Fiat already has said it would replace Chrysler's current CEO, Nardelli. Chrysler is a private company, and is therefore not required to publicize any executive's salaries, including that of the CEO.
In February, Nardelli told lawmakers he would be willing to take $1 in compensation if the company received a bailout. Technically, however, Nardelli has been earning $1 annual salary since 1997, leading executive-pay experts to speculate that he is being paid a significantly larger undisclosed salary by Chrysler's majority owner, the private equity firm Cerberus Capital Management.
Fiat is believed to have very few executives currently earning more than $500,000. Fiat CEO Sergio Marchionne's total compensation for 2008 reportedly was around $4 million.
Large salaries for executives at companies that have laid off workers and received government bailouts have become a flashpoint for populist and political rage.
Some 1,000 of Chrysler's 3,189 U.S. dealers likely will lose their franchise agreements, according to AP. Chrysler is targeting dealerships that are underperforming or sell just one of the car's three major lines.
Politicians sympathetic to the Chrysler dealers at risk of closure criticized the automaker for both its plan to oust dealers and skirt the government cap.
Sen. Ben Nelson, D-Neb., told reporters Wednesday he worried that his home state of Nebraska could lose about 2,000 jobs if General Motors and Chrysler move ahead with all their planned dealership closings.
When reached for comment on the pay loophole, Nelson referred ABC News to previous statements he has made on executive compensation.
"No one is angrier about excessive bonuses than I am," Nelson said last month. "No one should ever benefit from squandering taxpayer dollars that keep their company afloat."
Beyond the dealers, laid-off Chrysler workers were equally angry to learn about the partnership's plan to skirt the cap.
Between January 2007 and February 2009, Chrysler has cut some 32,000 positions, or 37 percent of its work force. The company currently is trying to cut its work force by some 3,500 jobs through buyouts.
Jeff Lillie, an autoworker who assembled Jeeps in Toledo, Ohio, for nearly 30 years and was laid off earlier this year, said if there was money to pay executives large salaries, workers should be entitled to some of it too.
"I don't think it's fair," he said. "I don't know how they can justify that."