Neal S. Cohen, Metro’s top choice for general manager, has never worked for a subway or bus system. But he is highly experienced in steering large companies through severe financial straits — a background that probably makes him attractive to a beleaguered transit agency struggling with an array of money problems, including stagnant fare revenue and restrictions on federal funding.
The executive committee of Metro’s governing board is in contract negotiations with Cohen, 55, who was a chief financial officer in the aerospace industry until last winter, when the Northern Virginia-based company for which he worked merged with another. Before that, he worked in the financially troubled airline industry.
A former colleague of Cohen’s who worked with him daily during parts of his airline career described him Thursday as “brilliant” and “quirky.”
“He was a [financial] cleanup artist, and he’s very good at what he does,” said the ex-colleague, a longtime airline official who spoke on the condition of anonymity to protect his current job. The former colleague, who is familiar with Metro’s operational and financial problems, predicted that Cohen would focus intensely on the agency’s fiscal bottom line.
“He’s going to come in as a cost-reduction artist,” said the former colleague, who repeatedly described Cohen as “quirky,” adding, “He’s likable — right up until the minute when he’s not.”
Cohen also is accustomed to making far more money than any public-sector employer could afford.
After the merger in February formed the aerospace company Orbital ATK, Cohen, who had been ATK’s chief financial officer, departed with a package of severance pay and other compensation totaling $8.4 million, according to filings with the Securities and Exchange Commission.
In the early and mid-2000s, he was the top financial executive first for US Airways and then for Northwest Airlines during a tumultuous period of contraction, bankruptcies and mergers in the airline industry.
After helping shepherd US Airways through bankruptcy, he received a severance package worth $2.4 million, SEC filings show. After doing the same for Northwest, he was given a compensation package estimated to be worth $10 million to $13.5 million, and he later received about $4.1 million in severance compensation from Northwest.
By contrast, former Metro general manager Richard Sarles, who retired in January, was paid $366,000 a year under a contract that also allowed for relatively modest annual performance bonuses at the Metro board’s discretion.
Cohen could not be located for comment Thursday. The Metro board’s executive committee was scheduled to meet behind closed doors Thursday night to continue discussions aimed at hiring Cohen.
The search for a new chief executive has dragged on for more than a year, since Sarles announced in September 2014 that he planned to retire. At one point, the search was halted because of a strong disagreement among board members over what kinds of skills to seek in a prospective general manager. Metro has been run by an interim chief executive, Jack Requa, since Sarles departed.
If Cohen and Metro’s four-member executive committee agree on contract terms, and if Cohen is approved by the full board, the hiring would mark a new era for the Washington area’s transit system, which has never been overseen by a top executive who did not have government or public transportation experience.
It also would be a victory for Maryland and District officials, who have pushed for the hiring of a financial expert to help reform Metro. The agency is struggling with a raft of money problems caused by steadily declining subway ridership in recent years and by Metro’s mismanagement of federal grant money, detailed in a 2014 audit by the Federal Transit Administration.
Until transit managers rectify numerous financial management problems described in the audit report, the FTA is restricting Metro’s access to federal grant money, which has forced the agency to rely heavily on short-term borrowing to pay its bills.
Virginia officials, citing Metrorail’s numerous operational failures and safety shortcomings, had initially called for the hiring of a traditional transit executive with experience in instilling a strong organizational safety culture. The subway system’s problems are so severe that it recently became the first in the country to be placed under direct federal oversight for safety.
But Virginia Transportation Secretary Aubrey Layne seemed to soften that stance recently, saying he would be happy with a general manager who at least had some experience “in the transportation field.” Noting Cohen’s background in the airline industry, Layne said he was satisfied with the choice and delighted that the protracted search for a new general manager appeared to be nearing an end.
Maryland Transportation Secretary Pete K. Rahn also said he approved of the board’s choice, given Cohen’s extensive financial experience.
Cohen’s financial career also has included stints in the investment, rental car and for-profit education industries.
As chief financial officer at US Airways from April 2002 to April 2004, Cohen and then-chief executive David N. Siegal helped shepherd the airline through one of two bankruptcies. Cohen drew criticism from labor unions representing US Airways employees because of the estimated $2.4 million severance package he received.
“He and Dave cut the apple down to the core,” the former colleague said. Referring to Cohen, the ex-colleague said, “He’s a brilliant guy, but he has a big old machete.”
He also called Cohen “an odd duck,” saying: “He would call meetings for 7 o’clock at night and then go to the gym. He would show up for the meeting at 8, find everyone in the room waiting for him and just say, ‘Hey, what’s up?’ ”
Cohen, who had worked for Northwest Airlines in the 1990s, returned to the company in May 2005 as chief financial officer. The airline filed for bankruptcy later that year. Cohen eventually became Northwest’s executive vice president for strategy and international business and chief executive of its regional operation.
At both airlines, Cohen tangled with unions. Pilots at US Airways called for his ouster after billions of dollars in concessions from unions failed to restore the airline to profitability.
After his years in the airline business and other fields, Cohen moved to the aerospace industry in 2012, becoming chief financial officer of Rosslyn-based ATK, a supplier of major components for satellites and rockets.
His salary and other compensation totaled $3.7 million in 2013 and $2.8 million in 2014, according to documents filed with the Securities and Exchange Commission.
In February this year, ATK merged with Orbital Scientific, a manufacturer of satellites, rockets and other aerospace products. Orbital’s chief financial officer remained as CFO of the new entity, Orbital-ATK, and Cohen left the company.
He received his 2015 salary of $574,873 and $7.8 million in other compensation, including severance pay, for a total of $8.4 million, an SEC filing shows.
Public records show that Cohen owns residential property in Florida and Minnesota and owned a house in Georgetown before selling it for $2.6 million in September.
While Cohen might be viewed as an unconventional choice, former Los Angeles mayor Richard Riordan (R) said officials sometimes should abandon traditional thinking when trying to solve seemingly intractable problems with public agencies.
As mayor, Riordan pushed to hire Julian Burke, a financial turnaround specialist, to reform Los Angeles’s transit system in the late 1990s.
“You don’t have to be an expert if you’re a doer,” Riordan said. “You hire the experts, and you empower them to do whatever is necessary.”
Ashley Halsey contributed to this report.