Table of
Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section
14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant |
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Filed by a Party other
than the Registrant |
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CHECK THE APPROPRIATE BOX: |
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Preliminary Proxy Statement |
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Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Under Rule
14a-12 |
AMERICAN EXPRESS COMPANY
(Name of Registrant as Specified In Its
Charter)
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
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BOX): |
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Check box if any part of the fee is
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Table of
Contents
2017
AMERICAN EXPRESS
COMPANY
PROXY STATEMENT
Table of
Contents
Table of
Contents
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|
American Express Company 200
Vesey Street New York, New York
10285 |
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS |
WHEN Monday, May 1, 2017 9:00 a.m.
Eastern Time
WHERE American Express Company 200 Vesey
Street, 26th Floor New York, New York 10285
RECORD
DATE March 3,
2017 |
|
ITEMS OF BUSINESS |
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To vote on the following proposals: |
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1. |
Election of directors proposed by our
Board of Directors for a term of one year, as set forth in this proxy
statement |
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2. |
Ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting
firm for 2017 |
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3. |
Advisory resolution to approve
executive compensation |
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4. |
Advisory resolution to approve the
frequency of future advisory votes on executive compensation |
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5. |
Two shareholder proposals if properly
presented at the meeting |
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6. |
Such other business that may properly come before the
meeting |
Carol V. Schwartz
Secretary
March
20, 2017
Important notice regarding
the availability of proxy materials for the 2017 annual meeting to be held on
May 1, 2017
Our proxy statement and annual report are
available online at http://ir.americanexpress.com.* We will mail to certain
shareholders a notice of internet availability of proxy materials, which
contains instructions on how to access these materials and vote online. We
expect to mail this notice and to begin mailing our proxy materials on or about
March 21, 2017.
*Web links throughout this
document are provided for convenience only. Information from the American
Express website is not incorporated by reference into this proxy
statement.
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2017 PROXY
STATEMENT | 03 |
Table of
Contents
TABLE OF
CONTENTS
04 | AMERICAN
EXPRESS COMPANY |
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Table of
Contents
PROXY
SUMMARY AND VOTING ROADMAP |
We present below a summary of certain
information in this proxy statement. Please review the complete proxy statement
and annual report before you vote.
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ITEM
1 |
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ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
✓ The Board
recommends a vote FOR each of these director nominees
You are being asked to elect 14
directors. Each of our current directors is standing for election to hold
office until the next annual meeting of shareholders or until his or her
successor is duly elected and qualified. Detailed information about each
nominees background, skills and expertise can be found starting on page
14. |
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Name |
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Age |
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Director Since |
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Other Public Boards |
Charlene Barshefsky |
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66 |
|
2001 |
|
The Estée Lauder Companies Inc. |
Senior International
Partner, |
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Intel Corporation |
WilmerHale |
|
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John J. Brennan |
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62 |
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2017 |
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General Electric Company |
Chairman Emeritus and
Senior Advisor, |
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LPL Financial Holdings, Inc. |
The Vanguard Group |
|
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Ursula M. Burns |
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58 |
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2004 |
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Exxon Mobil Corporation |
Chairman, |
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Xerox Corporation |
Xerox Corporation |
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Kenneth I. Chenault |
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65 |
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1997 |
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International Business Machines |
Chairman and
CEO, |
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Corporation (IBM) |
American Express Company |
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The
Procter & Gamble Company |
Peter Chernin |
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65 |
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2006 |
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Founder and
CEO, |
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Chernin Entertainment, LLC |
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Ralph de la Vega |
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65 |
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2016 |
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Former Vice Chairman, AT&T Inc. |
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Anne L. Lauvergeon |
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57 |
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2013 |
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Rio Tinto Plc |
Chairman and Chief
Executive Officer, |
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Suez |
A.L.P. SAS |
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Koç
Holding |
Michael O. Leavitt |
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66 |
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2015 |
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HealthEquity, Inc. |
Founder and
Chairman, |
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Medtronic, Inc. |
Leavitt Partners, LLC |
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Theodore J. Leonsis |
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61 |
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2010 |
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Groupon, Inc. |
Chairman and
CEO, |
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Monumental Sports & Entertainment, LLC |
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Richard C. Levin |
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69 |
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2007 |
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Chief Executive
Officer, |
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Coursera |
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Samuel J. Palmisano |
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65 |
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2013 |
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Exxon Mobil Corporation |
Former
Chairman, |
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President and CEO, IBM |
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Daniel L. Vasella |
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63 |
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2012 |
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PepsiCo, Inc. |
Honorary Chairman and
Former |
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XBiotech |
Chairman and CEO, Novartis AG |
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Robert D. Walter, |
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71 |
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2002 |
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Nordstrom, Inc. |
Lead Independent
Director |
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YUM! Brands, Inc. |
Founder and Former
Chairman and CEO, |
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Cardinal Health, Inc. |
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Ronald A. Williams |
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67 |
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2007 |
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The Boeing Company |
Former Chairman and
CEO, |
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Johnson & Johnson |
Aetna, Inc. |
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Envision Healthcare |
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2017 PROXY
STATEMENT | 05 |
Table of
Contents
PROXY SUMMARY AND
VOTING ROADMAP
Election of Directors for a Term of One Year
During 2016, our Board met 8 times and our
committees in the aggregate met 38 times. All directors attended 75 percent or
more of the meetings of the Board and Board committees on which they served in
2016.
Twelve of our thirteen directors in 2016
attended the 2016 annual meeting. Our Board encourages all of its directors to
attend the annual meeting but understands there may be circumstances that
prevent such attendance.
|
Average
Tenure 7.5 years
Average
Age 64.2 years |
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Corporate
Governance Highlights |
✓ |
Strong lead independent
director |
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✓ |
Diverse
board |
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✓ |
Regular board and
committee refreshment and a mix of tenures |
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✓ |
Non-management executive
sessions led by lead independent director at each regular board
meeting |
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✓ |
Board agenda includes
multi-day strategy sessions |
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✓ |
Key management and
rising talent reviewed at an annual talent review board
meeting |
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✓ |
Risk aware culture
overseen by a separate Risk Committee of the Board |
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✓ |
Annual election of all
directors |
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✓ |
Majority voting for
directors |
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✓ |
Proxy
access |
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✓ |
25 percent of
shareholders can call special meetings |
|
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✓ |
Active shareholder
engagement |
|
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✓ |
Significant share
ownership requirements for senior executives and
directors |
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✓ |
Annual board and
committee performance evaluations |
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|
✓ |
Ongoing board succession
planning |
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✓ |
Director access to
experts and advisors, both internal and external |
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✓ |
13 out of 14 directors are
independent |
06 | AMERICAN EXPRESS
COMPANY |
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Table of
Contents
PROXY SUMMARY AND VOTING
ROADMAP
Ratification of Appointment of
PricewaterhouseCoopers LLP for 2017
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ITEM
2 |
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RATIFICATION OF APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP
FOR 2017
✓ The Board
recommends a vote FOR this item
The Audit and Compliance Committee
reappointed PricewaterhouseCoopers LLP (PwC) as our independent registered
public accounting firm for 2017. We are asking you to ratify this
appointment. PwC has been our independent auditor since 2005. Additional information
about the Committees appointment of PwC and PwC fees for 2016 and 2015 is found beginning on pages 40-41.
One or more representatives of PwC
will be present at the meeting and available to respond to appropriate
questions. |
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ITEM
3 |
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ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION
(SAY ON PAY)
✓ The Board
recommends a vote FOR this item
We are asking you to approve on an
advisory basis the compensation of American Expresss named executive
officers. We believe that the compensation of our executive officers is
aligned with performance, correlates with our share price, appropriately
motivates and retains our executives and delivers pay which is strongly
linked to company performance over time. |
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We entered 2016 with significant
challenges, and we began to reposition the business for success going forward.
We laid out three key priorities for 2016 and 2017:
● |
Accelerating revenue
growth |
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● |
Optimizing
investments |
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● |
Resetting our cost
base |
We made significant progress in each of
these areas in 2016. Despite persistent macro-economic issues and the evolving
competitive and regulatory environment, we reached our 2016 goals
through:
● |
Healthy loan growth |
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● |
Strong card
acquisitions |
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● |
Excellent credit
performance |
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● |
Disciplined operating expense
control |
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● |
Strong capital
position |
As a result, we were able to raise our
earnings expectations over the course of the year while making a record level of
business-building investments. For 2016 as a whole:
● |
Net income was $5.4 billion,
up 5%
(including the gain from the sale of our Costco
portfolio) |
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● |
Diluted earnings per share (EPS) was
$5.65, and our adjusted diluted EPS (excluding restructuring charges) was
$5.931, exceeding the earnings
guidance range provided at the beginning of the year |
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● |
Return on Equity (ROE) was
26% |
1 |
Adjusted diluted EPS, a non-GAAP
measure, excludes $410 million in pre-tax restructuring charges ($266
million after-tax) for the year ended December 31, 2016. Management
believes adjusted diluted EPS is useful in evaluating the ongoing
operating performance of the Company and the Companys performance against
its 2016 EPS outlook originally provided in the Companys Q415 earnings
release on January 21, 2016, at which point restructuring charges and
other contingencies were not estimable and thus not included. See Appendix
A for reconciliation to diluted EPS on a GAAP
basis. |
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2017 PROXY STATEMENT | 07 |
Table of
Contents
PROXY SUMMARY AND
VOTING ROADMAP
Advisory Resolution to
Approve Executive Compensation (Say on Pay)
We are pleased to have ended the year
positively while continuing to strengthen our business. Our compensation to the
CEO and the other Named Executive Officers (NEOs) reflects their strong leadership in navigating the Company
through this important transition year and repositioning it for success. Further
information on our 2016 performance can be found beginning on page
44.
Awarded
Total Direct Compensation for our CEO for 2016
Performance |
At the beginning of 2016, the Compensation
and Benefits Committee set financial and strategic goals for our CEO and
executive team, the attainment of which would be signposts of the Companys
successful repositioning. In January 2017, the Committee evaluated Mr.
Chenaults performance, noted his success against these goals, and awarded
him target pay: total direct compensation (TDC)2 of $22,000,000 for
performance year 2016. Because the Companys repositioning is not yet complete,
however, the Committee determined that Mr. Chenault would receive all of his compensation, except for base salary, in the form
of deferred compensation linked to multi-year performance goals.
With most of Mr. Chenaults compensation
subject to multi-year performance goals, his realizable pay is tied closely to
the success of our efforts and the long-term success of the Company. Our pay for
performance linkage is illustrated on page 50, which shows that Mr. Chenaults
realizable compensation as of the end of 2016 was 8 percent lower than his awarded
TDC for the previous three performance years.
CEO Awarded TDC Mix
Details regarding Mr. Chenaults TDC can
be found on page 49.
Our Compensation Discussion and Analysis
is on pages 43-62 and our Summary
Compensation Table and other related tables
and narrative discussion are on pages 63-75.
2 |
Awarded TDC includes salary, the
annual incentive award (AIA) earned for the prior year and long-term
incentives granted that are tied to future
performance. |
08 | AMERICAN
EXPRESS COMPANY |
|
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Table of
Contents
PROXY SUMMARY AND VOTING
ROADMAP
Advisory Resolution to Approve the
Frequency of Future Advisory Say on Pay Votes (Say on Frequency)
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ITEM
4 |
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ADVISORY RESOLUTION TO APPROVE THE FREQUENCY OF FUTURE
ADVISORY SAY ON PAY VOTES (SAY ON FREQUENCY)
✓The Board
recommends continuing our current practice of holding an ANNUAL advisory
vote on executive compensation
We are asking you to approve
continuing to hold an annual advisory vote on executive compensation. In
making this recommendation the Board considered shareholder feedback and
that an annual say on pay vote enables our shareholders to provide us with
timely input on executive compensation matters. |
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ITEMS 5-6 |
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TWO SHAREHOLDER PROPOSALS (IF PROPERLY
PRESENTED)
✕ The Board
recommends a vote AGAINST each item
You will have the opportunity to
vote on two shareholder proposals, if properly presented at the meeting.
The text of these proposals, the proponents statements in support and our
responses are set forth beginning on page 77. |
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2017 PROXY STATEMENT | 09 |
Table of
Contents
CORPORATE GOVERNANCE AT AMERICAN
EXPRESS |
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ITEM
1 |
|
ELECTION OF DIRECTORS FOR A TERM OF ONE YEAR
Our Board of Directors currently has
14 members. Each director is standing for election to hold office until
the next annual meeting of shareholders or until his or her successor is
duly elected and qualified. Our Board has appointed Jeffrey Campbell,
Laureen Seeger, Carol Schwartz and Tangela Richter as proxies to vote your
shares on your behalf. The proxies intend to vote for the election of each
of the 14 candidates nominated by the Board unless you indicate otherwise
on your proxy or voting instruction form or when you vote by telephone or
online. Each candidate has consented to being named in this proxy
statement and serving as a director if elected. However, if any nominee is
not able to serve, the Board can either nominate a different person or
reduce the size of the Board of Directors. If the Board nominates another
individual, the persons named as proxies may vote for that
nominee.
ITEM 1
RECOMMENDATION: Our Board of Directors recommends a vote FOR the election
of the nominees listed on pages 14-21. |
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Board Composition
Ongoing
Board Succession Planning |
We seek to maintain a board that as a
whole possesses the objectivity and the mix of diverse backgrounds, skills and
experiences to provide effective oversight and guidance to management in the
context of an evolving business environment and our long-term strategy. Ongoing
board succession planning assures that the Board maintains an appropriate mix of
skills and provides fresh perspectives while leveraging the institutional
knowledge and historical perspective of our longer-tenured directors.
The Nominating and Governance Committee
assesses potential candidates based on their history of achievement, the breadth
of their business experiences, whether they also bring specific skills or
expertise in areas that the Committee has identified and whether they possess
personal attributes that will contribute to the effective functioning of the
Board. The Committee also considers succession planning for board positions such
as lead independent director and committee chair.
Attributes of Individual
Nominees:
● |
We look for individuals who have
established records of significant
accomplishment in leading global businesses
and large, complex organizations.
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● |
Nominees should have achieved prominence
in their fields and possess skills or
significant experience in areas of
importance to us. |
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● |
The minimum personal attributes that
must be met by a nominee include
integrity, independence, energy,
forthrightness, strong analytical skills
and the commitment to devote the necessary
time and attention to the Companys
affairs. |
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● |
Candidates should demonstrate they have the ability to challenge and stimulate management and exercise sound judgment.
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● |
Candidates must demonstrate a
willingness to work as part of a team in an
atmosphere of trust and candor and a
commitment to represent the interests of
all shareholders rather than those of a
specific constituency. |
10 | AMERICAN
EXPRESS COMPANY |
|
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Table of Contents
CORPORATE GOVERNANCE AT
AMERICAN EXPRESS
Item 1Election of Directors
for a Term of One Year
Identifying and Adding New
Directors |
The Nominating and Governance Committee
identifies and adds new directors using the following process:
1 |
|
Collect
Candidate Pool |
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✓Independent
Directors |
✓Independent
Search Firms |
✓Shareholders |
2 |
|
Review
Recommendations Candidates
meet with members of the Nominating and Governance Committee and with the
Chairman. Committee members and the Chairman assess candidates on the
basis of their skills and experience, their personal attributes and how
they will add to the mix of competencies and diversity on the Board. Due
diligence is conducted, and the Committee members and the Chairman solicit
feedback on potential candidates from other directors and from persons
outside the Company. |
3 |
|
Make
Recommendation to the Board Qualified candidates are presented to the Board of
Directors. |
4 |
|
Outcome Six new directors added since 2012:
|
|
✓Ethnic &
gender diversity |
✓Non-U.S.
directors |
✓Former
CEOs
✓Former
CFO |
✓Digital,
mobile, consumer, financial, investment, regulatory and M&A
experience |
✓Senior
government experience |
✓Global
business leaders |
The Committee uses a professional search
firm to help identify, evaluate and conduct due diligence on potential director
candidates. Mr. Brennan, who joined the Board in January 2017, was identified as
a potential candidate by the search firm. Using a search firm allows the
Committee to make sure it is conducting a broad search and looking at a diverse
pool of potential candidates. The Committee also seeks to maintain an ongoing
list of potential candidates.
The Committee considers all shareholder
recommendations for director candidates and applies the same standards in
considering candidates submitted by shareholders as it does in evaluating other
candidates. Shareholders can recommend candidates by writing to the Committee in
care of the Companys Secretary, whose contact information is on page 30.
Shareholders who wish to submit nominees for election at an annual or special
meeting of shareholders should follow the procedure described on page
85.
Our governance principles provide
that while the Board need not adhere to a fixed number of directors,
generally a board composed of 12-14 directors offers a sufficiently large
and diverse group to address the important issues facing the Company while
being small enough to encourage personal involvement and discussion. All
directors are elected annually under a majority voting
standard. |
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2017 PROXY
STATEMENT | 11 |
Table of Contents
CORPORATE GOVERNANCE AT
AMERICAN EXPRESS
Item 1Election of Directors
for a Term of One Year
While we do not have a specific policy on
board diversity, our governance principles provide that the Board should be
diverse, engaged and independent. The Nominating and Governance Committee
considers the diversity of the Board, including the dimensions of race,
ethnicity and gender. We believe the composition of our Board appropriately
reflects a diversity of skills, professional and personal backgrounds and
experiences.
Our Board has the following
characteristics:
●●●●●●●●●●●●●●
3 of 14 female
●●●●●●●●●●●●●●
4 of 14
minorities
●●●●●●●●●●●●●●
2 of 14 reside
outside of U.S.
We have added 6 new directors since 2012.
The average tenure of our non-management directors is 7.5 years. New directors
add fresh perspectives and longer-serving directors provide continuity and
institutional knowledge. We have a mandatory retirement age of 72 which provides for continued board refreshment in
addition to turnover that occurs when directors leave board service prior to the
mandatory retirement age.
12 | AMERICAN EXPRESS COMPANY |
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|
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Item 1Election of
Directors for a Term of One Year
Board Expertise and
Skills |
Experienced
leaders with the right skills and business experience to provide sound
judgment, critical viewpoints and guidance
in an evolving environment |
Core Business and Operating Expertise |
|
Senior Management and Leadership Skills |
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Digital, Mobile and Technology Experience |
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Government, Legal and Public Policy Experience |
|
Financial Literacy |
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Global
Business Experience |
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Financial,
Investment and M&A Experience |
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Public
Company Governance Experience |
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Audit and
Risk Oversight Experience |
|
Brand and
Marketing Expertise |
Non-management
Directors
American Express is a global services
company that provides customers with access to products, insights and
experiences that enrich lives and build business success. We provide innovative
payment solutions for individuals and businesses of all sizes around the world.
We have a highly valued brand, we are regulated in many jurisdictions, and we
operate in a rapidly evolving, technology-dependent and highly competitive
environment.
Our director nominees have held senior
positions as leaders of various large, complex businesses and organizations and
in government, demonstrating their ability to develop and execute significant
and complex policy and operational objectives at the highest levels. Many of our
nominees have been chief executives or chief
operating officers of large, global businesses through which they have developed
expertise in core business strategy and development, operations, finance, talent
management and leadership development, compliance, controls and risk management
as well as skills to respond to rapidly evolving business environments and
foster innovation and business transformation.
In addition, our nominees experience
serving on other boards brings valuable knowledge and expertise in the areas of
governance, talent management and compensation, financial reporting, risk
management and control and compliance. Detailed information about each nominee
follows.
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2017 PROXY
STATEMENT | 13 |
Table of Contents
CORPORATE GOVERNANCE AT AMERICAN
EXPRESS
Our Director
Nominees
Our Director
Nominees
Individual Qualifications, Skills and
Experiences |
|
The following
individuals have been recommended for election by the Nominating and
Governance Committee and approved by the Board of Directors, considering,
among other factors:
✓ The individual
contributions of the director to the Boards effectiveness
✓ The continued relevance of
each of their skills, qualifications and experiences
✓ The mix of skills and
backgrounds, and the tenure and diversity of the Board
✓ The Boards effectiveness as a whole in
exercising independence of thought and challenging and providing guidance
to management |
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CHARLENE BARSHEFSKY |
|
Director since
2001 |
|
Age 66 |
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Senior International Partner, WilmerHale
|
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|
Other Public Directorships |
|
●The Estée Lauder Companies
Inc.
●Intel
Corporation |
|
Specific
qualifications, experience, skills and expertise:
●High-level
government service
●Expertise negotiating with foreign governments
●Advisor to firms on doing business in
emerging markets
●Broad legal and public policy experience
●Public company
governance |
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Other Directorships in past five
years |
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●Starwood Hotels &
Resorts Worldwide, Inc. |
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American Express Committees |
|
●Innovation and
Technology
●Public Responsibility,
Chair |
|
Since
2001, Ambassador Barshefsky has been a Senior International Partner of
WilmerHale, a multinational law firm based in Washington, D.C. She advises U.S.
and international companies on international business transactions, government
relations, market access, and foreign government regulation of business and
investment. Prior to joining WilmerHale, Ambassador Barshefsky was the United
States Trade Representative (USTR) and a member of President Clintons Cabinet
from 1997 to 2001, and Acting and Deputy USTR from 1993 to 1996. As the USTR,
she served as chief trade negotiator and principal trade policymaker for the
United States and, in both roles, negotiated complex market access and regulatory and
investment agreements with virtually every major country in the world.
Ambassador Barshefsky is a trustee of the Howard Hughes Medical Institute and a
member of the Council on Foreign Relations.
14 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Director
Nominees
|
|
|
|
|
|
JOHN
J. BRENNAN |
|
Director since
2017 |
|
Age 62 |
|
|
Chairman Emeritus and Senior Advisor, The Vanguard
Group |
|
|
Other Public Directorships |
|
●General Electric
Company
●LPL Financial Holdings,
Inc. |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●CFO and financial accounting expertise
●Finance and investment expertise
●Financial industry regulation
●Institutional investor
perspective
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
●Guardian Life Insurance of
America
●Hanover Insurance Group
Inc. |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Audit and
Compliance
●Risk |
|
Mr. Brennan has been chairman emeritus and
senior advisor of The Vanguard Group, Inc., a global investment management
company, since 2010. Mr. Brennan joined Vanguard in July 1982, was elected Chief
Financial Officer in 1985, and President in 1989. He was Chief Executive Officer
from 1996 to 2008 and Chairman of the Board from 1998 to 2009. Mr. Brennan is
Chairman of the Board of Governors of The Financial Industry Regulatory
Authority (FINRA), a U.S. financial services industry regulator; Chairman of the
Board of Trustees of the University of Notre Dame; Chairman of the Vanguard
Charitable Endowment Program; and Founding Trustee of the King Abdullah
University of Science and Technology. Mr. Brennan is a former Chairman of the
Financial Accounting Foundation, an overseer of financial accounting and
reporting standard-setting boards.
|
|
|
|
|
|
URSULA M.
BURNS |
|
Director since 2004 |
|
Age 58 |
|
|
Chairman and
Former Chief Executive Officer, Xerox
Corporation |
|
|
Other Public Directorships |
|
●Exxon Mobil
Corporation
●Xerox
Corporation
|
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Global business leader
●Experience driving innovation through
technology
●Public company governance
●Audit oversight
experience |
|
|
|
|
|
|
|
|
Other Directorships in past five years |
|
|
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Compensation and
Benefits
●Risk |
|
Ms. Burns has been Chairman of Xerox
Corporation, a global document technology company, since May 2010. She was Chief
Executive Officer from July 2009 to December 2016; President and director from
April 2007 to July 2009; and Senior Vice President and President, Business Group
Operations from January 2003 to April 2007. Ms. Burns is a trustee of the Ford
Foundation and of the Massachusetts Institute of Technology and provides
leadership as a director to community, educational and nonprofit organizations
including FIRST (For Inspiration and Recognition of Science and Technology) and
Change the Equation. From March 2010 through December 2016, Ms. Burns served as
Vice Chair of President Obamas Export Council.
|
|
2017 PROXY
STATEMENT | 15 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Director
Nominees
|
|
|
|
|
|
KENNETH I. CHENAULT |
|
Director
since 1997 |
|
Age
65 |
|
|
Chairman and Chief Executive Officer, American Express
Company |
|
|
Other Public Directorships |
|
●IBM
●The Procter & Gamble
Company |
|
Specific
qualifications, experience, skills and expertise:
●Unique perspective
as company CEO
●Core business,
operations and management
●Payments and network
industry expertise
●Expertise in digital
and mobile innovation
●Brand and marketing
expertise
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
|
|
|
|
|
|
|
|
|
|
American Express Committees |
|
● N/A |
|
Mr. Chenault has been Chairman and Chief
Executive Officer of American Express Company since April 2001. Mr. Chenault
joined American Express in 1981 and was named President of the U.S. division of
American Express Travel Related Services Company, Inc. in 1993; Vice Chairman of
American Express Company in 1995; President and Chief Operating Officer in 1997;
and Chief Executive Officer in January 2001. Mr. Chenault is Chairman of the
National Museum of African American History and Culture, a member of The World
Trade Center Memorial Foundation and a trustee of the NYU Langone Medical
Center.
|
|
|
|
|
|
PETER CHERNIN |
|
Director since
2006 |
|
Age 65 |
|
|
Founder and CEO, Chernin Entertainment |
|
|
Other Public Directorships |
|
|
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Experience building global media businesses
●Digital business
development
●Brand and marketing
expertise
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
●Pandora Media,
Inc.
●Twitter,
Inc. |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Compensation and
Benefits
●Nominating and Governance,
Chair |
|
From June 2009 to the present, Mr. Chernin
has served as Founder and CEO of Chernin Entertainment, LLC, a film and
television production company, and The Chernin Group, LLC, which is involved in
strategic opportunities in media, technology and entertainment. He is also
co-founder of CA Media, L.P., which builds and manages media, technology and
entertainment businesses throughout the Asia Pacific region. Mr. Chernin was
President, Chief Operating Officer and a director of News Corporation from
October 1996 to June 2009, and was Chairman and Chief Executive Officer of the
Fox Group, where he oversaw the global operations of the companys film,
television, satellite cable and digital media businesses. At News Corporation,
Mr. Chernin led the companys expansion into the broadband and mobile markets
through the creation of Fox Interactive Media, Hulu, Jamba and other digital
properties. Mr. Chernin is a Chairman and Co-Founder of Malaria No More and a
director of the Harvard AIDS Initiative.
16 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Director
Nominees
|
|
|
|
|
|
RALPH DE LA VEGA |
|
Director since
2016 |
|
Age 65 |
|
|
Former Vice Chairman of AT&T Inc. |
|
|
Other Public Directorships |
|
|
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Global business leader
●Deep experience in Latin
America
●Digital and mobile technology
expertise
●Governance and audit
oversight |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
●New York Life Insurance
Company |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Audit and
Compliance
●Innovation and
Technology |
|
Mr. de la Vega was Vice Chairman of
AT&T Inc. and CEO of Business Solutions and International, AT&T from
February 2016 through December 2016. In this role, Mr. de la Vega led AT&Ts
Integrated Business Solutions group (both mobile and IP services), which served
more than 3.5 million business customers in 200 countries and territories, and
nearly all of the Fortune 1000 firms globally, and AT&Ts Mexican wireless
business and DIRECTV Latin America, which was part of AT&Ts 2015
acquisition of DIRECTV. Mr. de la Vega was President and Chief Executive
Officer, AT&T Mobile and Business Solutions, from August 2014 to February
2016; President and Chief Executive Officer of AT&T Mobility from 2007 to
2014; and prior thereto, the Chief Operating Officer of Cingular Wireless and
President of BellSouth Latin America. Mr. de la Vega is a director of New York
Life Insurance Company, where he is chair of the Audit Committee and a member of
the Governance and Insurance & Operations Committees. He also serves on the
boards of Junior Achievement Worldwide and the Boy Scouts of America.
|
|
|
|
|
|
ANNE L.
LAUVERGEON |
|
Director since 2013 |
|
Age 57 |
|
|
Chairman and Chief
Executive Officer, A.L.P. SAS |
|
|
Other Public Directorships |
|
●Rio Tinto
plc
●Suez
●Koç
Holding |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Deep business experience in Europe
●Government experience
●Public policy experience in
sustainability
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five years |
|
●Total
S.A.
●Vodafone Group
Plc.
●GDF Suez
S.A.
●Airbus
Group |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Audit and
Compliance
●Public
Responsibility |
|
Ms. Lauvergeon is Chairman and Chief
Executive Officer of A.L.P. SAS, a private French advisory company and, since
2014, has been Chairman of Sigfox, a French start-up that operates a cellular
network dedicated exclusively to small messages. She is a former Partner and
Managing Director of Efficiency Capital, an advisory firm dedicated to funding
technology and natural resources investments, where she served from 2012 to
April 2014; former Chief Executive Officer of AREVA Group, the leading French
energy company, where she served from July 2001 to June 2011; and former
Chairman and Chief Executive Officer of AREVA NC (formerly Cogema) where she
served from June 1999 to June 2011. Ms. Lauvergeon started her professional
career in 1983 in the steel industry and in 1990 she was named Advisor for
Economic International Affairs at the French Presidency and Deputy Chief of
Staff in 1991. In 1995 she became a Partner of Lazard Frères & Cie,
subsequently joining Alcatel Telecom as Senior Executive Vice President in 1997.
Ms. Lauvergeon has been a member of the United Nations Global Compact Board, an
executive committee member of the World Business Council for Sustainable
Development, and involved in various not for profit organizations in France. She
is also Chair of the Commission Innovation 2030, launched by the President of
France in 2013 to stimulate innovation in France.
|
|
2017 PROXY STATEMENT | 17 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Director
Nominees
|
|
|
|
|
|
MICHAEL O. LEAVITT |
|
Director since
2015 |
|
Age 66 |
|
|
Founder and Chairman, Leavitt Partners |
|
|
Other Public Directorships |
|
●HealthEquity,
Inc.
●Medtronic,
Inc. |
|
Specific
qualifications, experience, skills and expertise:
●Senior executive and
administrative experience
●Deep government experience
●Public policy
experience
●Regulatory experience
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
|
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Audit and
Compliance
●Innovation and
Technology |
|
Since 2009, Governor Leavitt has been
Founder and Chairman of Leavitt Partners, LLC, a health care consulting firm,
and since 2014, he has been Chairman of Leavitt Equity Partners, a private
equity fund. Prior to that, Governor Leavitt was the United States Secretary of
Health and Human Services from 2005 to 2009; Administrator of the Environmental
Protection Agency from 2003 to 2005; and Governor of Utah from 1993 to 2003.
Governor Leavitt has extensive board management and leadership experience,
including serving as the Governor of Utah, a large state with a diverse body of
constituents, appointments to positions with the U.S. government, where he
oversaw and advised on issues of national concern, and overseeing Leavitt
Partners work advising clients and making investments in the health care
sector. Governor Leavitt has decades of leadership experience with valuable
knowledge of the governmental and regulatory environment.
|
|
|
|
|
|
THEODORE J.
LEONSIS |
|
Director since 2010 |
|
Age 61 |
|
|
Chairman and Chief
Executive Officer, Monumental
Sports & Entertainment |
|
|
Other Public Directorships |
|
●Groupon,
Inc. |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Successful innovator and entrepreneur
●Expertise in social media and digital
trends
●Brand and marketing expertise
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five years |
|
●Nutrisystem
●Alcatel-Lucent |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Innovation and Technology,
Chair
●Public
Responsibility |
|
Since 2009, Mr. Leonsis has been Chairman
and Chief Executive Officer of Monumental Sports & Entertainment, LLC, a
sports, entertainment, media and technology company that owns the NBAs
Washington Wizards, NHLs Washington Capitals, the WNBAs Washington Mystics,
the Verizon Center in Washington, D.C., Monumental Sports Network and two Arena
Football League teams. Mr. Leonsis has also been Vice Chairman Emeritus of AOL
LLC, a leading global ad-supported Web company, since December 2006. Mr. Leonsis
held a number of executive positions with AOL from September 1994 to December
2006, most recently as Vice Chairman and President, AOL Audience Business. He is
also a filmmaker, an author and a director of several private internet and
technology companies and educational institutions. Mr. Leonsis was Chairman of
Revolution Money, Inc., which American Express acquired in January 2010. In
November 2011, Mr. Leonsis co-founded Revolution Growth II, LP, a speedup
capital fund to invest in technology-enabled businesses. In 2015, Mr. Leonsis
co-founded Revolution Growth III, LP, a similar fund to invest in and build
innovative, high-growth businesses.
