American Express (AXP) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

AMERICAN EXPRESS COMPANY

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

2021 Proxy Statement

POWERFUL BACKING STARTS WITH A POWERFUL PURPOSE WE’RE STRONGER TOGETHER We have a $1 billion action plan to promote diversity, equity and inclusion for colleagues, customers and communities. 100% We focus on inclusion and diversity by score on the Human Rights welcoming unique perspectives, experiences, and Campaign’s Corporate Equality Index since 2004, backgrounds across the organization and within based on our policies and practices that support our partnerships. LGBTQ+ inclusion. We back our communities 94% through sustainability initiatives of colleagues who participated in our annual ¶__’ū»ÆDÊĪ internal colleague survey said they would recommend American Express as a great place to work. We help small businesses stay in business by encouraging our customers to Shop Small® all year long and provide small business owners with resources and tools to help them thrive. This year, we’re especially focused on supporting small restaurants to help keep local kitchen doors open.

Executive Summary

Our Company’s Strategic Imperatives & Key Priorities for 2020

American Express is a globally integrated payments company that provides customers with access to products, insights and experiences that enrich lives and build business success. Our integrated payments platform includes card-issuing, merchant-acquiring and card network businesses. We are a leader in providing payments products and services to a broad range of customers including consumers, small businesses, mid-sized companies and large corporations around the world. Following two years of consistently strong financial performance driven by our success in executing against our strategic imperatives (detailed below), we quickly shifted our focus in 2020 to address the challenges of the COVID-19 pandemic. The pandemic has caused financial disruption for individuals and businesses around the world and the events of 2020 reinforced the important role that the business community plays in addressing both economic and social challenges. As a global company that employs thousands of people around the world, American Express has a long history of coming together as an organization to support our colleagues, customers and communities during challenging times. This past year we have intensified our commitments to be more intentional about how we show up for our colleagues, customers and communities, and to more effectively rally our resources to amplify our impact on a number of issues, including advancing diversity, equity and inclusion, advancing climate solutions, and building financial resiliency for our customers. Our framework for managing through the pandemic and the challenging economic environment is built on four principles:

The management team and the Board believe that these key priorities for managing through the cycle reflect the most important things to focus on during the pandemic to drive long-term value creation for the Company. We concentrated our efforts on these priorities in 2020 to address the near-term challenges of the pandemic, while remaining focused on the opportunities that would advance our four long-term strategic imperatives:

Business Performance

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Key 2020 Priorities for Managing Through the Cycle

2020 Financial Performance Highlights

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How our Compensation Program Supports our Business Strategy

Our executive compensation program is designed to support the longevity and stability of the Company by driving long-term business outcomes, promoting strong governance practices and encouraging responsible risk-taking. This is achieved by linking individual pay with the Company’s performance on a diverse set of measures as well as financial and strategic goals. Most senior executives’ compensation is variable and covers annual and multi-year performance periods. Long-term Incentive Awards are designed to align executives with the Company’s long-term performance using performance-based equity awards in the form of restricted stock units and stock options. Further, the Company scorecard incentivizes performance and includes key objectives in four categories: Shareholder, Customer, Colleague and Strategic Imperatives.

Our executive compensation program, including compensation principles and strategy, is discussed in detail under the Compensation Discussion and Analysis section of this proxy statement.

Our Board of Directors

The following provides current summary information about each director nominee. Our director nominees possess a range of diverse skills, backgrounds, experience and viewpoints that we believe are integral to an effective and well-functioning board. Detailed information about each nominee’s qualifications, experience, skills and expertise along with select professional and community contributions can be found starting on page 7.

Our Director Nominees

∎  Member     ●   Chair

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Director Nominee Demographics

Diversity of Skills, Viewpoints and Expertise

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Corporate Governance Highlights

		Board Structure and Independence

		Shareholder Rights

		Board Oversight

		Strong Corporate Governance Practices

For a detailed discussion of our corporate governance framework and our director nominees, please see “Corporate Governance at American Express” beginning on page 6.

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Corporate Governance at American Express

Item 1: Election of Directors for a Term of One Year

Our Board currently has 16 members. Fifteen of our directors are standing for re-election to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected and qualified. One of our current directors is retiring and not standing for re-election. For more information, please see “Our Retiring Director” on page 15. Our Board has appointed Laureen E. Seeger, Richard Starr and Kristina V. Fink as proxies to vote your shares on your behalf. The proxies intend to vote for the election of each of the 15 candidates nominated by the Board unless you indicate otherwise on your proxy or voting instruction form or when you vote by telephone or online. Each candidate has consented to being named in this proxy statement and serving as a director, if elected. However, if any nominee is not able to serve, the Board can either nominate a different person or reduce the size of the Board. If the Board nominates another individual, the persons named as proxies may vote for that nominee.

Our Director Nominees

Our director nominees hold and have held senior positions as leaders of various large, complex businesses and organizations and in government, demonstrating their ability to develop and execute significant policy and operational objectives at the highest levels. Our nominees include current and former chief executive officers, chief financial officers, chief operating officers and members of senior management of large, global businesses. Through these roles, our nominees have developed expertise in core business strategy, operations, finance, human capital management and leadership development, compliance, controls and risk management, as well as the skills to respond to rapidly evolving business environments and foster innovation and business transformation. Additionally, our nominees’ experience serving in government and on other boards bring valuable knowledge and expertise, including in the areas of public policy, governance, succession planning, compensation, financial reporting and regulatory compliance.

