The administration also urged new laws to give ordinary shareholders more say on how executive salaries are set.
The pay packets of top executives, which sometimes are equal to several hundred times the pay of average employees, ignited a storm of controversy after the U.S. Treasury rescued banks and other companies from the brink of collapse by pumping in billions in taxpayer dollars.
Many banks have chafed at restrictions on pay that accompanied the capital injections -- restrictions that 10 top U.S. banks will be free of after winning clearance on Tuesday to repay their bailout money.
Feinberg was named special master with authority to review, and potentially reject, compensation packages for executives at firms receiving taxpayer help.
He will review compensation structures for the top 100 salaried employees of firms receiving exceptional assistance, such as Bank of America, Citigroup and insurer AIG.
In addition, Treasury Secretary Timothy Geithner urged Congress to give the Securities and Exchange Commission new powers over executive pay.
Treasury wants Congress to pass legislation to give the SEC authority to oblige companies to give shareholders a non-binding vote on pay packages for top executives. It also wants legal power for the SEC to ensure that internal pay committees, which set pay levels and perks company leaders, are more independent from management.
LINKING PAY TO PERFORMANCE
President Barack Obama has argued that pay structures at financial firms encouraged excessive risk-taking, sowing the seeds of the financial crisis that has driven the United States and many other countries around the globe into recession.
Geithner said the administration's intent was not to set pay caps, but to link compensation more closely to a company's financial performance and to sound long-term direction of companies.
We will continue to work to develop standards that reward innovation and prudent risk-taking, without creating misaligned incentives, Geithner said.
He added that pay rules for firms that getting federal bailout money were coming relatively soon.
SEC Chairwoman Mary Schapiro told reporters that her agency's rules on compensation were very much in flux still but said they would not dictate particular compensation levels for corporate executives.
Geithner had met with Schapiro, Federal Reserve Governor Daniel Tarullo, Feinberg and pay experts at Treasury before speaking briefly to reporters.
The administration's legislative proposals may get a skeptical response from Congress. Representative Barney Frank, the powerful chairman of the House Financial Services Committee, said the proposal to make compensation committees more independent seems like a fruitless task.
Critics have argued that compensation committees often are made up of people from backgrounds similar to those of top executives and that they often rubber-stamp generous pay packets.
In early February, the administration had said it would put a $500,000 per year cap on the salaries of executives at firms in which it pumped in fresh aid from the government's $700 billion rescue fund. Any compensation above that amount was to have been in restricted stock or a similar long-term bonus incentive.
Officials determined that plan was not optimal after Congress passed legislation requiring that bonuses account for no more than one-third of an executive's compensation. If coupled with the administration's planned salary cap, that would have limited annual compensation to $750,000.
(Additional reporting by Tim Ahmann; Editing by Leslie Adler)