By Robin Sidel And Joann S. Lublin
The president of American Express Co. collapsed and died on the
way home from a business trip Friday morning, sending shock waves
through the New York company where he had worked since he was a
college student.
Edward Gilligan, 55 years old, was traveling on a corporate
plane returning to New York from a trip to Japan when he fell ill,
the company said. Other executives were also on the plane, a
spokesman said.
Mr. Gilligan was viewed as a likely successor to Kenneth
Chenault, the company's longtime chief executive. Mr. Chenault, who
will be 64 years old next week, wasn't on the plane.
Mr. Gilligan was named president of AmEx in 2013, having served
in a number of key roles at the company, and was viewed as a strong
leader internally and by investors.
"His contributions have left an indelible imprint on practically
every area of our business, from commercial card and travel to
international, consumer, small business, merchant services, network
services and, most recently, the group forging our digital
partnerships and driving payment innovations," Mr. Chenault said in
a letter to the staff.
Mr. Gilligan's death leaves the company without a clear
successor at a time when it is facing a number of difficulties. Its
revenue has repeatedly fallen below its internal goals despite
strong credit trends.
The company recently announced that it would end a 16-year
relationship with Costco Wholesale Corp. in which its plastic was
the only credit-card accepted at the warehouse club. AmEx also lost
a high-profile antitrust lawsuit that was filed by the Justice
Department.
"In our view, his name was at the top of any succession planning
and his absence obviously hurts," wrote Sanjay Sakhrani, an analyst
at Keefe, Bruyette & Woods, in a note to clients. Mr. Sakhrani
also said "there is a solid bench of executives at the
company."
AmEx shares dropped slightly after the news of Mr. Gilligan's
death was announced, closing down 0.5% at $79.72. The company's
shares are down more than 12% over the past year.
American Express faces an unusual conundrum as boards typically
plan ahead for the sudden demise of their leader--rather than the
heir apparent, one succession specialist said.
Directors likely will quickly identify other potential Chenault
successors and try "to put them on an accelerated development
path," predicted Jeffrey Cohn, a CEO succession expert.
"The problem is there is no such thing as accelerated
development" for a CEO role, he added. "It takes time."
Mr. Chenault, CEO since 2001, hasn't given any indication that
he plans to step down. But in the absence of a clear heir apparent,
Mr. Chenault's retirement "just got delayed by a couple of years,"
Mr. Cohn predicted.
Other top executives have left AmEx in recent years, including
Jud Linville, who now runs the credit-card division of Citigroup
Inc., and Dan Schulman, who is the chief executive of PayPal, which
is being spun off by eBay Inc.
The unexpected CEO succession crisis at American Express
underscores the fact that "you can't have all your eggs in one
basket," said Paul Winum, head of the board and CEO services
practice at RHR International, a leadership development firm. "A
good succession plan has to have multiple candidates."
Mr. Gilligan started at AmEx in a temporary accounting position
in 1980 while he was a student at New York University, where he
received an undergraduate degree in economics and management.
Mr. Gilligan spent significant amounts of time working in AmEx's
key businesses, including its commercial card division. He also
worked for the company in London, where he led its international
consumer-card business.
"Ed was a terrific friend whom I've always held in the highest
regard. He will be greatly missed," said Gordon Smith, a former
AmEx executive who now runs the consumer-banking business at J.P.
Morgan Chase & Co. The pair worked together at AmEx and also
lived in the same New Jersey town for a number of years.
Mr. Gilligan was on the board of the Lincoln Center for the
Performing Arts in New York. He was also on the board of trustees
of New York's Xaverian High School, which he graduated in 1977.
Mr. Gilligan is survived by his wife and four children.
"This is deeply painful and frankly unimaginable for all of us
who had the great fortune to work with Ed," Mr. Chenault said in a
statement. "He was a proud husband and father, and his love for his
family was evident in all that he did."
Write to Robin Sidel at robin.sidel@wsj.com and Joann S. Lublin
at joann.lublin@wsj.com
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