Detailed biographical information for each director nominee follows. We have included career highlights, other public directorships and select professional and community contributions along with the top qualifications, experience, skills and expertise that we believe each director brings to our Board. Our Board considered all the aforementioned attributes and the results of our annual board evaluations when deciding to re-nominate the following directors.

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Our Retiring Director

Anne Lauvergeon is retiring from our Board at the end of her current term and, therefore, will not stand for reelection at our Annual Meeting of Shareholders. We thank Ms. Lauvergeon for her service and wish her continued success in the future.

Our Board’s Composition

As illustrated by the director biographies on the previous pages, our Board is made up of a diverse group of leaders with substantial experience in their respective fields. Our Board believes that the combination of the various skills, qualifications and experiences of the director nominees contributes to an effective and well-functioning Board and that, individually and as a whole, the director nominees possess the necessary qualifications to provide effective oversight and insightful strategic guidance.

We continually review our Board’s composition to identify the skills needed for our Company both in the near term and into the future. Ongoing strategic board succession planning, along with our mandatory retirement age for directors, assures that the Board continues to maintain an appropriate mix of objectivity, skills and experiences to provide fresh perspectives and effective oversight and guidance to management, while leveraging the institutional knowledge and historical perspective of our longer-tenured directors. Over the next few years, several of our current Board members will retire due to our mandatory retirement age. Considering this, our Board engaged a third-party consultant in 2019 to gain an outside perspective and help support Board succession processes and assessments. This workstream is actively underway and our Board added three new members in 2020 and two new members in 2021. We believe that increasing the size of our Board in the short term to allow for knowledge transfer and information sharing between newer directors and retiring directors will help ensure an orderly and effective Board succession process over the next few years.

Ideal Director Nominee Attributes

The Nominating, Governance and Public Responsibility Committee assesses potential candidates based on their history of achievement, the breadth of their business experiences, whether they bring specific skills or expertise in areas that the committee has identified as desired and whether they possess personal attributes and experiences that will contribute to the sound functioning of our Board.

Diversity is also a key consideration in our nomination and succession planning processes. Our Corporate Governance Principles provide that the Board should be diverse, engaged and independent. When reviewing potential board nominees, the Nominating, Governance and Public Responsibility Committee considers the holistic diversity of the Board, including gender and race, and does not discriminate on the basis of ethnicity, sexual orientation, culture or nationality. Specifically, we seek individuals who:

Process for Identifying and Adding New Directors

The Nominating, Governance and Public Responsibility Committee uses a professional search firm to help identify, evaluate and conduct due diligence on potential director candidates. Using a professional search firm supports the committee in conducting a broad search and looking at a diverse pool of potential candidates. The committee also maintains an ongoing list of potential candidates and considers recommendations made by the Board’s independent directors.

In addition, the Nominating, Governance and Public Responsibility Committee considers all shareholder recommendations for director candidates and applies the same standards in considering candidates submitted by shareholders as it does in evaluating all other candidates. Shareholders can recommend candidates by writing to the committee in care of the Company’s Deputy Corporate Secretary, whose contact information is on page 29. Shareholders who wish to submit nominees for election at an annual or special meeting of shareholders should follow the procedure described on page 91.

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The Nominating, Governance and Public Responsibility Committee identifies and adds new directors using the following process:

 

1		Collect Candidate Pool

 

Independent search firms

 

Independent director recommendations

 

Shareholder recommendations

 

 

 

2		Holistic Candidate Review

Potential candidates are comprehensively reviewed and the subject of rigorous discussion during Nominating, Governance and Public Responsibility Committee meetings and Board meetings.

The candidates that emerge from this process are interviewed by members of the Nominating, Governance and Public Responsibility Committee and other Board members, including the Chairman and Lead Independent Director.

 

During these meetings, directors assess candidates on the basis of their skills and experience, their personal attributes and their expected contribution to the diversity of skills, experiences and backgrounds on our Board.

 

Due diligence is conducted by a third party, including soliciting feedback from other directors and persons outside the Company.

 

 

 

3		Recommendation to the Board

 

The Nominating, Governance and Public Responsibility Committee presents qualified candidates to the Board for review and approval.

 

 

Seven New Independent Directors Added Since 2017
		Racial, ethnic and gender diversity
		Current and former CEOs   Current and former CFOs
		Regulatory expertise
		Global business leaders
		M&A and investment expertise
		Technology and cybersecurity expertise
		Hospitality industry expertise
		Financial services, banking and payments industry expertise

 

 

Director Onboarding

The Company maintains a comprehensive director onboarding program. In 2020, due to the COVID-19 pandemic, the Company’s director onboarding program was transitioned to a virtual experience to facilitate the seamless integration of new directors into their roles, all while maintaining consistency, integrity and efficiency within the Company’s existing onboarding process. The Company’s virtual director onboarding program includes all elements of the in-person experience and each onboarding session is individually tailored to take into account a director’s prior experience and background. In addition, new processes were developed for the virtual environment to introduce new directors and facilitate integration on the Board.

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Our Board Evaluation Process

Our Board continually seeks to improve its performance. Throughout the year, our Lead Independent Director has regular one-on-one discussions with our Board members and conveys their feedback on an ongoing basis to our Chairman. Separately, our Chairman, Chief Legal Officer and Corporate Secretary, and Deputy Corporate Secretary each routinely communicates with our Board members to obtain real-time feedback. We believe that this continuous feedback cycle along with our formal annual evaluation process helps to ensure the continued effectiveness of our board.

