Chief Executive’s 2014 Wealth Creators Index: MasterCard CEO Ajay Banga Tops the List

Current common methods of measuring corporate performance are based on earnings, earnings growth and return on equity (ROE). While these have their place, it is possible for companies to take actions that increase earnings that do not create value, often in the hope of gaining stock analyst upgrades. Looking at performance from an EVA/MVA perspective corrects accounting distortions that are legitimate but do not offer a true picture of economic value. Using these metrics more accurately reflects which companies are generating wealth after factoring in their true cost of capital.

Topping the ranking this year is MasterCard, a Purchase, New York-based technology company in the global payments industry. It helps to have a business model that has proved wickedly successful at throwing off cash. The company returns to the top of the Wealth Creation Index (WCI). Then-CEO Robert Selander won in 2009. MasterCard operates the world’s fastest payments processing network connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries.

Since he assumed the role of CEO in 2010, Ajay Banga has accelerated the evolution of the $8.3 billion company, setting a vision and defining a culture that saw the company quickly shift from its historical focus on issuing banks. Ajay established a three-pronged strategy to diversify the business by:

  • Growing the core business (credit, debit, prepaid and commercial);
  • Diversifying across geographies and customers (expanding relationships with non-traditional segments); and
  • Building new businesses (addressing the increasing convergence of the physical and digital worlds).