FORTUNE DECEMBER 2020 /JANUARY 2021 11number was minuscule. It was in the
single-digit percentage of employees.
A stock plan aligns the interests of
two of your stakeholders—employees
and investors. Or take a simple thing
like retirement plans. Today, if you’re
at Mastercard and you save 6% of
your salary into your 401(k) or your
defined contribution plan, wherever
you are in the world, we’ll give you
10% [for a total of 16%]. And we
don’t have any deductions if you
leave early.
So our idea of stakeholder
capitalism starts with our employees.
We can then figure out what else
we need to do in our community,
including our efforts at financial
inclusion—but doing all that in a
way that is commercially sustainable
as compared to checkbook philan-
thropy, which is limited to the size
of your checkbook. And of course
there’s always shareholders who need
to be rewarded too. Because if you
don’t do well, you can’t do any of this.
You’ve got to do well and do good at
the same time. It’s not an either/or.GUIDING CAPITALISMAjay, you’ve had a remarkable
tenure—Mastercard’s revenue is
up an annualized 12.7% over the
past decade. Profit has climbed
18.7% a year, and return on capital
has soared at a 40% annual clip.^2
These numbers blow away the com-
parable stats for Visa and American
Express. But your CEO playbook
seems to start with an unconven-
tional play—at least as far as Wall
Street is concerned: Invest in your
employees first.
BANGA: I’m actually an old-
fashioned believer in capitalism. It’s
lifted a lot of people out of poverty.
But what we need to do today is to
reposition it for stakeholder capital-
ism—which is just capitalism with
guide rails. And the first of those
guide rails is to take care of your
employees. One way we do that at
Mastercard is through stock plans.
About 70% of our employees get
some kind of stock incentive award.
When I first joined 11 years ago, that“The good
thing for our
business is
that digital
has been on
afterburners.
Everybody
has embraced
contactless
commerce.”
The
Conversation
In the 10-plus years that Ajay Banga has been CEO of Mastercard, he has delivered
to shareholders a cumulative total return of 1,581%—nearly five times that of the
S&P 500—and made the company the 21st most valuable in the world, up from
No. 256 when he took the helm. That’s just one reason so many shareholders don’t
want this to be his exit interview. (Sorry.)^11 INTERVIEW BY CLIFTON LEAFTHIS EDITED Q&A HAS BEEN CONDENSED FOR SPACE AND CLARITY.AJAY BANGA
PHPHOOTTOOGRAPH GRAPH BY BY FIRST LASTNAMEMACKENZIE STROH