Our Nominating, Governance and Public Responsibility Committee oversees the formal annual evaluation process of the effectiveness of our Board and its standing committees. In 2020, our Board engaged a third-party evaluation firm to augment the Board’s annual written evaluation process. The third-party evaluation firm conducted confidential interviews with each director that included discussions of the overall functioning and effectiveness of the Board and its standing committees, the leadership structure of the Board as well as a peer review. The evaluation firm presented the findings to the Board for consideration and feedback. Our Board believes that employing an independent third-party evaluation firm to assist in the evaluation process provided valuable insights and will contribute to the overall functioning and ongoing effectiveness of the Board and will consider doing so periodically going forward.

In addition, the annual written evaluation questionnaires for the Board and standing committees, described further below, were also utilized in the 2020 evaluation process to maintain important year-over-year comparisons.

Our annual Board evaluations cover the following areas:

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Our Board Leadership Structure

We believe that strong independent leadership is essential for our Board to effectively perform its primary oversight functions. It is also important for the Board to retain flexibility to determine its leadership structure based on the particular composition of the Board, the individuals serving in leadership positions, the needs and opportunities of the Company as they change over time and the additional factors described below.

The Board feels that a combined Chairman and CEO role allows the Company to effectively convey its business strategy and core values to shareholders, customers, colleagues, regulators and the public in a single, consistent voice. The Board also recognizes the necessity of having a strong Lead Independent Director with a clearly defined role and set of responsibilities (as detailed below) where there is a combined Chairman and CEO or where the Chairman is not independent. Our Board has been led by Mr. Squeri, our Chairman and CEO, and Mr. Williams, our Lead Independent Director, since 2018. Messrs. Squeri and Williams have forged a strong, collaborative, candid and productive working relationship. Their leadership is supplemented by engaged and expert committee chairs along with independent-minded, skilled and committed directors.

Our Board and Nominating, Governance and Public Responsibility Committee recently completed its annual review of the Board’s leadership structure. The review considered the insightful, effective and sound leadership provided by Mr. Williams during his tenure as Lead Independent Director as well as the tangible benefits of having a Chairman and CEO with an operational focus and extensive company experience given the global and complex nature of our business. In addition, the review also considered how the Company’s robust corporate governance practices combined with the Board’s current leadership structure helps to ensure both clear, strategic alignment throughout the Company and independent oversight of management. Taking all of this into account, our Board continues to believe that our current structure, led by Messrs. Squeri and Williams, allows the Board to focus on key strategic, policy and operational issues, provides critical and effective leadership (both internally and externally), and creates an environment in which the Board can work effectively and appropriately challenge management, all of which we believe will benefit the long-term interests of our shareholders.

Strong Lead Independent Director with Defined Role and Responsibilities

The Board recognizes that in circumstances like ours where the positions of Chairman and CEO are combined, a strong Lead Independent Director with a clearly defined role and set of responsibilities is paramount for constructive and effective leadership.

Therefore, the position of Lead Independent Director at American Express comes with a clear mandate and significant authority and responsibilities that are detailed in our Board-approved Corporate Governance Principles.

Our Corporate Governance Principles provide that the Lead Independent Director will:

Preside at all meetings of the Board at which the Chairman is not present, including the executive sessions of the independent directors, and apprise the Chairman of the issues considered and decisions reached at those sessions;

Call additional meetings of independent directors as needed;

Lead the Board in putting forth its expectations for “tone at the top”;

Meet regularly with the Chairman and serve as a liaison between the Chairman and the independent directors;

Facilitate effective and candid communication to optimize Board performance;

Advise the Chairman of the Board’s informational needs, and review and approve the types of information sent to the Board and Board meeting agendas;

Review and approve the schedule of Board meetings to assure there is sufficient time for discussion of all agenda items;

Monitor and coordinate with the Chairman on appropriate governance issues and developments; and

Be available as appropriate for consultation and direct communication with major shareholders.

In addition, all Board members are encouraged to propose the inclusion of additional Board agenda items that they deem necessary or appropriate in carrying out their duties. All Board members have direct access to the Chairman and Lead Independent Director.

Our Board’s Primary Role and Responsibilities, Structure and Processes

Our Board bears the responsibility for the oversight of management on behalf of our shareholders in order to ensure long-term value creation. In that regard, the primary responsibilities of our Board include, but are not limited to (i) oversight of the Company’s annual business plan, (ii) corporate strategy and goals, (iii) ongoing succession planning and talent management and (iv) risk management.

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How our Board Oversees our Annual Business Plan and Corporate Strategy

Our Board oversees our strategic direction and business activities. At the beginning of each year, our senior management presents our consolidated annual business plan to the Board, and the Board discusses the Company’s results relative to the plan periodically throughout the year. Each year, the Board typically engages in a two-day offsite strategy meeting with management where it conducts a comprehensive review and discussion of the Company’s strategic goals over the short-, medium- and long-term, as well as management’s plans to achieve such goals. In addition, at least once a year, each of the global business groups presents an in-depth review of their business to the Board, which includes a review of the strategic goals of the business and business performance relative to business strategy.

