Mastercard’s handling of the finance chief’s medical condition drew high marks from some corporate governance experts who said disclosing medical challenges is often a delicate undertaking. First, companies must decide whether the matter is material to the company and, if so, they need to keep investors informed while also safeguarding the executive’s privacy.

“A CFO is really the face of the company on Wall Street,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, so their presence matters. “When in doubt, you should disclose...They made the right decision.”    

Medical issues are often a challenge for companies because they must “strike the right balance between transparency, oversharing and maintaining confidentiality when making any executive disclosure,” Shawn Cole, president of the executive search firm Cowen Partners, said in an email response to questions. 

In the case of a CFO potentially being unavailable, the board must put a plan in place to cover financial oversight, audits and strategic planning and, in addition, navigate communication around the disclosures. 

If they don’t disclose enough and the issue escalates — such as a problem leading to a loss or departure of a CFO — that can cause surprise and concern among investors, he said. On the other hand, if a company “overshares” and it turns out to be a non-issue, it risks unnecessary scrutiny. But Cole commended Mastercard for walking a careful line with their disclosure. 

“They’ve managed to provide enough information to reassure stakeholders without crossing into unnecessary detail,” he said. 

The issue has dogged some of the biggest public companies. For example, Apple CEO Steve Jobs resigned in 2011 saying “that day has come” and that he could no longer meet his duties after battling a rare form of pancreatic cancer, ABC News reported. Earlier that year debate swirled about how much investors were entitled to know about his health, according to a 2011 article in The Atlantic. Jobs died in October of 2011 at the age of 56, The New York Times reported.

NHL, the form of cancer that Mehra faces, typically starts in white blood cells, which are part of the body’s immune system, according to the American Cancer Society. Accounting for about 4% of cancers in the U.S., it can be found early with enlarged lymph nodes being one of the most common symptoms. 

Mastercard’s disclosure comes just days after the company agreed to acquire the cybersecurity company Recorded Future for $2.65 billion. 

Mehra’s compensation totaled $10.8 million last year, comprised largely of $6.5 million in stock awards as well as $1.78 million in non-equity incentive plan compensation, $1.7 million in option awards and $791,667 salary, according to the company’s April filing. 

By Maura Webber Sadovi on Sep 18, 2024
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