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December 19 2012, 3:45PM

ANZ investors have backed chief executive Mike Smith's $10 million-plus pay packet, despite some shareholders branding it excessive.

Mr Smith's annual pay grew to $10.1 million in 2012, including $5.2 million in cash and $4.95 million worth of shares, making him Australia's highest paid boss.

Shareholders at the bank's annual general meeting in Perth on Tuesday approved Mr Smith's pay during a vote on ANZ's executive remuneration report and gave the nod to him receiving $3.1 million in long-term performance rights.

His base salary of $3.5 million in the year to September 30 was unchanged from the previous year, but short-term cash incentives rose from $1.9 million, from $1.75 million in the previous year.

The Australian Shareholders' Association voted against ANZ's 2012 remuneration report, with spokesman John Campbell branding Mr Smith's pay packet as "excessive level of remuneration".

He said Mr Smith's pay was over 100 times more than the average ANZ employee's pay packet of $99,000 and noted he would this year make a net gain of $15 million through the vesting of long-term performance rights.

"Overall the remuneration structure is excessive generous," Mr Campbell told the meeting.

Despite the ASA's concerns about Mr Smith's pay, ANZ's remuneration report was provisionally approved by 95 per cent of shareholder votes.

Chairman John Morschel defended Mr Smith's pay packet as "perfectly reasonable", based on a global analysis of companies with a market capitalisation of $70 billion.

"I understand shareholders' concern that it is a lot of money but it's what global banking senior executives are being paid today and the last thing we want to do is risk losing Mr Smith to an overseas competitor," he said.

Mr Smith took home a total of $19 million in fiscal 2011/12 after receiving $13.9 million in long-term share based payments awarded between 2007 and 2010, according to calculations by the Australian Financial Review.

Mr Smith is the highest paid chief executive of the big four banks, followed by Westpac's Gail Kelly who earned $9.7 million in 2012.

Shareholders at the meeting also heard Mr Morschel predict that local and global economic conditions would remain soft in 2013, with political uncertainty adding to concerns.

He said a global economic recovery was proving frustratingly weak and increasingly, political developments and political risk around the globe will be a key feature shaping the 2013 outlook,".

The bank says the key challenge is weakening mining investment as softer commodity prices, high labour costs, policy uncertainty and the high Australian dollar all work against new investment projects.

Mr Smith called on political and business leaders to ensure Australia capitalises on Asia's economic growth.