Robert Selander, CEO of MasterCard Inc. (MA), looks to be getting ready for retirement, TheStreet.com says. According to a recent SEC filing, Selander plans to sell roughly one-third of his shares of the credit-card processor under a pre-arranged sale program for "personal financial management purposes" -- a common move for executives who might otherwise be restricted from trading because they possess material non-public information.
The sales are expected to begin in October and finish by February.
Under MasterCard's executive stock-ownership guidelines, Selander will be "encouraged to hold at least six times his base salary in stock" until he turns 62. But Selander, 58, seems unlikely to remain with the company another four years. In June, Mastercard hired Ajaypal Banga, formerly CEO of Citigroup (C)'s Asia Pacific region, as its chief operating officer. Banga's contract stipulates that he can terminate his employment and collect a healthy severance if he's not offered Mastercard's CEO job by the end of June 2010.
The SEC filing outlining Banga's employment deal shows he will receive a $4.2 million signing bonus, in addition to a $4.9 million restricted stock award -- all of which remains payable in full, should he not be named CEO. That's a pretty high price to pay for a hire who you don't plan on promptly promoting. (Banga's base salary is $800,000.)
The sequence of events suggests that succession planning is in the works, and it would be a significant step for MasterCard, in its evolution as a publicly traded company. Selander has been in charge since 1997 and was responsible for the 2006 IPO, which quickly became a favorite of institutional investors. Mastercard's attractiveness as an investment stems from its leading market positioning and its lack of exposure to credit. As a payment processor, MasterCard does not retain credit risk. Shares are up more than 300 percent, even as the S&P 500 ($INX) and Financial Select Sector SPDR (XLF) have languished with negative returns.
James Cullen edits and writes at CollegeAnalysts.com. He has no personal position in the stocks mentioned above.