Amex names a new CEO as it confronts a SCOTUS case, Costco recovery
There's never an easy time to change leaders, but for American Express it's a particularly challenging time as it faces legal challenges to a core part of its fee structure and is still revamping its business model after a stinging client loss.
Longtime CEO Ken Chenault, 66, will retire at yearend after 17 years as CEO. He will be succeeded by Stephen J. Squeri, Amex's vice chairman who was previously the group president of Amex's global corporate services group.
Squeri's being thrown into the deep end right away. Amex is adding mobile-driven services to offset the loss of its Costco cobrand business to Citigroup, a loss that has weighed on its financial performance. Even more fundamentally, Amex is headed for a Supreme Court showdown to protect its fee policies; it also faces regulators who contend Amex overcharged cardholders in the U.S. territories.
Amex has responded to the Costco loss through a focus on mobile services, a strategy that has started to show some results given the coming wave of Internet of Things deployments and the expansion of use cases for distributed ledger technology.
As it preps for its Supreme Court case, Amex will have to convince the justices that its anti-steering rules do not harm competition. The need to make the argument again was unexpected, given that a lower appeals court had dismissed the Department of Justice's case in an earlier ruling.
Amex did not return a request for comment. “We are completing a two-year turnaround ahead of plan with strong revenue and earnings growth across all of our business segments,” Chenault said in a release. “We’ve added new products and benefits, acquired record numbers of new customers, expanded our merchant network and lowered operating costs. We’ve dealt effectively with competitive challenges and redesigned our marketing, customer service and risk management capabilities for the digital age.”