Business planning at Commonwealth Bank is predicated on the basis of a worse recession than the already downbeat, consensus forecasts suggest, while the bank expects essentially no growth in credit and declining business volumes.In a briefing for officials of the Finance Sector Union on Friday, Ralph Norris, chief executive of CBA, explained across the board cuts in real wages announced that day on the basis of grim forecasts for the forthcoming financial year.The bank may also be straining to meet its own, and the market's, projections for the profit for the second half of the 2009 financial year, ending in June.The meeting between Norris and the FSU was unusual, with some long-time officials of the union meeting the bank's CEO for the first time on Friday afternoon. Norris (who has held the job of CBA CEO for almost four years) requested the meeting with the union earlier that day in order to explain decisions taken by the board last week and announced to staff on Friday morning.CBA advised staff in Australia that it will increase base pay for staff earning less than $100,000 by 1.5 per cent. The bank has paid staff annual increases of four per cent for the last six years or so.Sales targets will also be cut to reflect the subdued business environment. Achieving these targets is the trigger for the payment of bonuses for many staff (though still only a small percentage of overall income) and may also serve as the basis for dismissal when the target is not met.Staff on more than $100,000 face a pay freeze. Members of the executive committee face a cut of five per cent in their base pay. Norris agreed with the board to cut his own rate of pay by 10 per cent. Directors of the bank will also take a cut in pay.At ASB in New Zealand CBA will increase pay by between two and three per cent for staff earning up to NZ$50,000. The bank will freeze pay levels for staff earning more than NZ$50,000. ASB will also reduce the bonus pool for staff. ASB staff would also be able to volunteer to reduce their work hoursThe Finance Sector Union - with which the bank has declined to negotiate an enterprise-wide agreement for many years - last month proposed a package designed to ensure job security at Commonwealth Bank. One element of the FSU proposal was for a cut in executive pay levels.Norris told the FSU officials that while business volumes, especially in the retail bank, were much higher recently, this was largely due the collapse of non-bank lenders over the last two years and he now expected business volumes to fall.He also repeated key themes of the bulletin to staff on Friday, that business volumes were likely to slow and bad debt expenses likely to increase.The bank has also foreshadowed that it will not seek to shift any work offshore in line with another demand of the union.A corresponding pledge made in late 2008 to maintain