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American Express Chairman, CEO Kenneth Chenault got 38 percent higher pay package for 2011
LOS ANGELES (AP) ' The chairman and chief executive of American Express Co. received a compensation package valued at $22.5 million for 2011, a 38 percent increase from a year earlier, according to an Associated Press analysis of a regulatory filing.
The company credited Kenneth Chenault and his management team for delivering revenue and profit growth, and gaining market share over the past two years.
The executive, who has been chairman and CEO since 2001, received $16.3 million in compensation in 2010.
Chenault, 60, received a base salary of $2 million, up 3 percent from the previous year, according to documents filed Friday with the Securities and Exchange Commission.
The executive also received a cash bonus of $2 million, unchanged from 2010.
But the bulk of Chenault's compensation hike came in the form of stock awards, which were worth about $15.3 million at the time they were granted ' a sevenfold increase from $2.1 million worth of stock awards the year before.
Chenault also received option awards valued at about $2.2 million on the day they were granted, down 76 percent from $9.2 million a year earlier.
His other compensation declined 7 percent to about $1.02 million, and included $570,000 in company contributions to Chenault's defined contribution plans; $395,439 for perks and other personal benefits; $53,458 in dividends and equivalents; and, $3,939 in life insurance.
Even with high unemployment and continued doubts about the strength of the economy, credit card use has been on the rise.
New York-based American Express, which caters to a more affluent customer than its peers, saw its 2011 profit climb to $4.94 billion, an increase of 22 percent from the year before. Full-year revenue rose 9 percent to $29.96 billion.
Shareholders saw the company's stock price rise about 10 percent last year. The stock closed Friday at $52.99.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.