		In 2020, in response to the COVID-19 pandemic, our Board met regularly to analyze and assess the impact of the pandemic on the Company’s strategy and performance. Our Board and management discussed the Company’s strategy and business throughout the year. In addition, our Board engaged in a virtual two-day meeting to conduct a deep dive into the Company’s strategic goals, timeline to achieve these goals and execution plans.

How our Board Engages in Ongoing CEO and Key Executive Succession Planning

Our Board ensures that we have the right management talent to pursue our strategies successfully.

The entire Board is involved in the critical aspects of the CEO succession planning process, including establishing selection criteria that reflect our business strategies, identifying and evaluating potential internal candidates and making key management succession decisions. Succession and development plans are regularly discussed with the CEO as well as without the CEO present in executive sessions of the Board. The Board makes sure that it has adequate opportunities to meet with and assess development plans for potential CEO and senior management successors to address identified gaps in skills and attributes. This occurs through various means, including informal meetings, Board dinners, presentations to the Board and committees, attendance at Board meetings and the comprehensive annual talent review. In addition, the Board has developed an emergency CEO succession plan.

The Board also oversees management’s succession planning for other key executive positions. Our Board calendar includes at least one meeting each year at which the Board conducts a detailed talent review which includes a review of the Company’s talent strategies, leadership pipeline and succession plans for key executive positions.

Additionally, the detailed results of the Company’s Annual Colleague Experience Survey are reviewed each year with the Board. Our Annual Colleague Experience Survey provides insights into employee satisfaction, leadership efficacy, learning opportunities, and career development. The insights provided by the survey help improve the American Express colleague experience, workplace culture and business results. We believe that maintaining our strong workplace culture, adhering to our Blue Box Values and ensuring that our people feel included, valued, recognized and backed will help us attract, retain and develop the right talent to lead the Company and successfully execute our corporate strategy. Please see page 39 for additional information about our workplace culture.

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How our Board Oversees Risk Management

Board of Directors

We are committed to Board-level risk management. Our Board monitors our “tone at the top” and risk culture and oversees emerging strategic risks. Risk management is overseen by our Board through three Board committees: Risk, Audit and Compliance and Compensation and Benefits. Each committee consists entirely of independent directors and provides regular reports to the Board regarding matters reviewed at their committee. The committees meet regularly in executive sessions with our Chief Financial Officer, Chief Legal Officer and Corporate Secretary, Chief Risk Officer, Chief Compliance & Ethics Officer, Chief Audit Executive and other members of senior management with regard to our risk management processes, controls, talent and capabilities.

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Board Oversight of Information and Cybersecurity

We are a global financial services company and understand the substantial operational risks for companies in our industry as well as the importance of preserving the trust of our customers and protecting personal information. To that end, we have an extensive cybersecurity governance framework in place. Our Board receives reports on cybersecurity at least once a year and our Risk Committee receives reports on cybersecurity at least twice a year, including in at least one joint meeting with the Audit and Compliance Committee, and all receive ad hoc updates as needed. In addition, the Risk Committee annually approves the Company’s Information Security Program.

Our information and cybersecurity program is designed to protect the confidentiality, integrity and availability of information and information systems from unauthorized access, use, disclosure, disruption, modification or destruction. The program is built upon a foundation of advanced security technology, a well-staffed and highly trained team of experts, and robust operations based on the National Institute of Standards and Technology Cybersecurity Framework. This consists of controls designed to identify, protect, detect, respond to and recover from information and cybersecurity incidents. The framework defines risks and associated controls which are embedded in our processes and technology. Those controls are measured and monitored by a combination of subject matter experts and a security operations center with our integrated cyber detection, response and recovery capabilities.

Program Highlights

 

We have a robust Cyber Crisis Response Plan in place that provides a documented framework for handling high severity security incidents and facilitates coordination across multiple parts of the Company.

 

We deploy a defense-in-depth strategy with multiple layers of controls including embedding security into our technology investments.

 

We invest in threat intelligence and are active participants in industry and government forums to improve sector cybersecurity defense.

 

We collaborate with our peers in the areas of threat intelligence, vulnerability management and response and drills.

 

We routinely perform simulations and drills at both a technical and management level.

 

We incorporate external expertise and reviews in all aspects of our program.

 

All colleagues receive annual cybersecurity awareness training.

 

We continuously assess the risks and changes in the cyber environment and dynamically adjust our program and investments as appropriate and have considered the enhanced cybersecurity risks as a result of the COVID-19 pandemic and work-from-home arrangements.

How our Management Oversees Risk

We use our comprehensive Enterprise Risk Management (ERM) program to identify, aggregate, monitor and manage risks. The program also defines our risk appetite, governance, culture and capabilities. The implementation and execution of the ERM program is headed by our Chief Risk Officer.

There are several internal management committees, including the Enterprise Risk Management Committee (ERMC), chaired by our Chief Risk Officer. The ERMC is the highest-level management committee to oversee all firm-wide risks and is responsible for risk governance, risk oversight and risk appetite. It maintains the enterprise risk appetite framework and monitors compliance with limits and escalations defined in it. The ERMC oversees implementation of certain risk policies Company-wide. The ERMC reviews key risk exposures, trends and concentrations, significant compliance matters, and provides guidance on the steps to monitor, control and report major risks.

Our Board Committees

Our Board’s current standing committee membership information is listed on the following pages. Effective March 8, 2021, our Board approved revisions to the membership of our standing committees (see page 3 for our Board’s current committee membership). Each current member of our standing committees and each member in 2020 was independent and fulfilled the requirements applicable to each committee on which they served.

