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California high-speed rail hires CEO for $375,000

(The following story by Mike Rosenberg appeared on the San Mateo County Times website on May 6, 2010.)

SAN JOSE, Calif. — An executive for the company that built France's bullet trains will lead California's high-speed rail project for a salary of $375,000, making him one of state government's highest paid nonuniversity workers.

The California High-Speed Rail Authority board on Thursday unanimously voted to hire Roelof van Ark, 58, of New York as CEO of the $43 billion undertaking being touted as the largest public works project in the nation.

Van Ark will leave his job as president of Alstom Transportation, a role he has held since 2005. Alstom Transportation is the North American subsidiary of the French company Alstom, a corporation with $20 billion in annual sales that built France's TGV bullet trains and employs 65,000 people.

He is a former executive for Siemens, a major international high-speed-train manufacturer, and General Electric.

Van Ark said in a statement that he had no doubt "California is the place to be."

"California is leading the nation in high-speed rail," said van Ark, who was born and raised in South Africa but is an American citizen.

Van Ark will earn 77 percent more than the governor, who earns $212,000, and appears to have one of the highest base salaries of anyone in California government outside of the two state university systems. He will also get a $75,000 signing bonus to cover relocation costs, which he will have to return if he leaves the rail authority within two years.

Board members, who picked van Ark from a pool of 42 candidates, said he will be taking a hefty pay cut when he starts his new job in Sacramento on June 1. They said he earned more than $900,000 at his current job in the private sector.

"If anything, it's too low," said board member Quentin Kopp of San Francisco. He earlier this year voted against setting the future CEO's maximum salary at $375,000 but says he now supports the pay because of van Ark's credentials.

Board member Rod Diridon of San Jose said comparable jobs in the private sector yield salaries of as much as $1 million.

"He really wants to come and do this project," Diridon said. "He's made his money. He wants a legacy project now."

Van Ark's salary will be funded by the rail authority's voter-approved bond money and will not affect the state budget.

Rankings of the largest state salaries were not available from officials Thursday, but an online database compiled by the Sacramento Bee using state controller's office data shows that two other nonuniversity employees earned more base pay in 2009. One, former State Fund Chief Janet Frank, has since left her post. The other, Alan Trounson, earned a $490,000 salary in 2009 as president of the California Institute for Regenerative Medicine.

The authority added that the head of San Francisco Muni makes $328,000 while the Los Angeles transportation chief earns $310,000. BART's general manager makes $299,000, Santa Clara VTA's CEO makes $290,000 and Orange County's transportation head has a salary of $267,000.

Both Kopp and Diridon said van Ark's experience set him apart from the field of candidates.

After starting as an engineer in South Africa in 1976, van Ark joined Siemens in 1978. He worked for the company in South Africa and Germany until he served as Siemens Transportation CEO in Sacramento from 1999 to 2002. He then took a job in aviation security for a GE company until 2005.

It is unclear whether van Ark still has any stock holdings in his previous companies. He made a brief appearance at the board meeting before boarding a plane and was unavailable for interviews Thursday.

Authority officials said van Ark's previous employment will not influence the authority's decision on which manufacturer is hired to build California's high-speed trains or which countries are involved in the project. The authority has informal agreements to work with several nations, including China, France and Germany.

The authority in January hired a firm to conduct the international search for a CEO and later interviewed four finalists in closed session. Mehdi Morshed had been the executive director of the rail authority since 1998 and retired earlier this year.

Friday, May 7, 2010

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