Commonwealth Bank has abandoned negotiations with the Finance Sector Union and will adjust pay rates for most staff by 3.5 per cent.Yesterday, the FSU confirmed the bank had advised that it will lift pay rates without any extension of its enterprise agreement. The bank and the FSU last reached agreement on a one-year extension of their enterprise agreement in October last year, which was then back-dated to the beginning of the financial year.This year, the bank will pay any staff member deemed a "valued contributor" 3.5 per cent more. Those deemed as requiring "development" will receive a rise of 2.0 per cent.Bonus arrangements remain unchanged from prior years. These range from three per cent to nine per cent for line staff (and up to 15 per cent for managers).CBA lifted pay rates for most of its staff last year by four per cent.A statement emailed by Bryan Fitzgerald, the bank's head of communications, said the planned increases reflect "the group's current operating environment, prevailing pay conditions and, given the group's commitment to not off-shore Australian jobs, the need to maintain its competitiveness."The statement said that "the same factors were responsible for lower increases this year for most employees in the CBA Group and a pay freeze for senior executives."The FSU has pointed out, in campaign materials on their website, that this "freeze … is about their [executives'] base remuneration, and base remuneration only makes up a small portion of executive pay. CBA have made no commitments on bonuses."The union asserts (based on disclosures for a handful of very senior executives in the bank's annual report) that "when executives exercised 'wage restraint' in 2010, total remuneration paid to senior executives went up by 46 per cent in 2011."