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

How variable remuneration is structured

Short Term Incentive (STI)—how does it work?


Eligible permanent employees, including the CEO and other Executive KMP, participate in the annual STI plan, which puts a proportion of remuneration ‘at risk’ subject to meeting specific pre-determined Group and individual performance measures linked to Group objectives.

Performance period

The performance period is the financial year preceding the payment date.


For ‘at-target’ performance, the CEO has the opportunity to receive an STI payment of 100% of TEC and all other Executive KMP have the opportunity to receive 67% of TEC. The minimum STI outcome is 0% (if targets are not met) and the maximum is capped at 150% of the ‘at-target’ STI opportunity, which is only awarded for exceptional performance. STI awards for the CEO and other Executive KMP are delivered 50% in cash and 50% is deferred into Transurban stapled securities for two years following the performance year. The deferred securities are subject to service conditions (refer to Cessation of Employment section below) and participate in dividends and/or distributions paid during the deferral period. The number of deferred securities allocated is determined by dividing the amount to be deferred by a 10-day Volume Weighted Average Price (VWAP) of Transurban securities over the 10 business days immediately preceding the STI deferred plan offer. The Board determines the total STI pool to be distributed. The total pool will not exceed 125% of the aggregate STI target opportunity for all participants. The pool is allocated to individuals based on individual and Group performance in accordance with the following formula: (Individual STI outcome % x Group outcome %). This approach is designed such that higher performing employees receive a greater portion of the Group STI outcome than those who do not perform as well and aligns individual performance with overall Group performance. Individual measures (KPIs) are unique to the individual’s area of accountability. Individuals have a clear line of sight to KPIs and are able to directly affect outcomes through their own actions. These measures are aligned to security holder returns and value creation. Group measures comprise the following three components: • Proportional EBITDA* (40%): is one of the primary measures the Board uses to assess the operating performance of the Group. It reflects the contribution from individual assets to the Group’s operating performance and focuses on elements of the result that management can influence to drive improvements in short term earnings. This measure provides a better reflection of the performance of the Group’s assets than statutory EBITDA. • Proportional Net Costs** (40%): reflects management’s ability to influence the expenditure of the business. Strong cost management throughout the business drives an increase in proportional EBITDA and FCF and ultimately security holder value. • HSE (20%): measures focus on improving the Group’s HSE culture and reducing workplace injuries for employees and contractors, as well as customer safety. The HSE measure is a combination of two lead indicators and four lag indicators. The ‘Lead’ HSE KPI (Leadership) focuses on enhancing HSE culture, behaviours and accountability at Transurban. Employees are assessed against a five-scale rating according to their HSE KPI and this result is then aggregated across the Group and averaged to provide a Group score. The ‘Lag’ KPIs focus on recordable incidents, planning and tracking, including injury rates, crash rates and road safety action planning. In assessing the performance of the Group, the Board also references additional non-financial measures in determining the final Group STI pool. Definitions * Proportional EBITDA is the aggregation of EBITDA from each asset multiplied by the Group’s percentage ownership, as well as any contribution from Group functions. Proportional EBITDA figures used to assess performance are included in note B4 of the audited financial statements. ** Proportional Net Costs is the aggregation of total costs less fee and other revenues from each asset multiplied by the Group’s percentage ownership, as well as any contribution from Group functions. From FY23, the STI performance measures will be replaced with a Group Performance Scorecard which include KPIs in the following categories: • Financials • HSE • Customer and Delivery • Sustainability, Reputation and Leadership

Payment and deferral

Annual pool

Performance measures


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