Mastercard links bonuses to ESG goals

In a memo to staff, Mastercard CEO Michael Miebach said all employees’ compensation would be tied to the company’s ESG goals. This had previously only been the case for Mastercard executives.

Why should we care?
Miebach’s move suggests that he sees all company employees responsible for how Mastercard moves forward in the face of high-stakes social issues—not just its top leaders. “We’re tying compensation to emissions, financial inclusion, and the gender pay gap because we have a substantial impact in these areas and because they closely align with our vision,” the CEO said. Mastercard pledged in November to reach net-zero emissions by 2040; it also announced that women employees now make 93 cents on the dollar as compared to men, up from 92.4 cents in 2020. Expanding this socially oriented way of tying bonuses to social effects shows Mastercard knows it can be doing more. But, depending on how heavily bonuses are tied to ESG goals, then this announcement can also be largely symbolic rather than substantive. Mastercard said last year that ESG goals can swing compensation by 10 percentage points at most. A solid first step, this most recent announcement may encourage other financial institutions and payments companies to follow suit—or even double down further than Mastercard.