Just two months before announcing massive cutbacks in future spending to reduce debt, Transurban chief executive Kim Edwards was awarded more than $15 million in bonus and severance pay. The company has announced in its annual report that it paid Mr. Edwards a $5 million “strategic milestone incentive plan bonus”, a “business generation plan incentive” of $3.2 million and a $1 million short-term incentive payment.

In addition to more than $9 million in bonus money, more than $5 million was paid as a termination payment. Such exorbitant payments in the midst of budgetary cuts are sure to spark some Transurban shareholders, whose new CEO, Chris Lynch, has announced that the company would cut distributions for 58c to 22c in the 2008-2009 time period. The company also announced that it will no longer fund distributions with corporate debt. Future payments will be made only from available cash flow from the company’s toll holdings.

Transurban shares fell to $5.36 on news that Transurban held a loss of $27 million on its investment of Melbourne’s ConnectEast motorway, but Mr. Lynch attempted to put a positive spin on the announcement. “Our roads are quite robust in terms of traffic projections,” he said, stressing the group’s strong cash flows. He also highlighted his focus on improving the financial performance of the group’s roads in order to boost future distributions. There is a good growing revenue stream story.” An announcement from Mr. Lynch also stated that Transurban might buy out Macquarie Infrastructure’s share in Sydney’s M7. “It would be a good asset in our portfolio. But the key thing would be at what price,” he said

Learn more at: www.transurban.com.au