Norris cuts salary to $4m

Ralph Norris, the New Zealander who is chief executive of Commonwealth Bank of Australia (CBA), will take a 10 per cent cut to his base salary of A$3.12 million ($3.98 million) from July 1.

This is part of a programme of base salary cuts among senior managers and directors at the CBA aimed at staving off redundancies.

CBA's New Zealand subsidiary ASB also yesterday announced a pay cut for executives and pay freeze for many other staff.

The cuts to senior remuneration at CBA came as the bank agreed to a 1.5 per cent pay rise for most other staff.

In an internal communication, Norris told staff the bank's board of directors will have their fees cut by 10 per cent in the coming financial year.

CBA said its 10-strong executive committee will take a 5 per cent cut to their base salaries, which range between A$800,000-A$1 million.

"Although we are one of the strongest banks globally, we are likely to experience slowing business volumes and higher bad debt expenses, which will impact upon our profitability," Norris said.

"Typically, in such situations, organisations embark upon major redundancy programmes which, while addressing pressures in the short term, often leave organisations significantly under-resourced to respond to the inevitable recovery.

"To this end, in order to preserve jobs as best we can, and tailor our costs to a weaker economy, the board, which froze its directors' fees for the current financial year, has now decided to cut its directors' fees by 10 per cent for the coming year."

Middle management roles, which pay more than A$100,000 per year, will be subject to a 12-month freeze on salaries and short-term incentives, CBA spokesman Brian Fitzgerald said.

Staff earning under A$100,000 a year - about 70 per cent of the bank's total 40,000 permanent positions - would receive a 1.5 per cent pay rise from July 1, Fitzgerald said.

The bank decided on this remuneration threshold because of the Government's decision to pay a bonus to taxpayers earning less than A$100,000 as part of its A$42 billion stimulus package, he said.

CBA has also given a commitment to avoid moving any jobs overseas for the next three years and to retaining its call centres and operations processing centres in Australia for the next three years.

- AAP