AIG’s Liddy accepts $1 pay package

AIG boss Edward Liddy will receive a token $1 salary this year and next.

The troubled insurer has also frozen the pay of its top seven bosses and ruled out pay rises for another 50 executives.

The freeze comes as AIG faces pressure to slash costs following its $150bn (£98bn) bail-out by the US Treasury.

Liddy said: “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.

“This action by senior management demonstrates not only that we understand our obligation to taxpayers and shareholders, but also that we are committed to the success of this organisation.”

Liddy, who joined during the September bail-out, could be in line for a special bonus in 2010.

AIG said it had taken tough action to ensure no taxpayers’ money was spent on rewarding directors.

The New York-based insurer, which got into trouble after racking up huge debts on credit default swap contracts for mortgage-backed securities, is under huge pressure to sell its assets.

But it has stressed it would not sell its general insurance business, including AIG UK.

However, Munich Re, the world’s biggest reinsurer, has said it is interested in AIG’s Asian life arm.