Kenneth Chenault’s announcement that he is stepping down as CEO of American Express means there will be just three black CEOs running Fortune 500 companies.
The numbers are decreasing. In 2007, the 500 largest U.S. corporations by total revenue had seven black CEOs.
Chenault, 66, will leave the company after 16 years leading the credit card lender, and he’ll do so having amassed a fortune while working there.
This includes selling more than $200 million of pre-tax AmEx shares since 2002, and a retirement package worth as much as $94.9 million, according to data compiled by Bloomberg:
“He still owns $114.6 million of stock, as well as $68.6 million of options that he’s free to exercise now.”
However, Chenault’s departure is a disappointment for the Executive Leadership Council, whose 600-plus members are current and former black CEOs, board members, and senior executives at Fortune 1000 companies.
“While we are excited to learn about Ken’s next chapter in life, we are disappointed that his decision now leaves us with only three black CEOs running Fortune 500 companies,” council president and CEO Ronald Parker said in a prepared statement.
American Express C.E.O. Ken Chenault, lone African-American at helm of a big Wall Street firm, to Step Down @NYTimes https://t.co/zBlWRf13Nf
— Raju Narisetti (@raju) October 19, 2017
Unless another company hires a black CEO before Chenault retires on Feb. 1, 2018, that will leave Merck, TIAA and JCPenney as the only Fortune 500 companies with black leaders, CNN reported.
Merck’s CEO is Ken Frazier, TIAA’s CEO is Roger Ferguson and JCPenney’s CEO is Marvin Ellison.
Ursula Burns was the only black woman CEO in the Fortune 500 until she left Xerox on Jan. 1, 2017. She is now on the Uber, Inc board of directors, appointed by former Uber CEO and co-founder Travis Kalanick.
One the highest-paid CEOs in U.S. finance, Chenault seems to be quitting while he’s ahead.
Under his watch, AmEx aggressively pursued co-brand credit-card deals with airlines and other large retailers. Those partnerships helped it become the largest issuer by customer spending in the U.S., Bloomberg reported. The strategy began to unravel when competitors including JPMorgan Chase & Co. and Citigroup Inc. upped their spending on rewards to woo away AmEx’s wealthy customers.
“We’re completing a two-year turnaround ahead of plan and getting ready to start a new chapter,” Chenault said on a call with analysts after the company reported third-quarter profit that beat Wall Street estimates and boosted its full-year earnings forecast. “Given the progress we’re making, I thought this was the right time to begin the leadership transition.”
In 2007, there were seven black CEOs heading Fortune 500 companies, CNN reported. In 2013 there were six, and in 2015, five. Rodney O’Neal retired as CEO and president of Delphi in 2015. Don Thompson stepped down as CEO of McDonald’s in 2015.
“Studies have shown that boardroom diversity is tied to company performance,” said Deb DeHaas, chief inclusion officer at Deloitte, in a Feb. 26 statement. “Because the majority of new board members are still selected through relationships with other board members, it’s important to ask boards to consider board diversity based on gender, race/ethnicity, age and other perspectives as they look to fill positions, and to consider their extended networks both in business and in their communities.”
“Progress is glacially slow and boardrooms don’t look anything like the customers and stakeholders they serve and represent,” said Deborah Gillis, president and CEO of Catalyst. “Unfortunately, U.S. companies have a long way to go to achieve diversity in their boardrooms and their executive ranks.”
“There are still many companies that have zero African American representation on their boards. We are looking at an entire decade of virtually no growth. If other business objectives yielded the same results, it would be viewed as unacceptable business performance,” said Parker said in a February press release.
American Express vice chairman Steve Squeri, 58, has been chosen to replace Chenault. He has been at the firm for 30 years.
