PHOENIX (Reuters) - Many Americans applauded President Barack Obama’s move Wednesday to rein in pay at companies getting taxpayer aid but some felt uncomfortable about the government wading into the private sector.

“Thank you Mr. President. It is definitely time,” said flight attendant Dawn Berry of Obama’s plans to cap pay at $500,000 for executives of struggling Wall Street firms receiving bailout funds.

Berry, standing outside a coffee shop in Scottsdale, Arizona, said Obama’s move might send a message to other senior executives: “Don’t go around living high on the hog when you have employees who are wondering each day if they come in to work if it’s going to be their last day.”

Obama, who chided Wall Street chiefs for accepting billions of dollars in bonuses last year while the economy staggered toward collapse, had promised compensation reform as part of a package of stricter regulations on the financial industry.

Obama said the measures were needed to restore trust in the financial system and make certain that “taxpayer funds are not subsidizing excessive compensation packages on Wall Street.”

Chicago realtor Cathy Ivcich agreed.

“If you come begging for money and you’re broke, you don’t get a prize,” she said, questioning whether executives deserved even $500,000 “after playing loose and free with the company’s money.”

The move also requires firms getting exceptional government funds to limit additional compensation to stock that cannot be cashed in until the bailout money is paid back with interest.

“I think it’s great,” said Kevin Jarrott, a small business owner in Atlanta. “You get rewarded with bonuses for good business. If you are not meeting your objectives, you should not be rewarded.”

GOING TOO FAR?

The move to limit executive pay drew fire from some on Wall Street, who said it could prompt talented executives to flee companies that fall under the guidelines.

Despite the tarnished image of Wall Street and other firms involved in the financial crisis, the ideal of a free market and small government remains strong in the United States.

Jeff Schnedl, 42, a real estate agent in Cincinnati, was uncomfortable about the federal government playing a greater role in private sector decision-making and pay.

“I don’t like it,” he said.

“Someone who is going to rebuild a company and make them more money -- that is the way that business runs. You can’t put a cap on that. It’s hard for someone outside an industry to come in and put a cap on bonuses or commissions.”

For Kevin Washington, 41, a clothing store worker in San Francisco, the measure was meddling in corporate affairs.

“A company has a right to pay what they want to pay. Some of these CEOs do a damn good job and they deserve to get appreciation shown,” he said. “If you do a great job, you deserve to be rewarded for it.”

Outside a Phoenix area coffee shop, social worker Neill Keller said he felt uneasy about the government intervening to impose pay limits on “private corporations.”

“For me it’s more of a philosophical problem,” he said. “We want government out of our lives but it seems like we are going the opposite direction.”