cap the salary of public sector chief executives at 450,000 euros (566,624 U.S. dollars) per year, said Economy and Finance Minister Pierre Moscovici on Wednesday.

The decree, which will be released by the end of July, is designed to limit the accumulation of incomes, including fixed and variable compensation, to 20 times of the lowest wages in public companies, Moscovici said at a press conference.

This new decision will "apply to all public companies mainly owned by the French state," including their key subsidiaries, according to a statement published following Wednesday's cabinet meeting.

The French government has promised to ensure "that the new rules also apply to public institutions and other operators in the state," it said.

In companies where the French state does not hold a majority stake, the Economy and Finance Ministry will continue to instruct the state representatives in the governance bodies of these companies to offer the same rules of moderation in determining the compensation of executive officers, it added.

On May 17, the first cabinet meeting chaired by President Francois Hollande decided to cut by 30 percent salaries of France's president and ministers.