Potential storms at Westpac as investors urged to vote 'no' on pay

Westpac's management may clash with its shareholders, who are reportedly being urged to vote against the bank's remuneration report by leading governance advisory firm, Ownership Matters, which has said that the bank's management was only able to meet targets due to a write-off of software spending, which was not included in the bank's cash earnings report. The bank has since altered its accounting methods on capitalised software.

Westpac shareholders are being urged to vote against its remuneration report by a leading governance advisory firm, which says top executives were able to hit key performance hurdles because of the way the bank wrote off software spending.

Ahead of the lenders' annual general meeting next month, Ownership Matters has recommended that investors vote against a remuneration report, which said former chief executive Gail Kelly received $11.8 million in her final year at the bank.

Gail Kelly was the biggest beneficiary of the earnings per share hurdles being met, Ownership Matters said. Credit: Nic Walker

In a note to investors, Ownership Matters said Westpac management received a benefit in the 2015 financial year because a software write-off was excluded from cash earnings, the key measure of profits.

"Management in FY15 received the benefit of having a $354 million write-off of capitalised software expenditure excluded from cash earnings, the primary earnings measure used to assess management," the report said.