Widely expected to retire, Kenneth Chenault, 66, has been a veteran in the company and thanks to his leadership, Amex has reported a 19% rise in its quarterly earnings this year.
In a significant development, American Express Co has stated that Kenneth Chenault, 66, its chairman and chief executive will step down in early 2018.
The development makes an end to a nearly 17-year tenure at American Express, the No. 1 U.S. card issuer by spending.
Chenault, will be succeeded by Stephen Squeri, 58, American Express’ Vice Chairman on Feb. 1, said the company.
Squeri, is a 32-year veteran at the company and has served as the group’s president of global corporate services before taking over as vice chairman in July 2015.
American Express shares were barely down at $91.70 in after-hours trading.
Chenault has been widely expected to retire and has spent the last two years firefighting after the company lost a lucrative partnership with Costco Wholesale Corp, a warehouse club retailer.
Following the end of the deal, American Express lost nearly a fifth of its value in 2015.
The breakup shook up the credit card industry, driving business from millions of customers to other card companies.
“He probably would have hung it up about two years ago and then he decided to stick through (after) all the bad news … just to help them ride out that rough period,” said Edward Jones, an analyst at Kyle Sanders. “I think Steve carries on with the strategies that Ken has already had in place; I wouldn’t expect a major shift in how AmEx operates.”
“Ken’s been the gold standard for corporate leadership and the benchmark that I measure others against. He led the company through 9/11, the financial crisis and the challenges of the last couple of years,” said Warren Buffett.
Buffett’s Berkshire Hathaway Inc is American Express’ largest shareholder.
Incidentally, AmEx has reported a 19% rise in quarterly profits on the back of higher spending by card members and loan growth. As a result, it has raised its full-year 2017 EPS expectations to $5.80 to $5.90, from $5.60 to $5.80.
This is the first quarter without the impact of the loss of the Costco partnership.