By Robin Sidel And Joann S. Lublin
The president of American Express Co., who was viewed as a
likely successor to Chief Executive Kenneth Chenault, collapsed and
died on the way home from a business trip Friday. His death sent
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 also were on the plane, a
spokesman said.
Mr. Chenault, the company's longtime CEO 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 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
an 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's shares dropped slightly after news of Mr. Gilligan's
death was announced and closed down 0.5%, at $79.72. The company's
shares have declined 13% 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, who advises on CEO succession. "The
problem is there is no such thing as accelerated development" for a
CEO role, he said. "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 CEO of PayPal, which is being
spun off by eBay Inc.
Top executives at AmEx include John D. Hayes, chief marketing
officer since 2003; Joshua Silverman, president of consumer
products and a former eBay executive; Steve Squeri, who runs the
corporate business and has been with the company for more than a
decade; and Jeffrey Campbell, who was hired from McKesson Corp. in
2013 as chief financial officer.
It isn't clear if any of them would be potential candidates for
the top job when Mr. Chenault steps down.
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 who 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 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 also was on the board of trustees
of New York's Xaverian High School, from 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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