2022 Corporate Report

Corporate Report for the year ended 30 June 2022

Introduction and overview

Business performance

Governance and risk

Directors’ report

Remuneration report

Financial statements

Sustainability supplement

Security holder information

Remuneration Framework Review

2021 strike Transurban’s security holders signaled concerns with our Remuneration Report, delivering a first strike at the 2021 AGM with 74.26% voting in favour of the FY21 Remuneration Report and 25.74% voting against. In response, the Board gathered and carefully considered feedback over the course of FY22, as a further review of the executive remuneration framework was undertaken. Specifically, this included: • reviewing feedback from security holders and proxy advisors immediately prior to and during the 2021 AGM; and • holding additional meetings with security holders and proxy advisors following the 2021 AGM to seek further feedback and clarification as required. The Board has considered the interests of security holders as well as the need to ensure the Group has appropriate performance-based remuneration which can successfully attract, motivate and retain executive talent required to deliver our business strategy. Prior to the strike, the Board approved a number of changes to the remuneration framework during FY21 to strengthen the alignment of short-term results and long- term value creation with reward outcomes and to address concerns raised by security holders. Stakeholder feedback in FY22 was generally supportive of our current remuneration framework and changes are outlined on page 101. The following table summarises the concerns raised at our 2021 AGM, and our responses to those concerns.


Board response

Appropriateness of FY21 executive short-term incentive outcomes (including CEO) given status of WGTP

FY21 was a strong year for Transurban with a number of major achievements, including the addition of three assets, sale of 50% of Transurban’s interest in Transurban Chesapeake and overall strong management of the balance sheet in the COVID-19 environment. The Board determined that bonuses in the range of 93% to 117% of target were appropriate for Executive KMP in FY21. The Board had regard to the WGTP dispute but considered it appropriate to wait until the dispute was formally resolved before making material adjustments to Executive STI outcomes. The Board acknowledges that the view of some security holders was they would have preferred for this to have been incorporated into the FY21 STI outcomes rather than FY22. Following the WGTP dispute settlement announcement in December 2021, the Board considered the impact of the settlement conditions and determined the appropriate impact to FY22 STI outcomes for Executive KMP, as outlined on page 106. Transurban began transitioning to a four-year LTI performance period with the FY22 LTI grant and will fully implement a four-year LTI performance period with the FY23 LTI grant. There was also consistent support from security holders and proxy advisors for the reintroduction of a FCF measure to the LTI Plan in addition to the relative TSR measure. FCF and TSR measures will apply to LTI grants from FY23.

Positive feedback for extension of LTI performance period to 4 years

Impact of strike on CEO succession planning Whether any of the five proxy advisors in the Australian market recommended against the Remuneration Report or the LTI grant to the CEO, and if so, what concerns were raised and whether these concerns were shared by any of Transurban’s major security holders in the form of a material protest vote.

The strike does not impact CEO succession planning.

Three proxy advisors recommended against the adoption of the FY21 Remuneration Report. Their main concern, which was shared by some of Transurban’s major security holders, was that the FY21 STI outcomes were considered too high given the COVID-19 environment and the status of the WGTP dispute. As explained above, the Board has factored the WGTP settlement into the FY22 STI outcomes for Executive KMP. One proxy advisor raised concerns about the use of discounted face value (to account for non-payment of distributions) for LTI allocations which Transurban will discontinue for FY24 LTI grants. None of the proxy advisors recommended against the CEO LTI grant and were generally supportive of many aspects of Transurban’s remuneration approach and outcomes. The protest vote received on the FY21 Remuneration Report (25.74%) was the highest protest vote in relation to any remuneration resolution at Transurban over the last 10 years, with the majority of remuneration resolutions over that time receiving support above 90%.

Where does this protest rank when compared with other Transurban remuneration protest votes over the years?


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