Home View from Underground Jay Walder: Escape from New York

Jay Walder: Escape from New York

by Benjamin Kabak

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.

You may also like


Alon Levy July 22, 2011 - 2:25 am

While environmental and labor standards are deep concerns in China, a significant number of projects are ongoing.

Hong Kong != China.

epc July 22, 2011 - 7:16 am

Hongkong is becoming less != China with each passing year.

When I first went in the 1990s English and Cantonese were the dominant languages. I returned about five years ago and Mandarin had pushed aside Cantonese and English was decidedly the minor language.

Jeff July 22, 2011 - 8:23 am

Doesn’t that make it MORE China and not less?

Jeff July 22, 2011 - 8:24 am

Wait never mind, misread the sentence.

epc July 25, 2011 - 2:37 pm

Sorry, it was a goofy way to phrase what I meant.

My take is Hongkong is becoming more Chinese with each passing year. Shanghai today feels like Hongkong did in the 1990s which is ironic. While the press may be more free in Hongkong, it’s not US or UK “free press”.

Alon Levy July 23, 2011 - 1:41 am

Hong Kong still has free speech and free media (unlike Macao). And in terms of labor costs, China is becoming more like Hong Kong rather than the reverse.

Streetsblog New York City » Today’s Headlines July 22, 2011 - 9:03 am

[…] Ben Kabak Takes the Prize for Best Walder Headline […]

John-2 July 22, 2011 - 9:43 am

China does have more of a “top down” ability to determine its priorities than the U.S., due to the authoritarian nature of the regime, and the difference is even starker with public works projects when compared to New York, which pretty much chartered NIMBYism and where getting everyone on the same page for any project is like herding cats.

Walder’s main concern in his new job — given some reports of China’s overspending on rail projects that either are in areas where they aren’t needed or don’t work the way they’re supposed to — would be if China suddenly cools to mass transit infrastructure spending, and dealing with the pols there suddenly makes him long for the halcyon days of working with the Assembly and Senate up in Albany.

Anon July 22, 2011 - 12:55 pm

maybe he’ll build a tunnel to nowhere

pete July 23, 2011 - 6:00 pm

Supply and demand doesn’t exist in China. The government creates and destroys money how it wants, and normal citizens are not allowed to convert yuan to any other currency or buy anything from abroad by law. Corporations are all pretty much state owned, or state NGO or state non-profit, or state partnership or state stockholder. The government has a policy of preventing wasteful capitalistic competition for market share between its large corporations. You won’t see 2 of the same thing across the street from each other unless both are fully saturated. Some industries are “open” to free market capitalism, others are “closed” to free market capitalism. Thats what top-down system of China does.

Because the Yuan is created and destroyed as needed by the CPC, China can just build things and tear them down. Aslong as the workers get a paycheck every week, and there is food in the bazaar stalls, nobody cares. There are no billionaires, no hedge funds, no pension funds, no wall street, in China. China has almost no national debt, and none of it is the Yuan. No problem with printing or destroying money here. Is it better for the workers to sit at home and collect welfare checks, or questionable civil works?

Think about the toy store in the empty mall? Whats the owner’s rent if he sells 1 toy a day? Who pays the power bill? That would never happen in the USA. In the USA, the landlord will sit on the property waiting for the land to appreciate, then build upscale housing, or wait for a government bailout. The landlord in the USA will never lower the price to “market” price. Lets talk about Xanadu Meadowlands now 😀

In the end, Hong Kong and China have nothing to do economically. So why are we comparing the 2 here?

Jeff July 22, 2011 - 2:15 pm

He’s going to Hong Kong, not China… As mentioned in these comment sections time and time again, they are not the same.

The way its run, MTR is practically a private, profit-driven corporation.

Anon July 22, 2011 - 5:48 pm

From Hong Kong, passengers can travel with ease to Guangdong Province, Beijing and Shanghai in the Mainland of China using the MTR’s intercity railway services.

Anon July 22, 2011 - 9:05 pm

Looks like Consumerist is reading this Blog and not giving linkbacks


then again how often are their linkbacks to comments on a blog????

Anon July 22, 2011 - 9:06 pm

oops their post was from last week.

Ian July 22, 2011 - 10:06 am

All good points about the differences in compenstation, organizational structure/governance, and infrastructure development. All the more reason to make me believe that this may be our generation’s “Drop Dead” moment (or one in a series of them that started with the ARC tunnel cancellation).

Cuomo needs to act fast to appoint a new MTA head that will assure the public of one of two things:
– Continued commitment to the development of large and small capital projects, from 2nd Ave to routine maintenance and rehabilitation
– Re-structuring of capital projects to re-order, and where necessary, postpone non-essential work until the governmental budget outlook clears up

Suffice to say, the future of the city’s, and region’s economy, depends enormously on Albany’s commitment to “finish the job” or put it aside (again).

John S. July 22, 2011 - 11:31 am

Great article Ben! I will be sad to see Walder go. He had such a vision for improving our transit system, but the red tape surrounding everything in New York just proved too difficult to deal with. He’s better off in a place where he can be given the support and resources to implement his visions- sad to say that NY is not this place. Albany treats the MTA’s capital projects as year to year issues, but not implementing these projects now will cause chaos in the future.

Urban Omnibus » The Omnibus Roundup — Midtown in Motion, High Line Roller Rink, Walder Resigns and Reinvent NYC.gov July 22, 2011 - 1:55 pm

[…] to properly fund our transportation network than it does about new opportunities for his career.” Benjamin Kabak of Second Ave. Sagas analyzed some of the probable driving forces behind Walder’s departure and continues to post updates on the latest […]

Post: Cuomo must ‘find an equally talented replacement’ :: Second Ave. Sagas July 22, 2011 - 3:58 pm

[…] the aftermath of Jay Walder’s resignation, nearly everyone — except the TWU — seems to think that the MTA is losing a solid and […]

Kevin Walsh July 23, 2011 - 10:43 am

Walder used the MTA as a stepping stone and will triple his money in Hong Kong, while raising fares on the NYC punters who can least afford it.

But ain’t that America…

CUNY Institute for Sustainable Cities Blog » The MTA and Subterranean Burials July 26, 2011 - 10:02 am

[…] resignation of Jay Walder, has been stirring up discussion about the timely completion of MTA projects under way, including […]


Leave a Comment