American Express (NYSE: AXP), sometimes known as "AmEx" or "Amex", is a diversified global financial services company, headquartered in New York City. The company also has major offices in Fort Lauderdale, FL; Salt Lake City, UT; and Phoenix, AZ. The company is best known for its credit card, charge card and traveler's cheque businesses.
The company's common stock trades on the New York Stock Exchange under the ticker symbol "AXP." It is one of the 30 stocks that comprise the Dow Jones Industrial Average. In 2007, BusinessWeek and Interbrand ranked American Express as the 14th most valuable brand in the world, estimating the brand to be worth US$20.87 billion.
The current CEO is Kenneth Chenault, who took over in 2001
American Express Company
||Public (NYSE: AXP)
|| New York, NY, USA
(Chairman) & (CEO)
||Finance and Insurance, Travel agencies
||Financial services, Travel Services
||US$ 41.13 billion (2008)
||▲ US$ 31.557 billion (2007)
||▲ US$ 5.566 billion (2007)
||▲ US$ 4.012 billion (2007)
||▲ US$ 149.830 billion (2007)
||▲ US$ 11.029 billion (2007)
American Express Employment
Interviewing with American Express
The typical American Express interview process includes both phone and 1:1 interview formats, with a background check. Candidates rated the overall interview difficulty for American Express as "Average" compared to interviews at other companies (3.2 out of 5), and the interview experience as "Positive" compared to other company interviews.
American Express employees a wide variety regular full-time financial and technology workers, most of which are compensated on a salary basis. Below are pay details for some of the most common American Express salary positions:
- American Express Vice President salary - $174,286 (Average, USD)
- American Express Project Manager salary - $83,542 (Average, USD)
- American Express Financial Analyst salary - $63,682 (Average, USD)
- American Express Senior Marketing Manager salary - $102,786 (Average, USD)
- American Express Senior Product Manager salary - $93,024 (Average, USD)
American Express was founded in 1850, in Buffalo, New York, as a joint stock corporation that was a merger of the express mail companies owned by Henry Wells (Wells & Company), William Fargo (Livingston, Fargo & Company), and John Butterfield (Wells, Butterfield & Company, the successor earlier in 1850 of Butterfield, Wasson & Company), as an express business. The same founders also started Wells Fargo & Co. in 1852 when Butterfield and other directors objected to the proposal that American Express extend its operations to distant California. American Express first established its headquarters in a building at the intersection of Jay Street and Hudson Street in what was later called the TriBeCa section of Manhattan, and enjoyed a virtual monopoly on the movement of express shipments (Goods, Securities, Currency, etc.) throughout New York State. In 1874, American Express moved its headquarters to 65 Broadway in what was becoming the Financial District of Manhattan, a location it was to retain through two buildings.
American Express buildings
In 1854, the American Express Co. purchased a lot on Vesey Street in New York City as the site for its stables. The company's first New York headquarters were in an impressive marble Italianate palazzo at 55-61 Hudson Street between Thomas Street and Jay Street (1857-58, John Warren Ritch), which had a busy freight depot on the ground story with a spur line from the Hudson River Railroad. A stable was constructed nearby at 4-8 Hubert Street, between Hudson Street and Collister Street (1866-67, Ritch & Griffiths), five blocks north of the Hudson Street building.
The company prospered sufficiently that headquarters were moved in 1874 from the wholesale shipping district to the budding Financial District, and into rented offices in two five-story brownstone commercial buildings at 63 and 65 Broadway, between Exchange Alley and Rector Street, and between Broadway and Trinity Place that were owned by the Harmony family.
In 1880, American Express built a new warehouse behind the Broadway Building at 46 Trinity Place, between Exchange Alley and Rector Street. The designer is unknown, but it has a façade of brick arches that are redolent of pre-skyscraper New York. American Express has long been out of this building, but it still bears a terra cotta seal with the American Express Eagle. In 1890-91 the company constructed a new ten-story building by Edward H. Kendall on the site of its former headquarters on Hudson Street.
By 1903, the company had assets of some $28 million, second only to the National City Bank of New York among financial institutions in the city. To reflect this, the company purchased the Broadway buildings and site.
At the end of the Wells-Fargo reign in 1914, an aggressive new president, George Chadbourne Taylor (1868-1923), who had worked his way up through the company over the previous thirty years, decided to build a new headquarters. The old buildings, dubbed by the New York Times as "among the ancient landmarks" of lower Broadway, were inadequate for such a rapidly expanding concern. In March 1914, Renwick, Aspinwall & Tucker filed for the construction of a 32-story concrete-and steel-framed office tower in which all of the company's operations, then in four separate buildings, were to be consolidated. The building proposal of 1914 was abandoned, probably due to the war in Europe, but was resurrected two years later in a reduced form, at an estimated cost of $1 million.
