Foundation to Remain a Long-Term Mastercard
Stockholder
The Mastercard Foundation, in consultation with Mastercard
Incorporated (NYSE: MA), today filed an application with the
Ontario Public Guardian and Trustee for a court order to modify its
Deed of Gift. Once the order is granted, the changes are expected
to deliver greater flexibility in the Foundation’s long-term
investment and operational strategy to support its philanthropic
mission.
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Mastercard and its then shareholders created the independent
foundation in 2006 through a gift of company stock as part of its
initial public offering. The performance of Mastercard’s stock over
the past 17 years has led to the Mastercard Foundation developing
into one of the largest charitable foundations globally with assets
of approximately US$37 billion.
Since the Foundation’s formation, its stockholdings in
Mastercard have served as its sole source of funding. The original
Deed of Gift restricts the Foundation from selling its shares of
Mastercard except as required to meet the Canadian disbursement
quota and related operational needs until May 1, 2027. At that
point, the Foundation is permitted to diversify its holdings and
scale charitable programming spending, provided it does so in a
structured and orderly way so as not to unreasonably disrupt the
market for Mastercard stock. Today’s filing seeks permission to
commence the diversification process on January 1, 2024, and is
part of the Foundation’s operational growth and investment
strategy.
"The creation of an independent Foundation through a significant
gift of stock was an unprecedented act of generosity of Mastercard
and its shareholders. The growth of the value of the Mastercard
stock has enabled the Foundation to pursue its mission and create
lasting impact. We believe a diversified portfolio sets us on the
path to further expand our work and impact, investing in the people
and programs necessary to deliver on our mission — a world where
everyone has the opportunity to learn and prosper," said Reeta Roy,
President and CEO of the Mastercard Foundation.
The Foundation has consulted with Mastercard on the
diversification of its endowment if its application is successful.
The Foundation maintains confidence in the strength of the
Mastercard stock and will retain its name and branding, reinforcing
the shared values with Mastercard of doing well by doing good and
promoting financial inclusion. In addition, the Foundation and
Mastercard have entered into a non-binding Memorandum of Intention
and Understanding (MOI) to document the Foundation’s commitment to
an orderly sell-down and the ongoing belief in the strength of the
stock. The Foundation currently plans to sell the Mastercard stock
over seven years and retain a significant overweight holding of
Mastercard in its portfolio. The relevant excerpts from the MOI are
provided in the enclosed Appendix.
“The Foundation and its ability to thrive for the long-term is a
lasting legacy of our company,” said Tim Murphy, Chief
Administrative Officer of Mastercard. “Even as we have operated
independently, our respective work has helped to expand financial
inclusion and inclusive growth around the world. We believe the
steps outlined in the filing provide for an orderly diversification
of the Foundation’s holdings and look forward to a continued
relationship with the Foundation team for years to come.”
About the Mastercard Foundation
The Mastercard Foundation is a Canadian Foundation and one of
the world's largest foundations, with a mission to advance
education and financial inclusion. It works with visionary
organizations to enable young people in Africa and in Indigenous
communities in Canada to access dignified and fulfilling work. The
Foundation was established in 2006 through the generosity of
Mastercard when it became a public company. The Foundation is an
independent organization. Its policies, operations, and programs
are determined by the Foundation's Board of Directors and senior
leadership. www.mastercardfdn.org
About Mastercard (NYSE: MA)
Mastercard is a global technology company in the payments
industry. Our mission is to connect and power an inclusive, digital
economy that benefits everyone, everywhere by making transactions
safe, simple, smart and accessible. Using secure data and networks,
partnerships and passion, our innovations and solutions help
individuals, financial institutions, governments and businesses
realize their greatest potential. With connections across more than
210 countries and territories, we are building a sustainable world
that unlocks priceless possibilities for all.
www.mastercard.com
Forward-Looking Statements
This press release contains certain forward-looking statements
by Mastercard that are subject to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. When used in this
press release, the words “believe”, “expect”, “could”, “may”,
“would”, “will”, “trend” and similar words are intended to identify
forward-looking statements. Forward-looking statements involve a
number of risks and uncertainties. The factors that could cause
actual results to differ materially from expectations, include, but
are not limited to, whether the parties obtain court approval in a
timely manner and the market impact of the Mastercard Foundation’s
diversification of its shares of Mastercard common stock, as well
as additional factors detailed in Mastercard’s filings with the
U.S. Securities and Exchange Commission. Forward-looking statements
speak only as of the date they are made, and Mastercard undertakes
no duty to update any forward-looking statements made in this press
release or to conform such statements to actual results or changes
in the company’s expectations.
