American Express CEO Kenneth Chenault Is Retiring After A 16-Year Run

Kenneth I. Chenault, one of the longest-serving executives in finance and one of corporate America’s few black top leaders, will retire next year as the chairman and chief executive of American Express.

Under Mr. Chenault’s leadership, American Express expanded beyond its core market of corporate customers and wealthy cardholders to serve a broader clientele. The co-branding deals he sought out with airlines and large retailers helped the company become the credit card issuer with the highest customer spending in the United States.

But the company’s successes inspired envy — and copy-catting — from rivals. That competition picked off some of American Express’s most lucrative customers, straining its business in recent years, although the company’s approach has begun to renew investors’ enthusiasm.

“I’ve treasured every day of my 37-year career here,” Mr. Chenault, 66, said on a conference call with analysts. “It’s been a journey that spanned profound changes in the world of business.”

Mr. Chenault, the son of a dentist, joined American Express nearly four decades ago as a director of strategic planning and rose to become the company’s top executive in 2001. He has been the lone African-American at the helm of a big Wall Street firm since E. Stanley O’Neal stepped down as the chief executive officer of Merrill Lynch a decade ago, at the start of the financial crisis.

He will be succeeded by Stephen J. Squeri, 58, who has been the company’s vice chairman since 2015. Mr. Squeri will take Mr. Chenault’s place on Feb. 1.

In many ways, American Express came to define cachet in the credit card world, with its ubiquitous green card and mottos like “Membership Has Its Privileges.” For much of his run, Mr. Chenault parlayed exclusivity and status into strong profit growth and a soaring stock. From the end of 2001, revenues grew from around $21 billion to about $34 billion in 2014.

But the company struggled in recent years.

Others have horned in on American Express’s traditional territory, offering increasingly lavish rewards to attract high spenders. The Chase Sapphire Reserve card initially courted millennials with a large sign-up bonus of 100,000 points and a slew of benefits, attracting a wave of applications.

The company also lost two prominent deals, with Costco and JetBlue. Rivals had offered them better terms.

That competition hit the company’s finances. Revenues dropped in 2015 and 2016. Its shares sputtered.

Trying to regain the company’s footing, Mr. Chenault increased its focus on areas like international and small business customers. Its Small Business Saturday campaign became a mainstay of the “buy local” movement.

It also sought out new deals targeting affluent travelers. In June, it scored a coup and teamed up with Hilton, for which it will be the exclusive issuer next year.

Mr. Chenault’s revamped approach has begun to rekindle investors’ faith: After a yearslong slide, the company’s stock price rose 50 percent over the past year. Over his full tenure, American Express’s stock returns have outpaced those of the financial sector.

He described the company’s efforts over the last two years as a “turnaround,” and said that Mr. Squeri was the right choice to move the business forward.

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Mr. Chenault’s departure was widely expected, and the ascendance of Mr. Squeri, a 32-year company veteran, is unsurprising. Mr. Squeri has run a variety of business lines at the company, including its corporate card division.

American Express unexpectedly lost its heir apparent two years ago when Edward Gilligan, the company’s president, died after falling ill on a flight. Mr. Gilligan was a close friend of Mr. Chenault’s and had already taken over oversight of much of the company’s day-to-day operations.

During his 16 years in the top spot, Mr. Chenault often eschewed personal attention, serving as a reserved role model in the business community, particularly for black executives.

“Ken is a pioneer who set the standard for great leadership and quietly mentored and inspired generations of executives across many industries,” said Charles Phillips, a onetime software analyst who is now chief executive of the technology company Infor.

Mr. Chenault, who collected compensation valued at more than $60 million over the last three years, is an active philanthropist who took a leading role in raising money for the National Museum of African American History and Culture, which opened a year ago. He also serves on the boards of IBM, Procter & Gamble and nonprofit groups.

“He’s had an exceptional run,” said Bruce Gordon, a former president and chief executive of the N.A.A.C.P. and a friend of Mr. Chenault’s. “He’s been a steward of a great global brand. But Ken Chenault the man, in my opinion, is far more exceptional than Ken Chenault the C.E.O.”

While Mr. Chenault rarely drew attention to his position in an industry that remains dominated by white men in its top management ranks, he touched on it during an interview with the financier David Rubenstein that aired on Bloomberg TV.

“There were people inside and outside the company who said, ‘I don’t think a black person could ever become a C.E.O. of a company like Amex,’” Mr. Chenault said. “But my view, taken from my parents, was that obstacles were to be overcome.”

Warren E. Buffett, chairman and chief executive officer of Berkshire Hathaway — American Express’s largest shareholder — called Mr. Chenault “the benchmark that I measure others against” on corporate leadership.

On a call with investors, American Express’s departing and incoming leaders both offered assurances that the company’s troubles will recede.

American Express is “moving into a period of growth,” Mr. Squeri said. He said his priorities would include digital innovation, shoring up the company’s position in the premium consumer market and expanding its share of commercial payments globally.

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