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Board Committee Responsibilities

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Our Corporate Governance Framework

We have adopted Corporate Governance Principles that, together with the charters of the four standing committees of the Board (Audit and Compliance, Compensation and Benefits, Nominating, Governance and Public Responsibility and Risk), our Code of Conduct (which constitutes our code of ethics for colleagues) and the Code of Business Conduct for Members of the Board of Directors, provide our governance framework. Key governance policies and processes also include our Whistleblower Policy, our comprehensive Enterprise Risk Management Program, our commitment to transparent financial reporting and our systems of internal checks and balances. Comprehensive management policies, many of which are approved at the Board committee level, guide the Company’s operations.

Our Board, along with management, regularly reviews our Corporate Governance Principles and practices to ensure that they are appropriate and reflect our high standards and Blue Box Values. In reviewing our Corporate Governance Principles and making recommendations, the Nominating, Governance and Public Responsibility Committee considers the views of shareholders expressed to us in engagement meetings, as well as publicly available discourse on governance.

You may view the following documents by clicking on the “Corporate Governance” link found on our Investor Relations webpage at http://ir.americanexpress.com and then selecting “Governance Framework.” You may also access our Investor Relations webpage through our main website at www.americanexpress.com by clicking on the “About American Express” link, which is located at the bottom of the Company’s homepage. You may also obtain free copies of the following materials by writing to our Company’s Deputy Corporate Secretary:

Majority Voting Standard for Director Elections

In a non-contested election, directors are elected by a majority of “for” votes cast by shareholders. A non-contested election is an election where the number of nominees is the same as the number of directors to be elected. If a director receives a greater number of votes “against” than votes “for” his or her election, the director is required to immediately submit his or her resignation to the Board. The Board, excluding such individual, will decide whether or not to accept such resignation and will promptly disclose and explain its decision in a Form 8-K filed with the SEC.

In a contested election, the director nominees who receive the plurality of votes cast are elected as directors. Under the plurality standard, the number of persons equal to the number of vacancies to be filled who receive more votes than other nominees are elected to the Board, regardless of whether they receive a majority of votes cast. An election is considered contested under our Certificate of Incorporation if there are more nominees than positions on the Board to be filled at the meeting of shareholders as of the fourteenth day prior to the date on which we file our definitive proxy statement with the SEC.

Director Membership on Other Boards

Our Board expects individual directors to allot sufficient time and attention to Company matters and to use their judgment and consider all of their commitments when accepting additional directorships of other corporations or charitable organizations. Specifically, our Corporate Governance Principles provide that a director should not serve on the boards of more than four public companies (including ours) or, if the director is an active Chief Executive Officer or equivalent of another public company, on the boards of more than three public companies (including ours). Additionally, a director who serves on the Audit and Compliance Committee should not serve on more than two other public company audit committees.

All of our current directors comply with our policies set forth above. However, we are aware that some of our shareholders have their own board membership policies that are more restrictive than our policy. When a director joins our Board and annually thereafter, as part of our evaluation process, we ensure that each director has sufficient time to be a productive member of our Board and has exhibited as much throughout the year. Our Board believes that the above policy strikes the right balance by allowing for the experience gained through membership on other boards and the time commitment needed for engaged board service.

Director Attendance

Our meeting attendance policy is set forth in our Corporate Governance Principles. During 2020, our Board met 13 times and our committees met 31 times. All directors attended 75% or more of the meetings of the Board and Board committees on which they served in 2020.

All of our directors serving on our Board at the time of our 2020 Annual Meeting of Shareholders attended the meeting virtually due to the COVID-19 pandemic. Our Board strongly encourages all of its members to attend the Annual Meeting of Shareholders but understands there may be exigent circumstances, especially during these unprecedented times. Despite the extraordinary circumstances created by the pandemic, the Board continued to meet regularly on a virtual basis throughout the year.

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Executive Sessions

Executive sessions of independent directors, led by our Lead Independent Director, enable the Board to discuss matters, such as strategy, CEO and senior management performance and compensation, succession planning and board effectiveness, without management present. Any director may request additional executive sessions of independent directors. During 2020, our independent directors met in executive session at each regularly scheduled Board meeting.

Our Board’s Size

Our Corporate Governance Principles provide that while the Board need not adhere to a fixed number of directors, generally a board of 12-14 directors offers a sufficiently large and diverse group to address the important issues facing the Company and provides a wide range of perspectives, while being small enough to encourage personal involvement and discussion. We recognize that at times the number of directors on our Board may be higher than this range during periods of succession planning-related transitions, and when this occurs, expect the size of our Board to subsequently come back to within this range (12-14) as directors do not stand for re-election in accordance with our mandatory retirement age or to pursue other interests.

Proxy Access

A shareholder or group of no more than 20 shareholders that has owned at least 3% of our common shares for at least three years may nominate directors to our Board and include the nominees in our proxy materials to be voted on at our Annual Meeting of Shareholders. The maximum number of shareholder nominees that will be included in our proxy materials with respect to any such Annual Meeting of Shareholders is the greater of (i) two or (ii) 20% of directors to be elected. A shareholder who seeks to nominate a director or directors to our Board must provide proper notice to the Company’s Deputy Corporate Secretary under the terms of our bylaws.

Trading in Company Securities

We prohibit hedging and pledging transactions in Company securities by executive officers and directors. Employees that are not executive officers are also prohibited from hedging Company securities and discouraged from pledging Company securities and may only do so if certain criteria are met.

