Regular Coles critic Solomon Lew says he wants to unseat chairman Rick Allert at the annual meeting next month – and the battle is on.

Yesterday, Lew pointed out a discrepancy in the Coles profit targets.

When Coles was fighting off the barbarians, it told investors at the FY07 results presentation that it was on target for a profit of $1.06 billion for FY08. The Coles annual report issued last week sets the bar for executives considerably lower. This tends to contradict Coles’s own growth guidance.

At the results presentation, which was the centrepiece of the company’s defence against the KKR bid, the $1 billion target was described as realistic rather than stretching. Now we read that incentives for senior management cut in at a net profit of $893 million – an achievement of about 84% of a target previously described as realistic. The board describe the lower target as “difficult” and “provide senior management with a more reasonable degree of incentive potential”.

Call me old-fashioned if you wish, but I think bonuses are for rewarding above par performance.

It makes one wonder whether there are two sets of targets – one for fighting off the bidders and an internal set.

If Coles fails to deliver on its profit target of more than $1 billion, I thought we may seem KKR, or another bidder, back with an offer that makes $15.25 seem very generous. Now it appears that the board no longer thinks $1 billion is a realistic target.

The AGM is starting to look interesting. A challenge to the Chairman, internal contradictions, a sliding share price.

If the price heads toward $12, Coles might consider moving the meeting to the Coliseum.