Shareholders May Be More Conservative With American Express Company's (NYSE:AXP) CEO Compensation For Now

Key Insights

• American Express' Annual General Meeting to take place on 6th of May
• Salary of US$1.50m is part of CEO Steve Squeri's total remuneration
• The overall pay is 812% above the industry average
• Over the past three years, American Express' EPS grew by 26% and over the past three years, the total shareholder return was 60%

CEO Steve Squeri has done a decent job of delivering relatively good performance at American Express Company (NYSE:AXP) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 6th of May. However, some shareholders will still be cautious of paying the CEO excessively.

See our latest analysis for American Express

Comparing American Express Company's CEO Compensation With The Industry

Our data indicates that American Express Company has a market capitalization of US$169b, and total annual CEO compensation was reported as US$36m for the year to December 2023. Notably, that's a decrease of 26% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

On comparing similar companies in the American Consumer Finance industry with market capitalizations above US$8.0b, we found that the median total CEO compensation was US$3.9m. Accordingly, our analysis reveals that American Express Company pays Steve Squeri north of the industry median. What's more, Steve Squeri holds US$46m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	US$1.5m	US$1.5m	4%
Other	US$34m	US$47m	96%
Total Compensation	US$36m	US$48m	100%

Speaking on an industry level, nearly 15% of total compensation represents salary, while the remainder of 85% is other remuneration. A high-salary is usually a no-brainer when it comes to attracting the best executives, but American Express paid Steve Squeri a nominal salary to the CEO over the past 12 months, instead focusing on non-salary compensation. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

American Express Company's Growth

Over the past three years, American Express Company has seen its earnings per share (EPS) grow by 26% per year. It achieved revenue growth of 9.3% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has American Express Company Been A Good Investment?

Boasting a total shareholder return of 60% over three years, American Express Company has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

American Express primarily uses non-salary benefits to reward its CEO. Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for American Express that investors should think about before committing capital to this stock.

Important note: American Express is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.