Thread: Amex CEO Kenneth Chenault

Oh, and one other thing that I thought of today. One of the great things that leadership at American Express did as part of their restructuring was cut year end bonuses for managers and above. That means that Ken Chenault willingly gave up his $6,000,000 bonus for 2008. Not many of us would give up a bonus that was worth four or five times our annual salary. I know I wouldn't. Leadership at American Express did that so that their frontline people, the people who have the most contact with the customer, would be able to keep their raises and bonuses. That speaks volumes about the kind of integrity they have.

Originally Posted by fffresh

As much as their use of bailout money disappoints me, I don't think we can hold that against them as long as the remain true to the rest of their values. As you mentioned their competitors have access to the funds. It is a sellout but it may be a necessity in order to keep doing business as usual and continue to employ most of their employees.

How long have you been employed there? It doesn't hurt to put your resume out there but I wouldn't count out Amex quite yet as it will be extremely tough to find another job in the same sector. With the exception of the bailout funds have they remained loyal to their principles?

re: CEO compensation - Chenault should without a doubt forgo his $6,000,000 bonus this year. A bonus should be performance based and judging by their recent performance I do not see how he deserves a performance-based bonus right now.

I wouldn't hold their performance this year against leadership. There isn't much we can do when the market melts down and people stop paying their accounts. I think American Express is very well structured and has done a great job at positioning themselves to come out of this downturn stronger than they were before they went into it. If anything I think that Ken and his team deserve a bonus for all the stress they have gone through and the tough decisions they have had to make in an unprecedented economy. They are trying to steer a hundred and fifty + year old company through an economy that is chewing up and spitting out better men. It is definitely a time when they are earning their salaries, that's for sure.

My background is in the law, so I was thinking about going back in that direction. I don't need to work in finance to be happy. I can move laterally right now and have job security. The one thing that people will always need is lawyers. Unless people suddenly stop getting arrested or falling down stairs then litigation is always going to exist. I've only been with AMEX for less than ten years, so I'm not married to it yet.

My thread turned popular since I was here last.

I can't blame the guy for taking in that kind of pay. That's what all the bigwigs are taking in now and it's status quo. Him skipping the bonus this year says a lot about his integrity. I don't hear about many others doing that.

What would you say reasonable compensation would be for a company the size of Amex during good times? I'm going to go ahead and say $5-10 mil but that would include the value of options. That sounds about right most CEOs are getting paid right now 3x an amount that's close to fair.

Originally Posted by Cucumber

Fuzz if youre a lawyer go into securities law you make a killing off all the investor class action lawsuits that are going to pop up after this is all over!

LOL Yeah, ain't that the truth!

On the subject of attorneys, Ken Chenault happens to be one himself. This was unusual for a non-MBA to head a company like American Express.

Why not cap C.E.O. pay based as a percentage of the net worth of the company? Something around 1-2% once the company is above a certain income level and if it's a public company. It would be more fair.

There would still be an incentive to excel, but if you based the percentages right (and I'm not good with math so I don't know what that would look like), and gave them a ceiling, someone could still be motivated but not take as much of the pie.

having salary be a % of earnings would be an improvement but then you would see them playing all kinds of games to make earnings be artificially higher so they would get more pay