Special Master Kenneth Feinberg will review proposed executive compensation plans received by the U.S. Treasury Department from seven companies that received exceptional federal assistance under the Troubled Asset Relief Program (TARP) during the past year. Submission triggers a 60-day review period.

The proposed executive compensation plans cover the companies’ five senior executive officers, as well as the 20 highest paid employees at the seven companies. Mr. Feinberg, who was appointed by the administration as the Special Master for TARP Executive Compensation to review such plans, will follow general principles set forth by the Treasury to determine whether the companies have developed pay guidelines to avoid “excessive” risks, maximize shareholder value and protect taxpayer interests.

Treasury Secretary Timothy Geithner, in the meantime, has received a letter from House Speaker Nancy Pelosi and House Financial Services Committee Chair Barney Frank urging him to ensure that “compensation plans” do not disproportionately reward corporate executives at the expense of taxpayers.

It will be interesting to observe how strictly the Special Master applies the Treasury Department guidelines to the plans. His review will no doubt influence other companies that have received TARP funds, and could also become a standard by which the compensation committees of non-TARP companies evaluate executive compensation arrangements.

For more information on the TARP executive compensation guidelines,click here.