American Express Names President, COO
American Express Co. named Kenneth I. Chenault president and chief operating officer, marking the first public anointment of a black executive to run one of the nation’s biggest companies.
In an unusually forward-looking statement, Harvey Golub, the firm’s chairman and chief executive, said Thursday that Chenault was his choice for successor when Golub retires in seven years at age 65.
“This move clearly recognizes Ken as the No. 2 executive in the company and the primary internal candidate to succeed me when the time comes,” Golub said in a letter to the company’s employees.
Chenault, 45, would be the first African American to take control of a company the size of American Express, which Fortune magazine ranks as the 65th largest in the U.S., based on annual revenues.
None of the country’s top 100 companies has a black chief executive. The only other black president of a major company is Richard Parsons at Time Warner Inc.
But Time Warner is much smaller, with $8 billion in revenues in 1996, compared with American Express’ $15.8 billion. And Parsons has not been identified as a likely successor to Time Warner CEO Gerald Levin.
Aside from Parsons, only A. Barry Rand, an executive vice president at Xerox Corp., comes close to Chenault’s status among black executives in corporate America, said Alfred A. Edmond Jr., executive editor of Black Enterprise magazine, which tracks the rise and fall of black executives.
The position of president has been vacant since Jeff Stiefler resigned from the company in September 1995.
In a telephone interview, Chenault said that while “it would obviously be naive and untrue to say that race is not a factor in our society . . . at American Express, I have been totally judged on my performance” since joining the firm in 1981.
Shares of New York-based American Express fell $1.375 to close at $64.375 on the New York Stock Exchange.
As president and chief operating officer, Chenault will take charge of all of American Express’ businesses, except American Express Financial Advisors and American Express Bank. The latter two will continue to report to Golub initially, but later will be shifted to Chenault.
Chenault will also replace Golub as chief executive of American Express Travel Related Services.
Chenault, who holds a degree from Harvard Law School, rose through the ranks to run the company’s consumer card group. He became president of American Express Travel Related Services in 1993.
Chenault said he aims to increase American Express’ charge card market share, which he said reversed a decade-long drop last year.
He also said he would be able to accelerate the company’s annual profit growth, if American Express wins its campaign to get Visa USA and MasterCard International to allow their member banks to issue American Express cards in the United States.
