Congress will soon probe executive compensation at companies such as American International Group Inc and Bank of America Corp receiving significant taxpayer funds, the chairman of the House Oversight and Government Reform panel said on Wednesday.

Treasury's pay czar, Kenneth Feinberg, will testify in two weeks before the committee, the panel's chairman said. Feinberg is in charge of deciding compensation packages for the highest- paid employees at companies that received government assistance.

Those companies also include Citigroup Inc , General Motors Co , Chrysler, Chrysler Financial and GMAC.

What infuriates people is when bosses at bailed out companies ... continue to rake in millions, oversight committee Chairman Edolphus Towns said at a hearing to examine AIG's bonuses. It doesn't seem right that the people who caused this tragedy should be so richly rewarded.

Feinberg is pushing AIG to cut big pay incentives it claims were needed to keep staff, according to a report prepared by the watchdog for the $700 billion Troubled Asset Relief Program.

According to the report, Feinberg informed AIG management that some portion of the total of $198 million should be reduced, but does not specify the amount by which it should be cut.

The report found that the Treasury Department lapsed in its oversight of AIG's compensation practices. That failure was exposed in March when it was revealed that AIG was paying out $165 million in employee bonuses after receiving nearly $180 billion in taxpayer funds.

At the time, Treasury Secretary Timothy Geithner publicly took responsibility for the controversy but lawmakers are still questioning his actions.

He failed to know when he should have known, said Darrell Issa, the top Republican on the oversight panel.

The TARP watchdog said it saw no indication that Geithner had personal knowledge of the bonuses until three days before they were paid, but said this too suggests a failure of communication.

(Reporting by Rachelle Younglai; Editing by Andre Grenon, Bernard Orr)