American Express is poised to reverse a 10 percent cut in executive salaries imposed early this year. The company also will resume giving annual merit increases and retirement plan contributions in January, its chief executive said in a memo to employees.
The credit-card issuer cited an improving economic outlook, according to Bloomberg News. AmEx received $3.4 billion in TARP aid last December but repaid the government in June. Its shares are up 82 percent this year, the best-performing stock in the Dow Jones Industrial Average.
The company had cut salaries 10 percent for senior vice presidents and higher ranks this past February, a time when cardholder default rates were soaring. AmEx also cut expenses in other areas such as travel and entertainment, meetings, consulting and training. Those cuts will remain in place, Bloomberg reports.
The memo from CEO Kenneth Chenault noted "a somewhat more positive outlook about economic conditions in the coming months." But Chenault also said "we are likely to see a prolonged period of slow economic growth," even after the recession ends.
AmEx isn't alone in planning to lift recession-driven compensation cuts. Last month, a Watson Wyatt survey found that among big companies that had reduced salaries, 44 percent planned to restore pay levels within six months. And 24 percent of employers that reduced retirement-plan contributions expected to resume matching contributions in the next six months.