Additionally, we require members of senior management as well as our directors to pre-clear every transaction in Company securities for themselves, their immediate family members, and any family trust with the Deputy Corporate Secretary. This includes gifts, transactions in discretionary accounts and non-routine transactions such as optional cash purchases in the Dividend Reinvestment Plan.

Our Board’s Independence

Our Corporate Governance Principles provide that a substantial majority of our directors will meet the criteria for independence required by the New York Stock Exchange (NYSE). A director is considered independent if the Board determines that he or she does not have a material relationship with the Company. In making its annual independence determinations, the Board considers transactions between each director nominee and the Company. Our Board has established guidelines to assist it in determining director independence. These guidelines can be found within our Corporate Governance Principles and cover, among other things, employment and compensatory relationships, relationships with our auditors, customer and business relationships, and contributions to nonprofit organizations.

Based on our guidelines, the Board determined in March 2021 that all of its members in 2020, other than Mr. Squeri, and all of the Board’s director nominees for election at the 2021 Annual Meeting of Shareholders, other than Mr. Squeri, are independent.

Effective March 1, 2021, Ambassador Barshefsky retired as a partner from the law firm of WilmerHale, an international law firm based in Washington, D.C. From time to time and in the ordinary course of its business, WilmerHale provides legal services to American Express that we consider to be de minimis in nature. Ambassador Barshefsky does not provide any such legal services, and she does not receive any compensation from the firm that is generated by or related to our payments to WilmerHale for such services. The Nominating, Governance and Public Responsibility Committee determined, based on fees paid to the firm over the past three years, that WilmerHale does not perform substantial legal services for the Company on a regular basis. The fees and expenses paid to WilmerHale represented less than 1% of the firm’s annual revenue in each of the past three years and represented less than 0.1% of American Express’ revenues in each such year. Further, the Nominating, Governance and Public Responsibility Committee reviewed the nature of American Express’ engagement of WilmerHale and the services rendered, including the expertise and relevant experience of the firm and the specific partners engaged to work on the matters for which we have engaged the firm, and determined that Ambassador Barshefsky’s service on American Express’ Board should not impair American Express’ ability to engage WilmerHale when American Express determines such engagements to be appropriate and in our best interests. The committee is satisfied that WilmerHale, when engaged for legal work, is chosen by American Express’ legal group on the basis of the directly relevant factors of experience, expertise and efficiency. After considering the foregoing, the committee determined and recommended to the Board that American Express’ professional engagement of WilmerHale does not impair Ambassador Barshefsky’s independence.

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Shareholder Engagement

Our Board’s Commitment to Shareholder Engagement

WHY WE ENGAGE

Our directors and management recognize the benefits that come from robust dialogue with shareholders and other relevant parties and we have embraced an active engagement strategy for many years. We engage with shareholders throughout the year in order to:

 

Provide visibility and transparency into our business, our performance and our corporate governance, ESG and compensation practices;

 

Discuss with our shareholders the issues that are important to them, hear their expectations for us and share our views; and

 

Assess emerging issues that may affect our business, inform our decision making, enhance our corporate disclosures and help shape our practices.

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Following our 2020 Annual Meeting of Shareholders, we engaged with shareholders representing approximately 41% of our outstanding shares on corporate governance, ESG, executive compensation and related matters. During these meetings, depending on the investor’s priorities, we discussed and sought direct feedback on a broad number of issues including company strategy and performance, board composition, ESG and executive compensation programs. The below table provides a snapshot of our ongoing engagement process and outcomes.

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How to Communicate with our Board

You may communicate with the Board or an individual director by letter, email or telephone, directed in care of the Company’s Deputy Corporate Secretary, who will forward your communication to the intended recipient. However, at the discretion of the Deputy Corporate Secretary, materials considered to be inappropriate or harassing, unsolicited advertisements, or promotional materials and invitations to conferences may not be forwarded.

If you have an inquiry about our financial statements, accounting practices or internal controls, please direct your concern to the Chair of the Audit and Compliance Committee. If the inquiry relates to our governance practices, business ethics or corporate conduct, it should be directed to the Chair of the Nominating, Governance and Public Responsibility Committee or the Lead Independent Director. Matters relating to executive compensation may be directed to the Chair of the Compensation and Benefits Committee. If you are unsure of the category to which your concern relates, you may communicate it to any one of the independent directors, to the Lead Independent Director or to the Chairman.

Please direct such communications in care of the Deputy Corporate Secretary as follows:

Kristina V. Fink

Deputy Corporate Secretary

American Express Company

200 Vesey Street

New York, NY 10285

(212) 640-2000

corporatesecretarysoffice@aexp.com

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Compensation of Directors

The Nominating, Governance and Public Responsibility Committee reviews director compensation and seeks to compensate our directors in a manner that attracts and retains highly qualified directors and aligns the interests of our directors with those of our long-term shareholders. In 2019, the committee engaged an independent compensation advisory firm, Semler Brossy Consulting Group, to assist the committee in its review of the competitiveness and structure of the Company’s non-management director compensation. This review included a competitive benchmarking of our director compensation against the companies that our Compensation and Benefits Committee examines as a reference when examining the competitiveness of our executive compensation practices, as well as the S&P 100 and certain financial institutions. After completing its review, the Nominating, Governance and Public Responsibility Committee recommended modest increases to our program effective January 1, 2020, in order to better position our program from a competitive standpoint going forward, as described below. No changes were made to the Company’s non-management director compensation programs for 2021.