18 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Director
Nominees
|
|
|
|
|
|
RICHARD C. LEVIN |
|
Director since
2007 |
|
Age 69 |
|
|
Chief Executive Officer, Coursera |
|
|
Other Public Directorships |
|
|
|
Specific
qualifications, experience, skills and expertise:
●Thought leader in
American higher education
●Distinguished economist
●Expertise in statistical analysis and
modeling
●Leader in U.S.-China cooperation at
Yale
●CEO of online education
company |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
●C-3
Energy |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Public
Responsibility
●Risk |
|
Mr. Levin has been Chief Executive Officer
of Coursera, an educational platform that partners with top universities and
organizations worldwide to offer courses online, since April 2014. Mr. Levin is
also President Emeritus of Yale University, a private, independent university.
He was President of Yale from July 1993 to August 2013; a Frederick William
Beinecke Professor of Economics; and a former Chair of Yales Economics
Department and Dean of Yales Graduate School of Arts and Science. Mr. Levin
also is a trustee of the William and Flora Hewlett Foundation, one of the
largest philanthropic organizations in the United States concerned with solving
social and environmental problems. He is a fellow of the American Academy of
Arts and Sciences and the American Philosophical Society. Mr. Levin has served
on a number of Presidential Commissions and was appointed by President Obama to
serve on the Presidents Council of Advisors for Science and
Technology.
|
|
|
|
|
|
SAMUEL J.
PALMISANO |
|
Director since 2013 |
|
Age 65 |
|
|
Former Chairman,
President and Chief Executive Officer, IBM |
|
|
Other Public Directorships |
|
●Exxon Mobil
Corporation |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Business thought leader
●Cybersecurity experience
●Global business leader
●Financial, investment and M&A
expertise
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five years |
|
●IBM |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Compensation and
Benefits
●Nominating and
Governance |
|
Mr. Palmisano is former Chairman,
President and Chief Executive Officer of IBM, a company that provides business
and information technology products and services. Mr. Palmisano joined IBM in
1973. He was elected Senior Vice President and Group Executive of the Personal
Systems Group in 1997, Senior Vice President and Group Executive of IBM Global
Services in 1998, Senior Vice President and Group Executive of Enterprise
Systems in 1999, President and Chief Operating Officer in 2000, Chief Executive
Officer in 2002 and Chairman of the Board in 2003. Mr. Palmisano was President
and Chief Executive Officer through 2011, Chairman through September 2012 and
senior adviser to IBM through December 2012. Mr. Palmisano is Chairman of the
Center for Global Enterprises, a private, nonprofit research institution devoted
to the study of contemporary corporations, globalization, economic trends and
their impact on society. Mr. Palmisano was appointed by President Obama as Vice
Chair of the Commission on Enhancing National Cybersecurity, a bipartisan
government-industry panel that was charged with providing detailed
recommendations to strengthen public and private sector cybersecurity defenses.
Mr. Palmisano was also co-chair of an independent task force of the Council on
Foreign Relations on cybersecurity.
|
|
2017 PROXY STATEMENT | 19 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Director
Nominees
|
|
|
|
|
|
DANIEL L. VASELLA |
|
Director since
2012 |
|
Age 63 |
|
|
Honorary Chairman and Former Chairman and Chief Executive
Officer, Novartis AG |
|
|
Other Public Directorships |
|
●PepsiCo,
Inc.
●XBiotech |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Finance, investment and M&A experience
●Global business leader
●Led a highly regulated business
●Brand and marketing
expertise
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
●Novartis
AG |
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Audit and Compliance,
Chair
●Nominating and
Governance
●Risk |
|
Dr. Vasella is Honorary Chairman and
Former Chairman and Chief Executive Officer of Novartis AG, a company that
engages in the research, development, manufacture and marketing of health care
products worldwide. Dr. Vasella served as Chairman of Novartis from 1999 to
February 2013 and as Chief Executive Officer from 1996 to January 2010. From
1992 to 1996, Dr. Vasella held the positions of Chief Executive Officer, Chief
Operating Officer, Senior Vice President and Head of Worldwide Development and
Head of Corporate Marketing at Sandoz Pharma Ltd. Dr. Vasella is currently
working as a coach to senior executives. He is a member of the International
Business Leaders Advisory Council for the Mayor of Shanghai, a foreign honorary
member of the Academy of Arts and Sciences, a trustee of the Carnegie Endowment
for International Peace and a member of several educational
institutions.
|
|
|
|
|
|
ROBERT D.
WALTER |
|
Director since 2002 |
|
Age 71 |
|
|
Founder and Former
Chairman and Chief Executive Officer, Cardinal Health |
|
|
Other Public Directorships |
|
●Nordstrom,
Inc.
●YUM! Brands, Inc.
(Non-executive chairman) |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Founder of a global Fortune 100 company
●Financial, investment and M&A
expertise
●Successful entrepreneur
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five years |
|
|
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Compensation and Benefits,
Chair
●Nominating and
Governance |
|
Mr. Walter is founder and former Chairman
and Chief Executive Officer of Cardinal Health, Inc., a company that provides
products and services supporting the health care industry. Mr. Walter retired
from Cardinal Health in June 2008. Prior to his retirement, he served as
Executive Director from November 2007 to June 2008; Executive Chairman of the
Board from April 2006 to November 2007; and Chairman and Chief Executive Officer
from 1979 to April 2006. As a founder of a global Fortune 100 company, Mr.
Walter has deep expertise in finance, business development and business
integrations.
20 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Board's
Independence
|
|
|
|
|
|
RONALD A. WILLIAMS |
|
Director
since 2007 |
|
Age
67 |
|
|
Former Chairman and Chief Executive Officer,
Aetna |
|
|
Other Public Directorships |
|
●The Boeing
Company
●Johnson &
Johnson
●Envision
Healthcare |
|
Specific
qualifications, experience, skills and expertise:
●Core business,
operations and management
●Finance, risk management and investment
expertise
●Led a highly regulated business
●Experience innovating through information
technology
●Digital, mobile and technology
experience
●Public company
governance |
|
|
|
|
|
|
|
|
Other Directorships in past five
years |
|
|
|
|
|
|
|
|
|
|
|
American Express Committees |
|
●Compensation and
Benefits
●Nominating and
Governance
●Risk,
Chair |
|
Mr. Williams is former Chairman and Chief
Executive Officer of Aetna Inc., a leading diversified health care benefits
company. He was Chairman from October 2006 to April 2011; Chief Executive
Officer from February 2006 to November 2010; and President from May 2002 to July
2007. He serves as an operating advisor to Clayton, Dubilier & Rice, LLC. He
is a trustee of the Massachusetts Institute of Technology where he is also a
member of the Deans Advisory Council and Alfred P. Sloan Management Society. He
is a trustee of the Committee for Economic Development and Vice Chair of the
Board of Trustees of the Conference Board, a global, independent business
membership and research association working in the public interest. Prior to
joining Aetna, Mr. Williams co-founded several businesses and served in senior
management positions at a number of other companies.
Our Boards
Independence
13 of our 14 director
nominees are independent.
Our governance principles provide that a
substantial majority of our directors will meet the criteria for independence
required by the New York Stock Exchange (NYSE). A director is considered
independent if the Board determines that he or she does not have a material
relationship with the Company. In making its annual independence determinations,
the Board considers transactions between each director nominee and the Company.
Our Board has established guidelines to assist it in determining director
independence. These guidelines can be found within our Corporate Governance
Principles and cover, among other things, employment and compensatory
relationships, relationships with our auditors, customer and business
relationships, and contributions to nonprofit organizations.
Based on our guidelines, the Board
determined in February 2017 that all of the Boards director nominees other than
Mr. Chenault are independent.
Ambassador Barshefsky is a partner at the
law firm of WilmerHale, a multi-national law firm based in Washington, D.C. From
time to time and in the ordinary course of its
business, WilmerHale provides legal services to American Express. Ambassador
Barshefsky does not provide any such legal services, and she does not receive
any compensation from the firm that is generated by or related to our payments
to WilmerHale for such services. The Nominating and Governance Committee
determined, based on fees paid to the firm over the past three years, that
WilmerHale does not perform substantial legal services for the Company on a
regular basis. The fees and expenses paid to WilmerHale represented less than
one percent of the firms annual revenue in each of the past three years and
represented less than 0.1 percent of American Expresss revenues in each such
year. Further, the Nominating and Governance Committee reviewed the nature of
American Expresss engagement of WilmerHale and the services rendered, including
the expertise and relevant experience of the firm and the specific partners
engaged to work on the matters for which we have engaged the firm, and
determined that Ambassador Barshefskys service on American Expresss Board
should not impair American Expresss ability to engage WilmerHale when American
Express determines such engagements to be appropriate. The
|
|
2017 PROXY
STATEMENT | 21 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Corporate
Governance Framework
Committee is satisfied that
WilmerHale, when engaged for legal work, is chosen by American Expresss legal group on the basis of the directly
relevant factors of experience, expertise and efficiency. After considering the foregoing, the Committee determined and
recommended to the Board that American Expresss professional engagement of WilmerHale does not impair Ambassador
Barshefskys independence.
Our Corporate
Governance Framework
Corporate
Governance Principles |
Our corporate governance framework is
designed to support the Companys brand attributes of trust, security and
integrity, and to promote achievement of our financial targets through
responsible development and execution of our corporate strategy. Our directors
understand that they serve you as shareholders in carrying out their
responsibilities to oversee the operations and strategic direction of our
Company. To do so effectively, our Board, along with management, regularly
reviews our corporate governance principles and practices to ensure that they
are appropriate and reflect high standards. In reviewing our governance
principles and making recommendations, the Nominating and Governance Committee
considers the views of shareholders expressed to us in meetings, as well as
publicly available discourse on governance.
We have adopted a set of Corporate
Governance Principles which, together with the charters of the six standing
committees of the Board of Directors (Audit and Compliance, Compensation and
Benefits, Innovation and Technology, Nominating and Governance, Public
Responsibility, and Risk), our Code of Conduct (which constitutes our code of
ethics) and the Code of Business Conduct for the Members of the Board of
Directors, provide our governance framework. Key governance policies and
processes also include our whistleblower policy, our comprehensive
enterprise-wide risk management program, our commitment to transparent financial
reporting and our systems of internal checks and balances. Comprehensive
management policies, many of which are approved at the board level, guide the
Companys operations.
You may view the following documents by
clicking on the Corporate Governance link found on our investor relations
webpage at http://ir.americanexpress.com and then selecting Governance
Framework. You may also access our Investor Relations webpage through our main
website at www.americanexpress.com by clicking on the About American Express
link, which is located at the bottom of the Companys homepage. You may also
obtain free copies of the following materials by writing to our Company's Secretary at our
headquarters:
● |
Corporate Governance
Principles |
● |
Charters for each of the six
standing Board committees |
● |
Code of Conduct for Employees (which
constitutes our code of ethics) |
● |
Code of Business Conduct for Members
of our Board |
● |
Whistleblower
Policy |
COMMITMENT TO INTEGRITY AND TRUST
We seek to achieve strong results
for our shareholders through a commitment to high standards of ethical
behavior and integrity, sound governance and risk management practices, a
strong ethos of customer service and a commitment to giving back to the
communities in which we work and operate.
Leaders are responsible to
demonstrate the highest standards of integrity in all dealings with fellow
employees, customers, suppliers and the community at
large. |
22 | AMERICAN
EXPRESS COMPANY |
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CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Corporate Responsibility at American Express
Director Stock
Ownership
Our governance principles provide that
non-management directors are required to obtain a personal holding of shares
(directly or through share equivalent units) with a value of $1 million within
five years of joining the Board.
Majority
Voting Standard for Director Elections
In a non-contested election, directors are
elected by a majority of for votes cast by shareholders. (A non-contested
election is an election where the number of nominees is the same as the number
of directors to be elected.) If a director receives a greater number of votes
against than votes for his or her election, the director is required to
immediately submit his or her resignation to the Board. The Board, excluding
such individual, will decide whether or not to accept such resignation and will
promptly disclose and explain its decision in a Form 8-K filed with the
Securities and Exchange Commission (SEC).
In a contested election, the director
nominees who receive the plurality of votes cast are elected as directors. Under
the plurality standard, the number of persons equal to the number of vacancies
to be filled who receive more votes than other nominees are elected to the
Board, regardless of whether they receive a majority of votes cast. An election
is considered contested under our certificate of incorporation if there are more
nominees than positions on the Board to be filled at the meeting of shareholders
as of the fourteenth day prior to the date on which we file our definitive proxy
statement with the SEC.
A shareholder or group of no more than 20
shareholders that has owned at least 3 percent of our common shares for at least
3 years may nominate directors to our Board and include the nominees in our
proxy materials to be voted on at our annual shareholder meeting. The maximum
number of shareholder nominees that will be included in our proxy materials with respect to any such annual meeting is the
greater of (i) two or (ii) 20 percent of directors to be elected. A shareholder
who seeks to nominate a director or directors to our Board must provide proper
notice to the Companys Secretary under the terms of our by-laws.
Corporate
Responsibility at American Express
At American Express, we believe that
serving our communities is not only integral to running a business successfully;
it is one of our responsibilities as citizens of the world. The mission of our
corporate social responsibility program is to bring to life the American Express value of good corporate citizenship by
supporting communities in ways that enhance the Companys reputation with
employees, customers, business partners and other stakeholders.
In the past few years, we have taken
measurable actions to reduce our global carbon footprint, optimize the
efficiency and sustainability of our workplace, support our customers in
reducing their own environmental footprints and encourage our suppliers and
employees to act in more sustainable ways. For example, we reduced our carbon
emissions by 27.5 percent between 2007 and 2012. Building on this achievement,
American Express committed to reducing absolute
greenhouse gas emissions by 10 percent globally (vs. 2011 baseline) by the end
of 2016. For additional information regarding Corporate Responsibility at
American Express, please see pages 36-37.
|
|
2017 PROXY
STATEMENT | 23 |
Table of Contents
CORPORATE GOVERNANCE AT AMERICAN
EXPRESS
Our Board's Role and Responsibilities, Structure and Processes
Our Boards Role and
Responsibilities,
Structure and
Processes
How Our
Board Engages in CEO and Key Executive Succession
Planning |
A primary board responsibility is to
ensure that we have the appropriate management talent to pursue our strategies
successfully. The Board plans for CEO succession and oversees managements
planning for succession of other key executive positions. Our board calendar
includes at least one meeting each year at which the Board conducts a detailed
review of the Companys talent strategies, leadership pipeline and succession
plans for key executive positions. As the market for top talent in our industry
is highly competitive, the Compensation and Benefits Committee oversees how we
retain key talent.
The entire Board of Directors is involved
in the critical aspects of the CEO succession planning process, including
establishing selection criteria that reflect our business strategies,
identifying and evaluating potential internal candidates and making key
management succession decisions. Succession is regularly discussed with the CEO
as well as without the CEO present in executive sessions of the Board. The Board
makes sure that it has adequate opportunities to meet with and assess
development plans for potential CEO successors to address identified gaps in
skills and attributes. This occurs through various means, including informal
meetings, board dinners, presentations to the Board and committees, attendance
at board meetings and the comprehensive annual talent review. In addition, the
Board has developed an emergency CEO succession plan.
We use our comprehensive Enterprise
Risk Management (ERM) program to identify,
aggregate, monitor and manage risks. The program also defines our risk appetite,
governance, culture and capabilities. The implementation and execution of the
ERM program is headed by our Chief Risk Officer.
There are several internal management
committees, including the Enterprise-wide Risk Management Committee (ERMC),
chaired by our Chief Risk Officer, which oversee risks. The ERMC is the
highest-level management committee to oversee all firm-wide risks. It maintains
the enterprise-wide risk appetite framework and monitors compliance with limits
and escalations defined in it. The ERMC oversees implementation of risk policies
across the Company with approval by the appropriate Board committee. The ERMC
reviews key risk exposures, trends and concentrations, significant compliance
matters, economic capital and Basel capital trends, and provides guidance on the
steps to monitor, control and report major risks. The ERMC is responsible for
risk governance, risk oversight and risk appetite for all risks, including
individual credit risk, institutional credit risk, operational risk, compliance
risk, reputational risk, market risk, asset liability management risk, liquidity
risk, model risk and strategic and business risk.
How our
Board Oversees Risk Management |
Risk management is overseen by our Board
of Directors through three Board committees:
Risk, Audit and Compliance, and Compensation and Benefits. Each committee
consists entirely of independent directors and provides regular reports to the
Board regarding matters reviewed at their committee. The committees meet regularly in private sessions with our Chief Risk
Officer, the Chief Compliance Officer, the General Auditor and other senior
management with regard to our risk management processes, controls, talent and
capabilities.
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CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Board's Role
and Responsibilities, Structure and Processes
The risk management roles and
responsibilities of these committees are:
Risk Committee
●Provides oversight of our enterprise-wide risk management
framework, processes and methodologies. Approves our ERM policy, which
covers risk governance, risk oversight and risk appetite, including
individual credit risk, institutional credit risk, market risk, liquidity
risk, operational risk, reputational risk, compliance risk, model risk,
asset liability risk and strategic and business risk. Our ERM
policy:
Defines the authorized risk
limits to control exposures within our risk capacity and risk tolerance,
including stressed forward-looking scenarios
Establishes principles for
risk taking in the aggregate and for each risk type, and is supported by a
comprehensive system for monitoring limits, escalation triggers and
assessing control programs
●Reviews and concurs in the appointment, replacement, performance
and compensation of our Chief Risk Officer
●Receives regular updates from the Chief Risk Officer on key risks,
transactions and exposures
●Reviews our risk profile against the tolerances specified in the
Risk Appetite Framework, including significant risk exposures, risk trends
in our portfolios and major risk concentrations
●Provides oversight of our compliance with Basel capital and
liquidity standards and our Internal Capital Adequacy Assessment Process,
including the Comprehensive Capital Analysis and Review (CCAR) submissions
and resolution planning |
|
|
|
Audit and Compliance
Committee
●Assists the Board in its
oversight responsibilities relating to the integrity of our financial
statements and financial reporting process, internal and external
auditing, including the qualifications and independence of the independent
registered public accounting firm and the performance of our internal
audit services function, and the integrity of our systems of internal
accounting and financial controls
●Provides oversight of our Internal Audit Group
●Reviews and concurs in the appointment, replacement, performance
and compensation of our General Auditor and approves Internal Audits
annual audit plan, charter, policies and budget
●Receives regular updates on the audit plans status and results
including significant reports issued by Internal Audit and the status of
our corrective actions
●Reviews and approves our compliance policies, which includes our
Compliance Risk Tolerance Statement
●Reviews the effectiveness of our Corporate-wide Compliance Risk
Management Program |
|
Compensation and Benefits
Committee
●Works with the Chief Risk Officer to ensure our overall
compensation programs, as well as those covering our business units and
risk-taking employees, appropriately balance risk with business incentives
and that business performance is achieved without taking imprudent or
excessive risk
Our Chief Risk Officer is
actively involved in setting goals, including for our business
units
Our Chief Risk Officer also
reviews the current and forward-looking risk profiles of each business unit
and provides input into performance evaluations
Our Chief Risk Officer
meets with the Committee and attests whether performance goals and results
have been achieved without taking imprudent risks
●Uses
a risk-balanced incentive compensation framework to decide on our bonus
pools and the compensation of senior executives |
|
|
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STATEMENT | 25 |
Table of Contents
CORPORATE GOVERNANCE AT
AMERICAN EXPRESS
Our Boards
Role and Responsibilities, Structure and Processes
Our Board is led by a combination of Mr.
Chenault, Chairman and Chief Executive Officer, and Mr. Walter, our Lead
Independent Director, supplemented by active committee chairs and
independent-minded, skilled and committed directors. Our Board believes that
this structure creates an environment in which the Board can work effectively
and appropriately challenge management.
Our Nominating and Governance Committee
evaluates the effectiveness of our Board as part of the annual board evaluation
process. The Committee believes that Mr. Chenaults leadership as Chairman (in
particular, his knowledge of our business, his transparency, openness and
responsiveness to feedback, and his ability to draw on the resources and
expertise of the Board to make sure that all
directors actively contribute to the discussion) has promoted board focus on the
most impactful areas, effective board challenge and responsible decision-making.
In addition, Mr. Walters role and responsibilities are robust, and he devotes
significant time to his position. He has a deep knowledge of our Company and
history and the trust and confidence of the Board that he will appropriately
represent the directors views, present feedback to management and monitor that
the feedback is appropriately addressed. Mr. Walter was reelected Lead
Independent Director in February 2017 by the independent directors upon the
recommendation of the Nominating and Governance Committee. He has served in this
role since 2011.
Our Board Chairman |
|
Our Lead Independent
Director |
●Draws on his knowledge of
our business, operations, industry and competitive developments, key
customers and business partners in setting the agenda and focusing board
discussions
●Presents our message and
strategy to shareholders, employees, regulators, customers and the public.
Communicates feedback from these stakeholders to directors in a timely and
open manner
●Provides timely, open and
transparent communication of significant matters to
directors
●Calls special meetings of
directors when necessary and otherwise updates board members between
meetings through one-on-one or group phone calls
●Ensures that he is available
to all directors between meetings
●Leads meetings in a way that
generates healthy debate and exchange of viewpoints from all directors so
that board meetings are productive group
discussions
●Communicates to the entire
organization the culture of integrity and ethical behavior that the Board
expects
●Meets regularly with the
Lead Independent Director to receive feedback from the Board, set agendas
and discuss board functioning
●Engages with shareholders
and analysts
●Meets with key
regulators |
|
●Evolves his role as
circumstances change and devotes significant time to understanding our
business and key developments and reaching out to the Chairman and other
directors between meetings
●Presides at all meetings of
the Board at which the Chairman is not present. Leads non-management
director executive sessions at every regular board meeting and sessions of
the independent directors, presents feedback to the CEO and makes sure
that feedback is appropriately addressed
●Has the authority to call meetings of the
independent directors
●Serves as liaison between
the Chairman and the independent directors. Works with the Chairman to
make sure that all director viewpoints are considered and that decisions
are appropriately made
●Approves information sent to
the Board
●Approves meeting agendas for
the Board
●Approves meeting schedules
to ensure that there is sufficient time for discussion of all agenda
items
●Meets with directors between
meetings
●Engages with
shareholders
●Performs such other duties
as the independent directors may designate from time to
time |
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AMERICAN EXPRESS
Our Board's
Role and Responsibilities, Structure and Processes
Our
Non-Management Director Executive Sessions |
Executive sessions of non-management
directors, led by our Lead Independent Director, enable the Board to discuss
matters such as strategy, CEO and senior management performance and compensation,
succession planning and board effectiveness without management present. Our
non-management directors meet in executive
session at each regularly scheduled board meeting. Any director may request
additional executive sessions of non-management or independent directors. During
2016, our independent directors met in executive session at 8
meetings.
Our Board
Evaluation Process |
Our Board continually seeks to improve its
performance. Conducting a robust self-assessment presents the opportunity to
examine the Boards effectiveness and practices and identify areas for
improvement.
Our Board evaluations cover the following
areas:
✓ |
Board effectiveness |
✓ |
Board and committee
composition |
✓ |
Satisfaction with the performance of the
Chairman |
✓ |
Satisfaction with the performance of the Lead
Independent Director |
✓ |
Access to the Chief Executive Officer and other
members of senior management |
✓ |
Quality of the board discussions and balance
between presentations and discussion |
✓ |
Quality of materials presented to
directors |
✓ |
Board and committee information
needs |
✓ |
Satisfaction with board agendas and the frequency
of meetings and time allocations |
✓ |
Areas where directors want to increase their
focus |
✓ |
Board dynamics and
culture |
✓ |
Director access to experts and
advisors |
✓ |
Satisfaction with the format of the
evaluation |
|
|
2017 PROXY
STATEMENT | 27 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Our Board's Role
and Responsibilities, Structure and Processes
The table below summarizes our Board
Evaluation process.
1 |
Corporate Governance Review |
|
2 |
Annual Board and Committee Evaluations |
|
3 |
Summary of the Written Evaluations |
|
4 |
Board and Committee Review |
Our Nominating and Governance Committee reviews our Corporate
Governance Principles in light of general corporate governance
developments and practices suggested by governance organizations and
investors, and recommends changes that it believes are appropriate to
maintain high standards of governance. |
|
The format is reviewed by the
Nominating and Governance Committee.
We currently use a questionnaire
that is tailored to address the significant processes that drive board
effectiveness.
The questionnaire elicits discussion through open-ended
questions. |
|
The Companys Secretary summarizes
the responses, showing trends since the prior year and written comments,
which are shared with the Board and committee members. Responses are not
attributed to specific individuals to promote candor. |
|
The Chairman of the Nominating and Governance Committee and each committee
chair leads discussions of the Board and each committee, using the
questionnaire as a guide. Management is not present. Committee chairs
report on their evaluations to the full Board.
As an outcome of the discussions, directors deliver feedback
to the Chairman of the Board and suggest changes and areas for
improvement. |
5 |
Actions |
|
Examples of changes made
in response to this process over the years have included:
●Formed the Innovation and Technology Committee to enable
a deeper focus in this area
●Enhanced the information regularly provided to
directors
●Changed the format of board meetings to enable more time
for director discussion with and without the CEO present
●Changed the format of materials to combat information
overload and to enable directors to focus on the key data
●Increased informal meetings between directors and key
executives
●Provided director training on emerging risk
areas
●Added international board members and increased the
diversity of the Board
|
|
|
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CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Shareholder
Engagement
Shareholder
Engagement
Our
Boards Commitment to Shareholder
Engagement |
Why We
Engage
We have embraced a robust shareholder
engagement process for many years. Our directors and management recognize the
benefits that come from this dialogue. We engage with shareholders throughout
the year in order to:
✓ |
Provide visibility and transparency into our business, our
performance and our governance practices |
✓ |
Discuss with our shareholders the issues that are important to
them, hear their expectations for us and share our
views |
✓ |
Assess emerging issues that may affect our business, inform our
decision making, enhance our corporate disclosures and help shape our
practices |
How We
Engage
Investor
Relations and Senior Management We provide institutional investors with many opportunities to
provide feedback to our Board and senior management. We participate
in:
✓Formal events
✓One-on-one meetings
✓Group meetings throughout the year
To learn more about our engagement
with institutional investors, you may visit our investor relations website
at http://ir.americanexpress.com. |
|
Outcomes from
Investor Feedback Shareholder
feedback is thoughtfully considered and has led to modifications in our
executive compensation program, governance practices and disclosures. Some
of the actions we have taken in response to shareholder feedback over the
last several years include:
✓Adopted proxy access
✓Added performance vesting criteria to our annual restricted stock
unit grant
✓Required our CEO to retain a portion of shares granted until after
retirement
✓Made changes to our executive compensation peer group
✓Enhanced the process our Compensation and Benefits Committee uses
to determine CEO compensation and clarified the CEOs target and maximum
incentive opportunities
✓Enhanced our website disclosures on political contributions and
diversity
✓Enhanced our proxy disclosures
✓Amended our Corporate Governance Principles to limit the number of
public company boards on which our directors may serve
✓Designed our 2017 Incentive Compensation Plan to reflect evolving
shareholder preferences
✓Updated our Corporate Social Responsibility Report and included it
on our website |
|
|
Secretary and Chief Governance
Officer We engage with
governance representatives of our major shareholders through in-person
meetings and conference calls that occur during and outside of the proxy
season. Members of the corporate governance, investor relations and
executive compensation groups discuss, among other matters, company
performance, emerging governance practices generally and specifically with
respect to our Company, the reasons behind a shareholders voting
decisions at prior meetings, our executive compensation practices and our
corporate social responsibility practices. |
|
|
|
Board
Involvement We make our Lead
Independent Director available for engagement with large shareholders,
including participating in joint investor relations and corporate
governance meetings. We deliver feedback to our directors regarding these
shareholder meetings. |
|
Since January 2016, we have engaged with investors
representing over 53 percent of shares
outstanding. |
|
|
2017 PROXY
STATEMENT | 29 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Board
Committees
How To Communicate With Our Board |
You may communicate with the Board or an
individual director by letter, email or telephone, directed in care of the
Companys Secretary, who will forward your communication to the intended
recipient. However, at the discretion of the Secretary, unsolicited
advertisements or invitations to conferences or promotional material may not be
forwarded.
If you wish to communicate a concern about
our financial statements, accounting practices or internal controls, please
direct your concern to the Chair of the Audit and Compliance Committee. If the
concern relates to our governance practices, business ethics or corporate
conduct, it should be directed to the Chair of the Nominating and Governance
Committee or the Lead Independent Director. Matters relating to executive
compensation may be directed to the Chair of the Compensation and Benefits
Committee. If you are unsure of the category to
which your concern relates, you may communicate it to any one of the independent
directors, to the Lead Independent Director or to the Chairman.
Please direct such communications in care
of the Secretary as follows:
Carol V.
Schwartz Secretary and Chief Governance Officer American Express
Company 200 Vesey Street New York, NY 10285 (212)
640-2000 corporatesecretarysoffice@aexp.com |
Board Committees
Board
Committee Responsibilities |
Audit and
Compliance Committee
|
|
|
Members: John J.
Brennan Ralph de la Vega Anne L. Lauvergeon Michael O.
Leavitt Daniel L. Vasella (Chair)
Independence: Each member of
the Committee is independent and financially literate
Audit Committee
Financial Expert: Mr. Brennan meets
the requirements as defined by SEC rules
Meetings in Fiscal
Year 2016: 12 |
RESPONSIBILITIES:
●Assists the Board in
its oversight of the integrity of our financial statements and financial
reporting processes, and internal and external auditing, including the
qualifications and the independence of the independent registered public
accounting firm, the performance of the Companys internal audit services
function, the integrity of our systems of internal control over financial
reporting, and legal and regulatory compliance. See page 41 under
Report of the Audit and Compliance
Committee for additional information
regarding the duties of the Committee with respect to oversight of our
financial reporting process
●Appoints, replaces, reviews and evaluates the qualifications of the Company’s independent registered public accounting firm
●Oversees the process
for the receipt, retention and treatment, on a confidential basis, of
complaints we receive regarding accounting, internal accounting controls
or auditing matters and the confidential, anonymous submission by our
employees of concerns regarding questionable accounting or auditing
matters
●Reviews and
discusses reports from management regarding significant reported ethics
violations under our code of conduct and other corporate governance
policies
●Meets regularly in
executive session with management, the Companys General Auditor, the
Companys independent registered public accounting firm and the Companys
Chief Compliance Officer |
|
|
|
|
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CORPORATE GOVERNANCE AT
AMERICAN EXPRESS
Board
Committees
Compensation and Benefits
Committee
|
|
|
Members: Ursula M. Burns
Peter Chernin Samuel J. Palmisano Robert D. Walter (Chair)
Ronald A. Williams
Independence: Each member of
the
Committee is independent
Meetings in Fiscal
Year
2016: 4 |
RESPONSIBILITIES:
●Oversees the
compensation of our executive officers and designated key employees
●Oversees our
employee compensation plans and arrangements and employee benefit
plans
●Approves an overall
compensation philosophy and strategy for the Company and its executive
officers, including the selection of performance measures aligned with our
business strategy, and the review of our compensation practices so that
they do not encourage imprudent risk taking
●Evaluates potential
conflicts of interest with respect to its advisors
Compensation and
Benefits Committee Interlocks
and Insider
Participation: None of the current
members of the Committee is a former or current officer or employee of the
Company or any of its subsidiaries. None of them has any relationship
required to be disclosed under this caption under the rules of the
SEC. |
|
|
|
|
Innovation and Technology
Committee
|
|
|
Members: Charlene Barshefsky
Ralph de la Vega Michael O. Leavitt Theodore J. Leonsis
(Chair)
Meetings in Fiscal Year
2016: 4
|
RESPONSIBILITIES:
●Assists the Board in
its oversight of strategic innovation and technology
initiatives
●Reviews our digital
and technology strategy, our transformation initiatives and our digital product innovations
●Reviews metrics on
innovation and digital and technology developments and technology
progress |
|
|
|
|
Nominating and Governance
Committee
|
|
|
Members: Peter Chernin
(Chair) Samuel J. Palmisano Daniel L. Vasella Robert D. Walter
Ronald A. Williams
Independence: Each member of
the
Committee is independent
Meetings in Fiscal
Year
2016: 7 |
RESPONSIBILITIES:
●Considers and
recommends candidates for election to the Board
●Advises the Board on
director compensation
●Oversees the annual
performance evaluation process for the Board and
Board committees
●Advises the Board on
corporate governance and board leadership
●Discusses feedback
from shareholders regarding governance practices and advises on
shareholder engagement practices
●Administers the
Related Person Transaction Policy
●Supports the Board with respect to management succession planning
|
|
|
|
|
|
|
2017 PROXY
STATEMENT | 31 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Compensation of
Directors
Public
Responsibility Committee
|
|
|
Members: Charlene Barshefsky
(Chair) Anne L. Lauvergeon Theodore J. Leonsis Richard C.
