Wesfarmers’ chief Richard Goyder fronts shareholders at the annual meeting today, asking for a large grant of shares under a new incentive structure.

Shareholders are being asked to provide a reward which they, themselves, did not enjoy as a result of their managers’ performance.

Apparently the last long-term incentive structure was not adequate. Goyder missed a bonus and now, with Wesfarmers’ return on equity at a fraction of what it was before the acquisition of Coles, the Wesfarmers’ board has gone back to ROE metrics – now off a very low base.

They just don’t get it at Wesfarmers either. Are they not hearing the public ire over indefensible pay schemes?

In the year before the gargantuan $20 billion acquisition of Coles in 2007, Wesfarmers’ ROE was more than 25 per cent. Its return on assets (ROA) was 8.1 per cent, its EPS $1.95 and its dividend $2.25 per share.

Last year in 2011 however the ROE was 7.7 per cent, ROA 4.8 per cent, EPS $1.67 and dividend per share $1.50.

Shareholders have lost value, executives have gained.

Richard Goyder’s fixed pay has risen from $2.475 million to $3.34 million and he has picked up almost $5 million in cash bonuses and $102,560 shares.

And now that ROE has been quartered by the acquisition of Coles, the Wesfarmers’ board has opted to fashion a new set of long term-incentives, worth $6.7 million for their CEO, but priced from the low, post-Coles return on equity metrics.

Let’s not forget that during the financial crisis, this company was afforded special protection under the government’s short-trading ban.

Shareholders, taxpayers, thanks for coming.