Seven firms face Aug. 13 U.S. deadline on pay plans
* Seven firms must submit pay plans to Treasury by Aug 13
* Pay packages cover top 100 employees per company
* White House: Trader's $100 mln pay seems "out of whack"
WASHINGTON, July 27 (Reuters) - Seven financial and automotive companies that have received "exceptional" government aid face an Aug. 13 deadline to submit compensation plans to the U.S. Treasury Department's executive pay czar, people familiar with the process said on Monday.
Kenneth Feinberg, who has authority over the top 100 employees' pay, has been consulting with the seven companies, which include Citigroup Inc (C.N), American International Group Inc (AIG.N), Bank of America Corp (BAC.N), Chrysler Financial, Chrysler LLC, General Motors Co [GM.UL] and GMAC Inc, a Treasury spokesman said.
Feinberg, a lawyer, cannot force companies to break contractual obligations not covered by the statute that governs the pay restrictions, but has "broad authority" to ensure that pay is appropriate, Treasury spokesman Andrew Williams said.
"Companies will need to convince Mr. Feinberg that they have struck the right balance to discourage excessive risk taking and reward performance," Williams said. "That process is just beginning now."
He added that the process is designed to help companies "strike the right balance around their need to retain talent, reward performance and protect the taxpayers' investment."
Pay that may seem excessive drew the attention of the White House after The Wall Street Journal on Saturday said Andrew Hall, who heads Citigroup's energy trading unit Phibro LLC, is pressing the bank to honor a contractual obligation to pay him a potential $100 million in 2009.
Citigroup has taken $45 billion of federal bailout money and is expected this week to give the government a 34 percent equity stake. Keeping Phibro and its top performers, even at a high price, could bolster Citigroup's finances, making it perhaps easier for the bank to repay the government sooner.
Asked about Hall's possible pay package, White House spokesman Robert Gibbs said "one could easily come to the conclusion that that's probably a bit out of whack on any pay scale."
A Citigroup spokeswoman, Danielle Romero-Apsilos, declined to comment on Hall's compensation.
But she added: "Retaining and attracting the best talent is very important to the success of Citi and all its stakeholders. Citi continues to examine ways to ensure its employee compensation practices are competitive in this very challenging market environment."
Some of Citi's chief competitors, such as Goldman Sachs (GS.N), Morgan Stanley (MS.N) and JPMorgan Chase & Co (JPM.N) will be able to offer higher bonuses to top executives because they have repaid government capital and are free from pay restrictions.
A GM representative said the automaker, which emerged from bankruptcy protection earlier this month, would meet the Aug. 13 deadline to report its executive pay plan.
GMAC spokeswoman Gina Proia also said the finance company was working with Treasury on compensation. "Attracting and retaining key talent is critical toward continuing our efforts to transform the company and restore profitability," she said.
Feinberg has already had some influence on executive pay. AIG, the insurer reeling from public fury over its payment of $165 million in bonuses to some executives in March, did not make bonus payments of $2.4 million due on July 15, a senior Treasury official said last week. (Reporting by David Lawder in Washington, Jonathan Stempel in New York; Soo-Young Kim in Detroit; editing by Leslie Gevirtz)
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