Home MTA Politics Rabbitt to Cuomo: Lower the MTA CEO’s salary

Rabbitt to Cuomo: Lower the MTA CEO’s salary

by Benjamin Kabak

Assembly representative Annie Rabbitt believes lowering the MTA CEO's salary would help job retention.

When Jay Walder came to New York, he did so from the lucrative consulting firm McKinsey after working for Transport For London. Based on somewhat recent figures, TFL executives make upwards of $800,000, and top-flight McKinsey consultants make even. When he accepted the job in New York, then, Walder, a leader everyone would agree has impeccable credentials, had to take a paycut to re-enter the public sector in the United States.

His high-profile departure, then, two weeks ago came after years of hand-wringing over his $350,000 annual salary with the MTA. High by most standards, that figure is a small portion of what he will make when he starts his job with Hong Kong’s MTR, and New York’s inability to offer salary competitive with international public transportation agencies or the private sector will likely hinder its ability to find top talent in the future.

For months, the TWU and New York politicians took aim at Walder’s salary. He was, after all, making more than Gov. Andrew Cuomo and only $50,000 less than the President. He was also in charge of a sprawling organization that has over 68,000 employees and operates trains, buses and bridges 24 hours a day, 7 days a week, 365 days a year. Balancing the salary needed to lure qualified hirings against the economic realities of the organization and public perception of high-paid workers has become a tall task.

Still, Albany isn’t helping. Annie Rabbitt, an Assembly Republican from Greenwood Lake in Orange County, has penned an open letter to Gov. Cuomo urging him to lower the salary of the next MTA CEO and Chairman, because clearly that will help attract the kind of people we need to see the MTA through its dark economic hours. She writes:

While I am confident that you are giving careful consideration to candidates – with special consideration to their ability to stand up to the corruption that has long-plagued the MTA – before announcing your appointment, I would like to respectfully suggest that the salary of the MTA chair and chief fiscal officer be reduced to no more than your own current salary.

As you stated during your executive budget presentation in February, in reference to the salary of school superintendents, managing their budgets is certainly difficult but cannot be more difficult than being the governor of New York state.

Furthermore, given the MTA’s request this week to incur another $6.9 billion in debt, I am sure you will agree that restoring fiscal balance to this agency must be a top priority and anything we can do, including limiting the $350,000 per year MTA chair salary, will help send a message throughout the agency that a new day has come – a day that I hope will bring fiscal solvency to the MTA, help restore and expand services, reduce fares, and most importantly, repeal the job-killing payroll tax once and for all.

As we continue working together to reform New York State and restore our economic prospects, I believe this small, but meaningful step will help bring some much-needed reforms to the MTA. I look forward to your response and continuing our efforts to better the lives of New Yorkers, particularly those in Orange and Rockland counties.

Rabbitt’s “small but meaningful step” will bring the wrong kind of reform to the MTA. Instead of sending a message of fiscal responsibility, it will broadcast to the world that qualified candidates need not apply because New York politicians clearly won’t respect your job or reward you for the work that needs to be done. It’s reverse psychology at its worst.

The ultimate issue isn’t whether or not its tougher to run the MTA than it is to run New York State. It’s probably tougher to run New York State than it is to run Hewlett Packard, but no one says its CEO shouldn’t get his $1.2 million. It’s going to cost something to reform the MTA. It’s going to cost something to get top minds in top positions. Until Albany comes to terms with that, we’ll be left with unqualified, independently wealthy political cronies and campaign supporters who haven’t ridden a train in years. That isn’t real reform.

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Bolwerk August 5, 2011 - 12:21 pm

Again, someone in government punts. No changes in work rules, no new sources of funding, no payroll reductions, no contractor reform, no pushing for accountability, no grasp of the problems.

Andrew D. Smith August 5, 2011 - 12:44 pm

This seems to ignore the law of supply and demand.

We need not pay the governor a high salary because the job carries a prestige (and a certainty of future wealth) that would make many people fight for it, even if the salary were zero.

Being head of the MTA is a truly thankless task. Anyone who does it properly will have almost zero chance of any other political work and no easy way to prosper after leaving office. The only incentive for them might be the possibility of landing a more lucrative gig elsewhere should they succeed, a big if, particularly given an MTA structure that sets them up for failure.

Spencer K August 5, 2011 - 2:18 pm

Free markets should be the deciding factor for everything! That is unless those policies look bad in the face of a Republican politician’s constituents, in which case, this is completely ripping off the state!

Melanie August 5, 2011 - 12:48 pm

Small point, but Greenwood Lake is in Orange County, New York. Passaic County is nearby in New Jersey.

SEAN August 5, 2011 - 2:55 pm

Correct, but Greenwood Lake is split between NY & NJ making distinctions difficult.

John August 5, 2011 - 12:53 pm

“It’s probably tougher to run New York State than it is to run Hewlett Packard, but no one says its CEO shouldn’t get his $1.2 million.”

I’ll say it – the HP CEO shouldn’t get his $1.2 million. Some CEO’s are ridiculously overcompensated. But it’s the private sector and I respect their right to pay them whatever they want.

