Jay Walder: Escape from New York

For two years, Jay Walder was literally and figuratively the center of attention at the MTA. (Photo by Benjamin Kabak)

When Jay Walder made his return to New York, everyone wanted to talk about money. The State Senate, in a fit of legislative revenge, had just ousted Lee Sander and Dale Hemmerdinger as the heads of the MTA, and then-Gov. David Paterson wanted to ensure that his guy stuck around. So Walder and Paterson negotiated a Golden Parachute provision that would have given Walder a nice severance package had New York legislators decided to again remove the MTA head before his term expired.

As the confirmation hearings dragged on, everyone had a say about Walder’s compensation. He would be overseeing an organization that spans 12 counties and hundreds of millions and employs tens of thousands of workers. Still, the $350,000 he would earn annually as well as a housing subsidy drew raised eyebrows, and even billionaire Mayor Bloomberg spoke out against it. In the end though, it was all for naught.

Yesterday afternoon, Walder announced his resignation, effective Oct. 21, 2011, and all of a sudden, the Golden Parachute disappeared. Walder is leaving on his own accord, and the money — a pittance compared to his future earnings — doesn’t matter. While I don’t know the finer points of the decisions Walder had to make, I do know that his salary will enjoy a nice bump in Hong Kong, and as I’ve thought more about his departure, I realized it all boils down to a few key themes.

To me, Walder was an effective leader willing to take hard steps to cut staffing levels and reorganize the MTA. He wasn’t perfect, and he has his critics both in and outside the authority. I believe he’s going to be very, very tough to replace both in his willingness to make those hard decisions and in his knowledge of and love of New York City and its transit system. That said, it’s worth analyzing a few of the driving forces behind his departure.

Money, Money, Money

As the MTA had to come to grips with its own finances, Walder’s money often took center stage. The TWU constantly protested against his salary while its members were let go. They protested with post cards; they stood in front of his house. It was one barrage after another, and he wasn’t, in the grand scheme of things, making all that much. A CEO of a private company the size of the MTA would make significantly more than $350,000 a year, and that’s exactly what’s happening.

As Bloomberg News reported tonight, Walder is going to make $924,000 with “an undisclosed discretionary bonus and interest in shares.” If the United States’ great infrastructure minds can be lured to Asia by the promise of significantly more money, how will America’s cash-strapped transit agencies attract top talent and leadership? New York can’t pay the MTA head $1 million a year for reasons of politics and economics, but Hong Kong’s MTR, of which 76 percent is owned by the government, can.

Investing in Infrastructure or Shunning It

As the fallout from Walder’s departure lands, one sentiment runs through it all: Walder’s job in Hong Kong will be much better than his job in New York. Kathryn Wylde of the Partnership for New York summed it up perfectly for Transportation Nation. “He told me he regrets he has to choose between the job he loves here, and a much better job,” she said.

So outside of the salary, what makes the job in Asia so much better? For one, MTR is a leader in transit expansion. It is currently working on a line that will connect Hong Kong to China’s high-speed rail network while the U.S. is currently canceling commuter rail tunnels and running into obstructionist road blocks when it comes to high-speed rail. While environmental and labor standards are deep concerns in China, a significant number of projects are ongoing. New York’s two subway expansion projects seem positively wimpy in comparison, and even now, the state is hesitant about investing $10 billion into a capital project that would, by and large, maintain our current decrepit system.

So with MTR, Walder doesn’t have to read about his own money in the press, and he doesn’t have to deal with a broken down state apparatus. Who wouldn’t take that deal? It could very well signal the start of a brain drain to Asia, and that’s a problem politicians must address.

A Resistant and Rambunctious Albany

Finally, Walder’s relationship with the state could be another factor. In an interview with The Times, former Assemblyman Richard Brodsky — who is already using Micah Kellner to promote his own MTA candidacy — said Walder may have grown tired of the politicking. “I don’t think Jay has ever been comfortable in a highly political environment,” he said, “and with the budget scarcity that’s coming down the road, it’s likely to get more so.”

Basically, Walder — and the next MTA head and the next one after that — has to go to Albany and sit there while politicians who never ride the subways and often are from areas of the state a good six hours away from New York City, berate him for what they perceive as the shortcomings of the MTA. They don’t offer solutions, funding or help; they just sit there and yell. It’s tiring for me writing a blog to listen to Albany respond to it all, but when the guy they entrusted to lead gets it every day, I’m sure greener pastures of a cooperative government sound great.

* * *

By the time Second Ave. Sagas turns five in November, the MTA will have had at least four different leaders — and perhaps five or six if you count Helena Williams’ stint as interim MTA CEO and the eventual interim will-in for Walder. That turnover at the top isn’t good for an organizational strategy, bureaucratic efficiency or an overall growth strategy, and the reasons for that turnover aren’t going away any time soon. I certainly don’t envy the person who will be chosen to replace Jay Walder.