Levin
Meetings in Fiscal Year
2016: 3
|
RESPONSIBILITIES:
●Reviews legislation,
regulations and policies affecting us, our philanthropic programs, our
political action committee, our corporate political contributions and our
government relations activities
●Reviews legislation,
regulations and policies affecting the communities in which we operate and
our environmental and social programs and practices
Political
Engagement Activities: We communicate
with policymakers on public policy issues important to the Company. In
addition to our advocacy efforts, we participate in the political process
through the American Express Political Action Committee (AXP PAC) and
through corporate political contributions in those jurisdictions where it
is permissible to do so. AXP PAC is funded solely by voluntary employee
contributions and does not contribute to presidential campaigns. We
maintain comprehensive compliance procedures to ensure that our activities
are conducted in accordance with all relevant laws, and management
regularly reports to the Public Responsibility Committee regarding its
engagement in the public policy arena and its political contributions.
Information regarding our Companys political activities, including U.S.
political contributions, may be found at
http://about.americanexpress.com/news/pap.aspx. |
|
|
|
|
Risk
Committee
|
|
|
Members: John J. Brennan
Ursula M. Burns Richard C. Levin Daniel L. Vasella Ronald
A. Williams (Chair)
Independence: Each member of
the
Committee is independent
Meetings in Fiscal
Year
2016: 8 |
RESPONSIBILITIES:
●Assists the Board in
its oversight of the Companys enterprise-wide risk management framework
and the policies and procedures established by management to identify,
assess, measure and manage key risks facing the
Company
●Assists the Board in
its oversight of managements execution of capital management, liquidity
planning and resolution planning
●Meets regularly in
executive session with the Companys Chief Risk Officer.
Please see How
our Board Oversees Risk Management on pages 24-25 for additional
information regarding the activities of the
Committee |
|
|
|
|
Compensation of
Directors
The Nominating and Governance Committee
reviews director compensation. The Committees objectives are to compensate our
directors in a manner that attracts and retains highly qualified directors and
aligns the interests of our directors with those of our long-term shareholders.
In 2016, the Committee engaged an independent compensation advisory firm, Semler
Brossy Consulting Group, to assist the Committee in its review of the
competitiveness and structure of the Companys non-management director
compensation.
This review included a benchmark of our
director compensation against the 20 companies that our Compensation and
Benefits Committee examines as a source of benchmarking data when examining the
competitiveness of our executive compensation practices, as well as the S&P
100 and certain financial institutions. After completing its review, the
Nominating and Governance Committee determined not to change the amount or form
of director compensation.
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CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Compensation of
Directors
The following table provides information
on the 2016 compensation of non-management directors who served for all or a
part of 2016. We reimburse directors for reasonable out-of-pocket expenses
attendant to their board service.
Name |
|
Fees Earned or Paid in
Cash (1) |
|
Stock
Awards (2) |
|
All
Other Compensation (3) |
|
Total |
Charlene Barshefsky |
|
$ |
115,000 |
|
$ |
165,000 |
|
$ |
74,062 |
|
$ |
354,062 |
Ursula M. Burns |
|
$ |
125,000 |
|
$ |
165,000 |
|
$ |
75,450 |
|
$ |
365,450 |
Peter Chernin |
|
$ |
130,000 |
|
$ |
165,000 |
|
$ |
38,917 |
|
$ |
333,917 |
Ralph de la Vega |
|
$ |
90,000 |
|
$ |
165,000 |
|
$ |
1,834 |
|
$ |
256,834 |
Anne L. Lauvergeon |
|
$ |
120,000 |
|
$ |
165,000 |
|
$ |
13,664 |
|
$ |
298,664 |
Michael O. Leavitt |
|
$ |
120,000 |
|
$ |
165,000 |
|
$ |
14,535 |
|
$ |
299,535 |
Theodore J. Leonsis |
|
$ |
115,000 |
|
$ |
165,000 |
|
$ |
22,846 |
|
$ |
302,846 |
Richard C. Levin |
|
$ |
120,000 |
|
$ |
165,000 |
|
$ |
42,200 |
|
$ |
327,200 |
Samuel J. Palmisano |
|
$ |
110,000 |
|
$ |
165,000 |
|
$ |
12,248 |
|
$ |
287,248 |
Daniel L. Vasella |
|
$ |
160,000 |
|
$ |
165,000 |
|
$ |
18,106 |
|
$ |
343,106 |
Robert D. Walter |
|
$ |
160,000 |
|
$ |
165,000 |
|
$ |
66,096 |
|
$ |
391,096 |
Ronald A. Williams |
|
$ |
168,750 |
|
$ |
165,000 |
|
$ |
62,072 |
|
$ |
395,822 |
(1) |
Annual Retainers. For
service in 2016, we paid non-management directors an annual retainer of
$95,000 for board service and an additional annual retainer of $20,000 to
members (including the Chairs) of the Audit and Compliance and Risk
Committees, $10,000 to members (including the Chair) of the Compensation
and Benefits Committee and $5,000 to members (including the Chairs) of the
Innovation and Technology, Nominating and Governance, and Public
Responsibility Committees. We also paid an annual retainer to the Chair of
each of the Board committees as follows: Audit and Compliance,
Compensation and Benefits, Nominating and Governance and Risk, $20,000;
Innovation and Technology and Public Responsibility, $10,000. We pay no
fees for attending meetings, but the annual retainer for board service of
$95,000 is reduced by $20,000 if a director does not attend at least 75
percent of his or her aggregate board and committee meetings. Our Lead
Independent Director also receives an annual retainer of $25,000 (provided
that if he or she is also the Chair of the Nominating and Governance
Committee, the Lead Independent Director will not receive the annual
retainer for service as Chair of that Committee). |
|
|
All the non-management directors, except for Ms. Burns,
deferred all or a portion of their 2016 retainers into a cash account, a
share equivalent unit account, or both, under the deferred compensation
plan described below in footnote 2. |
|
(2) |
Share Equivalent Unit Plan. To align our non-management directors annual compensation with
shareholder interests, each non-management director is credited with
common share equivalent units (SEUs) upon election or reelection at each
annual meeting of shareholders. Each SEU reflects the value of one common
share. Directors receive additional SEUs as dividend equivalents on the
units in their accounts. SEUs do not carry voting rights and must be held
at least until a director ends his or her service on the Board. Each SEU
is payable in cash equal to the then value of one common share at the time
of distribution to the director. On May 2, 2016, the date of last years
annual meeting, each non-management director elected to the Board was
credited with SEUs having a value of $165,000, which consisted of 2,580
SEUs, based on the market price of our common shares for the 15 trading
days immediately preceding such date. We report in this column the
aggregate grant date fair value of these SEUs in accordance with FASB ASC
Topic 718, Compensation Stock Compensation. |
|
|
Deferred Compensation Plan for Directors.
Non-management directors may defer the receipt of
up to 100 percent of their annual cash retainer fees into either: (1) a
cash account in which amounts deferred will be credited at the rate of 120
percent of the applicable federal long-term rate for December of the prior
year or (2) their SEU account. Under either alternative, directors will
receive cash payments and will not receive shares upon payout of their
deferrals. |
|
|
The balances in directors SEU accounts at December 31,
2016 are set forth in the table below. These amounts represent the
aggregate number of SEUs granted under the Share Equivalent Unit Plan for
all years of service as a director, additional units credited as a result
of the reinvestment of dividend equivalents and, for directors who
participated in the SEU option under our deferred compensation plan for
directors, retainer amounts deferred into their SEU account and dividend
equivalents thereon. |
|
Name |
Number of
SEUs |
|
C. Barshefsky |
57,370 |
|
U.M. Burns |
65,349 |
|
P. Chernin |
34,299 |
|
R. de la Vega |
3,289 |
|
A.L. Lauvergeon |
13,944 |
|
M.O. Leavitt |
7,885 |
|
T.J. Leonsis |
21,702 |
|
R.C. Levin |
30,290 |
|
S.J. Palmisano |
11,633 |
|
D.L. Vasella |
18,089 |
|
R.D. Walter |
50,600 |
|
R.A. Williams |
55,544 |
(3) |
Insurance. We provide
our non-management directors with group term life insurance coverage of
$50,000. The group life insurance policy is provided to the directors on a
basis generally available to all company employees. This column includes
the premium paid for such coverage. |
|
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2017 PROXY
STATEMENT | 33 |
Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Director and
Officer Liability Insurance
|
Dividend Equivalents. Dividend equivalents are reinvested in
additional units for all directors based upon total SEUs held at the time
of company quarterly dividend payment dates. This column includes the fair
market value of the dividend equivalents received by the directors during
2016 in these amounts: Amb. Barshefsky $66,016; Ms. Burns $75,404; Mr.
Chernin $38,871; Mr. de la Vega $1,803; Ms. Lauvergeon $13,618; Gov.
Leavitt $6,489; Mr. Leonsis $22,800; Mr. Levin $34,154; Mr. Palmisano
$12,202; Dr. Vasella $18,060; Mr. Walter $58,050; and Mr. Williams
$62,026. |
|
|
|
Directors Charitable Award
Program. We maintain a Directors
Charitable Award Program for directors elected prior to July 1, 2004. To
fund this program, we purchased joint life insurance on the lives of
participating directors, including Mr. Chenault. The death benefit of
$500,000 funds a donation to a charitable organization that the director
recommends. The Company paid no premiums in 2016. |
|
|
|
Matching Gift Program.
Directors are eligible to participate in the
Companys Matching Gift Program on the same basis as company employees.
Under this program, the American Express Foundation matches gifts to
approved charitable organizations up to $8,000 per calendar year. This
column includes the amounts matched with respect to calendar year
2016. |
Director and Officer
Liability Insurance
We have an insurance program in place to
provide coverage for director and officer liability and for fiduciary liability
arising from employee benefit plans we sponsor. The coverage for director and
officer liability provides that, subject to the policy terms and conditions, the
insurers will: (i) reimburse us when we are legally permitted to indemnify our
directors and officers; (ii) pay losses, including settlements, judgments and
legal fees, on behalf of our directors and officers when we cannot indemnify
them; and (iii) pay our losses resulting from certain securities claims. The
fiduciary liability portion of the program covers: us, our employee benefit
plans and the directors, trustees and employees who serve as fiduciaries for our
employee benefit plans. Subject to the policy terms and conditions, it covers
losses from alleged breaches of fiduciary or administrative duties, as defined
in the Employee Retirement Income Security Act of 1974 or similar laws or
regulations. A portion of the program is blended with certain other insurances
covering the Company.
Effective from November 30, 2016 to
November 30, 2017, this insurance is provided by a consortium of insurers. ACE
American Insurance Company is the lead insurer. XL Specialty Insurance
Company, Illinois National Insurance Company,
Allied World Assurance Company Ltd., Freedom Specialty Insurance Company,
Continental Casualty Company, Everest National Insurance Company, American
International Reinsurance Company Ltd., Markel Bermuda Ltd., Starr Indemnity and
Liability Company, National Liability & Fire Insurance Company and QBE
Insurance Corporation provide excess coverage. The program also includes
supplemental layers dedicated exclusively to providing coverage for directors
and officers when we cannot indemnify them. The supplemental layers are provided
by XL Specialty Insurance Company, Zurich American Insurance Company, Federal
Insurance Company, Illinois National Insurance Company, Freedom Specialty
Insurance Company, Continental Casualty Company, Everest National Insurance
Company, U.S. Specialty Insurance Company, Travelers Casualty & Surety
Company of America, Starr Indemnity and Liability Company, Allied World
Assurance Company Ltd., American International Reinsurance Company Ltd., Chubb
Bermuda Insurance Ltd. and certain Lloyds of London syndicates. We expect to
obtain similar coverage upon expiration of the current program. The annual
premium for the program is approximately $4.5 million.
Certain Relationships
and Transactions
In the ordinary course of our business, we
engage in transactions, arrangements and relationships with many other entities,
including financial institutions and professional organizations. Some of our
directors, director nominees, executive officers, greater than 5 percent
shareholders, and their immediate family members (each, a Related Person) may be
directors, officers, partners, employees or shareholders of these entities. We carry out transactions with these entities on
customary terms and, in many instances, these Related Persons may not have
knowledge of them. To the Companys knowledge, since January 1, 2016, no Related
Person has had a material interest in any of our ongoing business transactions
or relationships except as described below.
34 | AMERICAN
EXPRESS COMPANY |
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Table of Contents
CORPORATE GOVERNANCE
AT AMERICAN EXPRESS
Certain
Relationships and Transactions
Our
Related Person Transaction Policy |
Our written Related Person Transaction
Policy governs company transactions, arrangements and relationships involving
more than $120,000 in which a Related Person has a direct or indirect material
interest (Related Person Transactions). Under the policy, Related Person
Transactions must be approved by the Nominating and Governance Committee. The
Committee will only approve a transaction if, after reviewing the relevant facts
and circumstances, it determines that the transaction is consistent with the
best interests of the Company. In the event we become aware of a Related Person
Transaction that was not pre-approved under the policy, the Committee will
consider the options available, including ratification, revision or termination
of the transaction. The policy does not supersede any other company policy or
procedure that may apply to any Related Person Transaction, including our
Corporate Governance Principles and codes of conduct.
The Companys Secretary is responsible for
assisting the Nominating and Governance Committee in carrying out its
responsibilities, and management is required to present to the Committee the
material facts of any transaction that it believes may require review. In cases
where it is impracticable or undesirable to delay a decision on a proposed
transaction until the next meeting of the Committee, the Chair of the Committee
may review and approve the transaction and then report any approval to the full
Committee at its next regularly scheduled meeting. If a matter before the
Committee involves a member of the Committee, the member must be recused and may
not participate in deliberations or vote on the matter.
Pre-Approved Categories of Related Person
Transactions |
The Nominating and Governance Committee
has pre-approved the following categories of transactions as being consistent
with the best interests of the Company. These categories, which may constitute
Related Person Transactions, are:
● |
Executive officer compensation
arrangements approved by the Board or the Compensation and Benefits
Committee |
● |
Non-employee director compensation
approved by the Board or the Nominating and Governance Committee
|
● |
Director and officer insurance
payments and indemnification payments made in accordance with the
Companys charter or by-laws |
● |
Transactions in the ordinary course
of business with entities at which a Related Person is a director,
executive officer, employee and/or a less than 10 percent beneficial
owner, provided the amounts involved do not exceed the greater of $1
million or 1 percent of the other entitys annual
revenues |
● |
Transactions in which the rates or
charges are determined by competitive bids |
● |
Contributions by the Company or the
American Express Foundation to a charitable organization at which a
Related Person serves as a director, executive officer and/or trustee,
provided that the aggregate annual amount of such contributions, excluding
contributions under the Companys gift match program and contributions
under the Companys Directors Charitable Award Program, do not exceed the
lesser of $1 million or 2 percent of the organizations total annual
revenues |
● |
Use of the Companys products and
services on terms and conditions similar to those available to other
customers or employees generally in similar circumstances or of like
credit-worthiness and |
● |
Transactions in which all
shareholders receive the same benefits on a pro-rata
basis |
Related
Party Transactions |
Our executive officers and directors may
from time to time take out loans from certain of our subsidiaries on the same
terms that these subsidiaries offer to the general public. For example, our two
U.S. card-issuing banks may extend credit to our
directors and executive officers under our charge or lending products. All
indebtedness from these transactions is in the ordinary course of our business
and is on the
|
|
2017 PROXY
STATEMENT | 35 |
Table of
Contents
CORPORATE GOVERNANCE AT
AMERICAN EXPRESS
Corporate
Responsibility at American Express
same
terms, including interest rates and collateral, in effect for comparable
transactions with other people. Such indebtedness involves normal risks of
collection and does not have features or terms that are unfavorable to our
subsidiaries. Our executive officers and directors may also have transactions
with us involving other goods and services, such as travel services and
investments in deposit products offered by subsidiaries of the Company. These
transactions are also in the ordinary course of our business, and we provide
them on terms that we offer to our customers generally. Occasionally, we may
have employees who are related to our executive officers, directors or director
nominees. We compensate these individuals in a manner consistent with our
practices that apply to all employees. The adult son of Mr. John Hayes, a former
executive officer, is employed by the Company in a non-executive position and
received compensation in 2016 of between $143,000 and $211,000. The compensation
and other terms of employment of Mr. Hayes son are determined on a basis
consistent with the Companys human resources policies.
Certain executive officers, directors and
members of their immediate families are directors, employees or have equity
interests in companies with whom the Company has
entered into ordinary course business relationships from time to time and with
whom the Company may enter into additional ordinary course business
relationships. These may include ordinary course merchant acceptance
relationships pursuant to which these companies accept our charge and credit
card products and pay us fees when their customers use these cards, as well as
use of the Companys cards and financial and other products and services,
including extensions of credit, on terms and conditions similar to those
available to other customers generally. From time to time, we may enter into
joint marketing or other relationships with one or more of these companies in
the ordinary course that encourage customers to apply for and use our cards. We
also may provide ordinary course commercial card and bill payments services or
business insights to some of these companies, for which these companies pay fees
to us. We may engage in other commercial transactions with these companies, and
pay or receive fees in those transactions. We have a number of similar ordinary
course relationships with Berkshire Hathaway Inc. and its subsidiaries. We have
also purchased insurance and other products from subsidiaries of Berkshire
Hathaway Inc. in the ordinary course of business and on arms-length terms.
Corporate
Responsibility at American Express
At American Express, we believe that
serving our communities is not only integral to running a business successfully, it is one of our responsibilities as citizens of the world. The mission of our
corporate social responsibility program is to bring to life the American Express
value of good corporate citizenship by supporting communities in ways that
enhance the Companys reputation with employees, customers, business partners
and other stakeholders. We do this by supporting visionary nonprofit
organizations that are:
● |
Preserving and sustaining unique historic places for the
future |
● |
Developing new nonprofit leaders for tomorrow |
● |
Encouraging community
service where our employees and customers live and
work |
We realize the importance of preserving
cultural assets around the world and, over the years, American Express has
contributed more than $65 million to historical preservation-related projects.
To commemorate the 100th Anniversary of the National Park Service, we partnered
with the National
36 | AMERICAN EXPRESS
COMPANY |
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Table of
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CORPORATE GOVERNANCE AT
AMERICAN EXPRESS
Corporate
Responsibility at American Express
Trust for Historic Preservation and
National Geographic Society on a unique public awareness campaign, Partners in
Preservation: National Parks, which engaged 1.1 million community participants.
Through this campaign, American Express provided financial support to preserve
historic sites at several National Parks, including Yellowstone, the Grand
Canyon, the Smoky Mountains and Yosemite, to name a few.
Recognizing the difference that effective
leadership can make, we also support programs that help nonprofit groups develop
talent within their organizations so they are better prepared to tackle the
important issues of today and tomorrow. In 2016, American Express supported the
training of nearly 6,000 emerging nonprofit leaders through grants to over 100
nonprofit organizations worldwide totaling over $8 million. Additionally, in an
effort to scale leadership development, we reached over 78,000 leaders through
online programs. By helping nonprofits increase their capacity to engage the
public and our employees as volunteers, we have mobilized hundreds of thousands
of volunteers across the globe. These projects address a wide range of causes
including environmental stewardship, access to education, health and wellness,
youth mentoring and efforts to supply basic needs
in underserved communities. Included in these efforts are the Companys programs
that engage our employees in charitable giving and community service.
In 2016, our volunteer program
Serve2Gether engaged over 16,000 volunteer employees resulting in over $4
million in donated time and talent. Our employee giving campaign Give2Gether
resulted in over $9 million in support to over 6,000 charitable organizations in
the United States, Canada and India. Through Serve2Gether Consulting, which
engages our employees in short-term pro bono consulting projects, we delivered
over 11,000 hours of consulting service valued at over $1.7 million to nonprofit
organizations and social entrepreneurs worldwide.
We also have a long history of helping
people in times of trouble. American Express and its employees have provided
humanitarian relief to victims of disasters including wildfires, floods,
earthquakes, tsunamis and other disasters. In the last decade, American Express
has provided assistance for over 50 disasters in more than 35 countries,
including Japan, Haiti, the Philippines and the northeastern United States
following Superstorm Sandy.
In the past few years, we have taken
measurable actions to reduce our global carbon footprint, optimize the
efficiency and sustainability of our workplace, support our customers in
reducing their own environmental footprints and encourage our suppliers and
employees to act in more sustainable ways. For example, we reduced our carbon
emissions by 27.5 percent between 2007 and 2012. Building on this achievement,
American Express committed to reducing absolute greenhouse gas emissions by 10
percent globally (vs. 2011 baseline) by the end of 2016. We will be publishing
the results of that effort later this year. Other programs and achievements in
2016 include:
● |
Improving the efficiency and
environmental profile of our buildings: more than 50 percent of our global
real estate portfolio is green-building certified |
● |
Investing in renewable energy: we
purchased more than 150,000 million kilowatt hours of green power and 100
percent of the electricity powering our Data Centers was carbon-free
|
● |
Reducing paper usage in our business
processes and sourcing environmentally preferable paper, electronics and
other commodities |
● |
Engaging employees in our
environmental responsibility programs |
We have also been recognized for our
progress in this sustainability journey:
● |
American Express ranked
63rd among the top U.S. green companies in the 2016 Newsweek
Green Ranking |
● |
The Environmental Protection Agency
has recognized American Express as a top user of sustainable energy in the
United States since 2014 |
Learn More About Corporate
Responsibility at American Express.
You may visit our corporate website at
http://about.americanexpress.com/csr to learn how we, together with our Card
Members and shareholders, are making a difference in our communities.
|
|
2017 PROXY STATEMENT | 37 |
Table of
Contents
|
|
|
|
|
ITEM
2 |
|
RATIFICATION OF
APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit and Compliance Committee
has sole authority to appoint and replace the Companys independent
registered public accounting firm, which shall report directly to the
Committee, and is directly responsible for its compensation and oversight
of its work. In February 2017, the Committee reappointed PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for
2017.
We are asking you to ratify this
appointment. If shareholders fail to ratify the appointment, the Committee
will consider it a direction to consider other accounting firms for the
subsequent year. One or more representatives of PwC will be present at the
meeting, will be given the opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate
questions.
ITEM 2
RECOMMENDATION: Our Board of Directors recommends that you vote FOR the
following resolution:
RESOLVED, that
the appointment by the Audit and Compliance Committee of the Companys
Board of Directors of PricewaterhouseCoopers LLP, as independent
registered public accounting firm for the Company, to audit the accounts
of the Company and its subsidiaries for 2017, is ratified and
approved. |
|
|
|
|
|
|
38 | AMERICAN EXPRESS
COMPANY |
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|
Table of
Contents
AUDIT COMMITTEE
MATTERS
Item 2 Ratification of
Appointment of Independent Registered Public Accounting Firm
Actions
Taken by the Committee to Support its
Recommendation |
AREAS OF FOCUS |
|
ACTIONS |
Committee charter requires a detailed review of
the independent audit firm including as compared to other firms
at least every 10 years |
|
PwC has been our independent auditor
since 2005. This review, conducted in 2014, assessed PwCs performance
across the following criteria: professional expertise, audit engagement
team performance, communications, independence and objectivity, and fees.
A wide range of internal stakeholders were surveyed and asked to comment
generally, identify areas for recognition and improvement, and indicate
how PwCs performance was trending over time. PwCs audit fees were
benchmarked against other firms based on publicly available data. The
positive results of the review resulted in the decision to continue to
engage PwC and also identified several areas with opportunity for
improvement that were discussed with PwC. |
PwCs objectivity and independence |
|
Reviews relationships between PwC
and American Express that may reasonably be thought to bear on
independence and reviews PwCs annual affirmation of independence.
Recognizing that independence and objectivity can be compromised by an
auditors provision of non-audit services, the Committee has approved a
management policy that limits PwCs provision of services other than audit
and audit-related services except when there is a compelling
rationale. |
Quality of PwCs auditing practices and PwCs commitment
to quality, efficiency and adding value
|
|
Reviews issues raised by the Public
Company Accounting Oversight Board (PCAOB) reports on PwC, PwCs internal
quality control procedures and results of PwCs most recent quality
control reviews, as well as issues raised by recent governmental
investigations. Discusses PwCs quality initiatives and the steps PwC is
taking to enhance the quality and efficiency of its audits with the lead
engagement partner and with the PwC senior relationship partner assigned
to American Express. |
PwCs performance as auditor |
|
Discusses and comments on PwCs
audit plan and strategy for the audit, including the objectives, overall
scope and structure, the resources provided and available at the firm, and
the Committees expectations. Receives periodic updates from the lead
engagement partner on the status of the audit and areas of focus by
PwC. |
Performance of lead engagement partner |
|
Committee chair is directly involved
in selecting the lead engagement partner. During the year, the Committee
chair meets one-on-one with the lead engagement partner to promote a
candid dialogue and the Committee meets in executive session with the lead
engagement partner to discuss the progress of the audit and any audit
issues, deliver Committee feedback and discuss any other relevant
matters. |
PwCs communications with the Committee |
|
Committee gives feedback to the lead
engagement partner on the clarity, thoroughness and timeliness of PwCs
communications to the Committee. |
Terms of
the engagement and audit fees |
|
Committee reviews the engagement
letter and approves PwCs audit and non-audit
fees. |
|
|
2017 PROXY
STATEMENT | 39 |
Table of
Contents
AUDIT COMMITTEE
MATTERS
PricewaterhouseCoopers
LLP Fees and Services
PricewaterhouseCoopers LLP Fees and Services
The following table sets forth the
aggregate fees billed or to be billed by PwC for each of the last two fiscal
years (in thousands):
Types of
Fees |
|
Fiscal
2016 |
|
Fiscal
2015 |
Audit Fees |
|
$22,885 |
|
$21,844 |
Audit-Related Fees(1) |
|
3,829 |
|
3,454 |
Tax Fees |
|
8 |
|
8 |
All Other Fees |
|
110 |
|
50 |
Total |
|
$26,832 |
|
$25,356 |
(1) |
PwC performs the audit
of the Companys pension plans for Switzerland and Hong Kong where the
fees are paid by the respective plan. These fees are not included in
Audit-Related Fees since they were not paid by the Company. The total fees
for these two audits in each of 2016 and 2015 were $31K for each
year. |
In the table above, in accordance with SEC
rules, Audit Fees consist of fees for professional services rendered for the
integrated audit of our financial statements, review of the interim consolidated
financial statements included in quarterly reports, and services provided in
connection with statutory and regulatory filings or engagements and other attest
services. Audit-Related Fees consist of fees for assurance and related
services that were reasonably related to the performance of the audit or review of our financial statements. The services
included employee benefit plan audits, internal control reviews, attest services
not required by statute or regulation, and consultations on financial accounting
and reporting matters not classified as audit. Tax Fees consist of fees for
professional services rendered for tax compliance and tax consulting services.
All Other Fees are fees for any services not included in the first three
categories.
Policy on
Pre-Approval of Services Provided by PricewaterhouseCoopers
LLP |
The terms of our engagement of PwC are
subject to the pre-approval of the Audit and Compliance Committee. All audit and
permitted non-audit services require pre-approval by the Committee in accordance
with pre-approval procedures established by the Committee. In accordance with
SEC rules, the Committees pre-approval procedures have two different approaches
to pre-approving audit and permitted non-audit services performed by PwC.
Proposed services may be pre-approved pursuant to procedures established by the
Committee that are detailed as to a particular class of service without
consideration by the Committee of the specific case-by-case services to be
performed if the relevant services are predictable and recurring.
We refer to this pre-approval method as
general pre-approval. If a class of service has not received general
pre-approval, the service will require specific pre-approval by the Committee
before such service is provided by PwC. All services provided by our independent
registered public accounting firm have been pre-approved in accordance with
these procedures. The procedures require all proposed engagements of PwC for
services of any kind to be directed to the Companys Controller and then
submitted for approval to the Committee (or, should a time-sensitive need arise,
to its Chair) prior to the beginning of any services.
40 | AMERICAN EXPRESS
COMPANY |
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Table of Contents
AUDIT COMMITTEE MATTERS
Report of the Audit and Compliance Committee
Other
Transactions with PricewaterhouseCoopers
LLP |
We have a number of business relationships
with individual member firms of the worldwide PwC organization. Our subsidiaries
provide card services to some of these firms and these firms pay fees to
our subsidiaries. These services are in the
normal course of business, and we provide them pursuant to arrangements that we
offer to other similar clients.
Report of
the Audit and Compliance Committee
A role of the Audit and Compliance
Committee is to assist the Board in its oversight of the Companys financial
reporting process. Management has the primary responsibility for the financial
statements and the reporting process, including the system of internal control
over financial reporting. PwC is responsible for auditing the Companys
financial statements and its internal control over financial reporting, in
accordance with the standards of the PCAOB, and expressing opinions as to the
conformity of the financial statements with accounting principles generally
accepted in the United States and the effectiveness of internal control over
financial reporting.
In the performance of its oversight
function, the Audit and Compliance Committee has reviewed and discussed with
management and PwC the Companys audited financial statements. The Audit and
Compliance Committee also has discussed with PwC the matters required to be
discussed by Auditing Standard No. 16, as adopted by the PCAOB, relating to
communications with audit committees. In addition, the Audit and Compliance
Committee has received from PwC the written disclosures and letter required by
applicable requirements of the PCAOB regarding PwCs communications with the Committee concerning independence, has discussed with PwC their
independence from the Company and its management, and has considered whether
PwCs provision of non-audit services to the Company is compatible with
maintaining the firms independence.
The Audit and Compliance Committee
discussed with the Companys General Auditor and PwC the overall scope and plan
for their respective audits. Internal Audit is responsible for
preparing an annual audit plan and conducting internal audits under the
direction of the Companys General Auditor, who is accountable to the Audit and
Compliance Committee. The Audit and Compliance Committee met with each of the
General Auditor, the Controller and PwC, with and without management present, to
discuss the results of their examinations, their evaluations of the Companys
internal controls, and the overall quality of the Companys financial reporting.
In addition, the Audit and Compliance Committee met with the Chief Executive
Officer and Chief Financial Officer of the Company to discuss the processes that
they have undertaken to evaluate the accuracy and fair presentation of the
Companys financial statements and the effectiveness of the Companys systems of
disclosure controls and procedures and internal control over financial
reporting.
Based on the reviews and discussions
referred to above, the Audit and Compliance Committee recommended to the Board
of Directors that the Companys audited financial statements be included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2016 for
filing with the SEC.
Audit and Compliance Committee
Daniel L. Vasella, Chairman
John J.
Brennan
Ralph de la Vega
Anne L. Lauvergeon
Michael O. Leavitt
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2017 PROXY STATEMENT | 41 |
Table of Contents
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ITEM 3 |
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ADVISORY RESOLUTION TO APPROVE EXECUTIVE COMPENSATION
(SAY ON PAY)
Pursuant to regulations under
Schedule 14A of the Securities Exchange Act of 1934, we are asking you to
approve, on an advisory basis, the compensation of American Expresss named
executive officers disclosed in the Compensation Discussion and Analysis
(CD&A), the Summary Compensation Table and the related compensation
tables, notes and narrative in this proxy statement.
Our Board believes that the
compensation of our executive officers is aligned with performance, is
sensitive to our share price, appropriately motivates and retains our
executives, and is a competitive advantage in attracting and retaining the
high caliber of executive talent necessary to drive our business forward
and build sustainable value for our shareholders. We believe our executive
compensation program delivers pay which is strongly linked to company
performance over time.
