In corporate America, diversity seems to dwindle the closer you get to the top. Of the few top Black executive leaders in corporate America, Kenneth Chenault, the chief executive of American Express is retiring. Read about Chenault and his amazing career as a top executive representing the Black community.
The Seattle Times reports in an article by Stacy Cowley:
Kenneth 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 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 copycatting — from rivals. That competition picked off some of American Express’ 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 Feb. 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 honed in on American Express’ traditional territory, offering increasingly lavish rewards to attract high spenders. The company also lost two prominent deals, with Costco and JetBlue. Rivals had offered them better terms.
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That competition hit the company’s finances. Revenues dropped in 2015 and 2016. Its shares sputtered.
But the company’s successes inspired envy — and copycatting — from rivals. That competition picked off some of American Express’ most lucrative customers, straining its business in recent years, although the company’s approach has begun to renew investors’ enthusiasm.
Trying to regain the company’s footing, Chenault increased its focus on areas like international and small-business customers. It also sought out new deals targeting affluent travelers. In June, it scored a coup and teamed up with Hilton, for which it will be the exclusive issuer next year.
Chenault’s revamped approach has begun to rekindle investors’ faith: After a yearslong slide, the company’s stock price rose 50 percent over the past year. Over his full tenure, American Express’ stock returns have outpaced those of the financial sector.
He described the company’s efforts over the last two years as a “turnaround,” and said Squeri is the right choice to move the business forward.
Chenault’s departure was widely expected, and the ascendance of Squeri, a 32-year company veteran, is unsurprising. Squeri has run a variety of business lines at the company, including its corporate card division.
During his 16 years in the top spot, Chenault often eschewed personal attention, serving as a reserved role model in the business community, particularly for black executives.
“Ken is a pioneer who set the standard for great leadership and quietly mentored and inspired generations of executives across many industries,” said Charles Phillips, a onetime software analyst who is now chief executive of the technology company Infor.
Chenault, who collected compensation valued at more than $60 million over the last three years, is an active philanthropist who took a leading role in raising money for the National Museum of African American History and Culture, which opened a year ago. He also serves on the boards of IBM, Procter & Gamble and several nonprofit organizations.
“He’s had an exceptional run,” said Bruce Gordon, a former president and chief executive of the NAACP and a friend of Chenault. He added: “He’s been a steward of a great global brand. But Ken Chenault the man, in my opinion, is far more exceptional than Ken Chenault the CEO.”
While Chenault rarely drew attention to his position in an industry that remains dominated by white men in its top management ranks, he touched on it during an interview with the financier David Rubenstein that aired on Bloomberg TV.
“There were people inside and outside the company who said, ‘I don’t think a black person could ever become a CEO of a company like Amex,’ ” Chenault said. “But my view, taken from my parents, was that obstacles were to be overcome.”
Warren Buffett, chairman and chief executive officer of Berkshire Hathaway — American Express’ largest shareholder — called Chenault “the benchmark that I measure others against” on corporate leadership.
On a call with investors, American Express’ departing and incoming leaders both offered assurances that the company’s troubles will recede.
Last week the company reported a third-quarter profit of $1.4 billion on sales of $8.4 billion, both ahead of analyst expectations.
“We’re starting the next chapter from a position of strength,” Chenault said. “I believe our best days are ahead of us.”
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One Of America’s Few Black CEO’s Is Retiring At The Top was originally published on blackamericaweb.com
