Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Classes of Capital Stock

Mastercard’s amended and restated certificate of incorporation authorizes the following classes of capital stock:

Class	Par Value Per Share	Authorized Shares (in millions)	Dividend and Voting Rights
A	$0.0001	3,000	One vote per share Dividend rights
B	$0.0001	1,200	Non-voting Dividend rights
Preferred	$0.0001	300	No shares issued or outstanding at December 31, 2016 and 2015, respectively. Dividend and voting rights are to be determined by the Board of Directors of the Company upon issuance.

Ownership and Governance Structure

Equity ownership and voting power of the Company’s shares were allocated as follows as of December 31:

	2016				2015
	Equity Ownership		General Voting Power		Equity Ownership		General Voting Power
Public Investors (Class A stockholders)	87.7	%	89.3	%	87.7	%	89.4	%
Principal or Affiliate Customers (Class B stockholders)	1.8	%	—	%	1.9	%	—	%
The MasterCard Foundation (Class A stockholders)	10.5	%	10.7	%	10.4	%	10.6	%

Class B Common Stock Conversions

Shares of Class B common stock are convertible on a one-for-one basis into shares of Class A common stock.  Entities eligible to hold Mastercard’s Class B common stock are defined in the Company’s amended and restated certificate of incorporation (generally the Company’s principal or affiliate customers), and they are restricted from retaining ownership of shares of Class A common stock.  Class B stockholders are required to subsequently sell or otherwise transfer any shares of Class A common stock received pursuant to such a conversion. 

The MasterCard Foundation

In connection and simultaneously with its 2006 initial public offering (the “IPO”), the Company issued and donated 135 million newly authorized shares of Class A common stock to The MasterCard Foundation (the “Foundation”). The Foundation is a private charitable foundation incorporated in Canada that is controlled by directors who are independent of the Company and its principal customers. Under the terms of the donation, the Foundation became able to resell the donated shares in May 2010 and to the extent necessary to meet charitable disbursement requirements dictated by Canadian tax law. Under Canadian tax law, the Foundation is generally required to disburse at least 3.5% of its assets not used in administration each year for qualified charitable disbursements. However, the Foundation obtained permission from the Canadian tax authorities to defer the giving requirements for up to ten years, which was extended in 2011 to fifteen years. The Foundation, at its discretion, may decide to meet its disbursement obligations on an annual basis or to settle previously accumulated obligations during any given year. The Foundation will be permitted to sell all of its remaining shares beginning twenty years and eleven months after the consummation of the IPO.

Stock Repurchase Programs

On February 5, 2013, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $2 billion of its Class A common stock (the “February 2013 Share Repurchase Program”), which became effective in March 2013. 

On December 10, 2013, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $3.5 billion of its Class A common stock (the “December 2013 Share Repurchase Program”), which became effective in January 2014.  

On December 2, 2014, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $3.75 billion of its Class A common stock (the “December 2014 Share Repurchase Program”), which became effective in January 2015.

On December 8, 2015, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $4 billion of its Class A common stock (the “December 2015 Share Repurchase Program”), which became effective in February 2016.

On December 6, 2016, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $4 billion of its Class A common stock (the “December 2016 Share Repurchase Program”). The December 2016 Share Repurchase Program will become effective after completion of the December 2015 Share Repurchase Program.

The following table summarizes the Company’s share repurchase authorizations of its Class A common stock through December 31, 2016, as well as historical purchases:

	Authorization Dates
	December 2016		December 2015		December 2014		December 2013		February 2013		Total
	(in millions, except average price data)
Board authorization	$	4,000	$	4,000	$	3,750	$	3,500	$	2,000	$	17,250
Dollar-value of shares repurchased in 2014	$	—	$	—	$	—	$	3,225	$	161	$	3,386
Remaining authorization at December 31, 2014	$	—	$	—	$	3,750	$	275	$	—	$	4,025
Dollar-value of shares repurchased in 2015	$	—	$	—	$	3,243	$	275	$	—	$	3,518
Remaining authorization at December 31, 2015	$	—	$	4,000	$	507	$	—	$	—	$	4,507
Dollar-value of shares repurchased in 2016	$	—	$	3,004	$	507	$	—	$	—	$	3,511
Remaining authorization at December 31, 2016	$	4,000	$	996	$	—	$	—	$	—	$	4,996
Shares repurchased in 2014	—		—		—		42.6		1.9		44.5
Average price paid per share in 2014	$	—	$	—	$	—	$	75.81	$	83.22	$	76.14
Shares repurchased in 2015	—		—		35.1		3.2		—		38.3
Average price paid per share in 2015	$	—	$	—	$	92.39	$	84.31	$	—	$	91.70
Shares repurchased in 2016	—		31.2		5.7		—		—		36.9
Average price paid per share in 2016	$	—	$	96.15	$	89.76	$	—	$	—	$	95.18
Cumulative shares repurchased through December 31, 2016	—		31.2		40.8		45.8		31.1		148.9
Cumulative average price paid per share	$	—	$	96.15	$	92.03	$	76.42	$	64.26	$	82.29

The following table presents the changes in the Company’s outstanding Class A and Class B common stock for the years ended December 31:

	Outstanding Shares
	Class A		Class B
	(in millions)
Balance at December 31, 2013	1,148.8		45.4
Purchases of treasury stock	(44.5	)	—
Share-based payments	2.9		—
Conversion of Class B to Class A common stock	8.2		(8.2	)
Balance at December 31, 2014	1,115.4		37.2
Purchases of treasury stock	(38.3	)	—
Share-based payments	2.0		—
Conversion of Class B to Class A common stock	15.9		(15.9	)
Balance at December 31, 2015	1,095.0		21.3
Purchases of treasury stock	(36.9	)	—
Share-based payments	2.3		—
Conversion of Class B to Class A common stock	2.0		(2.0	)
Balance at December 31, 2016	1,062.4		19.3