We engage with shareholders
throughout the year, including discussing our compensation program and
practices, and we also obtain feedback through this annual say on pay
vote. Although this advisory vote is non-binding, the results of this vote
and the views expressed by our shareholders in these discussions will
inform the Compensation and Benefits Committees future decisions about
our executive compensation. If shareholders approve our recommendation to
continue with annual say on pay voting, our next say on pay vote will
occur at the 2018 annual meeting.
ITEM 3 RECOMMENDATION: Our Board
of Directors recommends that you vote FOR the following advisory
resolution:
RESOLVED, that the compensation paid to the Companys Named
Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K,
including the Compensation Discussion and Analysis, compensation tables
and narrative discussion, is approved. |
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42 | AMERICAN EXPRESS COMPANY |
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Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
COMPENSATION DISCUSSION AND
ANALYSIS |
Our Compensation Discussion and Analysis
(CD&A) describes our executive compensation programs and compensation
decisions in 2016 for our Named Executive Officers (NEOs), who for 2016
were:
Name |
Title |
Kenneth I. Chenault |
Chairman and Chief Executive Officer |
Stephen J. Squeri |
Vice Chairman |
Jeffrey C. Campbell |
Executive Vice President and Chief Financial
Officer |
Laureen E. Seeger |
Executive Vice President and General Counsel |
Douglas E. Buckminster |
President, Global Consumer
Services |
TABLE OF CONTENTS
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2017 PROXY STATEMENT | 43 |
Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
1. 2016 In
Summary: CEO Pay Decisions
American Express closed 2016 with strong
progress against our three priorities for 2016 and 2017: (1) accelerating
revenue growth; (2) optimizing investments; and (3) resetting our cost base.
Highlights for 2016 include:
● |
Diluted EPS was $5.65 (including the
gain from our sale of the Costco portfolio); excluding restructuring
charges, adjusted EPS was $5.93, which exceeded our initial guidance of
$5.40 - $5.701 |
● |
Revenue performance improved
sequentially in the fourth quarter as a result of a record number of new
card acquisitions, growth in loans and a growing number of merchants
accepting our cards globally |
● |
We made significant progress in removing
$1 billion from our overall cost base by the end of 2017, on a run rate
basis |
● |
We made a record level of investments in
marketing and promotion and enhanced our Card Member value proposition to
support sustainable future revenue growth |
Due to this strong performance, the
Compensation and Benefits Committee awarded our CEO compensation equal to his
target level, $22.0 million.
Recognizing the Companys strategic reset
is ongoing and not yet complete, the Committee decided to reallocate our CEOs
target level bonus from cash into long-term incentives (see page 49). As a
result, all of Mr. Chenaults compensation for 2016, other than his base salary,
consisted of performance-contingent, multi-year awards tied to specific
financial and operational goals, with the majority being equity-based. Mr.
Chenaults 2016 compensation will therefore be closely tied to the ultimate
success of our strategic initiatives and aligned with long-term shareholder
outcomes. (See Section 3 for details.)
2. How Our
Pay Program Links to Our Business Strategy
Compensation Strategy
Our executive pay program is
deliberate, consistent and continues to align with our Companys business
strategy.
● |
We align pay with company performance
and support a long-term, high performance business
model |
● |
We link most of the pay for senior executives to long-term business strategies and key priorities. The CEO’s pay has added emphasis on long-term and stock-based incentives (91% of CEO’s awarded pay for 2016), with a substantial stockholding requirement (see page 58 for details).
|
● |
We measure performance against
challenging markers established before each performance cycle and aligned
with our key business priorities |
● |
We discourage imprudent risk taking by
avoiding undue emphasis on any one metric or short-term
goal |
These principles have served us well for
years, and we have adapted them in response to input from shareholders and
regulators, including the Board of Governors of the Federal Reserve System
(Federal Reserve).
1 |
Adjusted diluted earnings per
share (EPS), a non-GAAP measure, excludes $266 million after-tax
restructuring charges ($410 million pre-tax) for the year ended December
31, 2016. Management believes adjusted diluted EPS is useful in evaluating
the ongoing operating performance of the Company and the Companys
performance against its 2016 EPS outlook originally provided in the
Companys Q415 earnings release on January 21, 2016, at which point
restructuring charges and other contingencies were not estimable and thus
not included in the outlook. See Appendix A for a reconciliation to EPS on
a GAAP basis. |
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44 | AMERICAN EXPRESS COMPANY |
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Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Elements of Total Direct
Compensation
Variable compensation, which makes up most
of NEO pay, covers annual and multi-year performance periods and depends on
performance against comprehensive and carefully selected measures. Compensation
for 2016 had the following elements:
Base salaries correspond to
experience and job scope and provide competitive fixed
pay.
Performance
Measures3
●Shareholder
(55%)
●Strategic and
Transformational (15%)
●Customer
(15%)
●Employee
(15%) |
Portfolio Grant Award (PG) Payout range 0-125% of target
Vests in 3 years
(2017-2019) Paid in cash (except for CEO, who has had some or all
deferred and payable in equity) |
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Financial Metrics |
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Strategic
Milestones |
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Stock Option
Award
Vests 3 years after
grant 10-year term
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Net
Income5 |
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Performance RSU Award (PRSU)
Payout range 0-125% of target
Vests in 3 years (2017-2019) Ties payout to 3-year
performance |
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ROE4 |
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2 |
Historically, all or a portion of the AIA awarded to our CEO has
been paid in a form other than cash and has been deferred. Mr. Chenaults
2016 AIA was earned based on his 2016 performance, but all of the payout
was reallocated into long-term incentive awards: a combination of a
portfolio grant, performance RSUs and stock options. The portfolio grant
is subject to achievement of three-year (2017-19) financial and strategic
milestones approved by the Compensation and Benefits Committee in Q1 2017,
and the performance RSUs depend on 2017-19 ROE performance. The stock
options vest three years after grant, subject to meeting performance
conditions, and are exercisable for ten years. All or a portion of our
CEOs AIA earned for performance years 2010 2015 was paid in RSUs with
additional one-year vesting subject to positive net income. For these
2010-2015 RSU awards, 50% were settled in cash and 50% in shares with 100%
of the net shares to be held for one year post retirement. |
3 |
Details of performance measures under each of the below categories
can be found on page 48. |
4 |
Average ROE between
23-27% provides 100% target payout. Details of the applicable payout grid
are available on page 53. |
5 |
Subject to positive cumulative net income over the vesting
period. |
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2017 PROXY STATEMENT | 45 |
Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Setting Incentive Plan
Goals
The Compensation and Benefits Committee
sets comprehensive performance goals annually and remains engaged throughout the
year to monitor company strategy and performance toward goals.
Key Steps:
|
Board reviews competitive environment and business
strategy at a two-day offsite in May and at meetings throughout the
year |
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●The Board discusses the business environment as well as regulatory,
competitive and technological developments
●The Board reviews company performance against plan and against
peers
●Directors are given meaningful updates to business
strategy |
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Management presents the annual financial plan in
January; the Committee reviews and approves final incentive plan
metrics and goals, which are then approved by the Committee in Q1 of
each year |
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●Management presents company financial data and forward looking
guidance
●Based on the above, the Committee sets financial and strategic
incentive plan goals calibrated and aligned with Company
strategy |
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The Committee remains engaged throughout the year,
evaluates annual performance and determines final payout
amounts |
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●The Committee reviews performance against goals at multiple
points
●At the end of the year, it determines incentive payouts according
to performance relative to the goals
●It assesses Company performance relative to peers with respect to
revenue growth, billings growth and other relevant factors
●A combination of objective and subjective measurements brings rigor
to the process while allowing the Committee to account for unforeseen and
relevant market, political and other factors |
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3. 2016 Pay Outcomes
As a part of the annual pay decision
process, the Committee considers overall company performance as well as
performance against specific pre-established enterprise-wide financial goals,
achievement of strategic and transformational initiatives, performance relative
to our peers and financial markets, and a risk/control and compliance
assessment.
2016 Company Performance
In response to competitive dynamics over
the past few years, our leadership team took decisive steps to put American
Express in a position of strength. We believe we are appropriately managing our business
for the long term while being mindful of the short-term impact of ending certain
cobranding relationships. In re-setting the Companys strategic focus, we
identified three priorities for 2016-2017:
● |
Accelerating Revenue
Growth |
● |
Optimizing
Investments |
● |
Re-setting the Cost
Base |
46 | AMERICAN EXPRESS COMPANY |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The Company made strong progress against
these goals in 2016, as evidenced by the following:
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FY15 |
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FY16 |
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Key
Achievements |
Accelerating Revenue
Growth |
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Revenue (in millions) |
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$32,818 (adj
$29,358)6 |
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$32,119 (adj
$30,926)6 |
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● |
Acquired 10 million new Card Members
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● |
Experienced healthy loan growth
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● |
Increased adjusted (excluding
Costco-related volumes) worldwide spending on cards |
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Total Loans Held for
Investment7 (in millions) |
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$59,847 |
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$66,726 |
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● |
Grew loans while maintaining
excellent credit performance |
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● |
Lending net write-off rates remained
best-in-class relative to large issuer peers in the U.S. |
Optimizing
Investments |
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Return on Average
Equity |
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24%8 |
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26% |
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● |
Continued to leverage strong capital
position to return a total of over $5.6 billion of capital to shareholders
through buybacks and dividends in 2016 |
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Earnings Per Share
(EPS) |
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$5.05 (adj $5.38)9 |
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$5.65 (adj $5.93)9 |
|
● |
Adjusted diluted EPS of $5.93
(excluding restructuring charges) in
line with the raised EPS outlook disclosed in October 2016 and above the
initial guidance range given in January 2016 |
Re-setting the Cost
Base |
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Operating Expenses (in millions) |
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$11,769 |
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$10,421 |
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● |
Operating expenses and total expenses were down versus
the prior year, including benefits from gains on the sale of the Costco
and JetBlue cobrand card portfolios in 2016 (which were reported as
expense reductions) |
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● |
Accelerated
progress on expense reduction throughout the year |
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● |
Continued investments in service infrastructure, data
management and digital capabilities aimed at growing the
business |
6 |
Adjusted
for Costco-related revenues and foreign exchange. Refer to Annex A for a
reconciliation. |
7 |
Total
loans held for investment represents Card Member loans held for investment
and Other Loans. Total loans, which also includes Card Member loans held
for sale, was $74,947 million for FY15. |
8 |
Excluding a $335 million after-tax charge ($419 million pre-tax)
primarily related to the impairment of goodwill and technology assets and
restructuring in the prepaid services business, adjusted ROE for FY15 was
25.6%. Refer to Annex A for a reconciliation. |
9 |
Adjusted
diluted earnings per share (EPS), a non-GAAP measure, excludes the $335
million after-tax prepaid services business charge ($419 million pre-tax)
from 2015 and the $266 million after-tax restructuring charges ($410 million
pre-tax) from 2016. Refer to Annex A for a reconciliation of EPS on a GAAP
basis. |
Our business and financial performance in
2016 enabled us to raise our earnings expectations over the course of the year.
We also increased our spending on growth initiatives, particularly during the
fourth quarter, to take advantage of the opportunities in the marketplace and
position the Company for long-term growth.
We achieved this despite a more
challenging competitive and regulatory environment.
Total Shareholder
Return
American Express has enjoyed success under its current leadership. Since Mr. Chenault took the helm
as CEO (April 23, 2001) to December 31, 2016, the Companys total shareholder
return (TSR)10 of 153% over that
period has exceeded both the S&P Financials (48%) and S&P 500 (146%)
indices. More recent TSR for American Express has lagged these indices.
10 |
Total Shareholder Return (TSR) is the total return on
common shares over a specified period, expressed as a percentage
(calculated based on the change in stock price over the relevant
measurement period and assuming reinvestment of dividends). Source:
Bloomberg (returns compounded daily). |
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2017 PROXY STATEMENT | 47 |
Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
American Expresss TSR for 2016 was 9%. The
share price reacted favorably to the momentum displayed in the second half of
the year and also benefitted from the post-election rally that lifted financial
sector shares in general. Overall the Companys
TSR has lagged that of the S&P Financials and the S&P 500 indices on a
one-, three- and five-year basis.
2016 CEO Performance Against Annual
Goals
In determining the CEOs compensation,
the Committee sets and reviews specific targets for the year across financial,
strategic and operational objectives.
2016 CEO Performance Against
Annual Goals |
Shareholder
(55%) |
|
Actual |
|
Target |
|
Strategic and
Transformational (15%)
●On track to reduce expense base by $1 billion by the end
of 2017 on a run rate basis
●Reversal of trial court judgment against the Company in
the antitrust action brought by the Department of Justice
●Accelerated Merchant Coverage in a profitable manner
added approximately 1 million new merchant locations in the
United States
●Strengthened
Card Member Value Proposition substantial increase in product portfolio through the introduction of new and
refreshed products and investment in Membership Rewards experiences
●Made progress in lending growth initiatives
●New
transactions, business progress and innovation we continued to make progress in performance marketing, big
data, non-card lending and digital capabilities. Acquired inAuth, a mobile devices authentication
company |
EPS11 |
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$5.65 |
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$5.40-$5.70 |
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Revenue Growth12 |
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(1%) |
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(3%) to (1%) |
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ROE |
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26% |
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25.0% or more |
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Q4 Adjusted Revenue
Exit Momentum (FX adjusted)13 |
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Above Target |
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5%-7% |
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Customer
(15%)
●Amex Net Promoter Score increased by 200 bps in
2016
●Growth in many international markets, including billings
growth on an FX-adjusted basis and an increase in international active
locations in force |
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Employee
(15%)
●Target talent retention goals were achieved
●Diversity and inclusion measures were achieved at above
target
●We continued to be recognized as an Employer of Choice
in 20 U.S. surveys (including Fortune, Black Enterprise, and Anita
Borg Institute) and internationally in 14 countries |
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11 |
Adjusted EPS, a non-GAAP measure,
was $5.93, which excludes restructuring charges of $266 million ($410
million pre-tax). Please refer to Annex A for a reconciliation to GAAP
EPS. |
12 |
The growth rate of total revenues
net of interest expense, adjusted for FX. Refer to Annex A for
reconciliation to GAAP revenue. |
13 |
Q4 Adjusted Exit Revenue Momentum,
a non-GAAP measure, is our Fourth Quarter 2016 revenue growth over the prior year, adjusted for FX and adjusted for the impact of Costco and JetBlue on the prior year. |
48 | AMERICAN EXPRESS COMPANY |
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Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Performance and Risk
Modifiers
The Compensation and Benefits Committee
also considered the Companys performance against peers (e.g., EPS, TSR,
write-off rates), as well as the Chief Risk Officers assessment and
determination that the Company achieved its 2016 results by taking risks within
the Companys risk appetite. Finally, the Committee also considered Mr.
Chenaults leadership contributions and his long track record of success.
Awarded Total Direct Compensation (TDC)
for CEO in 2016
The Committee determined to award Mr.
Chenault compensation at target, or $22.0 million, the target level for the CEO
since 2014.
While acknowledging that the Company
exceeded initial expectations and made significant progress in 2016, the
Committee also recognized that additional work lies ahead to reset the Companys trajectory
toward profitable growth and high returns. Accordingly, the Committee
reallocated Mr. Chenaults bonus for 2016, $6.625 million, into awards payable over the long term. As a result, other than his base salary, all
of Mr. Chenaults compensation for 2016 consists of performance-contingent,
multi-year grants mostly denominated in the Companys stock. This reinforces the Companys philosophy to strongly link CEO compensation to future
performance and ultimately to shareholder returns. The Committees decision is
reflected below14:
CEO Compensation for
2016
In millions:
91 percent of TDC awarded for 2016 is deferred and
tied to company performance. |
14 |
Due to SEC reporting rules,
timing differences result in different amounts being allocated in the
chart above as compared to the Summary Compensation Table. A
reconciliation is shown on page 61. |
15 |
The combined equity target value
was $8,250,000. Generally, the Compensation and Benefits Committee grants
an equal number of stock options and Performance RSUs. The values for the
equity compensation elements are approximated in the table above using the
January 26, 2016 stock price and Black-Scholes valuation on that
date. |
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2017 PROXY STATEMENT | 49 |
Table of Contents
EXECUTIVE COMPENSATION
Compensation Discussion and
Analysis
CEO Pay Awarded Total Direct
Compensation (January 2014 January 2016) and Realizable Compensation
Comparison16
Because our pay program is subject to
performance against goals and a majority of compensation is denominated in equity,
realizable pay can differ meaningfully from the value of the compensation granted. The chart below
shows how realizable pay over the past three years has averaged less than the
value of the compensation at grantreflecting both below-target level performance in 2015 and the
share price decline.
In the following chart:
● |
Target compensation is as specified by
the Committee at the start of each year |
● |
Awarded total direct compensation
(awarded TDC) includes salary, AIA earned and the grant date value of
long-term incentives granted in January for performance in the prior
year17 |
● |
Realizable compensation refers to
the value in January 2017 of TDC awarded in prior years (Please refer to
page 62 for the methodology used to determine realizable
compensation) |
CEO-Awarded TDC vs. Realizable
Compensation (Three-Year Average)
Realizable compensation is 8 percent lower than awarded
TDC over the 3-year period while TSR20 is down by 6
percent, showing a strong link between pay outcomes and
Company stock price performance. |
In millions:
Other Named Executive Officers Awarded
TDC
The Committee uses a similar process to
determine compensation for the other NEOs, except that the CEO first develops
recommendations based on his assessment of company and individual performance
and our pay mix guidelines. The Committee then assesses each NEOs results,
which also support CEO objectives, in light of
each business unit and staff groups risk/control and compliance rating. It also
takes note of the Companys overall performance as described in the discussion
of CEO pay above, individual achievements of each NEO against goals set at the
start of the year and each NEOs leadership over the course of the year. The discussion below provides
highlights for each of the NEOs.
16 |
This analysis is a supplement and
is not a substitute for the Summary Compensation Table presented on page
63. |
17 |
See page 33 of the Proxy
Statement filed in March 2014 for details on January 2014 Awarded TDC. See
page 33 of the Proxy Statement filed in March 2015 for
details on January 2015 Awarded TDC. See page 48 of the Proxy Statement
filed in March 2016 for details on January 2016 Awarded
TDC. |
18 |
January 2014 Awarded TDC - $24.40
million; January 2015 Awarded TDC - $25.10 million; January 2016 Awarded
TDC - $18.52 million. See footnote 17 for additional details. |
19 |
As of January 31, 2017,
Realizable Compensation is $19.16 million, $19.68 million and $23.44
million from Awarded TDC in January 2014, January 2015 and January 2016,
respectively. |
20 |
The Compensation and Benefits
Committee makes pay decisions at its meeting at the end of each January
(covering pay for the prior fiscal year). Cash incentives are paid in the
first quarter following the Committee meeting date, and long-term
incentives are granted soon after awards are approved by the Committee.
Therefore, for the purposes of this analysis, the Companys three-year TSR
is calculated from January 31, 2014 to January 31, 2017. We use the
closing share price on January 31, 2017 ($76.38) given it was the last
business day of January 2017. |
50 | AMERICAN EXPRESS COMPANY |
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Table of Contents
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Stephen J. Squeri, Vice
Chairman
Mr. Squeri has served as Vice Chairman
since July 2015. He is responsible for Global Commercial Services, the global
business-to-business group providing payment and expense management solutions to
small, mid-sized and large companies around the world. He also oversees Prepaid
& Alternative Payments, as well as the Global Services Group, which
comprises the Companys shared services functions including global customer
care, credit administration, technology, real estate, procurement and marketing
operations. His 2016 achievements included:
● |
Delivering solid financial results
in business units he led including strong expense
management |
● |
Delivering superior customer service
globally, as evidenced by improved customer satisfaction
metrics |
● |
Enabling a number of different
capabilities across the Company that drove significant progress against
the Companys business objectives |
● |
Improving operational efficiency and
effectiveness through consolidation of key processes and
functions |
● |
Leading the Company-wide effort to reset
the cost base and cut $1 billion in expenses by the end of
2017 |
Jeffrey C.
Campbell, Executive Vice President and Chief Financial
Officer
Mr. Campbell has served as Executive Vice
President and Chief Financial Officer since August 2013. He is responsible for
leading the Companys Finance and Corporate Development organizations and
representing American Express to the financial community. His 2016 achievements
included:
● |
Assisting in achieving operational cost
targets aligned with the Companys risk-balanced
plan |
● |
Ensuring a strong financial and
regulatory reporting control environment |
● |
Continuing to enhance planning
processes consistent with regulatory requirements, while managing the
Companys CCAR and Basel processes to achieve capital, funding and
liquidity plans |
● |
Effectively communicating business
and financial information to regulatory bodies and the financial
community |
● |
Exhibiting leadership that improved
strategic and financial decisions |
Laureen E. Seeger,
Executive Vice President and General Counsel
Ms. Seeger has served as Executive Vice
President and General Counsel since July 2014. In 2016, she led the Law,
Government Affairs, Global Security and Corporate Secretarial functions. Her
2016 achievements included:
● |
Vigorously and successfully
defending the Companys interests in litigation
|
● |
Delivering exceptional guidance and
leadership to executive management and the Board on legal and governance
ramifications of strategic matters |
● |
Supporting business initiatives such
as new product launches and strategic customer agreements and
transitions |
● |
Monitoring, advising business
leadership on and championing the Companys interests with respect to
global laws and regulation in a complex environment
|
● |
Ensuring the safety and security of
the Companys global workforce |
Douglas E.
Buckminster, President, Global Consumer Services
Mr. Buckminster has served as President of Global Consumer Services (GCS) since October 2015. His
2016 achievements included:
● |
Delivering strong financial results
with progress in the proprietary issuing and network businesses. Drove
good results across the cobrand portfolio and re-signed certain key
partnerships |
● |
Restructuring the GCS organization
to capture global synergies, drive operating efficiencies and strengthen
subject matter expertise in growth areas |
● |
Reinvigorating service-based
differentiation and accelerating the digitization of our core marketing
and servicing processes |
● |
Effectively guiding the GCS
organization through executional imperatives (e.g., Costco & JetBlue
exits, global regulatory changes) |
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2017 PROXY STATEMENT | 51 |
Table of Contents
EXECUTIVE
COMPENSATION
Compensation Discussion
and Analysis
NEOs Awarded TDC Decisions
($000s)
The Compensation and Benefits Committees
TDC decisions for the NEOs for performance year 2016 are presented in the table
below21:
A
significant portion of the NEOs Awarded TDC is tied to future performance
of the Company,
including stock price
performance.
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NEO Offer
Letters
On joining the Company in
May 2014, Ms. Seeger was entitled to a total sign-on cash award of $7,900,000
payable over a period of three years (2015-2017) to replace, in line with
external market practices, some of the long-term
incentives she forfeited by leaving her prior employer. The second of these
payments was made in July 2016.
See the Potential Payments Upon Termination or Change in Control (CIC)
table, on pages 72-75, for details.
21 |
Due to SEC reporting rules,
timing differences result in different amounts being allocated in the
chart above as compared to the Summary Compensation Table. A
reconciliation is shown on page 61. |
22 |
The NEOs performance RSUs are
earned based on three-year average (2017-2019) ROE performance. With
respect to equity awarded to NEOs (noted above), an equal number of
shares were granted in the form of performance RSUs and stock
options. |
52 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Compensation Discussion
and Analysis
4. |
Determination of LTIA Payouts for
Awards Made In Prior Years |
Performance RSUs
Awarded in January 2014-Vesting Based on 2014-2016
Performance
Performance RSUs were awarded in January
2014 for the three-year performance period ending December 2016. The awards vest
based on the Companys three-year average ROE performance.
The below chart provides additional
details.
|
|
|
|
|
|
3-Year Average
ROE |
|
Payout
Percent* |
|
|
≥30% |
|
125% |
|
|
|
|
28% |
|
108% |
|
|
|
|
27% |
|
100% |
|
|
|
|
26.4% |
|
100% |
|
Actual |
|
|
23% |
|
100% |
|
|
|
|
22% |
|
95% |
|
|
|
|
20% |
|
75% |
|
|
|
|
≤5% |
|
0% |
|
|
|
|
|
|
|
|
|
|
* |
Percent of target shares
granted. |
Given that average ROE for years 2014-2016
was 26.4 percent (29.1 percent for 2014, 24.0 percent for 2015 and 26.0
percent for 2016), the Committee awarded a payout of 100 percent of target. This
resulted in the vesting of the following shares for the CEO and other
NEOs:
|
|
Target Number of
Shares |
|
Shares
Vested** |
K.I. Chenault |
|
78,361 |
|
78,361 |
S.J. Squeri |
|
26,260 |
|
26,260 |
J.C. Campbell |
|
21,008 |
|
21,008 |
D.E. Buckminster |
|
11,344 |
|
11,344 |
** |
In addition to these amounts,
deferred dividends were paid on the actual number of shares vested in the
first quarter of 2017. Ms. Seeger joined the Company in July 2014 and did
not receive a January 2014 Performance RSU
award. |
Portfolio Grant
Awarded in January 2014-Vesting Based on 2014-2016
Performance
The Portfolio Grant (PG) is a program with
three-year performance cycles23. Under the program, management is
assessed and rewarded for performance against a combination of concrete
financial and other shareholder objectives and for results against specific
strategic objectives that indicate success in positioning the Company for the
future. For the three-year award cycle ending December 31, 2016, the program
elements and their weights were:
1. 3-Year Cumulative EPS20%
weighting
2. 3-Year TSR vs. S&P 50030%
weighting
3. Strategic Milestones50%
weighting
Based on its assessment of performance,
the Committee determined that performance underachieved objectives and set
the payout for the 2014-2016 cycle at 60%
of the target award. Specifically:
3-Year Cumulative
EPS
The target goal established at
the beginning of the three-year cycle was cumulative earnings of $17.89 per
share, a level of earnings consistent with the Companys business plan and
management expectations at the start of the performance period. No payout would
be earned on this factor for performance below a 4% compound annual growth rate
(CAGR), or $15.84 per share. The maximum payout, 125% of target, was set at
$19.06 per share, which represented a 14% CAGR.
On a GAAP basis, cumulative earnings were
$16.26 per share; however, the Committee deemed it appropriate to consider
adjusted financials when determining payout for this factor. On an as-adjusted
basis (excluding impairment and restructuring
charges)24, the Company earned
$16.87 per share over the time period, which would correspond to a 56% payout
against target for this factor.
23 |
Participants receive
zero percent of the award at threshold level, 100 percent of the award at target level, and 125 percent of the
award at maximum level. The payout range for achievement of strategic milestones is 0-125 percent and actual payout is
based on actual performance against goals as well as the Compensation and Benefits Committees
judgment. |
24 |
Refer to Annex A for reconciliation of adjustments to
GAAP financials. |
|
|
2017 PROXY STATEMENT | 53 |
Table of Contents
EXECUTIVE
COMPENSATION
Compensation Discussion
and Analysis
3-Year TSR vs.
S&P 500
This factor would pay at 100% if the
Companys TSR was equal to the S&P 500 and scaled down to no payout if TSR
lagged the index by 9% or more. The maximum payout (125%) would be achieved if
the Companys TSR outperformed the index by 5% or more.
Actual performance over the period lagged
the index by 13%, which corresponds to no payout.
Strategic
Milestones
The strategic milestones established for
this grant covered a range of customer and revenue-generating initiatives,
including loyalty coalition revenue, merchant acceptance and customer
satisfaction. The range of payouts for achievement against strategic milestones,
as with the other elements, is from zero to 125% of target.
The Committee noted considerable success
in terms of the growth rate of U.S. merchants accepting the Companys cards, the
growth rate of loyalty coalition revenue and the improving and industry-leading
customer satisfaction score. The Committee also noted global expansion in the
corporate payments business, the deliberate shift in the Companys strategy
mid-cycle in this award period and managements progress against new, specific
initiatives to accelerate revenue growth in core areas, reset the Companys cost
base and optimize investments. As a result, the Committee determined that
management met expectations in its strategic accomplishments.
Final
Scoring
The Committee determined that given the shift
in the Companys strategy during the performance period, the strategic
accomplishments over the three-year period and the underperformance in earnings
(both on a GAAP and as-adjusted basis) and TSR over the 3-year period, the award
should pay out at 60% of its targeted
amount.
The CEO and other NEOs PG 2014-16 grants
resulted in the following payouts ($000s) at 60% of target:
|
|
PG
2014-16 Grant Amount |
|
PG
2014-16 (Q1 2017) Payout |
K.I. Chenault (See Note below) |
|
$ |
5,125 |
|
$ |
3,075 |
S.J. Squeri |
|
$ |
1,325 |
|
$ |
795 |
J.C. Campbell |
|
$ |
1,500 |
|
$ |
900 |
L.E. Seeger |
|
$ |
1,100 |
|
$ |
660 |
D.E. Buckminster |
|
$ |
900 |
|
$ |
540 |
Note: Mr. Chenaults payment of
$3,075,000 was in the form of RSUs granted in January 2017 that vest one year
from the grant date; one-half of RSUs are payable in shares (net shares must be held
until one year after retirement) and the other half are payable in cash.
Accordingly, the grant amount of these RSUs will be included in the Summary
Compensation Table next year in the stock awards column.
The grant amounts of PG 2014-16 were
included in the Grants of Plan-Based Awards table in the 2015 Proxy Statement.
The cash payouts made in February 2017 (for all NEOs except the CEO) are included in the Summary Compensation
Table on page 63 (non-equity incentive plan compensation for 2016).
5. |
Compensation and Benefits Committee:
Governance and Practices |
55 |
|
Shareholder Engagement and its
Influence on Our Programs |
55 |
|
Changes for 2017 - Updates to Annual
Incentive Program |
56 |
|
Key Compensation Practices What We
Do and Dont Do |
57 |
|
Assessing Competitive
Positioning |
58 |
|
Other Policies and
Guidelines |
60 |
|
Post-Employment
Compensation |
54 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Compensation Discussion
and Analysis
Shareholder
Engagement and its Influence on Our Programs
Shareholder
Feedback/Consideration of 2016 Advisory Vote on Executive
Compensation
We have benefited from
shareholder feedback about executive compensation, including feedback given
through our say on pay votes, for the past eight years. Our say on pay proposal
received 81.9 percent support in 2016. At the direction of our Board of
Directors, each year we reach out to our largest shareholders to discuss topics
including our performance, executive compensation program, proxy disclosures and
corporate governance. Our Lead Independent Director and Chairman of the
Compensation and Benefits Committee engages directly in some of these meetings.
Since January 2016, we have met with investors representing over 53 percent
of shares outstanding, and the Chairman of the Compensation and Benefits
Committee has participated in the discussions with several of our largest
shareholders. We bring feedback from these discussions to our Board and its
committees, including the Compensation and Benefits and the Nominating and
Governance Committees. Shareholder feedback has influenced a number of changes
to our executive compensation program over the years,
including:
● |
Modifying the AIA program for employees below the CEO level
to move toward a more formulaic approach - effective 2017 |
● |
Adding
performance vesting criteria to our annual RSU grant
|
● |
Enhancing the
process the Compensation and Benefits Committee uses to determine CEO
compensation |
● |
Clarifying the
CEOs target and maximum incentive compensation
opportunities |
● |
Modifying our
peer group |
The Compensation and
Benefits Committee will continue to consider the outcome of say on pay vote
results and other shareholder input in its future decisions regarding executive
compensation.
Changes for 2017 -
Updates to Annual Incentive Program
Starting in 2017, in response to
shareholder feedback as noted above, we are simplifying our AIA program for all
employees below the CEO level. The CEOs AIA decision framework (introduced in
2013) remains unchanged. The new AIA design will
determine AIA payouts for the other NEOs and senior executives. It is a more
formulaic program that considers quantitative goals set at the beginning of the
fiscal year, along with individual performance, to determine the final payout.
