ASB Bank is freezing pay for all New Zealand staff earning more than $50,000 to save jobs and maintain its financial strength.
The Australian-owned bank confirmed last week it does not intend to move any of its operations or roles offshore.
Staff earning under $50,000 may receive pay increases of up to 3%. Workers can also opt to reduce their hours, either by whole days or hours.
Chief executive Charles Pink told staff on Friday that he and his executive team will also voluntarily take a salary reduction from 1 July, and that the pool of money for bonuses scheduled to be paid in August will be reduced.
He declined to comment on the size of the executive team's salary and bonus drop, saying the significance was in the precedent the bank is setting.
Mr Pink says the bank is trying to act responsibly to protect jobs, and redundancies are a last resort.
Move applauded, but pay freeze 'too low'
The union for finance workers is applauding the bank's move to avoid redundancies but says it has set pay freezes too low.
Finsec campaigns director Andrew Campbell says the proposal is heartening but the union has concerns.
"We support, certainly, people in very senior roles and very high incomes having some form of freeze or reduction. What we don't necessarily support is wage freezes for people at lower levels," he says.
"But I think the overall package, which is about saying how can we keep people in work, is positive."
Mr Campbell says banking executives often receive seven-figure salaries and can afford to take significant cuts. The union believes the pay freeze threshold should be higher than $50,000.
Mr Campbell says it is disgraceful that other banks are not following ASB's lead, instead choosing to move their operations overseas or make staff redundant.