New York, June 21: Ajaypal Banga, Asia-Pacific CEO
of crisis-ridden behemoth Citigroup, will get a package of
about Rs 90 crore as the new second-in-command at payment
services firm MasterCard--an offer that could be billed as the
biggest package in the current state of the global economy.
Banga will join MasterCard as its new President and Chief
Operating Officer on August 31 and could possibly become CEO
of the global financial services giant within a year's time.
As per his employment contract with MasterCard, Banga
will be paid around USD 2.15 million (about Rs 10 crore) in
salary and other allowances every year and would also get a
one time benefit totalling about USD 15.9 million (about Rs 80
crore) including a sign-on bonus of about USD 4.2 million.
The package, which includes over USD 11 million to be
paid through stocks and remainder in cash, makes Banga the
highest-paid banker after American Express CEO Kenneth
Chenault and Citi chief Vikram Pandit as per the disclosed
remuneration paid to the two in the year 2008.
For the year 2008, Chenault's total compensation amounted
to USD 42.8 million, while Citi's Vikram Pandit received pay
packet of USD 38.2 million.
However, the package for both Pandit and Chenault could
come down in 2009, which could probably make Banga the highest
paid banker. Pandit has already said he will only take a token
salary of one dollar while the other components of his
compensation package are also expected to go down.
Besides, the package given to Banga is by far largest to
any executive hired by the financial services sector,
currently in the midst of its biggest ever crisis.
Banga would join MasterCard on August 31 and would report
to Robert W Selander its Chief Executive Officer. At present
Selander, also holds the position of President, which he would
hand over to Banga on August 31.
The initial term of agreement for Banga would be till
December 31, 2011 and the agreement provides for automatic
one-year renewals.
After the completion of one year service at Mastercard,
Banga would also be eligible to participate in the US Profit
Sharing Program, which may result in an annual payment ranging
from 0-10 per cent of his base salary subject to MasterCard's
financial performance for the year.
Banga would be responsible for business operations
including customer relationships globally and US markets,
products, services, marketing, technology and operations.
The 49-year-old Banga had joined Citi in 1996 as the Head
of Marketing and Sales in India. Prior to this, he was with
Nestle India and PepsiCo.
Banga's departure is being seen as a major shock for
Citi, whose CEO Vikram Pandit recently said that the company
would focus on overseas markets for future growth.
He serves on the Board of Kraft Foods. He is also on the
Board of Trustees of the Asia Society, has served as Vice
Chairman of the Board of Trustees of New York Hall of Science
and was a board member of National Urban League.
Bureau Report
First Published: Sunday, June 21, 2009, 14:32