Mastercard Inc. CEO Michael Miebach stated that the payments giant would tie top executive bonuses to many of its major environmental, social, and corporate governance programs.
Executive vice presidents and above will be judged on how they contributed to progress on attempts to reduce the firm’s carbon footprint, strengthen financial inclusion, and achieve gender parity, according to Miebach. To address changing goals, the firm will “expand and adapt” these priorities.
“The purpose of our incentive compensation programs is to encourage and reward performance that helps us achieve our goals — financial goals, of course, but also strategic goals that lay the groundwork for our future success,” Miebach wrote in a memo to employees on Wednesday.
Mastercard is one of an increasing number of businesses that use incentive compensation to drive ESG progress. The pay frameworks of Canada’s six biggest banks have all included such components. In contrast, the French oil and gas giant, Total SE, has said it would tie bonuses in part to success in lowering its customers’ greenhouse-gas emissions.
Mastercard, under Miebach and his predecessor Ajay Banga, has set ambitious goals to demonstrate its commitment to sustainability and social justice. The firm is one of those that have committed to achieving net-zero carbon emissions by 2050.
It is also one of the few financial-services businesses to provide a straightforward appraisal of the disparities in pay between men and women as it works to close that gap. As of September, the firm’s median salary for women was 92.4 percent of the worldwide median for men.
In addition, Mastercard stated last year that it hopes to get 1 billion individuals and 50 million micro-and small companies into the so-called digital economy by 2025. This commitment came after the payments network met an earlier obligation to bring 500 million excluded people into the financial system.
“We believe that these ESG goals, over which our senior leaders have the ability — and responsibility — to influence, will help our business grow and thrive for years to come,” Miebach said. “This change reaffirms our commitment to deepening our culture of inclusion and ensuring that people can reach their full potential, economic growth is inclusive, and the planet can thrive.”
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