The CEO of MasterCard Inc. received 2010 compensation valued at nearly $11.9 million after taking over the credit card company's top job midway through the year, according to an AP analysis of documents filed with regulators on Friday.
Ajay Banga's compensation last year rose 4 percent from the $11.3 million he received in 2009 as president and chief operating officer. He took over as CEO on July 1 from Robert Selander, who retired. Before joining MasterCard in August 2009, Banga left Citigroup as part of a leadership shake-up.
Banga's base salary was $850,000, according to documents that the Purchase, N.Y.-based company filed with the Securities and Exchange Commission.
The 51-year-old also got a bonus of $2.1 million. He received stock awards that were valued at $4.6 million at the time they were granted, and options valued at $2.2 million. He also got a performance-based cash bonus of $1.9 million. His other compensation totaled $149,286, including perks such as personal use of a corporate leased aircraft.
When Banga joined MasterCard, he was brought in for the top job. His contract with the company allowed him to leave the company with a $4.2 million signing bonus if it failed to offer him promotion to CEO before June 30, 2010. He was awarded a $2.1 million signing bonus in September 2009, before receiving the 2010 bonus, which totaled $2,123,906, and included a pro-rated profit-sharing payment.
After stepping down as CEO, Selander served as executive vice chairman and a board member until his retirement on Dec. 31. He had been the company's CEO since 1997.
In February, MasterCard reported its net income in 2010 totaled $1.85 billion, or $14.05 per share, compared with $1.46 billion, or $11.16 per share for
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.