Serious pay at private toll operations
By Peter Samuel
2012-10-05: Chief executives of the typical public sector toll operations in America seem to be paid somewhere in the range $150k to $350k per year. We thought it was hilarious when some newspapers in the Delaware Valley reported the $175k paid to Frank McCartney as CEO of the Delaware River Joint Toll Bridge Authority (DRJTBC) as some kind of scandalous overpayment.
There are unionized toll collectors and maintenance workers who make $100k, but the threshold to trigger lefty reporters' indignation is pretty low.
(Unionized toll collectors' pay is beyond a mere reporter's reach. Then perhaps you get the reporting you pay for!)
But as a free-market inclined reporter I would not be scandalized if they paid the guy responsible for overall operations of a $100 million business like DRJTBC a million a year.
Private sector toll operations pay a heck of a lot more.
The recent annual financial report for Transurban, head-officed in Melbourne Australia shows the CEO Chris Lynch was paid $7.36m last year. $3.09m of this was 'share based benefits' linked by some contractual formula to the company's share price. Some was pensions, other was leave, but his base pay or 'cash salary' as it was described was $2.15m.
And they pay cash!?!
As an aside, we're a bit surprised they paid Lynch cash. Their bank's ATM machine must have been stressed each month dispensing $100 bills, 1,794 of them if our arithmetic's right.
Six other senior execs of Transurban had total incomes including these various benefits over $1 million for the year.
North American chief got $1.89m
North American chief executive of Transurban, Ken Daley who led the 495 Express Lanes Capital Beltway and the 95 Express Lanes projects in northern Virginia was paid a total of $1.89m last year. Daley's 'cash salary' was $704k, by our calculation 586 $100 bills a month.
These are all A$ numbers but $As and US$s are close enough at the present exchange rate we haven't taken the trouble converting them.
Transurban of course is a lot bigger business than DRJTBC. Its toll revenues last year were $846m worldwide and it reported a profit of $59m.
Transurban is similar in toll revenue to that of the larger US public sector tollers such as the New Jersey Turnpike and the Illinois Tollway but a lot smaller than the US two biggest in New York/northern NJ - MTAB&T, PANYNJ.
You have to wonder the American CEOs aren't out there urging privatization!
NOTE: We doubt it's actually salary paid in cash, but it's fun to think of the pile of $100 bills.
Except who can use $100 bills nowadays?
We recently made the mistake of getting a $100 bill from an ATM machine and had to tender it three times before finding someone who'd accept it as legal tender and they looked at us sideways. The local Safeway and the Exxon gas station both said they don't accept $100 bills because the police tell them only drug dealers and prostitutes use $100 bills.
They don't want to be hassled by the cops about who was tendering $100 bills as shown in their cash deposits at the bank, and advise you not to have bills of greater than $20. Cash is supposedly "legal tender" but merchants treat it with great suspicion nowadays.
Normal tender at the supermarket and the gas station is a bank card.
Of course the word cash in English has two quite different meanings. The common meaning of cash is bills or bank notes, or coins. Hence cash toll collection, tolls paid for with bills or coins. But accountancy has a more expansive use of the term. For accountants cash is money, liquidity and is mostly bank accounts. Hence 'cash flow' and 'cash-on-hand' as represented mostly by bank balances that can be used imemdiately for payment.