The design will work as follows:
Individual Target Amount |
X |
Performance Multiplier
Company / Individual Line of Business (0
150%) |
X |
Individual Performance
Multiplier (Committee Discretion) (0 125%) |
= |
Annual AIA |
✓ |
Individual Target
Amount At the beginning of the fiscal
year, the Compensation and Benefits Committee will review and set the
target annual incentive amount for executive officers at a level intended
to reflect their role and responsibilities. |
✓ |
Performance Multiplier
The performance multiplier is comprised of
company and business components. Company performance is weighted at 70%
and the line of business performance at
30%. In the first quarter of the year, the Compensation and Benefits
Committee will approve performance objectives against which to evaluate
performance at the end of the year. |
✓ |
Individual Multiplier
Allows the Committee to modify an award downwards
or upwards within a 0-125% range to reflect factors such as individual
performance, leadership, compliance with risk and control objectives and
other relevant factors. |
|
|
2017 PROXY STATEMENT | 55 |
Table of
Contents
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Key Compensation
Practices What We Do and Dont Do
Key executive compensation practices are
summarized below. We believe these practices promote good governance and best
serve the interests of our shareholders:
WHAT WE
DO |
✓ |
Link pay outcomes to company
performance and total shareholder return |
✓ |
Defer a significant
portion of our CEO and NEOs total pay so that it is subject to future
company performance and aligned with shareholder
interests |
✓ |
Maintain ongoing
dialogue with shareholders and incorporate their feedback into our
compensation programs |
✓ |
Maintain significant
stock ownership requirements for NEOs, including a requirement that the
CEO hold a portion of his shares through one year after
retirement |
✓ |
Subject cash
incentives and equity awards to recoupment and forfeiture
provisions |
✓ |
Discourage imprudent
risk taking, including Chief Risk Officers review of goals and results to
confirm that actual results were achieved within the Companys risk
appetite |
✓ |
Prohibit executive
officers from hedging their company stock, including entering into any
derivative transaction on company shares (e.g., short sale, forward,
option or collar) |
✓ |
Prohibit executive
officers from pledging shares subject to stock ownership guidelines, and
strictly control whether any shares may be pledged at all (no executive
officer shares are pledged) |
✓ |
Conduct an in-depth
review of our CEOs and NEOs goals and performance (by an independent
Compensation and Benefits Committee) |
✓ |
Provide Compensation
and Benefits Committee discretion to clawback the cash portion of the
CEOs AIA if the Company does not achieve acceptable performance in the
following year |
✓ |
Evaluate management
succession and leadership development efforts |
✓ |
Maintain a cap on CEO
incentive compensation payments (125% of target) |
✓ |
Require termination of
employment in addition to a change in control before accelerating equity
vesting (known as double trigger) |
✓ |
Ensure that we include
performance criteria with respect to incentive compensation plans to
support tax deductibility for the Company |
✓ |
Employ a robust goal
setting process focused on aligning CEO and NEO goals with company
strategy |
✓ |
Review CEO pay from
alternative perspectives Target compensation, Awarded TDC and Realizable
Compensation |
WHAT WE DON'T
DO |
✕ |
No employment
contracts with NEOs |
✕ |
No payment of
dividends or dividend equivalents on RSUs granted to NEOs until they
vest |
✕ |
No excise tax
gross-ups upon a change in control |
✕ |
No repricing of
underwater stock options without shareholder approval |
✕ |
No individual change
in control arrangements |
56 | AMERICAN EXPRESS
COMPANY |
|
|
Table of
Contents
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Compensation and Benefits
Committee Consultant
The Compensation and Benefits Committee
endeavors to follow good governance practices and is composed solely of
independent directors. The Committee is responsible for our executive officer
compensation decisions. It has retained Semler Brossy Consulting Group (Semler
Brossy) as its independent compensation consultant. It held four meetings over
the course of 2016, all of which ended with executive sessions without
management present. During 2016, Semler Brossy attended committee meetings,
including executive sessions, and provided compensation advice independent of
the Companys management. The Committee assessed the independence of Semler
Brossy pursuant to SEC rules and concluded that their work did not raise any
conflicts of interest.
Assessing Competitive
Positioning
Our pay program is designed to reward
achievement of financial and strategic goals and to attract, retain and motivate
our leaders in a competitive talent market. The Compensation and Benefits
Committee periodically examines pay practices and pay data for a group of 20
companies as a source of benchmarking data to better understand the
competitiveness of our compensation program and
its various elements. While the benchmarking data is used to assess the
competitiveness of our compensation program, it is not used to make specific pay
decisions. In addition, we do not target a specific percentile relative to peers
or make pay decisions based on market data alone. CEO and NEO performance and
retention are the primary drivers of pay.
How We Select the
Companys Peers
In selecting the current
peer group, the Compensation and Benefits Committee identified prominent S&P
500 companies, generally with revenue levels similar to ours, and the companies
fall into the following categories: (1) financial institutions; (2) iconic
global consumer brands; and (3) payments related and technology businesses.
In 2016, the Compensation and Benefits
Committee evaluated the appropriateness of the peer group and maintained the
same categories as mentioned above. The Committee specifically considered and
addressed the impact of the spin-off of PayPal from eBay on the Companys peer
group and determined to exclude eBay and add PayPal given its stronger relevance
as a peer in the payments industry as a digital and mobile payment company. The
remainder of the group was unchanged.
Comparator Group 2016
Financial Institutions |
|
Iconic Global Consumer Brands |
|
Payments Related & Technology Businesses |
Bank of America Bank of New
York Mellon BlackRock Capital One
Financial Citigroup |
Goldman Sachs JPMorgan
Chase Morgan Stanley US Bancorp Wells Fargo |
|
Coca-Cola Colgate
Palmolive Nike |
PepsiCo Walt
Disney |
|
Discover MasterCard Visa |
Paypal Cisco |
|
|
2017 PROXY
STATEMENT | 57 |
Table of
Contents
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Other Policies and
Guidelines
Stock Ownership
Guidelines
Our stock ownership guidelines require the
CEO and our other NEOs to own and maintain a substantial stake in the Company.
The CEO and our other NEOs are required to accumulate a target number of shares
(i.e., shares owned outright, excluding
unvested/unearned shares and unexercised stock options), and to retain a portion
of the net after-tax shares received upon vesting or exercise of their equity
awards. The specific requirements are as follows:
|
|
|
|
|
|
Holding
Requirement |
|
|
|
Target Number
of Shares |
|
|
Before Target
Met |
|
After Target
Met |
K.I. Chenault25 |
|
|
500,000 |
|
|
75% of net shares until target number of shares is
met
|
|
50% of net shares for one year |
S.J. Squeri |
|
|
75,000 |
|
|
|
J.C. Campbell |
|
|
75,000 |
|
|
|
L.E. Seeger |
|
|
25,000 |
|
|
|
D.E. Buckminster |
|
|
25,000 |
|
|
|
25 |
In addition to these requirements, Mr. Chenault is
required to hold, one year beyond his retirement from the Company, 50
percent of his 2010-2015 year-end AIA and Portfolio Grant payouts
delivered in the form of RSUs. |
With the exception of Mr. Campbell and Ms.
Seeger, who were hired in 2013 and 2014, respectively, all of our NEOs own more
than the target number of shares. Mr. Campbell and Ms. Seeger are on track to
meet their requirements over the next few years. Mr. Chenault beneficially owned
1,075,334 shares as of December 30, 2016 with an estimated value of $79,660,743
using the Companys closing stock price on the same day.
Discouraging Imprudent
Risk Taking
Our executive compensation program is
structured to provide a balance of cash and stock; annual, medium-term and
long-term incentives; and financial, strategic and stock performance measures
over various time periods. It is designed to encourage the proper level of risk
taking consistent with our business model and strategies. Our business and risk
profile is different from other financial services firms; for example, we do not
generally trade securities, derivatives, mortgages or other financial
instruments other than for hedging our risks. Our executive compensation program
is designed to be consistent with the Federal Reserve principles for safety and
soundness.
The following policies and procedures help
discourage imprudent risk taking:
● |
Annual risk goals:
Our Chief Risk Officer reviews business unit and
NEO goals in relation to the Companys risk appetite and sets certain
annual risk goals for the Company at the beginning of each
year. |
● |
Monitoring of risk:
We monitor return on economic capital, credit risk
metrics and performance against our risk appetite metrics, and we assign
control and compliance ratings to each business unit and staff group as
part of our annual assessment of performance. |
● |
Adjustment of
compensation: At year-end, our Chief
Risk Officer meets with the Compensation and Benefits Committee and
certifies that actual results were achieved without taking imprudent
risks. Larger losses are analyzed as part of the year-end process, and the
Chief Risk Officer issues a year-end memorandum describing changes in the
risk profile of the Company. If deemed necessary, risk adjustments are
made to company and business unit annual incentive funding levels as well
as to individual incentive awards. |
● |
Cross-section of
metrics: We assess performance against
a cross-section of key metrics over multiple time frames to discourage
undue focus on short-term results or on any one metric and to reinforce
risk balancing in performance measurement. Our incentive plans are not
overly leveraged (i.e., there is a cap on the maximum
payout). |
● |
Deferred incentive
compensation: At least 50 percent of
incentive compensation for executive officers is deferred for at least
three years with performance-based
vesting. |
58 | AMERICAN EXPRESS
COMPANY |
|
|
Table of
Contents
EXECUTIVE
COMPENSATION
Compensation Discussion and Analysis
● |
Clawback policies:
We maintain clawback policies that include a
requirement that our CEOs cash AIA is subject to clawback at the
discretion of the Compensation and Benefits Committee if the Company does
not achieve acceptable performance the next year. |
● |
Performance-based
vesting: Performance RSUs are used in
place of time-based RSUs for the Companys senior
employees. |
● |
Stock ownership and holding
requirements: We have robust stock
ownership requirements for our CEO and other NEOs (as described above),
including the retention of a portion of net shares for one year after
stock option exercises and RSU vesting. |
Clawback Policies
We would seek to recover, to the extent
practicable, performance-based compensation from any executive officer and
certain other members of senior management in those circumstances
when:
● |
The payment of such compensation was
based on the achievement of financial results that were subsequently the
subject of a financial restatement; and |
● |
In the view of the Companys Board
of Directors, the employee engaged in fraud or misconduct that caused or
partially caused the need for the restatement, and a smaller amount would
have been paid to the employee based upon the restated financial
results. |
In addition, as noted above, the cash
portion of the CEOs AIA is subject to clawback at the discretion of the
Compensation and Benefits Committee if the Company does not achieve acceptable
performance in the following year.
American Express also maintains a
detrimental conduct policy covering approximately 500 employees, including the
CEO. This policy requires an executive to forfeit unvested awards and to repay
the proceeds from some or all of his or her compensation issued under our
incentive compensation program in the event the executive engages in conduct
that is detrimental to the Company.
Hedging and Pledging
Restrictions
Executive officers
may not hedge company shares (e.g., no short sales, forwards, options or
collars). They may not pledge shares subject to stock ownership and holding
requirements. We strictly control the pledge of any shares by requiring prior
approval of the Company Secretary and the Chairman of the Nominating and
Governance Committee to ensure that the pledge will not violate securities laws
or insider trading restrictions or potentially present reputational risk. No
executive officer shares are currently pledged.
Perquisites
We provide limited perquisites to support
our objective to attract and retain talent for key positions, as well as to
address security concerns. We also provide a flexible cash perquisite allowance
of $35,000 for executive officers of the Company.
Award
Timing
Consistent with past practice, annual
cycle LTIA awards were granted to NEOs in January after the regularly scheduled
January Compensation and Benefits Committee meeting. Our off-cycle LTIA awards
(for new hires, mid-year promotions, retention grants, etc.) are granted on
pre-established grant dates.
Tax
Treatment
Tax rules generally limit the
deductibility of compensation paid to our NEOs to $1 million per year unless
such compensation is performance-based. In general, the Company intends to
structure its incentive compensation arrangements in a manner that would comply
with these tax rules. However, the Compensation and Benefits Committee maintains
the flexibility to pay non-deductible incentive compensation.
|
|
2017 PROXY
STATEMENT | 59 |
Table of
Contents
EXECUTIVE
COMPENSATION
Report of the
Compensation and Benefits Committee
Post-Employment
Compensation
Retirement
Benefits
NEOs receive retirement
benefits through the following plans:
● |
Retirement Savings Plan
(RSP): A qualified 401(k) savings plan
available to all eligible employees. |
● |
Retirement Restoration Plan
(RRP): A nonqualified savings plan that
makes up for 401(k) benefits that would otherwise be lost as a result of
U.S. tax limits. |
● |
Deferred
Compensation: Allows NEOs to defer a
portion of their base salary and AIA payout. The annual deferral limit is equal to one
times their base salary.
|
All retirement benefits are more fully
described under Retirement Plan Benefits on page 69 and under Nonqualified
Deferred Compensation on pages 70 and 71.
Severance: Senior
Executive Severance Policy
Under the
Senior Executive Severance Policy, NEOs who are terminated involuntarily (except
in cases of misconduct) receive cash severance benefits equal to two years of base salary and AIA and also receive a pro rata
AIA payment for the year of termination. LTIAs continue to vest and certain
benefits continue during the severance period, unless the executive begins
full-time, outside employment. U.S.–based NEOs who are age 65 or older are not
eligible for severance unless the Compensation and Benefits Committee
specifically approves severance for such an executive.
To protect shareholders and our business
model, executives are required to comply with non-compete, non-solicitation,
confidentiality and non-denigration provisions during the period of time they
are receiving severance. Our uniform severance policy helps to avoid special
treatment and provides an important enforcement mechanism for these protections.
The Compensation and Benefits Committee must pre-approve severance for an
executive officer.
Change in Control
Benefits
The Company provides change in
control (CIC) benefits to encourage executives to consider the best interests of
shareholders by stabilizing any concerns about their own personal financial
well-being in the face of a potential CIC of the Company. Detailed information
is provided under Potential Payments Upon
Termination or Change in Control (CIC) on
pages 72-75.
Report of
the Compensation and Benefits Committee
The Committee has reviewed and discussed
the Compensation Discussion and Analysis with management. Based on such review
and discussion, it recommended to the Board of Directors, and the Board of
Directors approved, the inclusion of the Compensation Discussion and Analysis in
this Proxy Statement.
Compensation and Benefits
Committee
Robert D. Walter, Chairman
Ursula M.
Burns
Peter Chernin
Samuel J. Palmisano
Ronald A. Williams
60 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Report of the Compensation
and Benefits Committee
Note Regarding
2016 TDC Decisions and Summary Compensation Table
It is important to recognize that the way
the Compensation and Benefits Committee presents TDC is different from the
SEC-required disclosure in the Summary Compensation Table (SCT) and is not a
substitute for the information in that table.
In summary, the main difference between
the SCT and TDC is the timing of disclosure related to equity awards. The chart
below details this methodology.
|
|
|
|
Summary Compensation
Table* |
|
Total Direct
Compensation |
Concept and
Purpose |
|
|
|
Uses SEC
methodology, which includes a mix of both cash compensation actually
earned during 2016 and equity granted
SEC-mandated compensation
disclosure |
|
Includes only pay
that is awarded based on 2016 performance
Reflects the Compensation and Benefits
Committees January 2017 compensation decisions based on 2016
performance |
Calculated as a sum
of: |
|
Base Salary |
|
●Base salary paid in 2016 |
|
●Base salary set for 2017 |
|
|
Annual bonus |
|
●Annual cash bonus earned for 2016 performance
|
|
●Total annual bonus awarded for 2016 performance
regardless of form of payment (i.e., cash or equity) |
|
|
Portfolio Grant award |
|
●Value of PG earned for 2014-2016 (if paid in
cash) |
|
●Value
of PG 2017-2019 granted for performance year ending 2016 |
|
|
Equity awards |
|
●Accounting value of equity awards (Stock Options and
RSUs) granted in 2016 |
|
●Grant date value of equity awards (Stock Options and
RSUs) granted in January 2017 for performance year ending
2016 |
* |
The SEC rules also require
disclosure of additional elements of compensation beyond the ones
mentioned in this table, such as future pay opportunities for pension
benefits, above market interest rate on deferred compensation and all
other compensation. |
Glossary of Key
Compensation Terms
NEOs |
|
Named Executive Officers: refers
collectively to the Executive Officers referenced herein and includes
Messrs. Chenault, Squeri, Campbell and Buckminster and Ms.
Seeger |
TDC |
|
Total Direct Compensation: the sum of base
salary, Annual Incentive Awards (AIA) and Long-Term Incentive Awards
(LTIA) |
AIA |
|
Annual Incentive Award: the Companys annual
incentive program that measures Shareholder, Customer, Employee and
long-term signpost goals over a one-year period |
LTIA |
|
Long-Term Incentive Award: the combination
of cash- and equity-based long-term incentives that align with long-term
business objectives and shareholder value creation; includes Portfolio
Grants (PG), Restricted Stock Units (RSUs) and Stock Options
(SOs) |
PG |
|
Portfolio Grant: cash-denominated,
performance-based long-term incentive that measures financial performance
and the achievement of strategic milestones, all measured over a
three-year period |
RSUs |
|
Restricted Stock Units: share-denominated
long-term incentives. Performance RSUs refer to performance-based
restricted stock units that are conditioned on ROE performance over a
three-year period (also subject to service vesting) |
SOs |
|
Stock Options: share-denominated long-term
incentive that has value only if the Companys share price appreciates
above the grant price |
|
|
2017 PROXY
STATEMENT | 61 |
Table of Contents
EXECUTIVE
COMPENSATION
Report of the Compensation
and Benefits Committee
CEO Realizable
Compensation Methodology
Pay
Component |
|
Comments |
|
Methodology26 |
Salary |
|
● |
|
●Salary for the year |
Annual Incentive
Award (Cash–denominated) |
|
●Portion of AIA awarded for the prior performance
year |
|
●Denominated in cash |
Annual Incentive
Award (RSU–denominated) |
|
●Portion of AIA awarded for the prior performance year
paid in RSUs that vest one year after grant. 50 percent of net shares
received upon vesting must be retained until at least one year after
retirement |
|
●RSUs not subject to retention requirement are valued
using the Companys stock price on the vesting date
●RSUs subject to retention are valued using the January
31, 2017 closing stock price |
Portfolio
Grant |
|
●January 2014 award vested in January 2017 at 60 percent
of target and the earned amount was paid in RSUs (see page
54)
●January 2015 and January 2016 awards are still
outstanding and the potential payout range is 0-125 percent of target
based on three-year performance. Based on performance to date, these PGs
are likely to be earned at or below target |
|
●January 2014 award valued at actual payout
level
●January 2015 and January 2016 awards are valued assuming
a 70 and 100 percent of target payout27 |
Performance
RSUs |
|
●January 2014 award vested in January 2017 at 100 percent
of target (see page 53)
●January 2015 and January 2016 awards are still
outstanding and the potential payout range is 0-125 percent of target
based on three-year performance. Based on performance to date, these
Performance RSUs are likely to be earned at
target28 |
|
●January 2014 shares are valued using the Companys stock
price on vesting date
●January 2015 and January 2016 shares are valued using
January 31, 2017 stock price and are valued assuming payout at 100 percent
of target |
Stock
Options |
|
●January 2014 exercise price: $86.64
●January 2015 exercise price: $83.30
●January 2016 exercise price: $55.09 |
|
●All grants, except the January 2016 award, are underwater
and accordingly are valued at zero based on January 31, 2017 stock price
and exercise price of each option
grant |
26 |
The Compensation and Benefits Committee makes pay
decisions at its meeting at the end of each January (covering performance for the
prior fiscal year). Cash incentives are paid in the first quarter
(following the Committee meeting date) and long-term incentives are
granted soon after awards are approved by the Compensation and Benefits
Committee. Therefore, for the purposes of this analysis, outstanding RSUs
and stock options are valued using the closing share price on the last
business day of January 2017 (January 31, 2017: $76.38) to align with the
timing of Compensation and Benefits Committee decision-making and
long-term incentive award vesting. |
|
27 |
Payout range is 0-125 percent of target. Actual payout
could be higher or lower than the assumed payout based on future
performance. See page 48 of the Proxy Statement filed in March 2016 for
information on the Portfolio Grant awarded in January 2016. See page 33 of
the Proxy Statement filed in March 2015 for information on the Portfolio
Grant awarded in January 2015. |
|
28 |
See page 44 of the Proxy Statement filed in March 2016
for information on the Performance RSUs awarded in January 2016 and page
27 of the Proxy Statement filed in March 2015 for information on the
Performance RSUs awarded in January 2015. |
62 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Summary Compensation
Table
Summary Compensation
Table
The following Summary Compensation Table
(SCT) summarizes the compensation of our NEOs for the year ended December 31,
2016, using the SEC-required disclosure rules. It is important to recognize that
2016 TDC determined by the Compensation and Benefits Committee is different than the amounts disclosed below using the
SEC-required disclosure rules. See page 61 for key differences between the SCT
and TDC awarded by the Compensation and Benefits Committee for 2016.
Name and Principal
Position |
|
Year |
|
Salary |
|
Bonus (1) |
|
Stock Awards (2) |
|
Option Awards (2) |
|
Non-equity Incentive
Plan Compensation (3) |
|
Change
in Pension Value
and Non-Qualified Deferred Compensation Earnings (4) |
|
All
Other Compensation (5) |
|
Total |
K.I. Chenault |
|
2016 |
|
$ |
2,000,000 |
|
$ |
0 |
|
$ |
12,809,527 |
|
$ |
1,573,150 |
|
$ |
0 |
|
$ |
518,804 |
|
$ |
562,158 |
|
$ |
17,463,639 |
Chairman and Chief |
|
2015 |
|
$ |
2,000,000 |
|
$ |
0 |
|
$ |
16,339,045 |
|
$ |
2,563,088 |
|
$ |
0 |
|
$ |
300,525 |
|
$ |
785,433 |
|
$ |
21,988,091 |
Executive Officer |
|
2014 |
|
$ |
2,000,000 |
|
$ |
4,500,000 |
|
$ |
12,429,114 |
|
$ |
2,535,762 |
|
$ |
0 |
|
$ |
417,925 |
|
$ |
913,282 |
|
$ |
22,796,083 |
S.J. Squeri |
|
2016 |
|
$ |
1,350,000 |
|
$ |
5,100,000 |
|
$ |
3,763,308 |
|
$ |
886,690 |
|
$ |
795,000 |
|
$ |
50,006 |
|
$ |
386,262 |
|
$ |
12,331,266 |
Vice Chairman |
|
2015 |
|
$ |
1,301,154 |
|
$ |
2,750,000 |
|
$ |
8,563,819 |
|
$ |
811,088 |
|
$ |
771,150 |
|
$ |
0 |
|
$ |
359,965 |
|
$ |
14,557,176 |
|
|
2014 |
|
$ |
1,250,000 |
|
$ |
4,150,000 |
|
$ |
2,275,166 |
|
$ |
849,774 |
|
$ |
1,217,850 |
|
$ |
86,630 |
|
$ |
376,972 |
|
$ |
10,206,392 |
J.C. Campbell |
|
2016 |
|
$ |
1,000,000 |
|
$ |
3,925,000 |
|
$ |
2,023,235 |
|
$ |
476,703 |
|
$ |
900,000 |
|
$ |
0 |
|
$ |
230,988 |
|
$ |
8,555,926 |
Executive Vice President |
|
2015 |
|
$ |
1,000,000 |
|
$ |
4,850,000 |
|
$ |
2,147,224 |
|
$ |
752,688 |
|
$ |
873,000 |
|
$ |
0 |
|
$ |
222,403 |
|
$ |
9,845,315 |
and Chief Financial Officer |
|
2014 |
|
$ |
1,000,000 |
|
$ |
6,150,000 |
|
$ |
1,820,133 |
|
$ |
679,819 |
|
$ |
3,177,000 |
|
$ |
0 |
|
$ |
240,215 |
|
$ |
13,067,167 |
L.E. Seeger |
|
2016 |
|
$ |
800,000 |
|
$ |
4,733,000 |
|
$ |
1,618,599 |
|
$ |
381,365 |
|
$ |
660,000 |
|
$ |
0 |
|
$ |
200,109 |
|
$ |
8,393,073 |
Executive Vice President |
|
2015 |
|
$ |
800,000 |
|
$ |
3,858,000 |
|
$ |
1,480,824 |
|
$ |
519,088 |
|
$ |
640,200 |
|
$ |
0 |
|
$ |
157,631 |
|
$ |
7,455,743 |
and General Counsel |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D.E. Buckminster |
|
2016 |
|
$ |
700,000 |
|
$ |
2,200,000 |
|
$ |
1,294,890 |
|
$ |
305,095 |
|
$ |
540,000 |
|
$ |
37,529 |
|
$ |
246,427 |
|
$ |
5,323,941 |
President, Global Consumer |
|
2015 |
|
$ |
616,538 |
|
$ |
1,650,000 |
|
$ |
1,092,146 |
|
$ |
382,841 |
|
$ |
523,800 |
|
$ |
0 |
|
$ |
194,096 |
|
$ |
4,459,421 |
Services |
|
2014 |
|
$ |
600,000 |
|
$ |
2,150,000 |
|
$ |
982,844 |
|
$ |
367,092 |
|
$ |
953,100 |
|
$ |
66,847 |
|
$ |
2,883,175 |
|
$ |
8,003,058 |
(1) |
The amounts in this column reflect AIA cash payments for
annual performance. For Mr. Chenault, his 2016 AIA was reallocated and
paid out in the form of long-term incentive awards, comprising a
combination of Stock Options, Performance RSUs and PG 2017-19. For Ms.
Seeger, the 2016 amount also includes installments of a sign-on cash payment
of $2,633,000 made in accordance with her employment offer letter to
replace a portion of long-term incentives forfeited at her prior employer
as a result of joining the Company. |
|
(2) |
Represents the aggregate grant date fair value of the
awards pursuant to FASB ASC Topic 718, Compensation Stock Compensation.
Additional details on accounting for stock-based compensation can be found
in Note 11 Stock Plans to our Consolidated Financial Statements
contained in our 2016 Annual Report on Form 10-K. |
|
|
|
A significant portion of Mr. Chenaults total direct
compensation is delivered in the form of equity that is deferred. The
table below provides detail on the RSUs included in the stock awards
column: |
|
|
2016 |
|
|
2015 |
|
|
2014 |
Annual RSU award granted
in January for performance in the prior year* |
|
$ |
5,851,825 |
|
|
$ |
7,311,824 |
|
|
$ |
6,789,197 |
Portion of AIA awarded in
RSUs in January for performance in the prior year* |
|
$ |
3,974,964 |
|
|
$ |
3,599,893 |
|
|
$ |
1,949,920 |
Payment of PG award in the
form of RSUs. Amount in column reflects the RSUs granted in January with
respect to PG awards whose performance periods ended the prior
year |
|
$ |
2,982,738 |
|
|
$ |
5,427,328 |
|
|
$ |
3,689,997 |
TOTAL |
|
$ |
12,809,527 |
|
|
$ |
16,339,045 |
|
|
$ |
12,429,114 |
* |
For example, 2016 amount shows RSUs awarded in January
2016 for 2015 performance. |
|
|
With respect to the RSU awards for Mr.
Chenault, the amount in the Stock Awards column of the SCT reflects the
aggregate value of all of the awards set forth in the table above,
including the target value of his annual RSU award, assuming that target
performance is achieved against the average ROE target during the
three-year performance period ($5,851,825). For all other executives, the
amount in the Stock Awards Column of the SCT reflects only the target
value of their annual RSU awards, assuming that target performance is
achieved against the average ROE target during the three-year performance
period.
For each executives annual RSU award, the
maximum value as of the grant date, assuming the highest level of
performance will be achieved, is as follows: Messrs. Chenault
($7,314,740), Squeri ($4,704,135), Campbell ($2,529,017) and Buckminster
($1,618,599) and Ms. Seeger ($2,023,235). |
|
|
2017 PROXY STATEMENT | 63 |
Table of Contents
EXECUTIVE
COMPENSATION
Summary
Compensation Table
(3) |
The 2016 amounts in this column
reflect the cash payment made to the NEO in respect of a payout under the
PG 2014-16 awards granted in 2014, in accordance with award terms. For Mr.
Chenault, the 2016 amount excludes payment of $3,075,000 which was made in
the form of RSUs granted in January 2017 that vest one year from the grant
date. One-half of these RSUs are payable in cash and the other half are
payable in shares (net shares must be held until one year after
retirement). |
(4) |
The amounts in this column
reflect the actuarial increase or decrease in the present value of the
NEOs benefits under all defined benefit pension plans established by the
Company. The amounts reflect the impact of changes in interest rates and
the NEOs changes in age during the year which are used to measure the
present value. When interest rates fall, as they did during 2016,
the present value of this benefit will increase, but this increase does
not represent any additional benefit to the
executive. |
(5) |
See the All Other Compensation
Table below for additional information. |
All Other
Compensation Table |
Name |
|
Year |
|
Perquisites and Other Personal Benefits (1) |
|
Tax
Payments/ Reimbursements (2) |
|
Company Contributions to
Defined Contribution Plans (3) |
|
Executive
Life Insurance (4) |
|
Dividends and Dividend Equivalents (5) |
|
Total |
K.I. Chenault |
|
2016 |
|
$ |
285,310 |
|
$ |
N/A |
|
$ |
270,000 |
|
$ |
6,848 |
|
$ |
N/A |
|
$ |
562,158 |
|
|
2015 |
|
$ |
259,358 |
|
$ |
N/A |
|
$ |
520,000 |
|
$ |
6,075 |
|
$ |
N/A |
|
$ |
785,433 |
|
|
2014 |
|
$ |
344,795 |
|
$ |
N/A |
|
$ |
560,000 |
|
$ |
5,393 |
|
$ |
3,094 |
|
$ |
913,282 |
S.J. Squeri |
|
2016 |
|
$ |
79,472 |
|
$ |
N/A |
|
$ |
303,750 |
|
$ |
3,040 |
|
$ |
N/A |
|
$ |
386,262 |
|
|
2015 |
|
$ |
82,973 |
|
$ |
N/A |
|
$ |
274,249 |
|
$ |
2,743 |
|
$ |
N/A |
|
$ |
359,965 |
|
|
2014 |
|
$ |
79,989 |
|
$ |
N/A |
|
$ |
293,750 |
|
$ |
2,478 |
|
$ |
755 |
|
$ |
376,972 |
J.C. Campbell |
|
2016 |
|
$ |
73,248 |
|
$ |
N/A |
|
$ |
150,000 |
|
$ |
7,740 |
|
$ |
N/A |
|
$ |
230,988 |
|
|
2015 |
|
$ |
74,663 |
|
$ |
N/A |
|
$ |
140,000 |
|
$ |
7,740 |
|
$ |
N/A |
|
$ |
222,403 |
|
|
2014 |
|
$ |
82,229 |
|
$ |
N/A |
|
$ |
153,846 |
|
$ |
4,140 |
|
$ |
N/A |
|
$ |
240,215 |
L.E. Seeger |
|
2016 |
|
$ |
72,369 |
|
$ |
N/A |
|
$ |
120,000 |
|
$ |
7,740 |
|
$ |
N/A |
|
$ |
200,109 |
|
|
2015 |
|
$ |
43,645 |
|
$ |
N/A |
|
$ |
109,846 |
|
$ |
4,140 |
|
$ |
N/A |
|
$ |
157,631 |
D.E. Buckminster |
|
2016 |
|
$ |
86,303 |
|
$ |
N/A |
|
$ |
157,500 |
|
$ |
2,624 |
|
$ |
N/A |
|
$ |
246,427 |
|
|
2015 |
|
$ |
60,909 |
|
$ |
N/A |
|
$ |
130,778 |
|
$ |
2,409 |
|
$ |
N/A |
|
$ |
194,096 |
|
|
2014 |
|
$ |
789,328 |
|
$ |
1,950,150 |
|
$ |
141,000 |
|
$ |
2,244 |
|
$ |
453 |
|
$ |
2,883,175 |
(1) |
See the Perquisites and Other
Personal Benefits table below for additional information regarding the
components of this column. |
(2) |
For Mr. Buckminster, who was on
international assignment in London until June 2014, trailing tax
equalization payments or reimbursements have been made and recorded
following the termination of his assignment in 2014 in order to address
any foreign tax obligations relating to income received, awarded or earned
during his assignment. In 2016, Mr. Buckminster received a net foreign tax
credit of approximately $699,097 relating to payments made by the Company
on his behalf in previous years. This amount was returned to the Company
and is not reflected in the table above. |
(3) |
This column reflects Company
contributions to the NEOs accounts under the Companys Retirement Savings
Plan (RSP) and the RRP-RSP Related Account. See pages 69-71 for a further
description of the RSP and the RRP-RSP Related
Account. |
(4) |
This column reflects income
imputed to the NEO under the Companys executive life insurance
program. |
(5) |
This column reflects dividends
and dividend equivalents paid in connection with unvested RSUs awarded to
the NEOs. Starting in 2015, there are no amounts reflected in this column
because all dividends were factored into the grant date fair value of the
awards included in the Summary Compensation Table in the year of grant.
