Profit and people targets elude Mike Smith

Mike Smith, chief executive of ANZ, exceeded six of 14 performance measures listed in the bank's annual report, published yesterday. Smith "met" four more targets and "met in majority of business" two other categories.

Smith "did not meet" targets in two remaining categories.

The two targets Smith "did not meet" were in relation to underlying economic profit and an increase in prior-year employee engagement.

The six on which Smith "exceeded" target were underlying growth in earnings per share, the bank's tier one capital target, achievement of goals in corporate social responsibility, a reduction in underlying losses, a reduction in the number of internal audit items, and "progress towards longer term strategic goals".

ANZ paid Smith around A$10.9 million in the year to September 2010, half of it in share-based payments, which is about the same as in 2009.

The core cash remuneration for other, longer serving, members of the executive committee listed in the annual report was either marginally more or marginally less than in 2009. This indicates only muted satisfaction by ANZ's board with the results achieved by management. However, share-based payments improved for a couple of executives: Alex Thursby, who oversees the international business, and Chris Page, the chief risk officer.

The annual report is also notable for the expanded section on "principal risks and uncertainties". This stretches over eight pages and is pretty comprehensive.

Meanwhile, at Westpac, its annual report reveals a better board view of management, with 10 out of 13 listed executive receiving pay rises over 2010.

The three who experienced small falls in their total pay were CEO Gail Kelly (down A$1 million to A$9.6 million); Brad Cooper, the head of BT who formerly led the St George integration, and Rob Whitfield, the head of the retail bank.