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Mar 12, 02, 11:18 am
American Express's Chenault Got $27.9 Mln in 2001 Compensation
By George Stein
New York, March 11 (Bloomberg) -- American Express Co. Chairman Kenneth Chenault received compensation valued at $27.9 million in 2001 as the company's stock plunged 35 percent, the second-biggest decline among major diversified financial service companies.
Chenault, who became chairman of the fourth-biggest U.S. credit-card issuer in 2001, saw his total compensation rise 89 percent, as the company's net income fell 53 percent to $1.3 billion in 2001 from $2.8 billion in 2000.
American Express's board compensation committee acknowledged the company hadn't met long-term financial targets, blaming the recession, default rates for high-yield debt, a drop in stock trading and lower spending by American Express card holders.
``Paying anyone $28 million in a year that let down the shareholders in the way they did is just unwarranted and ludicrous,'' said Henry Asher, president of Northstar Group, which has about $100 million of assets, including 38,000 American Express shares.
The American Express board committee cited ``several accomplishments'' in boosting Chenault's compensation ``despite the disappointing overall performance.''
Cost cutting and diversification of its portfolio to be less dependent on good economic times were most important, according to the committee report, signed by committee chairman Jan Leschly, former chief executive of SmithKline Beecham Plc and now chairman of Care Capital Llc.
Job Cuts
American Express, which lost $1 billion on its high-yield bond investments last year, said it cut 14,200 employees from the 88,850 on its payroll in 2001.
Chenault declined to comment. ``We're not putting him forth for interviews,'' said spokeswoman Molly Faust.
Chenault's package included a raise in his base salary to $1 million from $700,000 and a bonus of $2.22 million, which was a drop from $2.88 million the year before. His long-term incentive pay rose to $2.72 million from $1.97 million.
The value of options Chenault received was calculated at $13.42 million, up from $8.65 million in last year's grant. He received other compensation of $289,963.
Chenault ended 2001 owning 1,021,062 shares, with rights to acquire another 1,700,694 shares.
American Express shares began 2001 at $52 and ended the year at $35.69, a 35 percent decline. Standard & Poor's index of diversified financial service companies began last year at 610.43 and finished at 548.25, for a 14 percent drop. Within the index, only Charles Schwab Corp., with a 45 percent slide, had a worse showing.
American Express, which is up 16 percent this year, rose $1.08 to 41.55 in New York trading.
By George Stein
New York, March 11 (Bloomberg) -- American Express Co. Chairman Kenneth Chenault received compensation valued at $27.9 million in 2001 as the company's stock plunged 35 percent, the second-biggest decline among major diversified financial service companies.
Chenault, who became chairman of the fourth-biggest U.S. credit-card issuer in 2001, saw his total compensation rise 89 percent, as the company's net income fell 53 percent to $1.3 billion in 2001 from $2.8 billion in 2000.
American Express's board compensation committee acknowledged the company hadn't met long-term financial targets, blaming the recession, default rates for high-yield debt, a drop in stock trading and lower spending by American Express card holders.
``Paying anyone $28 million in a year that let down the shareholders in the way they did is just unwarranted and ludicrous,'' said Henry Asher, president of Northstar Group, which has about $100 million of assets, including 38,000 American Express shares.
The American Express board committee cited ``several accomplishments'' in boosting Chenault's compensation ``despite the disappointing overall performance.''
Cost cutting and diversification of its portfolio to be less dependent on good economic times were most important, according to the committee report, signed by committee chairman Jan Leschly, former chief executive of SmithKline Beecham Plc and now chairman of Care Capital Llc.
Job Cuts
American Express, which lost $1 billion on its high-yield bond investments last year, said it cut 14,200 employees from the 88,850 on its payroll in 2001.
Chenault declined to comment. ``We're not putting him forth for interviews,'' said spokeswoman Molly Faust.
Chenault's package included a raise in his base salary to $1 million from $700,000 and a bonus of $2.22 million, which was a drop from $2.88 million the year before. His long-term incentive pay rose to $2.72 million from $1.97 million.
The value of options Chenault received was calculated at $13.42 million, up from $8.65 million in last year's grant. He received other compensation of $289,963.
Chenault ended 2001 owning 1,021,062 shares, with rights to acquire another 1,700,694 shares.
American Express shares began 2001 at $52 and ended the year at $35.69, a 35 percent decline. Standard & Poor's index of diversified financial service companies began last year at 610.43 and finished at 548.25, for a 14 percent drop. Within the index, only Charles Schwab Corp., with a 45 percent slide, had a worse showing.
American Express, which is up 16 percent this year, rose $1.08 to 41.55 in New York trading.