Early resignation of MTR Corp chief Jay Walder 'may scare off candidates'

PUBLISHED : Thursday, 17 July, 2014, 11:50am
UPDATED : Friday, 18 July, 2014, 8:25am

The resignation of MTR Corporation chief executive Jay Walder a year before his contract ends has raised concerns that potential candidates will be put off the job.

Walder will probably walk away with about HK$20 million - all the remuneration he is entitled to - to compensate him for being made "a scapegoat", corporate governance activist David Webb suggested.

The news of Walder's premature exit next month coincides with the conclusion of an internal investigation that said he should have "exercised more critical judgment" in monitoring the troubled construction of a HK$67 billion high-speed railway to Guangzhou. The link is now slated to be finished in 2017, two years behind schedule.

The investigation also found he and projects director Chew Tai-chong exercised "poor judgment" because they did not report problems to the MTR Corp board in a timely manner.

Both Webb and lawmaker Michael Tien Puk-sun said Walder's early departure might scare away people who could fill his shoes.

"It is the right move to make Walder leave earlier, but potential foreign candidates could be concerned,'' Tien, former chairman of the Kowloon-Canton Railway Corporation, said.

"Overseas standards are a lot lower than Hong Kong standards. There are advantages in hiring acclaimed foreigners, but there are also drawbacks. Cultural differences could lead to blunders."

Tien said the MTR Corp could be testing the ability of Walder's deputy Lincoln Leung by making him acting chief executive before formally giving him the job.

Veteran transport analyst Dr Hung Wing-tat of Polytechnic University said Walder should take responsibility, and that people who were capable would not shun the post.

"Football clubs always sack coaches, but have you ever seen Manchester United fail to hire a new coach before?"

Webb saw Walder as a scapegoat, as some of the factors contributing to the delay could not be prevented, such as a black rainstorm in March that damaged a tunnel-boring machine.

"If a senior executive agrees to leave as a scapegoat, normally he would be compensated," he said.

Walder's salary last year was HK$13 million, with HK$5 million linked to performance. He would also be entitled to 230,000 MTR shares - worth HK$6.85 million at yesterday's closing price - if he finished his contract.