The recipient of a massive federal bailout, American International Group Inc. (AIG), which has been under fire for alleged profligate pay and executive perks, has frozen pay and scrapped bonuses for seven top executives. As such, the company said that its Chief Executive Officer, Edward Liddy, will get a $1 salary.

A company statement said that the next 50 highest-ranked executives of the New York-based company will forgo pay raises through 2009. Even Paula Rosput Reynolds, the former CEO of Safeco Corp. hired in October to lead AIG's restructuring, will get no salary or bonus this year. Her 2009 compensation besides salary will be tied to company progress.

The proposed move comes in response to New York Attorney General Andrew Cuomo's demand that AIG disclose its compensation plans. Moreover, Liddy, 62, is cutting costs after lawmakers and regulators criticized AIG for bad bets that forced the insurer to take a taxpayer rescue that was increased this month to more than $150 billion.

Cuomo said the insurer took a "positive step", and he has called on other firms to follow. In a statement, he said: "It is only fair that top executives, who benefit the most when firms do well, should also bear the burden of the difficult economic consequences their firms now face."

AIG's move evoked the spirit of the so-called dollar-a-year men who left jobs in the business sector to help manage the federal government during the two world wars. Liddy said the action by the senior management team demonstrates the understanding of their obligation to taxpayers and shareholders, and their commitment to the future success of the organization.