Dividends and dividend equivalents on unvested RSUs granted to executive
officers will be paid only if and when underlying shares
vest. |
64 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Summary Compensation
Table
Perquisites and Other
Personal Benefits |
Name |
|
Year |
|
Local
and Other Travel Benefits (1) |
|
Personal Use
of Company Aircraft (2) |
|
Flexible Perquisite Allowance (3) |
|
Home Security System (4) |
|
Security During Personal Trips (4) |
|
International Assignment (5) |
|
Other Benefits (6) |
|
Total |
K.I. Chenault |
|
2016 |
|
$ |
19,731 |
|
$ |
152,538 |
|
$ |
35,000 |
|
$ |
48,715 |
|
$ |
15,111 |
|
|
N/A |
|
$ |
14,215 |
|
$ |
285,310 |
|
|
2015 |
|
$ |
13,089 |
|
$ |
145,611 |
|
$ |
35,000 |
|
$ |
30,570 |
|
$ |
23,234 |
|
|
N/A |
|
$ |
11,854 |
|
$ |
259,358 |
|
|
2014 |
|
$ |
23,377 |
|
$ |
181,638 |
|
$ |
35,000 |
|
$ |
45,373 |
|
$ |
19,952 |
|
|
N/A |
|
$ |
39,455 |
|
$ |
344,795 |
S.J. Squeri |
|
2016 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
14,472 |
|
$ |
79,472 |
|
|
2015 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
17,973 |
|
$ |
82,973 |
|
|
2014 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
14,989 |
|
$ |
79,989 |
J.C. Campbell |
|
2016 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
8,248 |
|
$ |
73,248 |
|
|
2015 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
9,663 |
|
$ |
74,663 |
|
|
2014 |
|
$ |
30,000 |
|
$ |
3,091 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
14,138 |
|
$ |
82,229 |
L.E. Seeger |
|
2016 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
7,369 |
|
$ |
72,369 |
|
|
2015 |
|
$ |
0 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
8,645 |
|
$ |
43,645 |
D.E. Buckminster |
|
2016 |
|
$ |
30,000 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
$ |
19,608 |
|
$ |
1,695 |
|
$ |
86,303 |
|
|
2015 |
|
$ |
0 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
$ |
24,021 |
|
$ |
1,888 |
|
$ |
60,909 |
|
|
2014 |
|
$ |
0 |
|
$ |
0 |
|
$ |
35,000 |
|
|
N/A |
|
|
N/A |
|
$ |
752,358 |
|
$ |
1,970 |
|
$ |
789,328 |
(1) |
For 2016, local and other travel
benefits include local travel allowance for NEOs other than Mr. Chenault.
For Mr. Chenault, the Companys security policy requires him to use for
all travel purposes, to the maximum extent practicable, the automobiles
and aircraft provided by the Company to executives for business travel.
The calculation of the incremental cost for personal use of Company-owned
automobiles and aircraft is based on the variable cost to the Company of
operating the automobiles and aircraft and includes, among other things,
fuel costs, maintenance costs and, in the case of aircraft, the cost of
trip-related crew hotels and meals, and landing and ground handling fees.
The calculation does not include fixed costs that would have been incurred
regardless of whether there was any personal use of the automobiles or
aircraft (e.g., purchase costs and depreciation, driver and flight crew
fixed salaries and benefits, insurance costs, etc.). |
|
(2) |
Effective January 1, 2010, the
Company requires reimbursement by Mr. Chenault for incremental costs in
excess of $200,000 per year for travel on Company aircraft that is deemed
by the SEC to be personal use, including use to travel to outside board
meetings. |
|
(3) |
The amount in this column
reflects the perquisite allowance paid to the NEOs. |
|
(4) |
The amounts in these columns
include costs associated with home security and security during personal
trips for Mr. Chenault. |
|
(5) |
The amounts shown include
expatriate services and allowances in connection with Mr. Buckminsters
repatriation to the United States, due to his international assignments.
The services provided to Mr. Buckminster are provided to all employees on
international assignment. Amounts that were paid or received in British
Pound Sterling were converted to U.S. Dollars based on the conversion rate
as of the date paid, received or allocated. |
|
(6) |
This column reflects the
aggregate amount of other perquisites and personal benefits provided, none
of which individually exceeded the greater of $25,000 or 10 percent of the
total amount of all perquisites and other personal benefits reported for
the NEO. These other benefits consist of office parking, reimbursement for
certain information technology services, payment of service awards and the
cost of certain meals from the Companys dining facilities. In addition to
the perquisites and other benefits described in the table and footnotes
above, our NEOs also receive occasional secretarial support with respect
to personal matters and may, on occasion, use the Companys tickets for
sporting and entertainment events for personal rather than business
purposes. We incur no incremental cost for the provision of such
additional benefits. |
|
|
For Mr. Chenault, the 2014 amount
includes premiums for Directors Charitable Award Program life
insurance. |
|
|
2017 PROXY STATEMENT | 65 |
Table of Contents
EXECUTIVE
COMPENSATION
Grants of Plan-Based
Awards
Grants of Plan-Based
Awards
The following table provides information
on SO, PRSU and PG 2016-18 awards granted to each of our NEOs in 2016 under the
2007 Incentive Compensation Plan.
Name |
|
Award
Type (1) |
|
Grant Date |
|
Approval Date |
|
Estimated
Future Payouts under Non-Equity Incentive Plan
Awards (2) |
|
Estimated
Future Payouts under Equity Incentive Plan Awards (2)
|
|
Exercise Price or Base Price of
Option Awards ($/sh)(3) |
|
Grant Date Fair Value of
Stock and Option Awards
(4) |
Threshold |
|
Target |
|
Maximum |
Threshold (#) |
|
Target (#) |
|
Maximum (#) |
K.I. Chenault |
|
PG 2016-18 |
|
1/26/2016 |
|
1/25/2016 |
|
$ |
0 |
|
$ |
5,125,000 |
|
$ |
6,406,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SO |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
121,198 |
|
|
|
$ |
55.09 |
|
$ |
1,573,150 |
|
|
RSU |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
126,297 |
|
|
|
|
|
|
$ |
6,957,702 |
|
|
PRSU |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
0 |
|
106,223 |
|
132,778 |
|
|
|
|
$ |
5,851,825 |
S.J. Squeri |
|
PG 2016-18 |
|
1/26/2016 |
|
1/25/2016 |
|
$ |
0 |
|
$ |
1,500,000 |
|
$ |
1,875,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SO |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
68,312 |
|
|
|
$ |
55.09 |
|
$ |
886,690 |
|
|
PRSU |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
0 |
|
68,312 |
|
85,390 |
|
|
|
|
$ |
3,763,308 |
J.C. Campbell |
|
PG 2016-18 |
|
1/26/2016 |
|
1/25/2016 |
|
$ |
0 |
|
$ |
1,500,000 |
|
$ |
1,875,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SO |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
36,726 |
|
|
|
$ |
55.09 |
|
$ |
476,703 |
|
|
PRSU |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
0 |
|
36,726 |
|
45,907 |
|
|
|
|
$ |
2,023,235 |
L.E. Seeger |
|
PG 2016-18 |
|
1/26/2016 |
|
1/25/2016 |
|
$ |
0 |
|
$ |
1,100,000 |
|
$ |
1,375,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SO |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
29,381 |
|
|
|
$ |
55.09 |
|
$ |
381,365 |
|
|
PRSU |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
0 |
|
29,381 |
|
36,726 |
|
|
|
|
$ |
1,618,599 |
D.E. Buckminster |
|
PG 2016-18 |
|
1/26/2016 |
|
1/25/2016 |
|
$ |
0 |
|
$ |
1,200,000 |
|
$ |
1,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SO |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
23,505 |
|
|
|
$ |
55.09 |
|
$ |
305,095 |
|
|
PRSU |
|
1/26/2016 |
|
1/25/2016 |
|
|
|
|
|
|
|
|
|
|
0 |
|
23,505 |
|
29,381 |
|
|
|
|
$ |
1,294,890 |
(1) |
Portfolio Grant (PG)
Awards. These awards link compensation
to our financial and strategic performance over a three-year period. The
goals for the performance period were based on financial performance
metrics and strategic milestones. |
|
The Company discloses the
specific performance metric goals as well as the performance outcomes of
each PG award at the end of the performance period so that shareholders
can assess the appropriateness thereof. The Company does not disclose the
goals at the time of grant due to competitive sensitivity. The potential
award payout is determined based on a table of possible performance and
earned payout levels, including a cap on the overall earned payout level.
The actual payout could be higher or lower than the notional target value
based on performance. |
|
Stock Options (SO).
The SOs have a ten-year term and 100 percent of
these shares become exercisable on the third anniversary of the grant
date, subject to the Company achieving positive Cumulative Net Income over
the vesting period. |
|
Performance-based Restricted
Stock Units (PRSU). Except as specified
otherwise, RSU awards will be granted with performance-based awards
vesting on the third anniversary of the grant date in an amount determined
based on performance against the average ROE target during the three-year
performance period. |
|
126,297 RSUs granted to Mr.
Chenault are in connection with his 2015 AIA and payout of PG 2013-15 and
will vest on the first anniversary of the grant date subject to the
performance hurdle of positive Cumulative Net Income over the vesting period. One
half of these RSUs are payable in cash and the other half are payable in
shares (net shares must be held until one year after retirement). Dividend
equivalents on RSUs will accrue but will not be paid unless and until the
underlying shares vest. |
(2) |
The amounts shown under these
columns represent potential aggregate threshold, target and maximum
payouts for achievement of threshold, target and maximum performance
levels for awards granted. The threshold payout is zero, since it
represents the level of performance for which no award would be earned.
The target payout is equal to 100 percent of the NEOs grant value and
represents the amount that may be paid for achieving the target level of
performance across all performance goals. The maximum payout (125
percent) represents the amount that may be paid for achieving or exceeding
the maximum level of performance across all performance goals, subject to
an overall cap on the payout amount. |
(3) |
The exercise price of the SOs is
the closing price of the Companys common shares on the NYSE on the grant
date. |
(4) |
Represents the aggregate grant
date fair value of the awards pursuant to FASB ASC Topic 718, Compensation
Stock Compensation. Additional details on accounting assumptions for
stock-based compensation are referenced in footnote 2 of the Summary
Compensation Table. |
|
All awards are subject to
continuous employment with the Company (unless specified otherwise),
except awards may vest upon death, disability termination, retirement or,
in certain circumstances, in connection with a change in control of the
Company, as described in the Potential Payments Upon Termination or Change
in Control Table. |
66 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Outstanding Equity Awards
at Fiscal Year-End 2016
Outstanding Equity
Awards at Fiscal Year-End 2016
The following table shows the number of
shares covered by exercisable and unexercisable SOs and unvested RSUs granted
under the 2007 Incentive Compensation Plan for our NEOs on December 31,
2016.
Name |
|
Grant Date |
|
Option
Awards |
|
Stock
Awards |
Number
of Securities Underlying Unexercised Options
(#) Exercisable |
|
|
Number
of Securities Underlying Unexercised Options
(#) Unexercisable |
|
Equity Incentive Plan Awards: Number
of Securities Underlying Unexercised Unearned Options (#) |
|
|
Option Exercise Price ($) |
|
Option Expiration Date |
Number of Shares or Units of Stock that
have Not Vested (#) |
|
Market Value of Shares or Units of
Stock that have Not Vested ($)(a) |
|
Equity Incentive Plan Awards: Number
of Unearned Shares, Units or other Rights that have
Not Vested (#) |
|
|
Equity Incentive Plan
Awards: Market or Payout Value of Unearned Shares,
Units, or other Rights that have
Not Vested ($)(a) |
K.I. Chenault |
|
1/26/2016 |
|
|
|
|
|
|
121,198 |
(1) |
|
$ |
55.09 |
|
1/26/2026 |
|
|
|
|
|
126,297 |
(b) |
|
$ |
9,356,082 |
|
|
1/26/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
106,223 |
(c) |
|
$ |
7,869,000 |
|
|
1/26/2015 |
|
|
|
|
|
|
87,777 |
(1) |
|
$ |
83.30 |
|
1/26/2025 |
|
|
|
|
|
87,777 |
(c) |
|
$ |
6,502,520 |
|
|
1/28/2014 |
|
|
|
|
|
|
78,361 |
(1) |
|
$ |
86.64 |
|
1/28/2024 |
|
|
|
|
|
78,361 |
(c) |
|
$ |
5,804,983 |
|
|
1/29/2013 |
|
103,786 |
(1) |
|
|
|
|
|
|
$ |
59.45 |
|
1/29/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
1/24/2012 |
|
123,706 |
(2) |
|
|
|
|
|
|
$ |
49.23 |
|
1/24/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
1/27/2011 |
|
135,981 |
(2) |
|
|
|
|
|
|
$ |
44.54 |
|
1/27/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2010 |
|
650,918 |
(2) |
|
|
|
|
|
|
$ |
38.10 |
|
1/26/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
1/29/2009 |
|
1,196,888 |
(2) |
|
|
|
|
|
|
$ |
16.71 |
|
1/29/2019 |
|
|
|
|
|
|
|
|
|
|
S.J. Squeri |
|
1/26/2016 |
|
|
|
|
|
|
68,312 |
(1) |
|
$ |
55.09 |
|
1/26/2026 |
|
|
|
|
|
68,312 |
(c) |
|
$ |
5,060,553 |
|
|
10/30/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68,250 |
(d) |
|
$ |
5,055,960 |
|
|
1/26/2015 |
|
|
|
|
|
|
27,777 |
(1) |
|
$ |
83.30 |
|
1/26/2025 |
|
|
|
|
|
27,777 |
(c) |
|
$ |
2,057,720 |
|
|
1/26/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,006 |
(e) |
|
$ |
1,111,644 |
|
|
1/28/2014 |
|
|
|
|
|
|
26,260 |
(1) |
|
$ |
86.64 |
|
1/28/2024 |
|
|
|
|
|
26,260 |
(c) |
|
$ |
1,945,341 |
|
|
1/29/2013 |
|
33,652 |
(1) |
|
|
|
|
|
|
$ |
59.45 |
|
1/29/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
1/24/2012 |
|
37,486 |
(2) |
|
|
|
|
|
|
$ |
49.23 |
|
1/24/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
1/27/2011 |
|
32,965 |
(2) |
|
|
|
|
|
|
$ |
44.54 |
|
1/27/2021 |
|
|
|
|
|
|
|
|
|
|
J.C. Campbell |
|
1/26/2016 |
|
|
|
|
|
|
36,726 |
(1) |
|
$ |
55.09 |
|
1/26/2026 |
|
|
|
|
|
36,726 |
(c) |
|
$ |
2,720,662 |
|
|
1/26/2015 |
|
|
|
|
|
|
25,777 |
(1) |
|
$ |
83.30 |
|
1/26/2025 |
|
|
|
|
|
25,777 |
(c) |
|
$ |
1,909,560 |
|
|
1/28/2014 |
|
|
|
|
|
|
21,008 |
(1) |
|
$ |
86.64 |
|
1/28/2024 |
|
|
|
|
|
21,008 |
(c) |
|
$ |
1,556,273 |
|
|
7/31/2013 |
|
24,892 |
(3) |
|
|
|
|
|
|
$ |
73.77 |
|
7/31/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
7/31/2013 |
|
49,785 |
(1) |
|
|
|
|
|
|
$ |
73.77 |
|
7/31/2023 |
|
|
|
|
|
|
|
|
|
|
L.E. Seeger |
|
1/26/2016 |
|
|
|
|
|
|
29,381 |
(1) |
|
$ |
55.09 |
|
1/26/2026 |
|
|
|
|
|
29,381 |
(c) |
|
$ |
2,176,544 |
|
|
1/26/2015 |
|
|
|
|
|
|
17,777 |
(1) |
|
$ |
83.30 |
|
1/26/2025 |
|
|
|
|
|
17,777 |
(c) |
|
$ |
1,316,920 |
|
|
7/31/2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,409 |
(f) |
|
$ |
2,104,539 |
D.E. Buckminster |
|
1/26/2016 |
|
|
|
|
|
|
23,505 |
(1) |
|
$ |
55.09 |
|
1/26/2026 |
|
|
|
|
|
23,505 |
(c) |
|
$ |
1,741,250 |
|
|
1/26/2015 |
|
|
|
|
|
|
13,111 |
(1) |
|
$ |
83.30 |
|
1/26/2025 |
|
|
|
|
|
13,111 |
(c) |
|
$ |
971,263 |
|
|
1/28/2014 |
|
|
|
|
|
|
11,344 |
(1) |
|
$ |
86.64 |
|
1/28/2024 |
|
|
|
|
|
11,344 |
(c) |
|
$ |
840,364 |
|
|
1/29/2013 |
|
16,354 |
(1) |
|
|
|
|
|
|
$ |
59.45 |
|
1/29/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
1/24/2012 |
|
19,493 |
(2) |
|
|
|
|
|
|
$ |
49.23 |
|
1/24/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
1/27/2011 |
|
19,779 |
(2) |
|
|
|
|
|
|
$ |
44.54 |
|
1/27/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
1/26/2010 |
|
94,488 |
(2) |
|
|
|
|
|
|
$ |
38.10 |
|
1/26/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
1/31/2008 |
|
100,000 |
(2) |
|
|
|
|
|
|
$ |
49.13 |
|
1/30/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
7/31/2007 |
|
50,000 |
(2) |
|
|
|
|
|
|
$ |
58.54 |
|
7/30/2017 |
|
|
|
|
|
|
|
|
|
|
|
|
2017 PROXY
STATEMENT | 67 |
Table of Contents
EXECUTIVE
COMPENSATION
Option Exercises and Stock
Vested in 2016
Unless specified otherwise, exercisability
of option awards and vesting of stock awards is subject to continuous employment
by the Company, except that unvested awards may vest upon death, disability,
termination, retirement or change in control of the Company as described on
pages 72-75.
Notes Relating to Option
Awards
(1) |
These SOs vest 100 percent on the
third anniversary of the grant date, subject to positive Cumulative Net
Income over the three-year performance period starting with the year of
grant. |
|
|
(2) |
These SOs vested 25 percent on the
first, second, third and fourth anniversaries of the grant
date. |
|
|
(3) |
These SOs vested on January 29,
2016 as a result of satisfaction of the performance criteria, which was positive Cumulative Net Income over the three-year
performance period (2013-2015). |
|
|
Notes Relating to Stock
Awards |
|
(a) |
The market value of the stock awards
is based on the closing price per share of our stock on December 31, 2016,
which was $74.08. |
|
|
(b) |
These awards vest on the first
anniversary of the grant date subject to positive Cumulative Net Income.
One half of these RSUs is payable in cash and the other half is payable in
shares (net shares must be held until one year after
retirement). |
|
|
(c) |
These awards vest on the third
anniversary of the grant date, subject to our achieving average annual ROE
of 23-27 percent for the 2016, 2015 and 2014 awards over the vesting
period. The number of awards above reflects that based on previous fiscal
years performance ROE is at target and a payout at 100 percent is made
based upon the trend in the ROE performance as of December 31,
2016. |
|
|
(d) |
For Mr. Squeri, an award of 68,250
RSUs was granted in connection with his promotion to Vice Chairman of the
Company. These awards vest on the third anniversary of the grant date
subject to positive Cumulative Net Income. |
|
|
(e) |
These awards vest on the second
anniversary of the grant date, subject to positive Cumulative Net
Income. |
|
|
(f) |
56,818 RSUs granted on July 31, 2014 vest in two equal
installments with 50 percent of grant vested on July 31, 2016 and 50
percent of grant vesting on July 31, 2017, subject to positive Cumulative
Net Income. |
Option Exercises and
Stock Vested in 2016
The following table contains information
about exercises of SOs and shares acquired by the NEOs upon the vesting of RSUs
during 2016.
Name |
|
Option
Awards |
|
Stock
Awards |
Number of Shares Acquired
on Exercise (#) |
|
Value Realized
on Exercise ($)(1) |
Number of Shares Acquired
on Vesting (#) |
|
Value Realized
on Vesting ($)(2) |
K.I. Chenault |
|
882,813 |
|
$ |
11,938,015 |
|
215,580 |
|
$ |
11,705,838 |
S.J. Squeri |
|
39,370 |
|
$ |
1,425,493 |
|
43,172 |
|
$ |
2,309,702 |
J.C. Campbell |
|
|
|
|
|
|
77,140 |
|
$ |
4,690,630 |
L.E. Seeger |
|
|
|
|
|
|
28,409 |
|
$ |
1,831,244 |
D.E. Buckminster |
|
50,000 |
|
$ |
831,065 |
|
16,893 |
|
$ |
903,776 |
(1) |
Amounts reflect the difference between the exercise
price of the SO and the market price of our common stock at the time of
exercise. |
|
(2) |
Amounts reflect the value of our common stock based on
the closing price of the Companys common shares on the NYSE on the day on
which the RSUs vested. |
68 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
EXECUTIVE
COMPENSATION
Retirement Plan
Benefits
Retirement Plan
Benefits
The table below shows the present value of
accumulated benefits payable to each of the NEOs under the American Express Retirement Plan and the
American Express Retirement Restoration Plan (RRP), a nonqualified plan. Mr.
Campbell and Ms. Seeger are not eligible to participate in these
plans.
Name |
|
Plan Name |
|
Number
of Years Credited Service (#) |
|
Present Value
of Accumulated Benefits
(1) |
|
Payments During Last
Fiscal Year |
K.I. Chenault |
|
Retirement Plan |
|
35 |
|
$ |
777,846 |
|
$ |
0 |
|
|
RRP-Retirement Plan |
|
|
|
$ |
8,730,392 |
|
$ |
0 |
|
|
Total |
|
|
|
$ |
9,508,238 |
|
$ |
0 |
S.J. Squeri |
|
Retirement Plan |
|
31 |
|
$ |
336,851 |
|
$ |
0 |
|
|
RRP-Retirement Plan |
|
|
|
$ |
629,936 |
|
$ |
0 |
|
|
Total |
|
|
|
$ |
966,787 |
|
$ |
0 |
D.E. Buckminster |
|
Retirement Plan |
|
30 |
|
$ |
304,861 |
|
$ |
0 |
|
|
RRP-Retirement Plan |
|
|
|
$ |
395,979 |
|
$ |
0 |
|
|
Total |
|
|
|
$ |
700,840 |
|
$ |
0 |
(1) |
Present Value of Accumulated
Benefits (PVAB) was determined using the same measurement date (December
31, 2016) and assumptions as used for financial reporting
purposes: |
● |
Discount rate equal to 3.85
percent |
● |
RP-2016 Mortality Table projected
with MP-2016 longevity improvements |
● |
Retirement age is assumed to be the
normal retirement age as defined in the plan (age
65) |
● |
Form of payment is the value of the
cash balance account payable as a lump-sum distribution upon
retirement |
● |
PVAB includes the value of the
MetLife benefit described below, if
applicable |
Retirement
Plan
The NEOs (except for Mr.
Campbell and Ms. Seeger) participate in the Retirement Plan, which is a defined
benefit cash balance retirement plan. As a result of amendments made to the
Retirement Plan in 2007, benefit accruals were discontinued, although the
Retirement Plan continues to credit participants with interest on their
outstanding account balances. The Retirement Plan sets the interest rate each
year based on the average of the interest rates for certain five-year U.S.
Treasury Notes, with a minimum interest rate of 5 percent. The maximum interest
rate is the lower of 10 percent or the applicable interest rate specified in the
Retirement Plan. For 2016 and 2017, the interest rate is 5 percent. In addition,
benefits from the prior retirement plan, which was terminated in 1985, are
payable through an insurance contract with Metropolitan Life Insurance Company
and are included in the table above.
RRP-Retirement
Plan
Each RRP participant who
participated in the Retirement Plan has a
Retirement Plan related account for benefits that
could not be provided under the Retirement Plan as a result of IRS limitations
on tax-qualified plans. Compensation for RRP-Retirement Plan account purposes
included the same components of compensation as for the Retirement Plan.
RRP-Retirement Plan benefits accrue and vest in a similar manner to benefits
under the Retirement Plan. Participants may elect
to receive payment of their RRP-Retirement Plan benefits in either a lump sum or
annual installments over a period of five, ten or fifteen consecutive years.
Lump sum payments are made on or about the January 1 or July 1 that is at least
six months following the participants separation from service and installment
payments commence on or about the July 1 of the calendar year following the year
in which the participant separates from service.
As a result of amendments made to the
Retirement Plan and RRP in 2007, benefit accruals were discontinued, however,
like the Retirement Plan, the RRP-Retirement Plan continues to credit
participants with interest on their outstanding account balances in accordance
with the Retirement Plan provision as described above.
|
|
2017 PROXY
STATEMENT | 69 |
Table of Contents
EXECUTIVE
COMPENSATION
Nonqualified Deferred
Compensation
Nonqualified Deferred
Compensation
The following table shows the executive or
company contributions, earnings, withdrawals and account balances for the NEOs
in the RRP-Retirement Savings Plan (RSP) accounts and the deferred compensation programs. These programs
are unfunded, unsecured deferred compensation programs.
Nonqualified
Deferred Compensation 2016
Name |
|
Plan
Name |
|
Executive Contributions in
Last FY |
|
Company Contributions in
Last FY (1) |
|
Aggregate Earnings in
Last FY (2) |
|
Aggregate Withdrawals/ Distributions |
|
Aggregate Balance at Last
FYE (3) |
K.I. Chenault |
|
RRP-RSP |
|
|
N/A |
|
$ |
235,000 |
|
$ |
88,566 |
|
$ |
0 |
|
$ |
6,260,391 |
|
|
Deferral Plan |
|
$ |
86,750 |
|
|
N/A |
|
$ |
907,061 |
|
$ |
0 |
|
$ |
30,648,003 |
|
|
Total |
|
$ |
86,750 |
|
$ |
235,000 |
|
$ |
995,627 |
|
$ |
0 |
|
$ |
36,908,394 |
S.J. Squeri |
|
RRP-RSP |
|
|
N/A |
|
$ |
295,250 |
|
$ |
212,560 |
|
$ |
0 |
|
$ |
2,898,286 |
|
|
Deferral Plan |
|
$ |
191,750 |
|
|
N/A |
|
$ |
245,122 |
|
$ |
581,165 |
|
$ |
4,640,438 |
|
|
Total |
|
$ |
191,750 |
|
$ |
295,250 |
|
$ |
457,682 |
|
$ |
581,165 |
|
$ |
7,538,724 |
J.C. Campbell |
|
RRP-RSP |
|
|
N/A |
|
$ |
130,125 |
|
$ |
17,349 |
|
$ |
0 |
|
$ |
397,494 |
|
|
Deferral Plan |
|
$ |
179,250 |
|
|
N/A |
|
$ |
32,637 |
|
$ |
0 |
|
$ |
562,267 |
|
|
Total |
|
$ |
179,250 |
|
$ |
130,125 |
|
$ |
49,986 |
|
$ |
0 |
|
$ |
959,761 |
L.E. Seeger |
|
RRP-RSP |
|
|
N/A |
|
$ |
100,125 |
|
$ |
7,443 |
|
$ |
0 |
|
$ |
196,545 |
|
|
Deferral Plan |
|
$ |
88,000 |
|
|
N/A |
|
$ |
19,728 |
|
$ |
0 |
|
$ |
181,343 |
|
|
Total |
|
$ |
88,000 |
|
$ |
100,125 |
|
$ |
27,171 |
|
$ |
0 |
|
$ |
377,888 |
D.E. Buckminster |
|
RRP-RSP |
|
|
N/A |
|
$ |
127,688 |
|
$ |
28,066 |
|
$ |
0 |
|
$ |
1,144,173 |
|
|
Deferral Plan |
|
$ |
104,250 |
|
|
N/A |
|
$ |
392,975 |
|
$ |
0 |
|
$ |
7,527,034 |
|
|
Total |
|
$ |
104,250 |
|
$ |
127,688 |
|
$ |
421,041 |
|
$ |
0 |
|
$ |
8,671,207 |
(1) |
The amounts in this column are also included in the
Summary Compensation Table on page 63 under All Other
Compensation. |
(2) |
Earnings on RRP-RSP and Deferral Plan balances are
determined based on hypothetical investment of those account balances at
the direction of the participant in the investment options available under
the RSP (other than the Self-Directed Brokerage Account and the Company
Stock Fund). In addition to the investment options in the RSP, a Market
Interest Rate option is available for pre-2011 Deferral Plan balances
only. The Market Interest Rate option earns a rate of return based on the
SEC-defined market rate for deferred compensation for the year, which is
120 percent of the long-term Applicable Federal Rate for December of the
preceding year. |
(3) |
Of the total amounts shown in this column, the following
amounts have been reported as Salary, Bonus or Non-Equity Incentive
Plan Compensation in the Summary Compensation Table on page 63 in this
proxy statement and in prior years proxy statements: for Mr. Chenault,
$10,195,598; for Mr. Campbell, $550,827; for Mr. Squeri, $2,596,750; for
Mr. Buckminster, $1,181,615; and for Ms. Seeger, $158,500. The amounts in
the preceding sentence do not include: 1) amounts deferred by each
executive before becoming an NEO; and 2) amounts reported in prior years
proxy statements as above-market earnings on deferred
compensation. |
Retirement Savings
Plan
Effective January 2010, all
active participants, including the NEOs, were immediately 100 percent vested in
the Company matching contribution, which is generally up to 5 percent of total
pay (base pay and eligible incentive pay capped at one times base pay). The RSP
was amended effective January 1, 2017 to increase the Company matching
contribution from 5 percent to 6 percent of total pay. The Company may also
contribute an annual discretionary profit sharing amount (ranging from 0-5
percent) for eligible employees based on the
Companys annual performance. As a result of the Companys 2016 performance, the
Board approved a profit sharing contribution of 2.5 percent of total pay for
eligible employees (including NEOs). Company profit sharing contributions
generally vest on the third anniversary of an employees service with the
Company.
For Company employees who commenced their
employment prior to April 1, 2007, an additional conversion contribution of up
to 8 percent of total pay is generally also contributed. The percentage varies
by
70 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
EXECUTIVE COMPENSATION
Nonqualified Deferred Compensation
individual based on their projected age
and service as of December 31, 2008. The conversion contributions for the NEOs
are as follows: Mr. Chenault: 6.0 percent and Messrs. Squeri and Buckminster:
3.75 percent. Mr. Campbell and Ms. Seeger commenced employment after April 1,
2007 and are not eligible for conversion contributions. As a result of the
amendments to the RSP effective January 1, 2017, conversion contributions will
be phased out, with contributions ending at the end of 2017 for certain
executives, including the NEOs, and ending at the end of 2018 for all other
employees.
RRP-RSP
Each RRP participant has an RRP-RSP account for benefits that cannot be
provided under the Retirement Savings Plan as a result of IRS limitations on
tax-qualified plans. The RRP was amended effective January 1, 2011, such that
the Company matches employee contributions in the RRP-RSP account up to a
maximum of 5 percent of total pay in excess of IRS compensation limits, only to
the extent the employee voluntarily defers compensation under the Companys
nonqualified Deferral Plan described below. All other Company contributions to
the RRP-RSP were not impacted by this amendment. Compensation for RRP-RSP
account purposes includes the same components of compensation as for the
Retirement Savings Plan, as well as the value of base pay and annual cash
incentive amounts deferred by a participant under the Companys nonqualified
Deferral Plan. The RRP was amended effective January 1, 2017 to be consistent
with the changes taking effect in the RSP for the Company matching contribution
and conversion contributions. Participants may elect to receive payment of their
RRP-RSP benefits in either a lump sum or annual installments over a period of
five, ten or fifteen consecutive years. New
participants will have a default lump-sum election for contributions
attributable to the first year.
