Mastercard CEO Michael Miebach announced that the global payment technology company will begin linking incentive compensation for senior executives to the company’s environmental, social and governance initiatives.
In a posting on the company’s website, Miebach wrote:
“We have embedded inclusion, sustainability, and decency into the heart of our business – blending purpose and profit. By bringing our innovation, insights, and ingenuity to the table, along with philanthropy, we’ve become leaders on advancing financial inclusion and inclusive growth around the world. Now, we’re taking another important step that underscores our shared commitments–and our shared accountability, which starts at the top.”
In addition to performance on financial and strategic goals, Mastercard’s senior executives, from the EVP level and up, will have incentive compensation tied to progress towards the company’s ESG priority areas of carbon neutrality, financial inclusion, and gender pay parity.
Mastercard’s new initiative is part of a growing trend among companies across a wide range of industries to tie compensation to ESG progress. Recently, Apple revealed that it will introduce an ESG modifier to its executive bonus payouts, Deutsche Bank announced that it plans to link top level executive and management compensation to ESG and sustainable finance criteria, and Marathon Oil restructured its incentive programs to prioritize issues including environmental performance and safety. Earlier this month, Chipotle Mexican Grill announced that its executive leadership team will be evaluated on progress toward its sustainability goals encompassing Food & Animals, People, and the Environment.
“We’ve seen firsthand how our commitment to environmental and social responsibility – and our core values of operating ethically, responsibly and with decency – is directly connected to our continuing success as a business. This is our starting point, and we will continue to evolve, expand and adapt these priorities to ensure they address the changing marketplace and our corporate objectives.”