American Express CEO Ken Chenault Is Retiring

Tyler Durden's picture

Despite credit card giant American Express reporting another round of solid quarterly earnings, with revenue of $8.40bn beating expectations of $8.19bn, and generating EPS of $1.50, also above the $1.48 expected, and boosting its profit guidance for good measure, now projecting full year EPS of $5.80 to $5.90, up from $5.60 to $5.80 (above the consensus estimate of $5.75), AXP stock initially spiked, then immediately slumped back to  unchanged, following news that the company's CEO since 2001, Ken Chenault, is retiring effective February 1, 2018.

The unexpected departure prompted Warren Buffett, the company's largest shareholder, to share the following parting words “Ken’s been the gold standard for corporate leadership and the benchmark that I measure others against. He led the company through 9/11, the financial crisis and the challenges of the last couple of years. American Express always came out stronger. Ken never went for easy, short-term answers, never let day-to-day challenges distract him from what was right for the moderate to long term. No one does a better job when it really counts and he’s always done it with the highest degree of integrity.”

Chenault will be replaced by Stephen Squeri, who has been Vice Chairman since 2015 and prior to that was Group President of the Company’s Global Corporate Services Group.

Full press release below:

American Express Announces Stephen J. Squeri to Succeed Kenneth I. Chenault as Chairman and Chief Executive Officer

 

American Express Company (AXP) said today that its Board of Directors has appointed Stephen J. Squeri Chief Executive Officer and elected him Chairman of the Board, each effective February 1, 2018. Mr. Squeri, 58, will succeed Kenneth I. Chenault, 66, who will retire after a distinguished 37-year career with the Company.

 

Mr. Squeri has been Vice Chairman since 2015 and prior to that was Group President of the Company’s Global Corporate Services Group.

 

Mr. Chenault has served as Chairman and Chief Executive Officer since 2001.

 

“We are completing a two-year turnaround ahead of plan with strong revenue and earnings growth across all of our business segments,” said Mr. Chenault. “We’ve added new products and benefits, acquired record numbers of new customers, expanded our merchant network and lowered operating costs. We’ve dealt effectively with competitive challenges and redesigned our marketing, customer service and risk management capabilities for the digital age.”

 

“We’re starting a new chapter from a position of strength and this is the right time to make the leadership transition to someone who’s played a central role in all that we’ve accomplished,” Mr. Chenault continued. “Steve knows the industry. He knows the business and the brand. He knows the marketplace and how important the relationships we build with customers are to our success. He’s an excellent strategist and a strong leader.”

 

Robert D. Walter, Lead Director of American Express’ Board of Directors said, “Clear vision, sound judgment and the courage to make tough decisions are what define a leader. For 16 years we’ve had a great one in Ken Chenault. He’s met every challenge head on. He’s rallied the organization at times of crisis and he’s delivered for shareholders by making a great company even better.”

 

“Ken has also groomed an outstanding successor,” Mr. Walter continued. “Steve built commercial payments into one of our fastest growing businesses. He strengthened a world-class customer service network and transformed our technologies infrastructure. He’s led a reengineering program that lowered operating expenses and reallocated funding to the initiatives that are now driving growth across the business.”

 

“We’ve had a very thorough succession process underway for five-plus years that involved every member of the board and we are unanimous in our decision that Steve’s the best person to build on the progress under way at American Express,” added Mr. Walter.

 

Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. said, “Ken’s been the gold standard for corporate leadership and the benchmark that I measure others against. He led the company through 9/11, the financial crisis and the challenges of the last couple of years. American Express always came out stronger. Ken never went for easy, short-term answers, never let day-to-day challenges distract him from what was right for the moderate to long term. No one does a better job when it really counts and he’s always done it with the highest degree of integrity.”

 

“American Express is a very special company, one in which I first invested 53 years ago,” Mr. Buffett added. “Ken built on its storied history – not by abandoning traditional strengths, but by building on them and adding new ones. He’s been a great CEO and Berkshire Hathaway shareholders owe him a huge thank you.”