The 21-story (plus basement), neo-classical, American Express Co. Building, was constructed in 1916-17 to the design of James L. Aspinwall, of the firm of Renwick, Aspinwall & Tucker, the successor to the architectural practice of the eminent James Renwick, Jr.. The building consolidated the two lots of the former buildings with a single address: 65 Broadway. This building was part of the "Express Row" section of lower Broadway at the time. The concrete-and-steel-framed building has an H-shaped plan with tall slender wings arranged around central light courts, a type of plan employed from the 1880s through the 1910s to provide offices with maximum light and air. Faced in white brick and terra cotta above a granite base, both facades employ the tripartite composition of base-shaft-capital then popular for the articulation of skyscrapers, with a colonnaded base and upper portion. The famous American Express Eagle adorns the building twice: there is an asymmetric eagle on the lower arch, while a symmetric eagle adorns the arch atop the building. The Broadway entrance features a double-story Corinthian colonnade with large arched windows. The building completed the continuous masonry wall of its block-front and assisted in transforming Broadway into the "canyon" of neo-classical masonry office towers familiar to this day
American Express sold this building in 1975, but retained travel services here. The building was also the headquarters over the years of other prominent firms, including investment bankers J.& W. Seligman & Co. (1940-74), the American Bureau of Shipping, a maritime concern (1977-86), and currently J.J. Kenny, and Standard & Poors, who has renamed the building for itself
American Express extended its reach nationwide by arranging affiliations with other express companies (including Wells Fargo – the replacement for the two former companies that merged to form American Express), railroads, and steamship companies.
In 1882, American Express started its expansion in the area of financial services by launching a money order business to compete with the US Post Office's money orders.
Sometime between 1888 and 1890, J.C. Fargo took a trip to Europe and returned frustrated and infuriated. Despite the fact that he was president of American Express and that he carried with him traditional letters of credit, he found it difficult to obtain cash anywhere except in major cities. Mr. Fargo went to Marcellus Flemming Berry and asked him to create a better solution than the traditional letter of credit. Mr. Berry introduced the American Express Traveler's Cheque which was launched in 1891 in denominations of $10, $20, $50, and $100.
Traveler's cheques established American Express as a truly international company. In 1914, at the outbreak of the First World War, American Express offices in Europe were among the few companies to honor the letters of credit (issued by various banks) held by Americans in Europe, despite other financial institutions having refused to assist these stranded travellers.
Charge card services history
American Express executives discussed the possibility of launching a travel charge card as early as 1946, but it was not until Diners Club launched their own card in March 1950 that American Express began to consider seriously the possibility. At the end of 1957, American Express CEO Ralph Reed decided to get into the card business, and by the launch date of October 1, 1958 public interest had become so significant that they actually issued 250,000 cards prior to the official launch date. The card was launched with an annual fee of $6, $1 higher than Diners Club, to be seen as a premium product. The first cards were paper, with the account number and cardmember's name typed. It was not until 1959 that American Express began issuing embossed ISO 7810 plastic cards, an industry first.
In 1966, American Express introduced the Gold Card and in 1984 the Platinum Card, clearly defining different market segments within its own business, a practice that has proliferated across a broad array of industries. The Platinum Card was billed as super-exclusive and had a $250 annual fee (it is currently $450). It was offered by invitation only to American Express customers with at least 2 years of tenure, significant spending, and excellent payment history.
In 1987, American Express introduced the Optima card, their first credit card product. Previously, all American Express cards had to be paid in full each month, but Optima allowed customers to carry a balance (the charge cards also now allow extended payment options on qualifying charges based on credit availability). Although Optima is no longer heavily promoted, Optima and Optima Platinum cards are still available on the American Express website. Today American Express offers a wide range of other credit card products including co-branded cards like the JetBlue Card and the Starwood Preferred Guest Card, as well as other credit cards promoting customer rewards like the Blue from American Express Card and the Blue Cash Rebate Card.
In 1994, the Optima True Grace card was introduced. The card was unique in that it offered a grace period on all purchases whether a balance was carried on the card or not (as opposed to traditional revolving credit cards which charge interest on new purchases if so much as $1 was carried over.) The card was discontinued a few years later; however, the currently-available One from American Express card offers a similar feature called "Interest Protection."
