Executive vice presidents and above will be evaluated on how they contribute to progress on efforts to curb the firm’s use of carbon, improve financial inclusion and reach gender-pay parity, Mastercard’s CEO said.
Mastercard Inc. Chief Executive Officer Michael Miebach said the payments giant will link bonuses for top executives to many of its key environmental, social and corporate-governance initiatives.
Executive vice presidents and above will be evaluated on how they contributed to progress on efforts to curb the firm’s use of carbon, improve financial inclusion and reach gender-pay parity, Miebach said. The company will “expand and adapt” these priorities to address changing objectives.
“The purpose of our incentive compensation programs is to encourage and reward performance that helps us achieve our goals — financial goals, of course, as well as strategic goals that lay the foundation for our future success,” Miebach said Wednesday in a memo to staff.
Mastercard is part of a growing roster of companies using compensation to drive ESG progress. Canada’s six largest banks have all added such components to their chief executive officers’ pay frameworks, while the French oil and gas giant Total SE has said it will partly tie bonuses to success in reducing the greenhouse-gas emissions of its customers.
Under Miebach and his predecessor Ajay Banga, Mastercard has set lofty goals to show a commitment to sustainability and social justice. The company is among those that pledged to achieve net-zero carbon emissions by 2050.
It is also one of the few financial-services firms to offer a blunt assessment of the differences between what it pays men and women as it seeks to close that gap. As of September, the firm’s median pay for women is 92.4% of the median for men globally.
And last year, Mastercard said it hopes to bring 1 billion people as well as 50 million micro- and small businesses into the so-called digital economy by 2025. That commitment came after the payments network fulfilled an earlier pledge to bring 500 million excluded individuals into the financial system.
“We believe these ESG goals, 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 further reinforces our commitment to deepen our culture of inclusion, and ensure people can reach their potential, economic growth is inclusive and the planet can thrive.”