 

“I’ve spoken with Steve and have been hearing about him from Ken,” continued Mr. Buffett. “From everything I’ve heard, he’s absolutely the right person for the job. He knows the business, has a great track record and appreciates what makes American Express special. Ken and the board have picked someone who is going to build on a great legacy of service and success.”

 

Berkshire Hathaway is American Express’ largest shareholder.

 

“It’s a privilege to lead one of the world’s most admired companies and I appreciate the expressions of confidence from the Board and our largest shareholder,” said Mr. Squeri. “Ken has been a terrific mentor. He leads by example and taught me, along with the rest of the organization, the importance of the personal connection millions of people around the world have with American Express."

 

“I feel very good about what we’ve accomplished and, while it’s a fast-moving competitive marketplace, I believe we’re in a strong position for the years ahead,” Mr. Squeri continued. “American Express is a unique brand and a franchise that’s unmatched by any one competitor. We have an impressive range of growth opportunities ahead of us. I’m going to be focused on innovating, building the brand around the strength of our customer service and partnering with merchants and businesses to take full advantage of the digital convergence that’s underway in the world of payments and commerce.”

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onewayticket2's picture

maybe the Board realized that sponsoring presidential death porn in central park wasnt such a good idea...

curbjob's picture

Word is he's retiring after reading the comment section of ZH.

Rapunzal's picture

I wish all those child abusing bankster creeps would just go away on an island and leave mankind alone. That would be doing gods work.

Jack McGriff's picture

Here is how the 1% roll people:  Retiring with over $100 MILLION in stocks as compensation, which is NOT subject to the highest progressive income tax rate of 39.6%; taxes already having been paid on such a windfall as capital gains at 15%.  Meanwhile, progressive income tax rates are for the wage slaves, the tax donkeys, the FOOLS who don't know what the fuck they are talking about and always bleat about how lowering income tax favors the 1%.  Har har!!  No, the 39.6% rate is for the regular people to prevent us from ever becomming rich.   The 1% might pay 15% capital gains but NEVER 39.6%!!!  

Déjà view's picture

Capital Gains 20% as of 01/01/2013...

aliens is here's picture

Someone is going to retire with millions in the bank.

robertsgt40's picture

No one wants to be the last rat off a ship.

Mikeyyy's picture

According to Bloomberg, Chenault owns 1,244,973 shares of American Expess worth $114,276,071 as of today's close.

 

Not billionaire status but should last him through retirement...

mily's picture

He knows what happens after prolonged period of economic depression...

Seal's picture

Fuk him & the car rental insurance no coverage

tedstr's picture

'bout f'n time.  this guy destroyed one of the great financial brands of all time.  I dumped my AMEX 10 years ago.  Free John Corzine!

TN VOLUNTEER's picture

....Dumped AX a month ago( member for 10 years), they have a shitty Costumer Service, if you don't have

the Gold Card... To Hell with them!

Harry Lightning's picture

I never understood why anyone uses the American Express card instead of a true Credit Card. Amex makes you pay your balance in full at the end of each billing cycle, whereas VISA and Mastercard allow you to carry some or most of the balance forward. Why wouldn't people want the flexibility of being able to run their balance forward, asde from the obvious interest rate accrual. 

If you have to pay the full amount of purchases at the end of the month, why not just pay cash for the item when you buy it ? Or wait until you have the cash to buy the item, which is what Amex is making you do anyway with a slight grace period of one to two weeks.

The annual fee Amex charges is another reason for not using their card. Many VISA and Mastercard accounts no longer charge annual fees, so why pay for something you don't need ?

F nally, the fees that Amex charges merchants is higher than the fees charged by VISA and Mastercard. This is why a lot of businessess will not take American Express. By some accounts, Anex charges a 4% fee on each bill pad with an Amex card, whereas VISA and Mastercand both charge less than 1%.

Pernicious Gold Phallusy's picture

Hey Ken! You can buy adult diapers and a walker at Costco!

Drop-Hammer's picture

They think that hiring a magic mulatto will increase their fortunes.  Typical cucks.  BTW, did not American Express once issue travelers checks (or cheques)?  I once left home without them.