New York:
MasterCard named a onetime star at Citigroup as its next chief executive on Monday, a widely expected move that could nonetheless shake up the giant payment company. The appointment of the executive, Ajay Banga, is to take effect on July 1, the company said. MasterCard hired Banga as president and chief operating officer last August and signaled early that he would succeed Robert W. Selander, who has held the top job since 1997.
Banga was also appointed to the company's board, effective immediately. The promotion is a sharp turn for MasterCard, which has a reputation for being as conservative and refined as the surroundings of its campus in Purchase, N.Y.
Banga, 50, has substantial international experience, having spent much of his career managing Citigroup's overseas credit card and consumer banking businesses. Before joining MasterCard, he spent a year overseeing the bank's operations in Asia, splitting time between Manhattan and Hong Kong.
He also has a background in brand management. Early in his career, he helped introduce the Pizza Hut and Kentucky Fried Chicken franchises to India.
Where Selander is reserved, Banga is outgoing and gregarious and is known for his extensive network of contacts, stretching from New York to New Delhi. Banga, a native of India, is also a Sikh and wears the turban that distinguishes worshippers of his religion.
Selander, 59, is retiring from MasterCard with a pile of cash. He took home more than $149 million over the last nine years in salary, bonuses and stock he cashed out, according to an analysis of corporate filings conducted by Equilar, a compensation research business. He also has a pension worth $3.7 million and an additional $33.3 million in stock and options.
Banga was estimated to have made about $13.5 million in 2009, according to filings, mostly from a large sign-on bonus and stock award to make up for compensation he was giving up by leaving Citigroup. MasterCard has not released the final details of Banga's compensation.
He joins a small but influential group of India-born corporate leaders, including Vikram S. Pandit of Citigroup and Indra K. Nooyi of PepsiCo.
Banga delights in pointing out that he did not attend an elite American university, as did his other chief executive countrymen. Instead, he received a bachelor's degree in economics from Delhi University in India and is an alumnus of the Indian Institute of Management, Ahmedabad.
Vindi Banga, Banga's brother, was a top executive at Unilever, the food and household goods giant, until he resigned last month. The financial press in India once ranked the brothers among the country's most influential leaders.
At a news conference on Monday, Ajay Banga said he had spent his first months at MasterCard traveling the globe to meet clients, employees and regulators. He said he would focus on improving revenue growth and market share in the company's core businesses of credit, debit and prepaid cards. He said he also would emphasize innovation in areas like mobile payments and online commerce and diversifying the company's revenue stream across the globe.
About 45 percent of MasterCard's revenue comes from the United States. Visa, its main rival, by contrast, reports deriving 59 percent of its revenue from the United States and is more than twice as big.
Banga said that MasterCard, like its competitors, is benefiting from a broad trend away from cash and checks and toward electronic forms of payment.
Adam Frisch, an analyst at Morgan Stanley, said Banga's experience would come in handy because emerging markets in Asia and Latin America are important areas of growth for the payment industry. He also said MasterCard needed to remain a leader in new technologies like mobile payments because many new competitors are emerging in those areas.
Frisch praised Selander's tenure at MasterCard, where he will remain on the board through 2010. But after 13 years at the helm, "a change of CEO may be a good thing," Frisch said.
"Banga's reputation is that of someone who's not afraid to change things around," Frisch said. "I think there's a fair amount that Ajay will leave unchanged, but it will be interesting to see how he puts his stamp on the company."