In the backdrop of raging debate on huge bonus payouts, American Express has raised the annual base salary for its Chief Executive Officer Kenneth I Chenault by 60 per cent to $ 2 million.
“The base salary of Kenneth I Chenault, Chairman and Chief Executive Officer of the company, has been increased from USD 1,250,000 per annum to USD 2,000,000 per annum,” global credit card major American Express said in a filing to the Securities and Exchange Commission.
The total compensation package for Chenault in 2008 was little over USD 27 million.
Hit by the financial meltdown, American Express had received over USD 3 billion in bailout funds from the US government, which was repaid recently.
The issue of huge bonuses given to top executives has come in for severe criticism, and many of them even blamed such practices for the ravaging financial crisis.
Many financial institutions have moved to raise the base salary for its top executives while cutting down on bonuses.
Apart from Chenault, base salaries for the company’s Vice Chairman Edward P Gilligan, Group President (Global Services and Chief Information Officer) Stephen J Squeri and Executive Vice President and CFO Daniel T Henry have been increased.
The decision by the firm’s Compensation and Benefits Committee would be effective from February 1.
The Committee approved a shift in compensation mix by raising base salary, while reducing the aggregate compensation that generally could be earned through annual incentive awards, among others, the filing noted.
”... overall executive compensation programme for named executive officers continues to be weighted toward longer—term incentives, particularly stock—based awards,” it added.
Driven by increased consumer spending, American Express recorded a three—fold jump in its 2009 December quarter profit at USD 716 million.
In the year—ago period, the profit stood at USD 240 million.
