My contractor wants to place my steamhead wright under my controls for my shower. This location makes my shower look great but is it going to cause the shower controls to get to hot?

This is a common installation location as this is the plumbing wall.  Distance of the steam head from any area you may come in contact with while the steam shower is is important.  You don't want the steam head too close to anything you may touch while steam is coming out.

I would suggest calling a steam bath specialist
http://www.steamsaunabath.com/catalog/project_coordinator.php
with the details of your installation (height of steam head, height of shower controls, material of shower controls, etc.) for specific recommendations.