New York’s MTA chairman Jay Walder announced yesterday that he is leaving to become Hong Kong’s MTR Corp’s CEO after only two years into his six-year term. MTR is Hong Kong’s urban rail operator.
Why is this news worth paying attention to? It shows how a firm bolstered by growth in China’s developing market is able to attract talent from companies in the U.S. Walder was given a tough job of maintaining and streamlining an old system of rails and buses stretching over 5,000 square miles (13,000 km2), serving more than 2.6 billion people a year, and employing about 70,000 workers. All on an extremely tight budget. $31 billion in debt and a $900 million gap in its operating budget for 2011.
Faced with this stark fiscal reality, Walder “slashed 3,500 jobs and curbed overtime pay over 18 months to cut costs by $525 million,” according to Bloomberg L.P. The MTA said Walder’s cost-cutting measures will save $3.8 billion by 2014 with more cuts on the way that will save an additional $4 billion. These brutal cuts have spared straphangers more fare increases, but they haven’t cozied Walder up with the Transit Workers Union Local 100. That’s 38,000 bus and subway workers who won’t be crying when he flies to Hong Kong on October 21st.
Walder’s decision to go was “entirely his own,” said an anonymous source to the Times. “The person described Mr. Walder’s new post as the type of job that he simply could not refuse.”
No! Really? Walder walked away from a physically decrepit and decaying institution that’s financially and bureaucratically hobbled that pays him $350,000 a year? Why? To be the CEO of a company that’ll pay him $924,000 a year with an undisclosed discretionary bonus and shares in its stock that has risen by 163% since 2004. Oh, that’s why.