Kenneth Chenault will step down as Chairman CEO of American Express in February, to be succeeded by Stephen Squeri, the company said on Wednesday.
It will be the end of a 17-year run at the helm of Amex, and a 37-year career with the company. Named CEO in 2001, Chenault, 66, is among the first African Americans to run a Fortune 500 company, and he recently completed a two-year turnaround.
In a statement he said, "We're starting a new chapter from a position of strength and this is the right time to make the leadership transition to someone who's played a central role in all that we've accomplished."
American Express shares have struggled since the company ended its partnership with Costco Wholesale in February 2015. That co-branding partnership accounted for one in 10 Amex cards in circulation.
Since the day before American Express lost the Costco partnership, the stock has returned just 12 percent, far below the 30 percent return for the S&P 500 and the 41 percent gain in the Financial Select SPDR, according to FactSet.
Chennault's track record is a bit better over the longer term but still not spectacular. The stock has returned 5.4 percent annually since December 2000, right before his tenure began, according to FactSet. That's nearly double the 2.6 percent annual return of the financial sector since that time.
Squeri, 58, has been a vice chairman since 2015 and was group president of Amex's global corporate services group before that.
Tasked with guiding Amex into its next phase, Squeri is credited with building the company's commercial payments business and transforming its technology infrastructure in addition to leading the latest restructuring effort.
Amex's brand has been bolstered by association with its largest shareholder, Berkshire Hathaway, which holds a nearly 17 percent stake. "American Express is a very special company, one in which I first invested 53 years ago," Berkshire's Warren Buffett said in a statement. "Ken built on its storied history—not by abandoning traditional strengths, but by building on them and adding new ones."
After the bell, Amex also raised its guidance for full-year profit to $5.80 to $5.90 a share, up from the average forecast of analysts calling for EPS of $5.74. In the third quarter, Amex beat revenue expectations, reporting $8.44 billion versus the Street's expectation of $8.28 billion. Profit of $1.50 a share also beat the $1.48 expected.