(Adds Feinberg comments on AIG, details)

* Obama pay czar "concerned" about retaining talent

* AIG CEO had expressed concerns over cuts, Feinberg says

* Says bailout repayments to measure compensation success

By David Lawder

WASHINGTON, Nov 12 (Reuters) - The Obama administration's pay czar said on Thursday he is concerned that pay cuts he ordered at bailed out companies could hamper their ability to retain talent and would consider offers to hire new executives at competitive industry rates.

Kenneth Feinberg, the U.S. Treasury's special master for executive pay at the seven firms that have received taxpayer bailouts, defended his pay restrictions as striking an appropriate balance between reining in excessive pay and allowing companies to thrive and repay the government.

"I'm always concerned that the companies thrive and they keep the personnel they need to stay in business. That's a major concern," Feinberg said at a forum sponsored by Bloomberg. "I took that into account in 2009 and I'll look at that again in 2010."

Feinberg last month ordered an average 50 percent cut in pay and bonuses for the top 25 earners at the seven bailed-out firms: General Motors [GM.UL], Chrysler Group, GMAC Financial Services, Chrysler Financial, American International Group (AIG.N: Quote, Profile, Research) , Bank of America (BAC.N: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research).