MasterCard -- New Boss -- Better Dividends?

MasterCard (MA) announced an new CEO. Richard Haythornthwaite, chairman, MasterCard Board of Directors anointed Ajay Banga as President and CEO effective July 1 replacing Robert W. Selander, who has been MasterCard’s chief executive officer since March 1997. The appointment was expected. Ajay Banga employment contract included a special multi-million dollar fee just in case he was not appointed by the Board. He also immediately becomes a member of the Board of Directors.

The real issue is what course will the new pilot plot for investors. CEO’s are similar to quarterbacks on NFL football teams. They make or break the team. There is precious little information about his intention or initiatives. There is precious little information about what the board sees as the future. We do know one thing the field is cut throat competitive. What does MasterCard have to offer that Visa, American Express and others are not already offering?

Trying to figure out MasterCard is like guessing what the Vatican will do. If you see too many consultants being hired for high level strategy look out. If you see a shoot for the moon expansion look out. If you see no change in dividends look out. MasterCard has a $33.9 billion market cap with an anaemic dividend yield of 0.23%. Weak and could use much improvement.

Disclosure: No position in this stock