GM Holden executives, including chairman and managing director Mark Reuss, will take a pay cut as the car maker continues to grapple with the global economic downturn.
Reuss said the outlook for 2009 remained "exceptionally challenging".
The cuts will take effect from 1 May and will include a 10 per cent reduction in pay for all executives and a seven per cent reduction for all senior staff.
Holden said executives would not receive any bonus payments in 2009 while the salaries of other staff, not governed by awards, would be maintained.
The company said the arrangements were necessary and would be reviewed at the end of the year.
"This is a critical time for our company and the automotive industry," Holden spokesman Scott Whiffin said.
"We are grappling with some of the worst market conditions in living memory.
"To survive in this environment we need to make some rapid changes to cut costs and today we've announced a number of decisions concerning executive and senior manager salary arrangements.
"These are short-term arrangements but we are also looking at initiatives to position the company for a viable, sustainable future."
The pay cuts come as Holden heads towards expected job losses after parent company General Motors announced plans in February to reduce its global workforce by 47,000.
Whiffin said the decisions on Holden's structure and operations would be made in the coming weeks however it is understood the company would press ahead with its plans to introduce a second car line at its Adelaide assembly operations to build a new, fuel-efficient, four-cylinder model.
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