American Express CEO Ken Chenault to step down
Kenneth I Chenault, one of the longest-serving executives in finance and one of corporate America’s few black top leaders, will retire next year as the chairman and chief executive of American Express.
Under Chenault’s leadership, American Express expanded beyond its core market of corporate customers and wealthy cardholders to serve a broader clientele. The co-branding deals he sought out with airlines and large retailers helped the company become the credit card issuer with the highest customer spending in the United States.
But the company’s successes inspired envy — and copy-catting — from rivals. That competition picked off some of American Express’s most lucrative customers, straining its business in recent years, although the company’s approach has begun to renew investors’ enthusiasm.
“I’ve treasured every day of my 37-year career here,” Chenault, 66, said on a conference call with analysts. “It’s been a journey that spanned profound changes in the world of business.”
Chenault, the son of a dentist, joined American Express nearly four decades ago as a director of strategic planning and rose to become the company’s top executive in 2001. He has been the lone African-American at the helm of a big Wall Street firm since E Stanley O’Neal stepped down as the chief executive officer of Merrill Lynch a decade ago, at the start of the financial crisis.
He will be succeeded by Stephen J Squeri, 58, who has been the company’s vice chairman since 2015. Squeri will take Chenault’s place on February 1.
In many ways, American Express came to define cachet in the credit card world, with its ubiquitous green card and mottos like “Membership Has Its Privileges.” For much of his run, Chenault parlayed exclusivity and status into strong profit growth and a soaring stock. From the end of 2001, revenues grew from around $21 billion to about $34 billion in 2014. But the company struggled in recent years.
Others have horned in on American Express’s traditional territory, offering increasingly lavish rewards to attract high spenders. The Chase Sapphire Reserve card initially courted millennials with a large signup bonus of 100,000 points and a slew of benefits, attracting a wave of applications.
The company also lost two prominent deals, with Costco and Jet Blue. Rivals had offered them better terms. That competition hit the firm’s finances. Revenues dropped in 2015 and 2016. Its shares sputtered.