NEW YORK (Legal Newsline)-Amid mounting pressure from New York Attorney General Andrew Cuomo, the American International Group has announced it will limit executive pay package, with its chief executive, Edward Liddy, receiving only a $1 a year plus equity grants.

The troubled insurer, which was recently the beneficiary of a federal bailout, also said Tuesday it was freezing the salaries and eliminating bonuses for its seven other top executives. Its next 50 highest-ranked executives would not receive raises through 2009.

For his part, the Democratic attorney general has hammered AIG over its spending on executive compensation and employee perks since the federal government's $150 billion bailout of the company.

In a statement, Liddy said he and other AIG top-brass realize they have an obligation to U.S. taxpayers since the bailout.

"We are extremely grateful for the assistance we have received, and we know we have an obligation to use that assistance to help AIG recover, contribute to the economy and repay taxpayers," he said in a statement.

Cuomo said the move marked a positive step for the company. He urged other companies to follow suit.

"Taxpayers have been slammed with a one-two punch seeing their investments dwindle while simultaneously having to fund the Wall Street bailout with billions of their tax dollars," Cuomo said in a statement. "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."

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.