Originally created 02/28/97

American Express names Chenault president, puts him in line for top job

NEW YORK - American Express Co. named Kenneth I. Chenault president and chief operating officer, marking the first public anointment of a black executive to run a one of the country's biggest companies.

In an unusually forward-looking statement Thursday, Harvey Golub, the company's chairman and chief executive, said Mr. Chenault was his choice for successor when Mr. Golub retires in seven years at age 65.

"This move clearly recognizes Ken as the Number Two executive in the company and the primary internal candidate to succeed me when the time comes," Mr. Golub said in a letter to the company's employees.

Mr. Chenault, 45, would be the first black person to take control of a company the size of American Express, which Fortune magazine ranks as the 65th largest in the country 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's $15.8 billion. And Mr. Parsons has not been identified as a likely successor to Time Warner chief Gerald Levin, and could be considered to be behind Ted Turner.

Aside from Mr. Parsons, only A. Barry Rand, an executive vice president at Xerox Corp., comes close to Mr. 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.

Customers of service companies like American Express have come to expect more diversity in executive suites, said John Nash, chief executive of the National Association of Corporate Directors. Also, public officials who run big pension funds for government employees have also been pushing for change, he said.

Mr. Chenault's appointment distinguishes him from a number of potential rivals at American Express. The position of president has been vacant since Jeff Stiefler resigned from the company in September 1995.

Mr. Chenault has been a vice chairman for just more than two years.

Two other vice chairmen - Chuck Farr and Jon Linen - will now report to Chenault. Richard Goeltz, vice chairman and chief financial officer, will continue to report to Golub.

Chenault was also nominated to sit on the company's board of directors.

As president and chief operating officer, Chenault will take charge of all of American Express's 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.

"For Ken, obviously it's a breakout, but it's a result of a steady ascent at American Express marked by results," Edmond said. "In many ways, if he were not black, this would not be a surprise."

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 as director of strategic planning.

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 won its campaign to get Visa U.S.A. and MasterCard International to allow their member banks to issue American Express cards in the United States.


Trending this week:


© 2018. All Rights Reserved.    | Contact Us