Feinberg's measures

Feinberg's measures are designed to reward long-term success of executives who build firms rather than seek get-rich-quick profits, and turn existing cash guarantees held by executives into long-term stocks.

Minimizing the threat of systemic risk was also a prime goal of the Fed's new compensation guidelines.

"The Federal Reserve is working to ensure that compensation packages appropriately tie rewards to longer-term performance and do not create undue risk for the firm or the financial system," said Fed chairman Ben Bernanke.

The proposed rules stop short of specific pay caps or dollar targets for bonuses or commissions, but the Fed could intervene to compel compliance by 28 "large, complex banking organizations."

Obama appointed Feinberg to the new post of "special master" in June, with powers to reject "excessive or inappropriate" salary plans from firms getting taxpayer help.

The corporate pay czar said he hoped his actions would set an example to other companies that have not had to resort to taxpayer generosity to survive.

"I would hope, voluntarily, that corporate America would take a look at the structure that we have developed here, involving less cash for salaries, more long-term stock tied to company performance," he told CNN.

But he stressed that he did not seek to expand the limits beyond the seven firms.

"It's not a good idea for the United States government to start micro-managing compensation practices at American businesses," he said.

"But that's not this case. These are... seven specific companies that are, in effect, owned by the taxpayers of the United States."

Critics have complained at government interference in the free market and warned that the pay cuts may see already struggling firms lose top executive talent to competitors not subject to pay curbs.

Feinberg brushed aside those fears, saying he thought the "right balance" had been struck with the new salary limits.

General Motors, which like Chrysler has benefited from tens of billions of dollars in emergency government loans in a bankruptcy proceeding, said it would accept the new measures.

"Following a collaborative and constructive review of GM's executive compensation, GM is adopting the changes to its executive compensation as outlined by the special master," the company said in a statement.

Feinberg also sought to curtail some corporate perks offered to executives, capping them at $25 000.