In 1999, American Express introduced the Centurion Card which is often referred to as the "black card," catering to an even more affluent and elite customer segment. The card charged a $1,000 annual fee at the time of its introduction (today, it is $2,500 with an additional one-time initiation fee of $5000) and offered (and continues to offer) a variety of exclusive benefits. There have always been rumors of a super-exclusive card that gives American Express' richest and most powerful customers special perks. It was this rumor that caused Amex to profit off the word-of-mouth and sparked the launch of Centurion.
The company made another addition to its products in 1999 by introducing Blue from American Express, which quickly became a popular card among young adults due to an appealing marketing campaign directed towards a youthful demographic. Based on a successful product for the European market, Blue had no annual fee, a rewards program, and a multi-functional onboard chip. A cashback version, "Blue Cash", quickly followed.
American Express also launched an exclusive agreement with Costco in 1999, replacing an earlier agreement with Discover Card. Under the agreement, American Express cards replaced Discover as the only credit/charge card accepted at the warehouse club in the US, and American Express became the first and only credit/charge card accepted at Costco's locations outside the US. To introduce Costco members to American Express, a co-branded cashback credit card was also introduced with no annual fee with a valid Costco membership. An added benefit of the agreement is that Costco membership fees can also be paid for with the card. At present, the consumer version of the card offers 3% back on gasoline & dining out, 2% on travel, and 1% on other charges. Business versions of the card offer similar benefits, with the gasoline benefit earning 5% back instead of 3%. The cash back rebate is issued annually as part of the February statement in the form of a rebate check which must be redeemed at a Costco location. The rebate check can be redeemed for cash, merchandise, or any combination thereof. The agreement was highly successful l and was renewed in 2004 for an additional 10 years.
As of 2005, the US Centurion card has a $2500 annual fee, while other American Express cards range between no annual fee (for Blue and many other consumer and business cards) and a $450 annual fee (for the Platinum Card.) Annual fees for the Green card start at $95, while Gold card annual fees start at $125.
In 2005, American Express introduced Clear, advertised as the first credit card with no fees of any kind. It also incorporates the ExpressPay technology premiered with the Blue card. Also in 2005, American Express introduced One, a credit card with a "Savings Accelerator Plan" that contributes 1% of eligible purchases into an FDIC-insured High-Yield Savings Account. Other cards introduced in 2005 included "The Knot" and "The Nest" Credit Cards from American Express, co-branded cards developed with the wedding planning website theknot.com. They have also introduced City Reward Cards that earn INSIDE Rewards points to eat, drink, and play at New York, Chicago and LA hot spots. American Express began phasing out the INSIDE cards in mid-2008, with no new applications being taken as of July 2008.
Also in 2005, American Express introduced ExpressPay, a MasterCard PayPass clone, based on a wireless RFID payment method, that requires a card to simply be waved in front of a special reader and not swiped. This technology replaced the smart chip on the Blue card. Many US merchant and restaurant partners including 7-Eleven, CVS/pharmacy, McDonald's, Regal Entertainment Group, and Ritz Camera, now offer ExpressPay at most or all of their locations. The technology was tested on the ski bus from Salt Lake City to local resorts.
In 2006, the UK division of American Express licensed the Product Red brand and began to issue a Red Card. With each card member purchase the company contributes to good causes through The Global Fund to help African women and children suffering from HIV/AIDS, malaria and other diseases.
In 2007, American Express again raised the annual fee for their American Platinum charge cards, moving the Personal cards fee to $450, and the Business division to $395. With the increase, customers now receive four complimentary companion coach tickets per calendar year. Additionally, a long rumored "relationship" fee of $5,000 to establish a Centurion card was added. The annual fee of $2,500 remains the same, however. In late 2007, they announced their new Plum Card as the latest addition to their card line for small business owners. The card provides a 2% early pay discount or up to two months defer pay on purchases. However, the 2% discount is only available for billing periods where you spend at least $5,000. The first 10,000 cards began to be issued to members on December 16, 2007.
Features: Some versions of the card include various features such as Damage waiver on cars rented with the card, and accident insurance during travel bought with the card.
Financial services history
During the 1980s, American Express embarked on its dream to become a financial services supercompany. In mid-1981 it purchased Shearson Loeb Rhoades Inc the second largest securities firm in the US. In 1984 it purchased the 90-year old Investors Diversified Services, bringing with it a fleet of financial advisors and investment products. Also in 1984, American Express acquired the investment banking and trading firm, Lehman Brothers Kuhn Loeb, and added it to the Shearson family, creating Shearson Lehman/American Express. In 1988, the Firm acquired E.F. Hutton, forming Shearson Lehman Hutton until 1990, when the Firm's name became Shearson Lehman Brothers. When Harvey Golub took the reins in 1993 he negotiated the sale of Shearson's retail brokerage and asset management business to Primerica and in following year, spun-off of the remaining investment banking and institutional businesses as Lehman Brothers Holdings Inc.