Deferral Plan
As part of planning for retirement or other long-term
financial needs, the Company provides the NEOs and certain other senior-level
employees with an annual opportunity to defer receipt of a portion of their base
salary or annual cash incentive award up to one times their base
salary.
Under the Deferral Plan, certain
participants may elect for payment to commence upon separation from service or a
specified date at least five years after deferral, but not later than separation
from service, and to receive payment in either a lump sum or annual installments
over a period of five, ten or fifteen consecutive years. For 2007 and prior years,
participants were able to defer receipt until termination of employment or a
specified date at least five years after deferral, but not later than ten years
after termination of employment.
Deferral Plan
Earnings
Starting January 1, 2011,
earnings for NEOs on deferral balances are based on investment options similar
to those offered under the Retirement Savings Plan (other than the Company Stock
Fund and the Self Directed Brokerage Account). Furthermore, for participants,
including NEOs, with pre-2011 balances, the Deferral Plan was amended to allow
for an additional investment option that provides a market interest rate based
on 120 percent of the long-term Applicable Federal Rate for December of the
preceding year. Interest crediting on deferrals was previously based on
ROE-linked interest crediting schedules.
|
|
2017 PROXY STATEMENT | 71 |
Table of Contents
EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
(CiC)
Potential Payments Upon Termination or
Change in Control (CIC)
The tables below show certain potential
payments that would have been made to an NEO if the NEOs employment had
terminated on December 31, 2016, under various scenarios, including a Change in
Control. The tables do not include the pension benefits or nonqualified deferred
compensation that would be paid to an NEO, which are set forth in the Pension
Benefits 2016 and Nonqualified Deferred Compensation 2016 tables above, except
to the extent that the NEO is entitled to an additional benefit as a result of
the termination. In addition, the tables do not include the value of vested but unexercised SOs as of December 31, 2016,
and cash AIA and PG awards for performance cycles ending on December 31, 2016.
The footnotes to the tables describe the assumptions used in estimating the
amounts shown in the tables.
Because the payments to be made to an NEO
depend on several factors, the actual amounts to be paid out upon an NEOs
termination of employment can only be determined at the time of an executives
actual separation from the Company.
Potential
Payments Upon Termination of Employment/CIC as of December 31,
2016(1) |
K. I. Chenault
|
|
Death (a) |
|
Disability (a) |
|
Retirement (b) |
|
Termination
w/o Cause not in Connection with CIC (c) |
|
Termination w/o
Cause or Constructive Term. in Connection with
CIC (d) |
Incremental Benefits Due to Termination
Event |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
11,950,000 |
|
$ |
11,950,000 |
Value of Accelerated LTIA(2) |
|
$ |
0 |
|
$ |
0 |
|
$ |
35,803,053 |
|
$ |
0 |
|
$ |
0 |
Deferred Compensation |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
814,560 |
|
$ |
814,560 |
Retirement Savings Plan |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Plan |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Other Benefits |
|
$ |
0 |
|
$ |
0 |
|
$ |
823,670 |
|
$ |
289,812 |
|
$ |
136,455 |
Gross-Up on Excise Taxes |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
0 |
TOTAL VALUE OF INCREMENTAL
BENEFITS |
|
$ |
0 |
|
$ |
0 |
|
$ |
36,626,723 |
|
$ |
13,054,372 |
|
$ |
12,901,015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
S. J.
Squeri |
|
|
|
Death (a) |
|
Disability (a) |
|
Retirement (b) |
|
Termination
w/o Cause not in Connection with CIC (c) |
|
Termination w/o
Cause or Constructive Term. in Connection with
CIC (d) |
Incremental Benefits Due
to Termination Event |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
8,200,000 |
|
$ |
8,200,000 |
Value of Accelerated
LTIA(2) |
|
$ |
14,025,402 |
|
$ |
14,025,402 |
|
$ |
5,328,061 |
|
$ |
10,935,600 |
|
$ |
12,935,652 |
Deferred
Compensation |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
16,234 |
|
$ |
16,234 |
Retirement Savings
Plan |
|
$ |
0 |
|
$ |
181,676 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Plan |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Other Benefits |
|
$ |
0 |
|
$ |
0 |
|
$ |
280,292 |
|
$ |
271,820 |
|
$ |
132,426 |
Gross-Up on Excise
Taxes |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
0 |
TOTAL
VALUE OF INCREMENTAL BENEFITS |
|
$ |
14,025,402 |
|
$ |
14,207,078 |
|
$ |
5,608,353 |
|
$ |
19,423,654 |
|
$ |
21,284,312 |
72 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
(CiC)
J. C. Campbell
|
|
Death (a) |
|
Disability
(a) |
|
Voluntary Resignation (b) |
|
Termination
w/o Cause not in Connection with CIC (c) |
|
Termination w/o
Cause or Constructive Term. in Connection with
CIC (d) |
Incremental Benefits Due to Termination
Event |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
7,700,000 |
|
$ |
7,700,000 |
Value of Accelerated LTIA(2) |
|
$ |
9,883,922 |
|
$ |
9,883,922 |
|
$ |
0 |
|
$ |
6,465,833 |
|
$ |
8,114,672 |
Deferred Compensation |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Savings Plan |
|
$ |
0 |
|
$ |
201,251 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Plan |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Other Benefits |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
169,421 |
|
$ |
134,421 |
Gross-Up on Excise Taxes |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
0 |
TOTAL VALUE OF INCREMENTAL
BENEFITS |
|
$ |
9,883,922 |
|
$ |
10,085,173 |
|
$ |
0 |
|
$ |
14,335,254 |
|
$ |
15,949,093 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L.E.
Seeger |
|
|
|
Death (a) |
|
Disability (a) |
|
Voluntary Resignation (b) |
|
Termination w/o Cause not in
Connection with CIC (c) |
|
Termination w/o Cause or Constructive
Term. in Connection with CIC (d) |
Incremental Benefits Due to Termination Event |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
4,050,000 |
|
$ |
4,050,000 |
Value of Accelerated LTIA(2) |
|
$ |
10,989,949 |
|
$ |
10,989,949 |
|
$ |
0 |
|
$ |
8,255,459 |
|
$ |
9,692,499 |
Deferred Compensation |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Savings Plan |
|
$ |
73,435 |
|
$ |
305,568 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Plan |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Other Benefits |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
169,032 |
|
$ |
134,032 |
Gross-Up on Excise Taxes |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
0 |
TOTAL VALUE OF INCREMENTAL BENEFITS |
|
$ |
11,063,384 |
|
$ |
11,295,517 |
|
$ |
0 |
|
$ |
12,474,491 |
|
$ |
13,876,531 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. E.
Buckminster |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death (a) |
|
Disability (a) |
|
Retirement (b) |
|
Termination w/o Cause not in
Connection with CIC (c) |
|
Termination w/o Cause or Constructive
Term. in Connection with CIC (d) |
Incremental Benefits Due to Termination Event |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
4,700,000 |
|
$ |
4,700,000 |
Value of Accelerated LTIA(2) |
|
$ |
3,387,610 |
|
$ |
3,387,610 |
|
$ |
2,711,626 |
|
$ |
3,387,610 |
|
$ |
2,515,810 |
Deferred Compensation |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
17,645 |
|
$ |
17,645 |
Retirement Savings Plan |
|
$ |
0 |
|
$ |
215,704 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Retirement Plan |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
Other Benefits |
|
$ |
0 |
|
$ |
0 |
|
$ |
209,345 |
|
$ |
265,297 |
|
$ |
135,833 |
Gross-Up on Excise Taxes |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
|
N/A |
|
$ |
0 |
TOTAL VALUE OF INCREMENTAL BENEFITS |
|
$ |
3,387,610 |
|
$ |
3,603,314 |
|
$ |
2,920,971 |
|
$ |
8,370,552 |
|
$ |
7,369,288 |
|
|
2017 PROXY STATEMENT | 73 |
Table of Contents
EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
(CiC)
(1) |
An NEO is retirement
eligible if he/she is at least age 55 with ten or more actual or deemed
years of service to the Company prior to termination of service. With
respect to LTIA granted, once retirement eligible, all LTIA outstanding
for more than one year will vest in full upon retirement up until the NEO
is at least age 62 with ten or more actual or deemed years of service to
the Company, at which time all outstanding LTIA will vest in full upon
retirement, subject to applicable performance. |
|
|
|
For Messrs. Chenault,
Squeri and Buckminster, the scenarios shown that are noted with (a), (c)
and (d) include the incremental benefit that they would receive under
these scenarios over and above what they would otherwise receive upon
retirement.
For Ms. Seeger, the amounts in each column except Voluntary
Resignation include a sign-on cash payment of $2,634,000 that will be made
to her in each scenario in accordance with her employment offer letter to
replace a portion of the long-term incentives she forfeited at her prior
employer as a result of joining the Company. In the event of Voluntary
Resignation, the portion of the sign-on cash payment ($2,633,000) that has
already been paid to her is required to be repaid to the
Company. |
|
(2) |
Value of Accelerated
LTIA. RSU and SO values are based on a
share price of $74.08, the closing price per share of our stock as of
December 31, 2016. For SOs, the value reflects the in the money value of
SOs that vest upon termination of employment or termination following CIC.
With respect to PGs, the value reflects the PGs target value adjusted by
the applicable payout percentage. |
|
|
(a) |
Death and
Disability. An NEO or his/her
designated beneficiary or estate would receive: |
|
|
|
(i) |
Pro Rata Bonus:
A pro rata AIA for the year of termination at the end of the performance
period, subject to Compensation and
Benefits Committee discretion. |
|
|
|
(ii) |
Value of Accelerated
LTIA: Vesting of 100 percent of outstanding SOs, RSUs and PG
awards. |
|
|
|
(iii) |
RSP and RRP-RSP: Immediate vesting of any unvested account balances
related to company contributions. Upon disability, future employer
contributions in the RSP through age 65. |
|
|
(b) |
Retirement/Voluntary
Resignation. For non-retirement
eligible NEOs, 100 percent of AIA bonus and 100 percent of unvested LTIA
will be forfeited. Since Mr. Chenault, Mr. Squeri and Mr. Buckminster are
retirement eligible, they would receive: |
|
|
|
(i) |
Pro Rata Bonus:
A pro rata AIA for the year of termination, subject to Compensation and
Benefits Committee discretion. |
|
|
|
(ii) |
Value of Accelerated
LTIA: |
|
|
|
|
|
Stock options: For Mr.
Chenault, all unvested SOs outstanding continue to vest; for Mr. Squeri
and Mr. Buckminster, all unvested SOs outstanding for more than one year
continue to vest, subject to performance at the end of the performance
period. |
|
|
|
|
|
PG awards: For Mr.
Chenault, 100 percent of the grants continue to vest in full and for Mr.
Squeri and Mr. Buckminster, 100 percent of the grants continue to vest in
full if outstanding more than one year, subject to performance at the end
of the performance period. |
|
|
|
|
|
RSUs: For Mr. Chenault, all unvested RSUs will continue to vest, subject to performance.
The amount for Mr. Chenault also includes the full value of PG awards (PG 2014-16) that were granted in the form of
39,713 RSUs in January 2017, but does not include the value of 2015 AIA and PG awards (PG 2013-15) that were granted
in the form of 126,297 RSUs in January 2016, as these were included in the table last year and vested fully in
January 2017.
For Mr. Squeri and Mr. Buckminster, all unvested RSUs outstanding for more than one year
continue to vest, subject to performance. For Mr. Squeri, the amount excludes his special leadership award granted in
January 2015 and promotional award granted in October 2015. |
|
|
|
(iii) |
Other Benefits: For
retirement eligible NEOs, the cash surrender value of the life insurance
under our Key Executive Life Insurance Plan. |
|
|
(c) |
Termination without
Cause Not in Connection with a Change in Control. In the event of termination without cause not in
connection with a CIC, an NEO would receive: |
|
|
|
(i) |
Severance: Two
years annual compensation, which includes two times the most recent base
salary and two times the amount of the last AIA paid. |
|
|
|
(ii) |
Pro Rata Bonus: A pro
rata portion of the AIA for the year of termination is paid out at the end
of the performance period, subject to Compensation and Benefits Committee
negative discretion. |
|
|
|
(iii) |
Value of Accelerated
LTIA: |
|
|
|
|
|
For non-retirement eligible
employees: RSUs and PG continue to vest and are canceled upon the earlier
of the end of the severance period or commencement of full-time outside
employment. Stock options remain exercisable during the severance period
and are canceled on the earlier of their expiration date, the end of the
severance period or the commencement of full-time outside
employment. |
|
|
|
|
|
Retirement eligible
employees: LTIA will vest as described in footnote (1) above. As a
result, all PG, SO and RSU awards for Mr. Chenault will vest in full and Messrs. Squeri and Buckminster will vest partially in unvested
LTIAs. |
|
|
|
(iv) |
Deferred Compensation:
Reflects two years of additional interest crediting (using the prior
years interest rate assuming 2.72 percent for 19942004 programs) on the
grandfathered amounts (amounts that were earned and vested prior to
December 31, 2004). |
|
|
|
|
|
Non-retirement eligible:
Account balance is paid in a lump sum grandfathered amounts are paid at
the end of the two-year severance period and all other amounts are paid on
a date at least six months following the date of termination. |
74 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
EXECUTIVE COMPENSATION
Potential Payments Upon Termination or Change in Control
(CiC)
|
|
|
Retirement eligible: Amounts are
paid at the time and in the form (lump sum or installments) elected by the
NEO; otherwise, the NEOs account balance is paid in a lump sum
grandfathered amounts are paid at the end of the two-year severance
period and all other amounts are paid on a date at least six months
following the date of termination. |
|
|
(v) |
|
Other Benefits: Two years of
contributions to U.S. medical, dental, health savings accounts and
premiums, if applicable, under the basic and Key Executive Life Insurance
Plans; perquisite allowance for the year of termination ($35,000 for all
NEOs); and outplacement services ($100,000 for all NEOs). |
|
(d) |
Termination without
Cause or Constructive Termination in Connection with a Change in Control.
In the event of termination without
cause or constructive termination in connection with a CIC, an NEO would
receive: |
|
|
(i) |
Severance: Two years annual
compensation, which includes two times the most recent base salary and two
times the amount of the last AIA paid. |
|
|
|
(ii) |
Pro Rata Bonus: A pro rata
portion of the AIA for the year of termination is paid out at the end of
the performance period, subject to Compensation and Benefits Committee
negative discretion. |
|
|
|
(iii) |
Value of Accelerated LTIA: For
all awards granted upon employment termination (double trigger), 100
percent vesting of SOs and RSUs upon CIC and a pro rata portion of
outstanding PG awards based on the average of the payout percentages for
the last two PG programs paid out before the CIC. |
|
|
|
(iv) |
Deferred Compensation: Reflects
two years of additional interest crediting (using the prior years
interest rate assuming 2.72 percent for 1994-2004 programs) on the
grandfathered amounts (amounts that were earned and vested prior to
December 31, 2004). Grandfathered amounts are paid in a lump sum on a date
that is at least six months following the date of termination. If the NEO
is retirement eligible, all other account balances are paid at the time
and in the form (lump sum or installments) elected by the NEO. If the NEO
is not retirement eligible, all other account balances are paid in a lump
sum on a date that is at least six months following the date of
termination. |
|
|
|
(v) |
Other Benefits: Two years of
contribution to U.S. medical, dental and health savings accounts, premiums
toward basic life insurance, outplacement services ($100,000 for all NEOs)
and, if applicable, the cash surrender value of the life insurance under
our Key Executive Life Insurance Plan. |
|
|
|
(vi) |
Excise Tax Reimbursement and Tax
Gross-Up: Effective January 2011, we no longer provide excise tax
reimbursements and tax gross-up payments in the case of a CIC;
consequently, the table above does not reflect any value. |
|
|
2017 PROXY STATEMENT | 75 |
Table of Contents
EXECUTIVE
COMPENSATION
Item
4Advisory Resolution to Approve the Frequency of Future Advisory Say on Pay
Votes (Say on Frequency)
Equity Compensation
Plans
The following table provides summary
information with respect to the Companys equity compensation plans under which
the Companys common shares may be issued to employees or non-employees (such as
consultants or advisors) as of December 31, 2016, each of which was approved by
shareholders. Information relating to employee stock purchase plans and employee savings plans (such as 401(k) plans) is not
included. Information is provided in the aggregate for the Companys equity
compensation plans which have been approved by the Companys shareholders. There
are no such plans that have not been approved by shareholders.
Equity
Compensation Plan Information |
Plan Category |
|
(A) Number of Securities to be Issued Upon Exercise
of Outstanding Options, Warrants and Rights |
|
(B) Weighted-Average Exercise Price of Outstanding
Options, Warrants and Rights |
|
(C) Number of Securities Remaining Available
for Future Issuance Under Equity Compensation Plans (Excluding
Securities Reflected in Column (A)) |
Equity compensation plans |
|
10,271,612 |
|
$47.68 |
|
17,445,733 |
approved by shareholders |
|
|
|
|
|
|
Equity compensation plans not |
|
0 |
|
0 |
|
0 |
approved by shareholders |
|
|
|
|
|
|
TOTAL |
|
10,271,612 |
|
$47.68 |
|
17,445,733 |
|
|
|
|
|
ITEM
4 |
|
ADVISORY RESOLUTION TO APPROVE THE FREQUENCY OF FUTURE
ADVISORY SAY ON PAY VOTES (SAY ON FREQUENCY)
✓ The Board
recommends continuing our current practice of holding an ANNUAL advisory
vote
We are asking you to approve an annual
advisory vote on executive compensation. In making this recommendation for
an annual advisory vote on executive compensation, the Board considered
that an annual say on pay vote enables our shareholders to provide us with
timely input on our compensation matters. |
|
|
|
|
|
|
76 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
|
|
|
|
|
ITEM
5 |
|
SHAREHOLDER PROPOSAL RELATING TO ACTION BY WRITTEN
CONSENT
Myra K. Young, 9295 Yorkship Court,
Elk Grove, CA 95758, has advised that she is the owner of 50 common shares
and that she intends for Mr. John Chevedden to introduce the following
proposal on her behalf: |
|
|
|
|
|
|
Item 5
Right to Act by Written Consent |
Resolved, Shareholders request that our board of directors undertake such steps as
may be necessary to permit written consent by shareholders entitled to cast the
minimum number of votes that would be necessary to authorize the action at a
meeting at which all shareholders entitled to vote thereon were present and
voting. This written consent is to be consistent with applicable law and
consistent with giving shareholders the fullest power to act by written consent
consistent with applicable law. This includes shareholder ability to initiate
any topic for written consent consistent with applicable law.
A shareholder right to act by written
consent and to call a special meeting are two complimentary ways to bring an
important matter to the attention of both management and shareholders outside
the annual meeting cycle. Both are associated with increased governance quality
and shareholder value.
A shareholder right to act by written
consent is one method to equalize our limited provisions for shareholders to
call a special meeting. For instance it takes 25% of American Express shares outstanding, net long, to call a special
meeting. New York law would allow 10% of shares outstanding to call a
special meeting without mandating a net long requirement.
With a net long requirement of 25%,
a significant percentage of American Express shares outstanding could be
disenfranchised from having any voice whatsoever on calling a special
meeting.
This proposal topic won 40% support
last year at American Express, up from 35% a year earlier. It also won
majority shareholder support at 13 major companies in a single year. This
included 67%-support at both Allstate and Sprint. Hundreds of major
companies enable shareholders to act by written consent.
Please vote FOR our Right to Act by
Written Consent to protect shareholder value.
|
|
2017 PROXY
STATEMENT | 77 |
Table of Contents
SHAREHOLDER
PROPOSALS
Item 5
Shareholder Proposal Relating to Action by Written Consent
Board of
Directors Statement in Opposition |
The Board recommends a vote AGAINST this
proposal because:
● |
Our shareholders may
effect change by calling a special meeting to raise matters for the review
and approval of all shareholders. |
● |
Permitting action at a
meeting (whether the annual meeting or a special meeting) is a fairer
process than the written consent process as it provides all shareholders
the opportunity to participate and
vote. |
The Board believes that implementation of
this proposal is unnecessary given the ability of shareholders to call special
meetings. Currently, the Companys by-laws provide that shareholders holding 25
percent or more of the Companys outstanding common shares may call a special
meeting. Thus, shareholders may propose any proper matter for a vote either
through a special meeting or at our annual meeting. Implementation of this
proposal, by contrast, could permit fundamental corporate changes to occur
outside of a meeting and without notice to other shareholders or time for
thoughtful consideration.
The Board believes that permitting action
at a meeting (whether the annual meeting or a special meeting) is a fairer
process than the action by written consent process as it provides all
shareholders the opportunity to participate and vote. Meetings are held at a
time, date and venue announced publicly in advance, and all shareholders receive
prior notice of the meeting and are invited to attend the meeting and make their
views known. To the contrary, the shareholder proposal could allow shareholders
owning slightly over 50 percent of the Companys outstanding shares to act on a
significant matter without prior notice of the meeting to all shareholders and
without affording all shareholders the opportunity to present their views. This
would disenfranchise shareholders who are not given the chance to
participate.
In addition, the action by written consent
process could result in duplicative or contradictory written consents being
circulated at the same time, creating substantial confusion and disruption among
shareholders.
The Board further believes that the
Companys strong corporate governance processes make adoption of this proposal
unnecessary. Our practices and policies, which enhance Board accountability,
include:
● |
Annual election of all
directors; |
● |
Our adoption in 2016 of by-law
amendments that implement proxy access, allowing eligible shareholders
to include their own nominees for director in our proxy materials along
with the Board-nominated candidates; |
● |
Our shareholders right to directly
communicate with and raise concerns to the Board or an individual
director; and |
● |
Our robust shareholder engagement
process that allows shareholders to bring matters to the attention of the
Board and management outside of the annual meeting
process. |
In summary, the Board believes that the
implementation of this proposal is not in the best interests of shareholders or
the Company and is unnecessary, given the ability of shareholders to call
special meetings and the Companys strong corporate governance practices and
policies.
ITEM 5 RECOMMENDATION: Our Board of Directors
recommends that you vote AGAINST this proposal.
78 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
SHAREHOLDER
PROPOSALS
Item 6
Shareholder Proposal Relating to Gender Pay Equity Disclosure
|
|
|
|
|
ITEM
6 |
|
SHAREHOLDER PROPOSAL RELATING TO GENDER PAY EQUITY
DISCLOSURE
Arjuna Capital, 49 Union Street,
Manchester, MA 01944, has advised us that it intends to introduce the
following resolution on behalf of its client, Steven Matthew Schewel,
owner of more than $2,000 in common shares. This resolution is co-sponsored
by Walden Asset Management, which has advised that it is the owner of more
than $2,000 in common shares; and Clean Yield Asset Management, which is
submitting the resolution on behalf of its client, Alice S. Werbel, who it
has advised owns more than $2,000 in common shares. |
|
|
|
|
|
|
Item 6
Gender Pay Equity Disclosure |
Whereas:
The median income for women working full
time in the United States is reported to be 79 percent of that of their male
counterparts. This 10,800 dollar disparity can add up to nearly half a million
dollars over a career. The gap for African America and Latina women is wider at
60 percent and 55 percent respectively. At the current rate, women will not
reach pay parity until 2059.
A 2016 Glassdoor study finds an unexplained
6.4 percent gender pay gap in the financial services industry after statistical
controls, among the highest of industries examined.
Women make up over half of entry level
positions in finance, yet a 2016 Oliver
Wyman study finds it will take until 2048 to
reach 30 percent female executive committee representation. Mercer finds female
executives are 20 to 30 percent more likely to leave financial services careers
than other careers.
At American Express, approximately 57
percent of our U.S. employees are women, but women account for only 30 percent
of leadership.
A large body of evidence suggests
diversity in leadership leads to better performance. McKinsey & Company
states, the business case for the advancement and promotion of women is
compelling and has found companies with highly diverse executive teams boasted
higher returns on equity, earnings performance, and stock price growth. Best
practices to address this underleveraged opportunity include tracking and
eliminating gender pay gaps.
Mercer finds actively managing pay equity
is associated with higher current female representation at the professional
through executive levels and a faster trajectory to improved
representation.
Regulatory risk exists as the Paycheck
Fairness Act pends before Congress. The Equal Employment Opportunity Commission
has proposed rules requiring wage gap reporting. California, Massachusetts, New
York, and Maryland have passed some of the strongest equal pay legislation to
date.
The Wall
Street Journal reports, Research attributes
salary inequalities to several factors—from outright bias to women failing to
ask for raises. A Harvard University economist concluded the gap stems from
women making less in the same jobs. As much as 40 percent of the wage gap may be
attributed to discrimination.
S&P 500 companies including Intel,
Apple, Expedia, and eBay have publically reported and committed to gender pay
equity.
Resolved: Shareholders request American Express prepare a report by October 2017
(omitting proprietary information, prepared at reasonable cost) on the Companys
policies and goals to reduce the gender pay gap.
The gender pay gap is defined as the
difference between male and female median earnings expressed as a percentage of
male earnings (Organization for Economic Cooperation and
Development).
Supporting Statement: A report adequate for investors to assess American Expresss
strategy and performance would include the percentage pay gap between male and
female employees across race and ethnicity, including base, bonus and equity
compensation, policies to address that gap, methodology used, and quantitative
reduction targets.
|
|
2017 PROXY
STATEMENT | 79 |
Table of Contents
SHAREHOLDER
PROPOSALS
Item 6
Shareholder Proposal Relating to Gender Pay Equity Disclosure
Board of
Directors Statement in Opposition |
The Board recommends a vote AGAINST this
proposal because:
● |
We
have a long history of advocating for equality and diversity in all areas
of our business, including with respect to compensation
programs. |
● |
Our
compensation philosophy and best practices help to ensure that we
compensate employees equitably and free of any
bias. |
● |
We
feel that our employees are compensated fairly regardless of gender. We
fully support gender equality in our workforce and are focused on
continuing to deliver on our gender pay equity
commitment. |
Our Long-Standing
Commitment to Diversity and Inclusion and to Developing Women
Leaders
American Express is widely recognized as a
leader in diversity and inclusion. Our commitment, which began nearly three
decades ago, is to create an employee base that reflects the diverse customers
and communities we serve and enables innovation that drives business growth.
Equally critical to our success is building an inclusive culture where all
employees have a voice and are enabled to reach their full potential.
● |
We are proud of our progress toward
creating a more gender-balanced organization. Women represent more than 50 percent of our employees worldwide and
30 percent of our senior executives. We invest in research to help
identify potential barriers to womens advancement in the workplace, and
we have created programs designed to develop and promote high-potential
women at American Express. These programs include a focus on sponsorship;
gender intelligence training; strengthening our talent pipeline; and
building a global network. We also provide opportunities for more
visibility to women employees through a program where they can shadow
senior executives as part of their career
development. |
● |
In addition, we offer an online
learning module to encourage more effective relationships between high
potential women and executive sponsors. More than 1,500 employees have completed the module since it was
introduced in June 2015. |
● |
We have joined with several Fortune
500 companies as inaugural members of Blue Circle Leadership Institutes
Transformation Leadership program to address the lack of representation of multicultural women in managerial,
senior or executive jobs, and on boards. The nine-month program gives
high-potential, mid-career women of color the resources they need to get
to the next level, including tailored and self-paced leadership
development guides and live web-based discussions. Additionally, we
partner with other external organizations to provide leadership
development opportunities for early- to mid-career
women. |
● |
Our senior leaders are evaluated
annually against diversity goals. Their performance toward achieving these
goals is tied to compensation. |
● |
We have been consistently recognized
as a leader in diversity through placement on surveys administered by
external experts such as: Working Mother Media, Great Place to Work
Institute and the Human Rights Campaign. Our diversity initiatives are often cited as best in class by
leading publications, and we have shared information on our programs
publicly. |
More detail can be found on our website:
http://about.americanexpress.com/csr.
Our Long-standing
Commitment to Pay Equity
Pay equity is embedded in our Companys
DNA. Our compensation practices reflect our commitment to equitable pay across
the board. Pay equity, including gender pay equity, is a fundamental expectation
at American Express and is central to our mission to attract and retain the best
talent. Our compensation philosophy and best practices help to ensure that we
compensate employees equitably and free of any unlawful bias.
80 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
SHAREHOLDER
PROPOSALS
Item 6
Shareholder Proposal Relating to Gender Pay Equity Disclosure
Our Pay Equity
Guiding Principles and Processes
We continue to enhance our compensation
processes to reinforce and maintain our pay equity culture.
● |
Culture: We position gender pay equity as a fundamental
expectation at American Express in line with our compensation philosophy
and dedication to fair and equitable compensation practices.
We periodically review our practices to maintain our commitment to pay
equity. |
● |
Pay for Role: We set pay guidelines for roles, independent of the
people who perform in such roles. |
● |
Pay for Performance:
We compensate our employees based on performance
and other business-related criteria without regard to gender or any other
unlawful factors. |
● |
Pay Governance: We hold ourselves fully accountable to uphold a high
standard on pay equity. |
● |
Pay Parity: We compensate employees for doing the same job equitably
and free of unlawful bias. |
● |
Education: We focus our leader education programs on diversity and
inclusion in line with our commitments in this
area. |
● |
Management: All compensation offers for leadership positions are
reviewed by the compensation team to promote pay equity, and compensation
for existing employees is periodically reviewed
for equity. |
Conclusion
We feel that our employees are compensated
fairly regardless of gender.
We fully support gender equality in our
workforce and are focused on continuing to deliver on our gender pay equity
commitment. We are proud of our commitments to
diversity and inclusion at all levels of our Company, and we intend to continue
to implement leading best practices.
We do not believe that disclosing gender
pay data is necessary to enhance our commitment to a diverse and equitable
culture or meaningfully furthers our goal of fairly rewarding talent in the
workplace.
ITEM 6 RECOMMENDATION: Our Board of Directors
recommends that you vote AGAINST this proposal.
|
|
2017 PROXY
STATEMENT | 81 |
Table of Contents
STOCK
OWNERSHIP INFORMATION |
The table below shows how many American
Express Company common shares certain individuals and entities beneficially
owned on February 28, 2017. These individuals and entities include: (1) owners
of more than 5 percent of our outstanding common shares; (2) our current
directors and nominees; (3) the executive officers named in the Summary
Compensation Table on page 63; and (4) all current directors, nominees and
executive officers as a group. A person has beneficial ownership of shares if
the person has voting or investment power over the shares or the right to acquire such power within 60 days. Investment
power means the power to direct the sale or other disposition of the shares.
Each person has sole voting and investment power over the shares, except as we
describe below. The Number of Shares Owned column does not include restricted
stock units granted to executive officers or stock equivalent units (SEUs) owned
by directors because they are not beneficially owned under SEC rules. The SEUs
credited to the directors accounts as of December 31, 2016 are shown in the
last column in the table below.
