Amex CEO Replaces Competitive Executive Bonus System with Companywide Performance Model

American Express CEO Stephen Squeri has abolished the company's previous executive bonus system, which pitted business-unit chiefs against each other in a competition for investment capital and cash rewards. Squeri identified that this structure encouraged leaders to act as divisional owners rather than enterprise builders, fostering internal rivalries that hindered optimal resource allocation. The old model often led to tensions where executives defended their turf instead of prioritizing the company's best interests, a flaw exposed during the pandemic when rapid strategic shifts were necessary. Under the new incentive model, executive bonuses are no longer determined by individual unit performance relative to peers. Instead, they are tied directly to American Express’s overall corporate performance, including metrics such as earnings per share, revenue growth, and shareholder return. This change aims to unify the leadership team under a shared goal, ensuring that capital is allocated to the highest-return opportunities across the entire organization. While this approach risks allowing weaker performers to benefit from strong company years, it emphasizes collective accountability and disciplined performance management. Squeri’s strategy seeks to eliminate internal silos, promoting a culture where leaders sink or swim together, ultimately strengthening the company's operational unity and long-term strategic focus.