Benjamin Kabak August 5, 2011 - 12:55 pm

Some CEOs are ridiculously compensated, but I don’t think HP’s is. We’re talking about a global company with over 320,000 employees that sees over $125 billion in annual revenue.

BrooklynBus August 5, 2011 - 3:37 pm

A company that also has not been doing well the past few years. There needs to be a greater tie between performance and salary and that applies across the board.

Adirondacker12800 August 5, 2011 - 6:14 pm

It’s not like the CEO has to sign all the paychecks. Other world class companies, ones outside of the Anglosphere, manage to attract and retain world class executives for much lower salaries.

Alex C August 5, 2011 - 1:59 pm

I wonder if this woman has ever ridden the subway? She probably wouldn’t know an NYC subway car if it burst through her bedroom wall with a sign saying “I’m a subway car” on it.

nycpat August 5, 2011 - 2:12 pm

“the corruption that has long plagued the MTA”- as opposed to the probity of the NY legislature or those upstate republican machines.

Handicapping the Walder replacement race :: Second Ave. Sagas August 5, 2011 - 3:01 pm

[…] « Rabbitt to Cuomo: Lower the MTA CEO’s salary Aug […]

SEAN August 5, 2011 - 3:14 pm

Someone please explane how a putz like this who obviously has zero knowledge of what it takes to run the MTA is allowed to dictate it’s finantials? The MTA needs to get a home rule request past in order to take control of it’s future needs. Otherwise they will be at greater finantial risk.

Alon Levy August 5, 2011 - 10:04 pm

The local political machine gave her an Assembly seat. That’s how.

Scott E August 5, 2011 - 3:42 pm

I’m sure she’ll mandate that the MTA spend five times the amount of the CEO’s salary to hold a round of Public Hearings for the next fare or service change.

BrooklynBus August 5, 2011 - 3:43 pm

I disagree. There is much prestige in heading the MTA. No one will take it just for the salary so I see no problem in keeping it the same or even lowering it a bit. What do you propose? Sign someone who you believe to be qualified to a $500,000 contract for six years and then he leaves like Walder does as soon as he gets a better offer? We better not make the same mistake again by not putting in a penalty clause for someone leaving early. A contract needs to work both ways or else the executive always makes out while the public gets screwed.

Donald August 5, 2011 - 3:47 pm

I know:

Appoint someone who is super rich and will work for $1 a year.

Donald August 5, 2011 - 3:52 pm

“and most importantly, repeal the job-killing payroll tax once and for all.”

is it possible for Republicans ever to speak without saying “job-killing tax”? It’s almost like it’s built into their vocabularly from they day they are born.

Bolwerk August 5, 2011 - 4:37 pm

It’s code. It means elimate the [pick one or two: poor or minority]-supporting taxes on the good, upstanding white people who drive to suburban office parks. If Republikans were concerned about jobs, they’d try to encourage employment with infrastructure investment, among other things.

Donald August 5, 2011 - 4:29 pm

It’s nice to know that Annie Rabbitt also volunteered to take a pay cut. After all, it would be hypocrital for her to demand someone get a pay cut without taking one herself. Oh wait, you mean Annie Rabbitt did not volunteer to cut her own pay too?

Brian H August 6, 2011 - 2:35 am

This is what they had to pay Walder because he took a massive paycut to take the MTA job. Even then, we had the benefit of hiring a New Yorker who saw the MTA chair as sort of a dream job. I don’t think any Brit in the TfL would see taking a pay cut to deal with the rough and tumble of New York politics as any sort of promotion, and I don’t see the MTA being able to compete with those kinds of wages. So I’d say international hires are unrealistic. That leaves just the US transit execs. Those are the people who are already used to US government wages… people who would be thrilled to make what Lee Sander was making. And I’m not so impressed with the US candidates to think they’re any sort of a flight risk to any of the higher paying international systems. I hate to agree with Rabbitt, because I seriously doubt she thought it through like that. But I think she’s right. The next MTA chair can be paid less than Walder.

Donald August 6, 2011 - 2:26 pm

I don’t agree with Rabbitt. Nobody from the private sector is going to head the MTA for a $350,000 a year. And certanly nobody with political ambitions and dreams of higher office will come within 100 feet of the job. So who does that leave us? Executives from other failed US transit agencies? Yes, let’s appoint someone from Amtrak, because when you think of well managed and innovation, you think of Amtrak!

jake August 6, 2011 - 11:21 am

The MTA is no different than NYPA or LIPA – they are all critical quality of life agencies. And if a CEO doesn’t do a good job then its right that they don’t get to land a more lucrative position later. Walder’s sudden defection for bigger money in Hong Kong shows me that like the former head of LIPA, Kevin Law, these dedicated public servants are more interested in public perception of themselves to spin into greater earnings than doing the job they were hired for. Law accomplished nothing at LIPA and bailed when he realized he didn’t know how to solve the critical issues at hand. Walder cut services, raised rates and left capital projects unfunded. If I did this on my job I would be fired not scouted for a higher salary. Let’s find talent committed to doing the job, not using the position to promote themselves. Wen they are successful then reward them with bonuses, not before. The people of NY deserve more.


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