Name |
|
Number of Shares Owned (3) |
|
|
Right to Acquire (4) |
|
Percent of Class (%) |
|
Number of SEUs Owned by Director |
Warren Buffett Berkshire Hathaway
Inc. and subsidiaries 3555 Farnam Street Omaha, NE
68131 |
|
151,610,700 |
(1) |
|
|
|
16.8% |
|
N/A |
The Vanguard Group 100 Vanguard
Blvd. Malvern, PA 19355 |
|
48,780,294 |
(2) |
|
|
|
5.32% |
|
N/A |
Charlene Barshefsky |
|
20,134 |
|
|
|
|
* |
|
57,370 |
John J. Brennan |
|
4,000 |
|
|
|
|
* |
|
|
Douglas E. Buckminster |
|
66,718 |
|
|
311,458 |
|
* |
|
N/A |
Ursula M. Burns(5) |
|
20,000 |
|
|
|
|
* |
|
65,349 |
Jeffrey C. Campbell(6) |
|
73,222 |
|
|
95,685 |
|
* |
|
N/A |
Kenneth I. Chenault(7) |
|
1,096,390 |
|
|
2,289,640 |
|
* |
|
N/A |
Peter Chernin |
|
18,300 |
|
|
|
|
* |
|
34,299 |
Ralph de la Vega |
|
|
|
|
|
|
* |
|
3,289 |
Anne L. Lauvergeon |
|
|
|
|
|
|
* |
|
13,944 |
Michael O. Leavitt |
|
|
|
|
|
|
* |
|
7,885 |
Theodore J. Leonsis |
|
20,000 |
|
|
|
|
* |
|
21,702 |
Richard C. Levin |
|
2,000 |
|
|
|
|
* |
|
30,290 |
Samuel J. Palmisano |
|
550 |
|
|
|
|
* |
|
11,633 |
Laureen E. Seeger |
|
12,628 |
|
|
|
|
* |
|
N/A |
Stephen J. Squeri |
|
228,711 |
|
|
130,363 |
|
* |
|
N/A |
Daniel L. Vasella |
|
|
|
|
|
|
* |
|
18,089 |
Robert D. Walter |
|
230,300 |
|
|
|
|
* |
|
50,600 |
Ronald A. Williams |
|
59,125 |
|
|
|
|
* |
|
55,544 |
All current directors, nominees
and executive officers (26 individuals)(8) |
|
2,332,259 |
|
|
3,679,952 |
|
* |
|
369,994 |
* |
Less than 1
percent. |
|
|
(1) |
Based on information contained in a report on Form 13F
that Berkshire Hathaway Inc. (Berkshire) filed with the SEC, which
contained information provided by Berkshire as of December 31, 2016. Of
the shares listed in the table, National Indemnity Co. and its
subsidiaries beneficially owned 120,141,879 shares. National Indemnity Co.
is a subsidiary of Berkshire. Mr. Buffett, Berkshire and certain
subsidiaries of Berkshire share voting and investment power over these
shares. Based on information provided to the Company, Mr. Buffett owned
32.6 percent of the aggregate voting power of the outstanding shares of
Berkshires Class A Common Stock and Class B Common Stock. As a result of
this ownership position in Berkshire, Mr. Buffett may be considered the
beneficial owner of the shares that Berkshire beneficially
owns. |
|
|
In 1995, we signed an agreement with Berkshire designed
to ensure that Berkshires investment in our Company will be passive. The
agreement remains in effect as long as Berkshire owns 10 percent or more
of our voting securities. Berkshire made similar commitments to the Board
of Governors of the Federal Reserve System. Berkshire and its subsidiaries
have also agreed to follow our Boards recommendations in voting company
common shares they own as long as Mr. Chenault is our chief executive
officer and Berkshire owns 5 percent or more of our voting securities.
With certain exceptions, Berkshire and its subsidiaries may not sell
company common shares to any person who owns more than 5 percent of our
voting securities or who attempts to change the control of the
Company. |
82 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
STOCK OWNERSHIP
INFORMATION
Section 16(a) Beneficial
Ownership Reporting Compliance
(2) |
Based on information contained in
a report on Form 13G that the Vanguard Group (Vanguard) filed with the
SEC, which contained information provided by Vanguard as of December 31,
2016. |
|
(3) |
This column includes shares held
in Retirement Savings Plan (RSP) accounts on February 28, 2017, as
follows: |
|
Name |
|
Number of Shares in
Plan Accounts |
|
K.I. Chenault |
|
24,708 |
|
J.C. Campbell |
|
|
|
L.E. Seeger |
|
|
|
S.J. Squeri |
|
117 |
|
D.E. Buckminster |
|
13,042 |
|
All current executive
officers |
|
46,720 |
(4) |
These are shares that the named
individuals have the right to acquire within 60 days upon the exercise of
stock options or the vesting of restricted stock units they
hold. |
|
(5) |
Includes 5,519 shares held in
family trusts in respect of which Ms. Burns holds voting and investment
power. |
|
(6) |
Includes 61,902 shares held in
family trusts in respect of which Mr. Campbell holds voting and investment
power. |
|
(7) |
Includes 126,690 shares held in
family trusts in respect of which Mr. Chenault shares voting and
investment power with a directed trustee. |
|
(8) |
On February 28, 2017, the current
directors, nominees and executive officers beneficially owned 6,012,211
shares or about 0.67 percent of our outstanding shares. No current
director, nominee or executive officer beneficially owned more than 1
percent of our outstanding shares. |
Section 16(a) Beneficial Ownership
Reporting Compliance
Section 16(a) of the Securities Exchange
Act of 1934 requires our directors, officers and beneficial owners of 10 percent
or more of our common shares to file reports with the SEC. We assist our
directors and officers by monitoring transactions and completing and filing
these reports on their behalf. Based on our records and other information, we
believe that all reports, except one, that were required to be filed under
Section 16(a) during 2016, were timely filed. One Form 4, filed on behalf of Mr.
Jeff Campbell to reflect the vesting of options, was inadvertently filed late as
a result of an administrative error at the Company.
|
|
2017 PROXY STATEMENT | 83 |
Table of Contents
Attending the Annual Meeting of
Shareholders and Webcast
Admission
We do not require tickets for admission to
the meeting but do limit attendance to shareholders as of the record date or
their proxy holders. Please bring proof of your common share ownership, such as
a current brokerage statement, and photo identification. Only shareholders or
their valid proxy holders may address the meeting. Please note that cameras,
camcorders, videotaping equipment and other recording devices, and large
packages, banners, placards and signs will not be permitted in the
meeting.
Street Name Holders
If your shares are held in a bank,
brokerage or other institutional account, you are a beneficial owner of these
shares but not the record holder. This is known as holding shares in street
name. If you wish to vote these shares in person at the meeting, you must
obtain a proxy from your bank, broker or other intermediary and bring it with
you to hand in with your ballot.
Webcast
You can access a live audio webcast and a
replay of the meeting on our investor website at
http://ir.americanexpress.com.
You may confirm your vote was cast in
accordance with your instructions. Beginning April 17, 2017, and for up to two
months after the annual meeting, you may confirm your vote beginning 24 hours
after your vote is received, whether it was cast by proxy card, electronically
or telephonically. To obtain vote confirmation, log onto www.proxyvote.com using
your control number (included on your notice, on your proxy card or in the instructions that accompanied your proxy
materials) and receive confirmation on how your vote was cast. If you hold your
shares through a bank or brokerage account, the ability to confirm your vote may
be affected by the rules of your bank or broker, and the confirmation will not
confirm whether your bank or broker allocated the correct number of shares to
you.
Solicitation of Proxies;
Expenses
We are providing this proxy statement to
you in connection with the solicitation of proxies by our Board of Directors for
the 2017 annual meeting including any adjournment or postponement of the
meeting.
We will pay the expenses of soliciting
proxies on behalf of the Board of Directors. Our directors, officers or
employees may solicit proxies for us in person or
by mail, telephone, facsimile or electronic transmission.
We have hired Morrow
Sodali LLC, 470 West Avenue, Stamford, CT 06902, to help us distribute and
solicit proxies. We will pay them $19,000 plus expenses for these
services.
84 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
OTHER INFORMATION
Notice of Business to Come Before the Meeting
Notice of Business to Come Before the
Meeting
Mr. Peter Lindner, a shareholder and
former employee of the Company, notified the Company of his intention to
nominate himself as a candidate for director. Such notification did not comply
with the Companys by-laws. The Company intends to rule Mr. Lindners nomination
out of order should Mr. Lindner present his nomination at the meeting. Our Board
of Directors and the Companys management have
not received notice of, and are not aware of, any business to come before the
annual meeting other than the agenda items referred to in this proxy statement.
If any other matter comes before the meeting, the named proxies will use their
best judgment in voting the proxies.
2018 Annual Meeting of Shareholders
Information
Shareholder Proposals For Inclusion in Next Years Proxy
Statement |
To be considered for inclusion in next
years proxy statement, any shareholder proposals submitted in accordance with
SEC Rule 14a-8 must be received by our Secretary
at our principal executive offices no later than November 20, 2017. Any such
proposals must comply with all of the requirements of SEC Rule 14a-8.
Other
Shareholder Proposals For Presentation at Next Years Annual
Meeting |
Under our by-laws, shareholders must
follow certain advance notice procedures to nominate a person for election as a
director at an annual or special meeting, or to introduce an item of business at
an annual meeting. Under these advance notice procedures, shareholders must
submit the proposed nominee or item of business by delivering a notice to the
Secretary at our principal executive offices. We must receive notice as
follows:
● |
If it is a shareholders intention
to introduce a nomination or proposed item of business for an annual
meeting, we must receive notice not less than 90 days nor more than 120
days before the first anniversary of the prior years meeting. Assuming
that the 2017 Annual Meeting of
Shareholders is held on schedule, we must receive notice pertaining to the
2018 Annual Meeting of Shareholders no earlier than January 1, 2018 and
no later than January 31, 2018. |
● |
However, if we hold the 2017 Annual
Meeting of Shareholders on a date that is not within 25 days before or
after such anniversary date, we must receive the notice no later than ten
days after the earlier of the date we first provide notice of the meeting
to shareholders or announce it publicly. |
● |
If we hold a special meeting to
elect directors, we must receive a shareholders notice of intention to
introduce a nomination no later than ten days after the earlier of the
date we first provide notice of the meeting to shareholders or announce it
publicly. |
Our by-laws provide that notice of a
proposed nomination must include certain information about the shareholder and
the nominee, as well as a written consent of the proposed nominee to serve if
elected. A notice of a proposed item of business must include a description of
and the reasons for bringing the proposed business to the meeting, any material
interest of the shareholder in the business and certain other information about
the shareholder. Any notice (other than a proposal pursuant to Rule 14a-8) that
is received outside of the window specified above for proposed items of business
will be considered untimely under Rule 14a-4(c) under the Securities Exchange
Act of 1934. The persons named in the proxy for the meeting may exercise their
discretionary voting power with respect to all such matters, including voting
against them. All director nominations and shareholder proposals, other than
shareholder proposals made pursuant to Rule 14a-8 under the Securities Exchange
Act of 1934, must comply with the requirements of the Companys by-laws. You may
obtain a copy of the Companys by-laws at no cost from the Companys Secretary.
The contact information for the Companys Secretary is on page 30.
|
|
2017 PROXY STATEMENT | 85 |
Table of Contents
OTHER INFORMATION
Additional Voting Information
Additional Voting Information
Voting at
the Annual Meeting |
Shares represented by valid proxies or
voting instruction forms that are received on time will be voted as specified.
If you sign and return your proxy card or voting instruction form but do not
indicate specific choices, your shares will be
voted as our Board recommends. The way you vote your shares prior to the meeting
will not limit your right to change your vote at the meeting if you attend in
person and vote by ballot.
If you hold shares in street name and you
want to vote in person at the meeting, you must obtain a proxy from the record
holder of your shares at the close of business on the record date indicating
that you were beneficial owner of these shares, as well as the number of shares
of which you were the beneficial owner on the
record date, and appointing you as the record holders proxy to vote these
shares. You should contact your bank, broker or other intermediary through which
you hold your shares for instructions on how to obtain a proxy.
You may vote all common shares that you
owned as of the close of business on March 3, 2017, the record date for the
meeting. On the record date, we had 899,917,252
common shares outstanding and entitled to vote. Each common share is entitled to
one vote on each matter properly brought before the meeting.
You may own common shares in one or more
of the following ways:
● |
Directly in your name as the
shareholder of record, including shares purchased through the
Computershare Investment Plan, our transfer agents stock purchase plan,
or restricted stock awards issued to employees under our long-term
incentive plans |
● |
Indirectly through a broker, bank or
other intermediary in street name |
● |
Indirectly through the American
Express Company Stock Fund of our Retirement Savings Plan (RSP) or the
Employee Stock Ownership Plan of Amex Canada, Inc. and Amex Bank of Canada
(ESOP) |
If your shares are registered directly in
your name, you are the holder of record of these shares and we are sending proxy
materials directly to you. As the holder of record, you have the right to give
your proxy directly to our tabulating agent. If you hold your shares in street
name, your broker, bank or other intermediary is sending proxy materials to you
and you may direct them how to vote on your behalf by completing the voting
instruction form that accompanies your proxy materials or following the
instructions in the notice you received.
86 | AMERICAN EXPRESS COMPANY |
|
|
Table of Contents
OTHER INFORMATION
Additional Voting Information
If you participate in the Computershare
Investment Plan, which is the stock purchase plan administered by Computershare,
the Companys transfer agent, your proxy includes
the number of shares enrolled in that plan as well as any shares you have
acquired through dividend reinvestment. If you participate in the RSP or ESOP,
your proxy includes shares that the relevant plan has credited to your
account.
To allow sufficient time for the RSP
and the ESOP trustees to vote, the trustees must receive your voting
instructions by 3:00 p.m. Eastern Time on Wednesday, April 26, 2017. If
the trustees for the RSP and the ESOP do not receive your instructions by
that date, the trustees will not vote your
shares. |
You may vote common shares that you owned
as of the close of business on March 3, 2017, which is the record date for the
meeting. We encourage you to vote as soon as possible, even if you plan to
attend the meeting in person. Please follow the instructions on your proxy
card, voting instruction form or on the notice of
internet availability of proxy materials that you received. If you submit your
vote prior to the meeting, you may still attend and vote at the
meeting.
You may vote in the following
ways:
|
|
|
|
|
|
By Telephone |
|
You can vote by calling the number
on your proxy card or voting instruction form or provided on the website
listed on your notice. |
|
|
Online |
|
You can vote online at
www.proxyvote.com. |
|
|
By Mail |
|
If you received written materials,
you can vote by mail by marking, dating and signing your proxy card or
voting instruction form and returning it in the envelope provided.
|
|
|
In
Person |
|
You can vote in person at the annual
meeting. If you hold your shares in street name, you must obtain a proxy
from the record holder to vote in person. |
|
|
|
|
|
|
For telephone and online voting, you will
need the 16-digit control number included on your notice, on your proxy card or
in the voting instructions that accompanied your proxy materials. Telephone and
online voting are available through 3:00 p.m. Eastern Time on Wednesday, April
26, 2017, for shares held in employee plans, and through 11:59 p.m. Eastern Time
on Sunday, April 30, 2017, for all other shares.
We maintain the confidentiality of the
votes of individual shareholders. Your vote will not be disclosed unless the law
requires disclosure, you authorize disclosure or your vote is cast in a
contested election. If you write comments on your proxy card or ballot,
management may learn how you voted in reviewing
your comments. In addition, the Inspectors of Election and selected employees of
our independent tabulating agent may have access to individual votes in the
normal course of counting and verifying the vote.
|
|
2017 PROXY STATEMENT | 87 |
Table of Contents
OTHER
INFORMATION
Additional Voting Information
Effect of
Not Casting Your Vote |
If you hold your shares in street name,
you must instruct your bank, broker or other nominee how to vote your
shares. Under NYSE rules, brokers are permitted to exercise discretionary
voting authority on routine matters when voting instructions have not
been received from a beneficial owner ten days prior to the shareholder
meeting. The only routine item on this years annual meeting agenda is
Item 2 (Ratification of the Companys independent registered public
accounting firm).
If you hold your shares in street name and you wish to
have your shares voted on all items in this proxy statement, please return
your voting instruction form or cast your instructions by telephone or
online. Otherwise, your shares will not be voted on any items with the
exception that your broker may vote in its discretion on Item
2. |
You can revoke your proxy at any time
before your shares are voted if you:
● |
Submit a written revocation to our
Companys Secretary |
● |
Submit a later-dated
proxy |
● |
Provide subsequent telephone or
online voting instructions or |
● |
Vote in person at the
meeting |
If you hold your shares in street name,
please follow the directions provided to you by your bank, broker or other
intermediary to change or revoke any voting instructions you have already
provided.
We will have a quorum and will be able to
conduct the business of the annual meeting if the holders of a majority of the
votes that shareholders are entitled to cast are present at the meeting, either
in person or by proxy. For the 2017 annual meeting, to elect directors and adopt
the other proposals, the following votes are required under our governing
documents and New York State law:
Item |
|
Vote
Required |
|
Do abstentions count as
votes cast? |
|
Is
broker discretionary voting allowed?* |
|
|
Approval of the majority of
the |
|
|
|
|
Election of directors |
|
votes cast |
|
No |
|
No |
Ratification of
appointment of independent registered |
|
Approval of the majority of
the |
|
|
|
|
public accounting firm |
|
votes cast |
|
No |
|
Yes |
Advisory resolution to
approve executive |
|
Approval of the majority of
the |
|
|
|
|
compensation** |
|
votes cast |
|
No |
|
No |
Advisory resolution to
approve the frequency of the |
|
Approval of the majority of
the |
|
|
|
|
executive compensation vote** |
|
votes cast |
|
No |
|
No |
|
|
Approval of the majority of
the |
|
|
|
|
Shareholder proposals** |
|
votes cast |
|
No |
|
No |
* |
A broker non-vote occurs when a
broker submits a proxy but does not vote for an item because it is not a
routine item and the broker has not received voting instructions from
the beneficial owner. As described under Effect of Not Casting Your Vote,
your broker may vote in its discretion only on Item 2, Ratification of
appointment of the Companys independent registered public accounting
firm. |
** |
Advisory/Non-binding |
88 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
OTHER
INFORMATION
Multiple Shareholders Sharing the Same Address
There are no cumulative voting rights.
Abstentions and broker non-votes are not considered as votes cast and will have
no effect on the outcome of the vote on any of the proposals. If any other
matter comes before the meeting, the named proxies will use their best judgment
in voting the proxies.
Multiple Shareholders
Sharing the Same Address
We are sending only one notice or one
proxy statement and annual report to the address of multiple shareholders unless
we have received contrary instructions from any shareholder at that address.
This practice, known as householding, reduces duplicate mailings, saving paper
and reducing printing costs. If any shareholder
residing at such an address wishes to receive an individual copy of the
materials, or if you are receiving multiple copies of our proxy statement and
annual report and would like to enroll in this service, please contact the
Companys Secretary. The contact information for the Companys Secretary appears
below.
Availability of Form
10-K
If you would like a paper copy of our 2016
Form 10-K, excluding certain exhibits, please contact Carol V. Schwartz,
Secretary, American Express Company, 200 Vesey Street, New York, New York 10285
or by telephone at 212-640-2000.
KENNETH I. CHENAULT
Chairman and Chief Executive Officer
* * *
*
|
|
2017 PROXY
STATEMENT | 89 |
Table of Contents
ANNEX
AINFORMATION REGARDING
NON-GAAP FINANCIAL
MEASURES |
The tables below provide further
information regarding adjusted amounts included in this proxy statement and
reconciliations to GAAP measures. Operating expense represents salaries and
employee benefits, professional services, occupancy and equipment,
communications and other expenses.
REVENUE NET OF INTEREST
EXPENSE ADJUSTED FOR FX AND COSTCO ($ IN MILLIONS) |
|
2015 |
|
|
2016 |
|
GAAP Total Revenues Net of Interest Expense |
|
$ |
32,818 |
|
|
$ |
32,119 |
|
Estimated Costco-Related Revenues(1) |
|
$ |
(3,057 |
) |
|
$ |
(1,193 |
) |
Total Revenues Net of Interest Expense Excluding
Costco |
|
$ |
29,761 |
|
|
$ |
30,926 |
|
FX-Adjusted Total Revenues Net of Interest Expense(2) |
|
$ |
32,415 |
|
|
|
|
|
FX-Adjusted Total Revenues Net of Interest Expense Excluding
Costco(2) |
|
$ |
29,358 |
|
|
|
|
|
YoY% Increase/(Decrease) in GAAP Total Revenues Net of
Interest Expense |
|
|
|
|
|
|
(2% |
) |
YoY% Increase/(Decrease) in Adjusted Total Revenues Net of
Interest Excluding Costco |
|
|
|
|
|
|
4% |
|
YoY% Increase/(Decrease) in FX-Adjusted Total Revenues Net of
Interest Expense |
|
|
|
|
|
|
(1% |
) |
YoY% Increase/(Decrease) in FX-Adjusted Total Revenues Net of
Interest Excluding Costco |
|
|
|
|
|
|
5% |
|
|
|
|
|
|
|
|
|
|
ADJUSTED RETURN ON
EQUITY FOR PREPAID BUSINESS SERVICES CHARGES ($ IN
MILLIONS) |
|
2015 |
|
|
|
|
|
GAAP Net Income for the twelve months ended December
31 |
|
$ |
5,163 |
|
|
|
|
|
2015 Prepaid Services Business Impairment (pre-tax)(3) |
|
$ |
419 |
|
|
|
|
|
2015 Tax Impact of Prepaid Services Business
Impairment(3) |
|
$ |
84 |
|
|
|
|
|
2015 Prepaid Services Business Impairment
(after-tax)(3) |
|
$ |
335 |
|
|
|
|
|
Adjusted Net Income |
|
$ |
5,498 |
|
|
|
|
|
Average Shareholders Equity |
|
$ |
21,494 |
|
|
|
|
|
Return on Average Equity |
|
|
24.0% |
|
|
|
|
|
Adjusted Return on Average Equity |
|
|
25.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED DILUTED
EPS |
|
2015 |
|
|
2016 |
|
GAAP Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.05 |
|
|
$ |
5.65 |
|
2015 Prepaid Services Business Impairment (pre-tax)(3) |
|
$ |
(0.41 |
) |
|
|
|
|
2015 Tax Impact of Prepaid Services Business
Impairment(3) |
|
$ |
0.08 |
|
|
|
|
|
2015 Prepaid Services Business Impairment
(after-tax)(3) |
|
$ |
(0.33 |
) |
|
|
|
|
2016 Restructuring (pre-tax) |
|
|
|
|
|
$ |
(0.43 |
) |
2016 Tax Impact of Restructuring |
|
|
|
|
|
$ |
0.15 |
|
2016 Restructuring (after-tax) |
|
|
|
|
|
$ |
(0.28 |
) |
Adjusted Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.38 |
|
|
$ |
5.93 |
|
|
|
|
|
|
|
|
|
|
CUMULATIVE ADJUSTED
DILUTED EPS |
|
|
|
|
|
|
|
|
2014 GAAP Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.56 |
|
|
|
|
|
2015 GAAP Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.05 |
|
|
|
|
|
2016 GAAP Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.65 |
|
|
|
|
|
Cumulative GAAP Diluted EPS Attributable to Common
shareholders |
|
$ |
16.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015 Prepaid Services Business Impairment (pre-tax)(3) |
|
$ |
(0.41 |
) |
|
|
|
|
2015 Tax Impact of Prepaid Services Business
Impairment(3) |
|
$ |
0.08 |
|
|
|
|
|
2015 Prepaid Services Business Impairment
(after-tax)(3) |
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 Restructuring (pre-tax) |
|
$ |
(0.43 |
) |
|
|
|
|
2016 Tax Impact of Restructuring |
|
$ |
0.15 |
|
|
|
|
|
2016 Restructuring (after-tax) |
|
$ |
(0.28 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Adjusted Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.56 |
|
|
|
|
|
2015 Adjusted Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.38 |
|
|
|
|
|
2016 Adjusted Diluted EPS Attributable to Common
Shareholders |
|
$ |
5.93 |
|
|
|
|
|
Cumulative Adjusted Diluted EPS Attributable to Common
shareholders |
|
$ |
16.87 |
|
|
|
|
|
90 | AMERICAN EXPRESS
COMPANY |
|
|
Table of Contents
ANNEX AINFORMATION
REGARDING NON-GAAP FINANCIAL MEASURES
(1) |
Represents estimated Discount
revenue from Costco in the United States for spend on American Express cards and
from other merchants for spend on the Costco cobrand card as well as Other
fees and commissions and Interest income from Costco cobrand Card
Members. |
|
(2) |
FX-adjusted information assumes a
constant exchange rate between the periods being compared for purposes of
currency translations into U.S. dollars (i.e., assumes the foreign
exchange rates used to determine results for the twelve months ended
December 31, 2016 apply to the period(s) against which such results are
being compared). FX-adjusted revenues is a non-GAAP measure. Management
believes the presentation of information on an FX-adjusted basis is
helpful to investors by making it easier to compare the Companys
performance in one period to that of another period without the
variability caused by fluctuations in currency exchange
rates. |
|
(3) |
Primarily includes the impairment
of goodwill and technology costs, together with some restructuring costs,
within the Prepaid Services Business. |
|
|
2017 PROXY
STATEMENT | 91 |
Table of Contents
LOCATION OF
THE 2017 ANNUAL MEETING
Our world headquarters is the site of the
2017 Annual Meeting of Shareholders. We are located at 200 Vesey Street on
the west side of Lower Manhattan in Brookfield Place (formerly known as
the World Financial Center). |
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By
subway |
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By car or
taxi |
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Take any of these subway lines: the
A, C, E, R or the 1, 2, 3, 4 or 5 trains. All of these trains stop near
Brookfield Place. Brookfield Place is located across the West Side Highway
(also known as West Street) from the trains, toward the Hudson River. Our
building is on the north side of the Winter Garden in Brookfield
Place. |
|
Take the West Side Highway in Lower
Manhattan. Enter Brookfield Place by turning west on either Murray Street
or Vesey Street. Go to the main entrance of our building located at the
corner of Vesey Street and the West Side Highway.
If you need special assistance at
the annual meeting, please contact Carol V. Schwartz, our Secretary, by
telephone at 212-640-2000, by email at corporatesecretarysoffice@aexp.com
or by writing to her at the Companys headquarters at 200 Vesey Street,
New York, New York 10285. |
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|
2017 PROXY
STATEMENT | 95 |
Table of Contents
Table of
Contents
200 VESEY STREET
NEW YORK,
NY 10285
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SCAN TO VIEW MATERIALS &
VOTE |
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VOTE ONLINE - www.proxyvote.com or scan
the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 3:00 P.M. Eastern Time on April 26, 2017 (for
holders in employee benefit plans), or up until 11:59 P.M. Eastern Time on April
30, 2017 (for all other shareholders). Have your proxy card in hand when you
access the website and follow the instructions to obtain your records and to
create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred
by our company in mailing proxy materials, you can consent to receive all future
proxy statements, proxy cards, and annual reports electronically via e-mail or
the Internet. To sign up for electronic delivery, please follow the instructions
above to vote online and, when prompted, indicate that you agree to receive or
access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your
voting instructions up until 3:00 P.M. Eastern Time on April 26, 2017 (for
holders in employee benefit plans), or until 11:59 P.M. Eastern Time on April
30, 2017 (for all other shareholders). Have your proxy card in hand when you
call and then follow the instructions. Toll free in the U.S. and
Canada.
VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the
postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
VOTE CONFIRMATION
You may confirm that your instructions were
received and included in the final tabulation to be issued at the Annual Meeting
on May 1, 2017 via the ProxyVote Confirmation link at www.proxyvote.com by using
the information that is printed in the box marked by the arrow ➔XXXX XXXX XXXX XXXX
. Vote Confirmation is available 24 hours after
your vote is received beginning April 17, 2017, with the final vote tabulation
remaining available through July 3, 2017.
TO VOTE, MARK
BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: |
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E19392-P87289 |
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KEEP THIS PORTION FOR YOUR
RECORDS |
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DETACH AND
RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED. |
AMERICAN EXPRESS
COMPANY |
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Vote on
Directors
The Board of Directors recommends that you vote FOR each
director nominee listed in Proposal 1 below (please mark your vote for each director
separately): |
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1. |
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Election of director nominees proposed by the Board of Directors
for a term of one year. |
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For |
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Against |
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Abstain |
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1a. |
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Charlene
Barshefsky |
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☐ |
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☐ |
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☐ |
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1b. |
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John J.
Brennan |
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☐ |
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☐ |
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☐ |
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1c. |
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Ursula M.
Burns |
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☐ |
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☐ |
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☐ |
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1d. |
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Kenneth I.
Chenault |
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☐ |
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☐ |
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☐ |
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1e. |
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Peter
Chernin |
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☐ |
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☐ |
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☐ |
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1f. |
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Ralph de la
Vega |
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☐ |
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☐ |
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☐ |
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1g. |
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Anne L.
Lauvergeon |
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☐ |
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☐ |
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☐ |
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1h. |
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Michael O.
Leavitt |
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☐ |
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☐ |
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☐ |
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1i. |
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Theodore J.
Leonsis |
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☐ |
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☐ |
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☐ |
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1j. |
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Richard C.
Levin |
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☐ |
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☐ |
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☐ |
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1k. |
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Samuel J.
Palmisano |
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☐ |
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☐ |
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☐ |
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1l. |
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Daniel L.
Vasella |
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☐ |
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☐ |
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☐ |
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1m. |
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Robert D.
Walter |
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☐ |
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☐ |
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☐ |
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1n. |
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Ronald A.
Williams |
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☐ |
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☐ |
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☐ |
Vote on
Proposals
The Board of Directors
recommends that you vote FOR the following proposals:
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For |
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Against |
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Abstain |
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2. |
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Ratification of appointment of
PricewaterhouseCoopers LLP as independent registered public accounting
firm for 2017. |
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☐ |
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☐ |
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☐ |
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3. |
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Approval, on an advisory basis, of the
Company's executive compensation. |
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☐ |
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☐ |
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☐ |
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The Board of Directors recommends you vote 1 YEAR on the
following proposal: |
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1 Year |
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2 Years |
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3 Years |
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Abstain |
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4. |
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Advisory resolution to approve the frequency of future
advisory votes on the Company's executive compensation. |
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☐ |
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☐ |
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☐ |
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☐ |
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The Board of Directors recommends
that you vote AGAINST the following proposals: |
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For |
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Against |
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Abstain |
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5. |
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Shareholder proposal to permit
shareholders to act by written consent. |
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☐ |
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☐ |
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☐ |
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6. |
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Shareholder proposal to require gender
pay equity disclosure. |
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☐ |
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☐ |
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☐ |
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The proxies are authorized to
vote in their discretion upon any other matter that may properly come
before the meeting or any adjournment(s) or postponement(s)
thereof. |
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For address changes and/or
comments, please check this box and write them on the back where
indicated. |
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☐ |
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Signed proxies returned
without specific voting instructions as to any director or item will be
voted as the Board of Directors recommends. |
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Please
sign exactly as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator, or other fiduciary, please give full title as such.
Joint owners should each sign personally. All holders must sign. If a
corporation or partnership, please sign in full corporate or partnership name by
authorized officer.
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Signature
[PLEASE SIGN WITHIN BOX] |
Date |
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Signature (Joint
Owners) |
Date |
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Table of
Contents
Notice to employees participating in
the American Express Retirement Savings Plan ("RSP")
or the Employee Stock
Ownership Plan of Amex Canada, Inc. and Amex Bank of Canada
("ESOP").
Your voting instructions must be
received on or before 3:00 P.M. Eastern Time, on
April 26, 2017, by
Broadridge, which is acting on behalf of the Trustees of the RSP and ESOP.
If your voting instructions are not received
by 3:00 P.M. Eastern Time, April 26, 2017,
the Trustees of the RSP and the
ESOP will not vote the shares.
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting:
The Annual Report, Notice and Proxy Statement are available at
www.proxyvote.com.
AMERICAN EXPRESS COMPANY
Proxy for the
Annual Meeting of Shareholders
to Be Held on Monday, May 1,
2017
Solicited on behalf of the Board of
Directors
The undersigned hereby appoints Jeffrey
Campbell, Laureen Seeger, Carol V. Schwartz, and Tangela S. Richter, or any of
them, proxies or proxy, with full power of substitution, to vote all common
shares of American Express Company that the undersigned is entitled to vote at
the Annual Meeting of Shareholders to be held at the Companys headquarters at
200 Vesey Street, New York, NY 10285, on Monday, May 1, 2017 at 9:00 A.M.,
Eastern Time, and at any adjournment(s) or postponement(s) of the Meeting, as
indicated on the reverse side of this proxy card with respect to the proposals
set forth in the Proxy Statement, and in their discretion upon any matter that
may properly come before the Meeting or any adjournment(s) or postponement(s) of
the Meeting. The undersigned hereby revokes any proxies submitted
previously.
To ensure timely receipt of your vote
and to help the Company reduce costs, you are encouraged to submit your voting
instructions online or by telephone. Follow the instructions on the
reverse side of this card.
If you choose to submit your voting
instructions by mail: Mark, sign, and date this proxy card on the reverse side
and return it promptly in the envelope provided. You do not need to mark any boxes if you wish to vote as the Board of
Directors recommends.
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Address
Changes/Comments: |
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(If you noted any Address
Changes/Comments above, please mark corresponding box on the reverse
side.) |
|
(Please sign and date on the reverse
side)
This regulatory filing also includes additional resources:
amex_courtesy-pdf.pdf
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