The FINANCIAL - Mastercard CEO to step down

Mastercard CEO to step down

Mastercard CEO to step down

The FINANCIAL -- Credit card and electronic payments giant Mastercard – announced that Ajay Banga, President and Chief Executive Officer, will transition to the role of Executive Chairman and Michael Miebach, Chief Product Officer, to become Chief Executive Officer and a member of the Board of Directors. Also, the company said the coronavirus outbreak could negatively impact revenues this quarter by 2% to 3%.

Banga, who took charge of the company just after the 2008-09 financial crisis, has seen the payment processor’s revenue triple during his tenure as online shopping gained prominence around the world. India-born Banga will take on the role of executive chairman, while Miebach will become the company’s president. Before joining Mastercard as president of Middle East and Africa in 2010, Miebach served as managing director at Barclays Bank and general manager at Citibank, according to Reuters.

Mastercard’s Board unanimously elected Michael Miebach, Chief Product Officer, to become Chief Executive Officer and a member of the Board of Directors on January 1, 2021 and, as part of the transition, he will become President of the company, effective March 1, 2020. As President of the company, Miebach will oversee the sales, marketing, products, services and technology organizations. “As the company moves into this next phase of growth, we have a deep leadership bench--with Michael at the helm--to take us to the next level,” said Banga. “He has a proven track record of building products and running businesses globally. Over his career, Michael has held leadership positions in Europe, the Middle East and Africa and in the U.S. across payments, data, banking services and technology, as reported by Business Wire.

In connection with Miebach's appointment as president, Mastercard has entered into a new compensation agreement that adds $750,000 to his annual base salary, the payment processor said in a filing. Miebach will also receive an equity grant with a target value of $6.25 million, FOX Business wrote.

"Mastercard has outstanding people, leading technology and tremendous potential. I am honored to have the opportunity to lead this great company with a team by my side that is second to none," said Miebach. "I’ve dedicated the last decade of my career to payment innovation and will continue to evolve and execute Mastercard’s strategy. I would like to thank the Board of Directors for their confidence and trust, and I am excited to continue to partner with Ajay, our leadership team and all of our employees to build solutions that address the current and future needs of the ecosystem as well as pursue new growth opportunities for our company," Business Wire wrote.

Mastercard shares fell 6.7% in Tuesday’s session, though, on news that the company said the coronavirus outbreak could negatively impact revenues this quarter by 2% to 3%. Wall Street is estimating Mastercard’s sales to come in at $4.3 billion for the quarter, according to CNBC.

Mastercard (MA) - warned late Monday that the effects of the coronavirus will result in slower revenue growth for the first quarter than the company guided for on its Jan. 29 earnings call. Mastercard on Monday said that if current trends continue through the end of the quarter, “year-over-year net revenue growth in the first quarter will be approximately 2-3 percentage points lower than discussed on our January 29, 2020 earnings call.” The company added that in those circumstances it would “expect year-over-year net revenue growth of 9%-10% in the first quarter,” The Street wrote.

Author: The FINANCIAL