Australia' Commonwealth Bank cuts executive salaries, freezes pay rise

18 April 2009

The Commonwealth Bank of Australia (CBA) has become the first major Australian busiess to cut executive pay packets to safeguard itself from the global financial crisis.

The move has come in for commendation from commentators who have termed the CBA action prudent and said the Norris and CBA were reminding that the best leaders lead by example.

So far, many of Australia's top companies including AMP, Qantas, Virgin Blue have only frozen executive salaries.

The bank's chief executive, Ralph Norris, announced he would take a 10-per cent cut in his A$3.122 million base salary, while an across the board pay freeze takes effect from 1 July.

The change means Norris will take home A$8.35 million instead of A$8.662million including bonus and superannuation. The move comes in the wake of CBA and its rivals refusing to pass on the Australian Reserve Bank's April interest rate cut last week to customers.

The bank's board will cut 10 per cent off its fees with its top 10 executives taking 5 per cent less in wages.