The following table provides information on the 2020 compensation of non-management directors who served for all or a part of 2020. We reimburse directors for reasonable out-of-pocket expenses attendant to their board service.

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The balances in directors’ SEU accounts as of December 31, 2020 are set forth in the table below. These amounts represent the aggregate number of SEUs granted under the SEU Plan for all years of service as a director and additional units credited as a result of the reinvestment of dividend equivalents and, for directors who participated in the SEU option under our deferred compensation plan for directors, retainer amounts deferred into their SEU account and dividend equivalents thereon.

Director Stock Ownership

Our Corporate Governance Principles provide that non-management directors are required to obtain a personal holding of shares (directly or through SEUs) with a value of $1 million within five years of joining the Board. All non-management directors have achieved or are on track to achieve this requirement during the required time period.

Director and Officer Liability Insurance

We have an insurance program in place to provide coverage for director and officer liability. The coverage provides that, subject to the policy terms and conditions, the insurers will: (i) reimburse us when we are legally permitted to indemnify our directors and officers; (ii) pay losses, including settlements, judgments and legal fees, on behalf of our directors and officers when we cannot indemnify them; and (iii) pay our losses resulting from certain securities claims. A portion of the insurance program is blended with certain other insurances covering the Company. The insurance program is effective from November 30, 2020 to November 30, 2021 and is provided by a consortium of insurers. ACE American Insurance Company and XL Specialty Insurance Company are the lead insurers with various other insurers providing excess coverage. We expect to obtain similar coverage upon expiration of the current insurance program. The annual premium for the insurance program is approximately $5.2  million.

Certain Relationships and Transactions

In the ordinary course of our business, we engage in transactions, arrangements and relationships with many other entities, including financial institutions and professional organizations. Some of our directors, director nominees, executive officers, greater than 5% shareholders, and their immediate family members (each, a Related Person) may be directors, officers, partners, employees or shareholders of these entities. We carry out transactions with these entities on customary terms and, in many instances, these Related Persons may not have knowledge of them. To the Company’s knowledge, since January 1, 2020, no Related Person has had a material interest in any of our ongoing business transactions or relationships except as described on the following page.

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Our Related Person Transaction Policy

Our written Related Person Transaction Policy governs company transactions, arrangements and relationships involving more than $120,000 in which a Related Person has a direct or indirect material interest (Related Person Transactions). Under the policy, Related Person Transactions must be approved by the Nominating, Governance and Public Responsibility Committee, other than certain pre-approved transactions (described below). The Committee will only approve a transaction if, after reviewing the relevant facts and circumstances, it determines that the transaction is consistent with the best interests of the Company. In the event we become aware of a Related Person Transaction that was not approved under the policy, the Committee will consider the options available, including ratification, revision or termination of the transaction. The policy does not supersede any other company policy or procedure that may apply to any Related Person Transaction, including our Corporate Governance Principles and codes of conduct.

The Company’s Corporate Secretary is responsible for assisting the Nominating, Governance and Public Responsibility Committee in carrying out its responsibilities, and management is required to present to the committee the material facts of any transaction that it believes may require review. In cases when it is impracticable or undesirable to delay a decision on a proposed transaction until the next meeting of the Nominating, Governance and Public Responsibility Committee, the Chair may review and approve the transaction and then report any approval to the full committee at its next regularly scheduled meeting. If a matter before the Nominating, Governance and Public Responsibility Committee involves a member of the committee, the member must be recused and may not participate in deliberations or vote on the matter.

Pre-Approved Categories of Related Person Transactions

The Nominating, Governance and Public Responsibility Committee has pre-approved certain categories of transactions as being consistent with the best interests of the Company. These categories, which may exceed the proscribed threshold for Related Person Transactions, include but are not limited to, director and executive officer compensation, use of Company products and services, transactions involving indebtedness to the Company, certain banking-related transactions, immaterial ordinary course transactions with other entities, charitable contributions and indemnification payments.

Related Person Transactions

Our executive officers and directors may from time to time take out loans from certain of our subsidiaries on the same terms that these subsidiaries offer to the general public. For example, our U.S. card-issuing bank may extend credit to our directors and executive officers under our charge or lending products. All indebtedness from these transactions is in the ordinary course of our business and is on the same terms, including interest rates and collateral, in effect for comparable transactions with other people. Such indebtedness involves normal risks of collection and does not have features or terms that are unfavorable to our subsidiaries. Our executive officers and directors may also enter into transactions with us involving other goods and services, such as travel services and investments in deposit products offered by subsidiaries of the Company. These transactions are also in the ordinary course of our business, and we provide them on terms that we offer to our customers generally. Occasionally, we may have employees who are related to our executive officers, directors or director nominees. We compensate these individuals in a manner consistent with our practices that apply to all employees. The sister-in-law of Mr. Squeri, our Chairman and CEO, is employed by the Company in a non-executive position and received compensation in 2020 of between $240,000 and $270,000. The compensation and other terms of employment of Mr. Squeri’s sister-in-law are determined on a basis consistent with the Company’s human resources policies.