Appendix
The following excerpts are taken from the Non-Binding Memorandum
of Intention and Understanding (MOI) entered into between
Mastercard Foundation and Mastercard Incorporated on June 15, 2023.
The MOI confirms that, with the exception of certain provisions
(including section 4, quoted below), the MOI does not constitute an
enforceable agreement between the parties, but is a non-binding
statement of the present intention and understanding of the parties
based on their consultations to date.
NB: The “Unlimited Alienation Period” referenced in the excerpts
below is a defined term in the Deed of Gift between the Mastercard
Foundation and Mastercard. It refers to the period beginning on May
1, 2027, and continuing indefinitely thereafter, when the
Foundation is permitted to diversify its endowment. The Foundation
has applied to vary its Deed of Gift so that the Unlimited
Alienation Period begins on January 1, 2024.
“4. Adherence to Requirements in Deed of
Gift. In carrying out the sale of Mastercard shares, the
Foundation confirms its commitment to adhere to the requirements in
Section 5.01(c) of the Deed, which provides that all sales of
Mastercard shares during the Unlimited Alienation Period shall be
conducted in an orderly and structured manner so as not to
unreasonably disrupt the market for Mastercard shares. Section 5 of
this MOI reflects the plan approved by the Foundation to implement
the orderly sell-down of the Mastercard shares and the Foundation’s
commitment to do so in a manner that does not unreasonably disrupt
the market for Mastercard’s shares.
The parties acknowledge and agree, consistent
with the Deed, that nothing in this MOI shall prevent the
Foundation’s directors from performing their fiduciary duties with
respect to the Mastercard shares, which requires them to act in the
best interests of the Foundation and its charitable purposes.
5. Plan for Sales of Mastercard
Shares. Conditional upon the granting of the said Order and
after the new commencement date of the Unlimited Alienation Period,
the Foundation has approved the following plan with respect to the
ordered and structured sales of the Mastercard shares:
(a) The Foundation will proceed with the
sell-down of the Mastercard shares into the public market to
diversify its investment portfolio over a seven-year period, ending
when the Foundation notifies Mastercard that it has reached the
target investment described in paragraph 5(b) (the “Sell-down
Period”).
(b) The Foundation intends to maintain a
target investment in Mastercard shares that represents
approximately 10% of the Foundation’s investment portfolio (which
portfolio shall consist of the Mastercard shares plus other
investments in the diversified portfolio including the Perpetual
Endowment Fund) at the end of the Sell-down Period. This target is
approximate, and the Foundation’s investment in Mastercard shares
may fluctuate following the Sell-down Period.
(c) The Foundation will sell between 13-15%
of its initial Mastercard shares (i.e., the total Mastercard shares
held by the Foundation at the beginning of the Unlimited Alienation
Period) annually during the Sell-down Period.
(d) The Foundation will limit daily sales of
Mastercard shares to not more than 5% of the average daily trading
volume for the previous two weeks.
(e) The parameters in paragraphs 5(a), (b),
(c) and (d) are subject at all times to prevailing market
conditions, applicable securities laws, and the Foundation’s
fiduciary duties. This may result in periodic adjustments to
aspects of the plan above over the course of the Sell-down
Period.”
6. Mastercard Acknowledgement and
Agreement: Mastercard acknowledges and agrees with the
Foundation’s intended actions …to seek the Order allowing earlier
diversification, on the basis of the Foundation’s expressed
commitment and intentions as set forth in Sections 4 and 5 of this
MOI. Mastercard will provide its written consent to the
[application to vary the Deed].”
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Mastercard Foundation Media Relations: Wariko
Kabuga-Waita wwaita@mastercardfdn.org +1 416-992-9089
Mastercard Investor Relations: Devin Corr or Jud Staniar
investor.relations@mastercard.com +1 914-249-4565
Mastercard Media Relations: Seth Eisen
Seth.Eisen@mastercard.com +1 914-249-3153
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