An Insider Takes Charge : American Express Names Richard M. Furlaud Chairman

The board of American Express Co. named one of its own Monday as chairman, picking former pharmaceuticals executive Richard M. Furlaud, 68, to succeed James D. Robinson III, who in essence was forced to resign late last week by angry shareholders.

Looking past the tumult of the last few days, investors clearly were cheered by the developments--and the belief that new Chief Executive Harvey Golub now will have freer rein to revitalize the financial services giant.

American Express’ stock rose $1.375 to close Monday at $24.625. With 6.6 million shares traded, it was the day’s most active issue on the New York Stock Exchange.

The appointment of Furlaud represents the latest example of a giant U.S. corporation appointing a chairman who is not a part of management and also not chief executive. Troubled General Motors Corp. took a similar step last year. Some shareholder activists say this can help ensure that company management doesn’t become entrenched and insular to the detriment of shareholder interests.

Michael A. Lewis, an analyst at Dean Witter Reynolds, described the market reaction as positive “but not euphoric.” The stock has gained back much, but not all, of the ground it lost after what turned out to be the short-lived announcement last Monday that Robinson had beaten back an attempt to oust him.

Investors’ enthusiasm Monday may have been tempered by the fact that Furlaud, who will not be part of management, largely presided over the succession process that recommended keeping Robinson. Furlaud is to become chairman Feb. 22, the date Robinson’s resignation is effective.

Furlaud had been chief executive of Squibb Corp. After the pharmaceuticals firm merged with Bristol-Myers, he served until 1991 as the combined companies’ president. He has been an American Express director since 1972, heading the board’s compensation, benefits and nominating committee.

In a conference call with journalists, Furlaud underscored that Golub, 53, will be in charge of day-to-day operations. He declined to give a detailed description of his own role, saying only that he will “get involved with the major details of the long-term health of the business.”

Without specifying how long he plans to remain as chairman, Furlaud said it is by no means certain that Golub will eventually succeed him. “I intend to give it all the time necessary,” Furlaud said, but he added that his tenure may be limited by his age.

Meanwhile, more details emerged Monday of the wrangling that broke Robinson’s will to stay at the helm of the firm he led for 16 swaggering years.

Golub--who was Robinson’s choice as his successor--confirmed that big institutional holders of American Express stock “demanded” in a meeting last week that he inform the board of their displeasure that Robinson was remaining on as chairman.

He denied published reports that he confronted Robinson and urged him to resign. But pressed for details of their conversation, Golub said he also didn’t urge Robinson to stay.

Investors had become restive in recent years. The company’s stock price had declined steadily as its core business--the American Express card--was battered in intense competition with bank credit cards.

American Express also suffered through a series of mishaps as a result of Robinson’s expansion efforts. Robinson had to acknowledge that the acquisition of E. F. Hutton & Co. in the 1980s was a mistake; its brokerage unit, Shearson Lehman Bros., faced a continuing series of major problems.

Robinson is giving up all of his positions at American Express. And Golub made clear Monday that the executive Robinson pushed aside as head of Shearson, Howard L. Clark Jr., won’t be returning to that role.

A survey Monday of analysts who follow American Express indicated widespread sentiment that Golub has already put in place many of the steps needed to shore up the charge card business.

As the firm’s president, he quelled a merchant revolt by trimming the cut American Express takes on each customer charge. He has also spurred cardholders to use the card more by crafting an array of enhancements.