Golub to Take Over Troubled AmEx Unit
Harvey Golub, the second-ranking executive at American Express and heir-apparent to Chairman James D. Robinson III, moved Monday to take direct control of the company’s troubled main subsidiary, Travel Related Services.
In a separate development, sources close to the company said several TRS executives will soon be dismissed as a result of an internal investigation into why losses on the company’s Optima card were understated in financial reports earlier this year. The company has declined to comment on the investigation, which is continuing.
Golub, 53, is to be named chairman and chief executive of TRS. The move follows recent reports of losses at TRS, which encompasses American Express’ charge card, travelers check and travel businesses.
Golub, who headed American Express’ hugely successful IDS Financial Services unit, has moved up rapidly in the company in recent months. In July, he was named president of the parent company and became half of a newly created two-person office of the chairman with Robinson.
Before the announcement, the TRS unit was headed by Edwin M. Cooperman and G. Richard Thoman, whose titles were TRS co-chairmen and co-chief executives.
It was announced Monday that Cooperman will leave American Express to become one of two executive vice presidents at the insurance concern Primerica. Primerica is headed by Sanford I. Weill, a former American Express executive, who in recent months has hired away several senior American Express executives. In a brief interview, Weill said he had been in discussions with Cooperman “for quite a while” about a high-ranking job at Primerica.
Thoman will become vice chairman of TRS, giving up his other TRS titles, although he will remain president of American Express International.
American Express spokesman Larry Armour said that since September, Golub has been working full time on TRS. He said Golub’s new title as head of TRS “formalizes what had been sort of an ad hoc relationship.” Armour said Cooperman hadn’t been pressured to leave the company, and in a written statement Robinson praised Cooperman and said, “We are disappointed that Ed will be leaving American Express.”
American Express disclosed on Oct. 2 that it was taking a $265-million charge against third-quarter earnings because of big losses on the Optima card--mainly from customers who haven’t paid their bills--and to cover a reorganization of the unit.
The unit is expected to eliminate 1,700 jobs. In addition to problems with Optima, TRS has had disappointing results because of the recent drop-off in travel caused by the Gulf War and a slowing of growth in its flagship American Express charge business.