In April 1992, American Express spun off its subsidiary, First Data Corp., in an IPO. Then, in October 1996, the company distributed the remaining majority of its holdings in First Data Corp., reducing its ownership to less than 5%.
In December 2000, American Express agreed to acquire the credit card portfolio of Bank of Hawaii, then a division of Pacific Century Financial Corp. In January 2006, American Express sold its Bank of Hawaii card portfolio to Bank of America (MBNA). Bank of America will issue Visa and American Express cards under the Bank of Hawaii name.
Until 2004, Visa and MasterCard rules prohibited issuers of their cards from issuing American Express cards in the United States. This meant, as a practical matter, that U.S. banks could not issue American Express cards. These rules were struck down as a result of antitrust litigation brought by the U.S. Department of Justice, and are no longer in effect. In January 2004, American Express reached a deal to have its cards issued by a U.S. bank, MBNA America. Initially decried by MasterCard executives as nothing but an "experiment", these cards were released in October of 2004. Some said that the relationship was going to be threatened by MBNA's merger with Bank of America, a major Visa issuer and original developer of VISA. However, an agreement was reached between American Express and Bank of America on December 21, 2005. Under the terms of the agreement, Bank of America will own the customer loans and American Express will process the transactions. Also, American Express will dismiss Bank of America from its antitrust litigation against Visa, MasterCard and a number of U.S. banks. Finally, both Bank of America and American Express also said an existing card-issuing partnership between MBNA and American Express will continue after the Bank of America-MBNA merger. The first card from the partnership, the no-annual-fee Bank of America Rewards American Express card, was released on June 30, 2006.
Since then, Citibank, GE Money, and USAA have also started issuing American Express cards. Citibank currently issues several American Express cards including an American Airlines AAdvantage co-branded card, while GE is currently issuing a co-branded card for Dillard's. HSBC Bank USA is currently testing both HSBC-branded and Neiman Marcus co-branded American Express rewards credit cards, with a full rollout scheduled for late 2007 or early 2008. Also, UBS launched its Resource Card program for US Wealth Management clients issuing Visa Signature credit cards and American Express charge cards linked to their customers accounts and employing a single rewards program for the two cards.
In 2005, American Express released the American Express Travelers Cheque Card, a stored-value card that serves the same purposes as a traveler's cheque, but can be used in stores like a credit card. The card has since been discontinued as of October 31, 2007, due to "changing market conditions". All cardholders were issued refund checks for the remaining balances.
On 30 September 2005, American Express spun off its American Express Financial Advisors unit as a publicly traded company, Ameriprise Financial, Inc.. Due to this, American Express revenues for 2005 are down around $5 billion, however, like-for-like they are up 10.5% in 2005. Also, on September 30, 2005, RSM McGladrey acquired American Express Tax & Business Services (TBS).
In 1975, David Ogilvy of Ogilvy & Mather developed the highly successful "Don't Leave Home Without It" ad campaign for American Express Traveler's Cheques, featuring Oscar-award-winning actor Karl Malden. Karl Malden served as the public face of American Express Travelers Cheques for twenty-five years. His television ads were a combination of suspense, excitement, news, and a compelling call to action. First, you would see a thief stealing money from some poor unsuspecting tourist's wallet or beach bag or hotel room. Then Karl would arrive on the scene looking like the cop he played in the famous television series, Streets of San Francisco. He would say, "This could happen to you!" And then the call to action: "Don't let a thief spoil your vacation. Get American Express Travelers Cheques. Don't leave home without them." After Karl Malden's departure, and the card was promoted over the traveller's cheques, American Express continued to use celebrities. A typical ad for the American Express Card began with a celebrity asking viewers: "Do you know me?" Although he/she gave hints to his/her identity, the star's name was never mentioned except as imprinted on an American Express Card; after which announcer Peter Thomas told viewers how to apply for it. Each ad concluded with the celebrity reminding viewers: "Don't Leave Home Without It." The "Don't Leave Home Without It" slogan was revived in 2005 for the prepaid American Express Travelers Cheque Card.
- The long-running PBS children's TV series, "Sesame Street" parodied the "Do you know me?/Don't Leave Home Without It" ad campaigns with three skits involving a Muppet Character holding a Grown-Up Friend's Hand while crossing the street. One skit featured Forgetful Jones (performed by Richard Hunt) with Olivia (Alaina Reed Hall) as his Grown-Up Friend, a second featured Bert and Ernie (Frank Oz and Jim Henson respectively) with Gordon (Roscoe Orman) as their Grown-Up Friend, and the third featured Big Bird (Carroll Spinney) with Bob (Bob McGrath) as his Grown-Up Friend. All three skits ended with their names being embossed at the bottom of a card looking like an American Express Card that had a big human left hand in the middle with the words "Grown-Up Friend's Hand" above it, and a voiceover saying "A Grown-Up Friend's Hand. Don't cross the street without it."
