MasterCard International is cutting its board of directors from 31 to 17 members, the association announced Wednesday.
The move is in line with expectations and conforms to the wishes of Citigroup, which said it is tilting its card business toward MasterCard.
Among MasterCard's new slate of board nominees is Robert B. Willumstad, head of global consumer lending for Citigroup, who oversees the cards business. Before Citibank merged with Travelers Group, he previously served on MasterCard's board as a representative of Travelers.
He would be the only Citigroup representative; two Citigroup executives sat on the Visa board until recently.
MasterCard said voting proxies for the new board have been sent to members, and the first meeting will be March 25.
MasterCard also said it has appointed an executive to "work with regional heads in the development of our relationship with Citigroup outside the United States," said a spokeswoman.
Citigroup co-chairman John Reed and consumer banking co-chief Robert Lipp resigned from the Visa U.S.A. board Feb. 5, apparently dissatisfied with Visa's rules. Citi has wanted to emphasize its own brand over those of the card associations.
"We believe the restructuring of MasterCard makes it an association more in line with our strategic thinking," said Susan Weeks, a Citigroup spokeswoman. "As a result of that, we think over time we will issue a larger proportion of MasterCards in the future, but we still will continue to issue Visa."
Ms. Weeks said MasterCard's moves - which include an internal reorganization announced last month - "return more control to the individual issuers," which is what Citigroup favors.
Robert W. Selander, president and chief executive officer of MasterCard, said the changes reflect his company's "leadership, flexibility, and intense focus on serving our most important customers."
The new MasterCard board would consist of representatives from seven U.S. card issuers and nine foreign ones, plus Mr. Selander. Donald L. Boudreau, vice chairman of Chase Manhattan Corp., will remain chairman of the board.
The other U.S. issuers that retain representation are: MBNA Corp., Metris Cos., USAA Federal Savings Bank, Household International, and Mellon Bancorp. Household recently sold off portions of its portfolio, and Mellon said it plans to sell its card accounts.
Departing from the board will be representatives of BankBoston Corp., KeyCorp, Europay International, and GE Capital Corp., which has largely left the bank card business.
MasterCard's executive committee decided that a 31-person board was too unwieldy and determined that 17 members was the "optimum size," especially "in light of the consolidation in the industry," said Sharon Gamsin, a MasterCard spokeswoman.
Visa International has 23 board members.
"Not surprisingly, some of our larger members will play a role in the governance of the organization," Ms. Gamsin said. "Smaller members will continue to participate on regional boards and numerous committees."
In an internal announcement last week, MasterCard also elaborated on a structural reorganization it made public Feb. 17. At that time, five business line heads were named, cutting back from the 11 people who had previously reported to Mr. Selander, who is a former Citibank executive.
In a shift away from geographical divisions, MasterCard had named Alan J. Heuer, formerly president of the U.S. region, senior executive vice president in charge of all customer-related activities.
Filling in some blanks in the organizational chart, MasterCard Wednesday named three of the regional heads who will report to Mr. Heuer. Jean F. Rozwadowski, who has overseen Europe, the Middle East, and Africa, will move to the region representing Latin America and the Caribbean, succeeding Richard N. Child, who resigned.
Donald Van Stone, who previously reported to Mr. Rozwadowski as senior vice president for the Middle East and Africa, has been named to Mr. Rozwadowski's former position, and Andre Sekulik remains head of Asia- Pacific. No regional executive has been named for North America yet.
Two executives reporting to Mr. Heuer will be responsible for relationships with the top 10 MasterCard members globally: G. Henry Mundt 3d, who has until recently served as executive vice president of global deposit access (debit) products; and Gary Flood, senior vice president of member relations. New titles have not been announced.
Gary Heatherington, who had been running MasterCard's Canadian operation, will be responsible for "developing our approach to working with the next 40 largest members," Ms. Gamsin said.
Nicholas A. Utton, until now senior vice president of marketing, will oversee global marketing and report to Mr. Heuer. Joseph V. Tripodi, an executive vice president of global marketing who reported to Mr. Selander, has resigned to join Seagram Co. as chief marketing officer.
Ann Camarillo, senior vice president of member relations, will be in charge of non-U.S. relations with Citigroup.
Creating a dedicated position for Citigroup "is nothing more than common sense," said Mark Sievewright, a former British banker and Europay executive. "I think they would deserve it, given their size."
Mr. Sievewright, who is now president of PSI Global in Tampa, a market research firm, said MasterCard made a good decision in weighting its board toward international members, who may have more expertise than U.S. members in growing payment instruments such as debit and smart cards.
"Visa has put a lot of effort into communicating its emphasis on these emerging technologies," Mr. Sievewright said. "I think what MasterCard is saying is, 'The world is global, we have to be a global organization, and we have to reflect that in our board composition.' " u
