January 07, 2016
Total director compensation, 2008–2014: $3,941,896
Average annual director compensation: $563,128
Average compensation per full year of service as director: $281,564
Kenneth Chenault is the current chairman and CEO of American Express, a position he has held for the past 14 years. He joined the company in 1981 after working as a management consultant at Bain & Co. A frequent guest of President Obama, he was selected to be a member of the President’s Council on Jobs and Competitiveness and was reportedly approached by White House officials about becoming Treasury Secretary in 2012. Chenault is a graduate of Bowdoin College and holds a JD from Harvard Law School.
In addition to being chairman of the board for American Express, Chenault is also a member of the boards for IBM and Procter & Gamble. He joined IBM in 1998, and Procter & Gamble in 2008. SEC filings reveal that as a director at these companies Chenault has been compensated a total of $3.9 million since 2008, averaging $563,128 annually. On average, each directorship Chenault served a full year at compensated him $281,564. It is important to note that the amount he has made as a director only includes compensation from IBM and Procter & Gamble. Chenault is not compensated for his service on the American Express board because of his role as the company’s chief executive. As CEO of American Express Chenault has averaged $22.5 million in annual compensation since 2008, and made a total of $157.7 million during this same period.
Mr. Chenault is in the interesting position of being a CEO responsible, in part, for setting the pay of other CEOs. It is unclear whether this has made him more or less generous towards the CEOs at IBM and Proctor & Gamble. There was a decrease in pay of the CEOs at both companies of about 20 percent from 2008 to 2014. This is probably due to the fact that both companies had changes in leadership between 2011 and 2012. In both cases, there is a clear decline in pay as a new executive takes the top office.
Between 2008 and 2014 the performance of American Express, IBM, and Procter & Gamble is mixed. For comparison, the S&P 500 saw an increase in prices during this period of 42 percent. Underperforming this was Procter & Gamble, whose prices grew by just 26 percent. IBM kept pace with the market, its prices grew by 53 percent. American Express preformed the best overall during this period, its share prices grew by 82 percent. However, American Express has struggled in the last year. Its share prices have actually fallen from $94 per share to $69. This has caused some rumors that Mr. Chenault might soon be replaced as CEO, although, with the death of his most likely successor in May of this year, the company has thus far seemed unable to find a suitable replacement.