- Another parody was seen on an episode of the CBS game show, "Press Your Luck," when the animated "Whammy Character" would give the "Do you know me?" tag line, followed by the display of an AmEx card-parody, which then had "WHAMMY" typed in on the bottom line of the card.
- The 1989 movie, Major League also parodied the campaign. In one scene, in which every player is dressed in a tuxedo, the Cleveland Indians tell viewers of the film why every player carries the American Express Card with much of the explanation done one line at a time by players Jake Taylor (Tom Berenger), Eddie Harris (Chelcie Ross), Rick "Wild Thing" Vaughn (Charlie Sheen), Pedro Cerrano (Dennis Haysbert), and Roger Dorn (Corbin Bernsen), and Manager Lou Brown (James Gammon). The scene ends with Willie "Mays" Hayes (a tuxedo-clad Wesley Snipes) sliding into home plate in front of the rest of the team, holding up his card and saying to the viewers: "The American Express Card. Don't steal home without it."
The Adventures of Seinfeld & Superman
To this day, American Express continues to use celebrities in their ads. Some notable examples include a late 1990s ad campaign with comedian Jerry Seinfeld, including the two 2004 webisodes in a series entitled "The Adventures of Seinfeld and Superman." In late 2004, American Express launched the "My life. My card." brand campaign (also by Ogilvy & Mather) featuring famous American Express cardmembers talking about their life. The ads have featured actors Kate Winslet, Robert De Niro, Ken Watanabe and Tina Fey, Duke University basketball coach Mike Krzyzewski, fashion designer Collette Dinnigan, comedian and talk show hostess Ellen DeGeneres, golfer Tiger Woods, professional snowboarder Shaun White, tennis pros Venus Williams and Andy Roddick, Chelsea Football Club manager José Mourinho, and film directors Martin Scorsese, Wes Anderson, M. Night Shyamalan and most recently singer Beyonce Knowles. In 2007, a two-minute black-and-white ad entitled "Animals" starring Ellen DeGeneres won the Emmy Award for Outstanding Commercial.
Acquisition of American Express Bank Ltd. by Standard Chartered plc
On 18 September 2007, it was announced that Standard Chartered plc agreed to acquire American Express Bank Ltd, a commercial bank, from American Express Co, for an estimated $1.1 billion, through a friendly divestiture process. The transaction is currently subject to regulatory approvals. Lehman Brothers is advising American Express in this deal.
Management and corporate governance
Key executives include:
- Kenneth Chenault: Chairman and Chief Executive Officer
- Edward Gilligan: Group President - Global Corporate Services and International Payments
- Alfred Kelly, Jr.: Group President - U.S. Consumer and Small Business Services
- Ashwini Gupta: President - Risk, Information Management, Banking and Chief Risk Officer - American Express Company
- Daniel T. Henry: Executive Vice President and Chief Financial Officer
- Jonathan Linen: Vice Chairman - American Express Company
- L. Kevin Cox: Executive Vice President Human Resources and Quality
- John D. Hayes: Executive Vice President Global Advertising & Brand Management, and Chief Marketing Officer
- Louise Parent: Executive Vice President and General Counsel
- Steve Squeri: Executive Vice President and Chief Information Officer
- Thomas Schick: Executive Vice President Corporate Affairs and Communications
Current members of the board of directors of American Express include:
- Daniel F. Akerson: Managing Director of The Carlyle Group
- Charlene Barshefsky: Former United States Trade Representative
- Ursula M. Burns: Senior Corporate Vice President and President of Business Group Operations Xerox Corporation
- Kenneth I. Chenault: Chairman and CEO of American Express Co.
- Ronald A. Williams: Chairman and CEO, Aetna, Inc.
- Peter Chernin: President and COO, News Corporation
- Vernon E. Jordan, Jr.: Senior Managing Director with Lazard Freres & Co. LLC
- Jan Leschly: CEO of Care Capital LLC
- Richard C. Levin: President, Yale University
- Richard A. McGinn: Former CEO of Lucent Technologies, Partner, RRE Ventures
- Edward D. Miller: Former President and CEO of AXA SA
- Frank P. Popoff: Chairman Chemical Financial Corp
- Robert D. Walter: Chairman and CEO Cardinal Health
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