Industry leaders applaud the legacy of Scott Charlton, who’s stepping down from Transurban

The tributes have come quickly for infrastructure titan Scott Charlton, who has announced his resignation from Transurban.

Transurban chief executive Scott Charlton has announced his imminent departure. Picture: Valeriu Campan

He’s the man who “out Macquarie Banked Macquarie Bank”, creating the dominant toll road company in Australia and making himself an extremely wealthy man in the process.

Now Scott Charlton, who started his career as an engineer designing laser guidance systems for missiles in the US, has announced his departure from Transurban after 11 years in the role.

“It’s sad that his reign was going to have to finish,” says Transurban chairman Craig Drummond, who also sits on the board of Transurban shareholder Australian Foundation Investment Company.

“I don’t think there is a stakeholder out there that doesn’t think he has done an outstanding job.”

It’s no mean feat given the political and financial challenges that come with building billions of dollars of toll roads and tunnels.

Former NSW premier Mike Baird says Charlton is a person who “finds opportunities when others haven’t” and is a capable leader who delivers outcomes.

He points to NorthConnex, a 9km tunnel linking the M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at West Pennant Hills in Sydney’s north.

The road had been low down on the 10-year horizon for the NSW state government when Transurban came in with an unsolicited pitch.

“NorthConnex came out of left field,” says Baird, who cites Charlton’s “ability to join the dots, be innovative, and present a compelling story”. And can he deliver on that story? “Yes,” says Baird with a laugh. “There is currently a NorthConnex.”

Transurban’s other assets include the Cross City Tunnel, the Eastern Distributor, Hills M2, and WestConnex in Sydney.

Transurban chair Craig Drummond is also the president of the Geelong Football Club. Picture: Peter Ristevski

In Melbourne there’s CityLink, it’s first project, and the West Gate Tunnel Project – which has suffered setbacks, while in Brisbane its assets include AirportlinkM7, and Gateway Motorway. The company also has assets in North America and Canada.

Money talks, of course and it’s worth noting that Transurban ­donates freely to political parties and provides billions of dollars in shareholder distributions.

Nevertheless, all the people spoken to for this article who worked with Charlton universally describe him as a charmer, respected for his intellect, and a great team player. His departure leaves the market wondering what comes next.

“Who else can get everyone drinking out of the same trough like he does?” asks Dieter Adamsas, who hired Charlton out of Deutsche Bank into Leighton Holdings. Charlton was the heir apparent at Leighton for a period before some investments turned south.

“His is quite a remarkable journey,” adds Adamsas.

At Transurban, he took the company from six assets and a million customers to 22 assets and 10 million customers by the time of his announced resignation. The company’s share price has risen 146 per cent and it has paid out $10bn in distributions and raised $15.6bn in equity.

UniSuper chief investment officer John Pearce says Charlton’s “shoes will be hard to fill”. Transurban is UniSuper’s largest single investment.

“Scott deserves a lot of the credit for the confidence we have in the company,” says Pearce, who describes him as a “natural leader” who has a “unique set of skills and experience”.

“While we are obviously disappointed that he is leaving, his successor will be taking the helm of a company in great shape,” says Pearce.

Veteran fund manager Geoff Wilson from Wilson Asset Management calls Charlton a “great CEO” who made the most of record low interest rates to borrow money and build what is close to a toll road monopoly.

Wilson Asset Management founder Geoff Wilson. Picture: Jane Dempster

“He made the most of a decade of cheap capital to build Transurban into the cash machine that it is today,” says Wilson. Importantly, Charlton is “equally comfortable with politicians and investors”.

The Texas-born chief executive is yet to say what he will do next. Given his career spans building laser guidance systems for missiles, to investment banking, chief financial officer of Leighton and now CEO of Transurban, it’s a good guess he will remain in the pointy end of finance.

“It’s quite a remarkable journey,” says Adamsas, who sits on the board of Infrastructure NSW and private company Built Holdings. “He is highly intelligent and articulate and you can’t help but be impressed with the guy. It was always in him to build the dominant toll road operator in Australia and he will definitely have a plan for what comes next.”

Transurban has appointed headhunter Russell Reynolds Associates to look for his replacement, although Charlton and Drummond have been keen to point out the strong internal candidates.

Andrew Head, who runs WestConnex, is one potential candidate flagged in the press, and CFO Michelle Jablko, who previously held that role at ANZ, is also a likely candidate.

Still, the incoming CEO will have challenges. The company comes under the spotlight for its neat financial structuring that allows it to pay billions in distributions but very limited tax. And customers aren’t always in love with Transurban. Hefty tolls can be particularly tough on lower-income drivers struggling with the surging cost of living.