MasterCard Preps for Public Offering
RENEE MONTAGNE, host:
Time now for business news. One of the world's largest credit card companies is planning to go public. Mastercard will hold a stock offering, change its corporate governance structure and create a large charitable foundation, as NPR's Chris Arnold reports.
CHRIS ARNOLD reporting:
The stock offering would dramatically change the way Mastercard is set up. That's because right now the company is owned by some 1,400 banks and other financial institutions that issue credit cards under the Mastercard name. Mastercard now wants to sell a controlling ownership stake to the public through an initial stock offering. The banks and institutions will hang onto 41 percent of the company. That structure, though, is causing some people concern.
Mr. CRAIG MAURER (Fulcrum Global Partners): They have, potentially, down the road some significant conflicts of interest.
ARNOLD: Craig Maurer is a managing director at Fulcrum Global Partners in New York. He says Mastercard will be serving two masters: the banks and the shareholders. For example, if some day it has to lower the fees it charges to merchants when customers make purchases...
Mr. MAURER: Do I cut the percentage I'm giving to my association banks to maintain my own profitability, which would make my public shareholders happy, or do I keep the banks whole and then annoy my own shareholders?
ARNOLD: If the changes go ahead, the company says it will appoint a new board with a majority of independent directors. And in an unusual step, Mastercard said in a statement that a full 10 percent stake in the company will be put into a charitable foundation. A Mastercard spokesperson declined to comment while the stock offering is pending. Chris Arnold, NPR News.
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