Certain executive officers, directors and members of their immediate families are directors, employees or have equity interests in companies with whom the Company has entered into ordinary course business relationships from time to time and with whom the Company may enter into additional ordinary course business relationships. These may include ordinary course merchant acceptance relationships pursuant to which these companies accept our charge and credit card products and pay us fees when their customers use these cards, as well as use of the Company’s cards and financial and other products and services, including extensions of credit, on terms and conditions similar to those available to other customers generally. From time to time, we may enter into joint marketing or other relationships with one or more of these companies in the ordinary course that encourage customers to apply for and use our cards. We have periodically engaged Martellus Group (Martellus), a consulting company where the spouse of our Chief Risk Officer, Mr. Raymond Joabar, was a co-owner. Mr. Joabar’s spouse sold her interest in Martellus in June 2020 and retained no beneficial interest therein. Historically, Martellus had small engagements with various parts of the Company’s marketing and serving organizations. Each transaction was conducted on, and all services were provided in, the ordinary course of business and on arm’s-length terms. While Mr. Joabar’s spouse was a co-owner, she was not in any client-facing roles and primarily served as the back-office administrator for Martellus. In 2020, we made aggregate payments to Martellus of approximately $975,218 for consulting services. We also may provide ordinary course commercial card and bill payments services or business insights to some of these companies, for which these companies pay fees to us. We may engage in other commercial transactions with these companies and pay or receive fees in those transactions. We have a number of similar ordinary course relationships with Berkshire Hathaway Inc. and its subsidiaries. We have also purchased insurance and other products from subsidiaries of Berkshire Hathaway Inc. in the ordinary course of business and on arm’s-length terms. Additionally, the Company may from time to time make charitable contributions to nonprofit organizations where our directors or executive officers are directors or trustees.

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How We Approach Environmental, Social and Governance (ESG)

Our approach to our ESG work is a natural extension of both our mission – to become essential to our customers by providing differentiated products and services to help them achieve their aspirations – and our commitment to doing what is right. We deliver value for our shareholders, colleagues, customers, communities and other stakeholders by investing financial and human resources in ways that address their social, environmental and economic needs.

We view sustainable value creation through many lenses:

Our approach is underscored by disciplined risk management that helps us endure as a place where people want to work, invest and do business.

ESG Strategy and Oversight Framework

In 2020, we completed a comprehensive assessment to update our priority environmental, social and governance issues. One key insight from the assessment was the interconnectedness of many key ESG issues, such as the impact that inclusion and diversity, climate change and financial resiliency have on important priorities like colleague attraction and retention, customer satisfaction and community resiliency. From these findings, we developed a framework to drive our ESG strategy moving forward.

Governance

At the Board level, the Nominating, Governance and Public Responsibility Committee reviews our ESG strategy and Corporate Social Responsibility (CSR) program, monitors progress against our goals and provides guidance on our efforts. Day to day, our CSR team works with colleagues throughout the Company to shape our efforts and monitor progress on key issues. Additional information can be found under the Governance & Corporate Responsibility tab on our Investor Relations website.

Our Executive Committee reviews and evaluates performance and long-term goals with respect to ESG matters for the Company. In 2020, we launched a new cross-functional ESG Steering Committee, led by senior executives from across the Company, to help guide our ESG strategy and related policies and programs. To support the integration of this strategy into our business, the ESG Steering Committee plans to develop new goals and metrics.

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Strategic Engagement

Our strategy begins by identifying our key stakeholders, then engaging with them to understand the ESG issues that matter to them, as well as the impact those issues have on our business. We have identified eight key stakeholder groups based on their impact on our business activities, including shareholders, colleagues, customers (consumers, small businesses, mid-sized companies and large corporations), governments and regulators, suppliers, community and nonprofit organizations, ESG research and rating agencies, and partners and peers. Our continued engagement with these stakeholders helps ensure we are meeting their expectations and advancing our efforts to operate responsibly. In 2020, as part of our comprehensive ESG issue assessment, we interviewed more than 30 internal and external stakeholders, including Executive Committee members, shareholders, customers, strategic partners, suppliers, nonprofit leaders and others. We also conducted an ESG survey of our colleague base across the Company.

Operations and Reporting Enhancements

In 2020, we expanded our ESG reporting and operational practices, including:

Office of Enterprise Inclusion, Diversity and Business Engagement

In 2020, we launched a new Office of Enterprise Inclusion, Diversity and Business Engagement. This office, partnering closely with our Executive Committee, Chief Colleague Inclusion & Diversity Officer and Colleague Advisory Networks worldwide, is working to create new and expand existing initiatives across the enterprise as we intensify our focus on driving meaningful, long-term change in our culture and the way we operate. The framework for this effort spans across six pillars, Brand, Culture, Colleague, Customer, Business and Community with each led by members of the Executive Committee charged with developing comprehensive, multi-year plans that include timelines, accountabilities and metrics for driving progress within their respective pillars.

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Our ESG Ratings

We monitor our performance across several environmental, social and governance-related ratings and rankings. Highlights from 2020 include:

2020 HIGHLIGHTS

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$1 Billion Action Plan to Promote Diversity, Equity and Inclusion for Colleagues, Customers and Communities

In 2020, we announced our action plan to advance diversity, equity and inclusion priorities across the Company. The plan includes a series of internal and external initiatives, commitments and resources, supported by $1 billion in investments toward enhancing diverse representation and equal opportunities for our colleagues, customers and communities. Some of our new commitments include:

Diversity, Equity and Inclusion

We actively cultivate an inclusive and diverse workplace where every voice is valued, teamwork is rewarded and different points of view are celebrated. We are also committed to making sure our colleagues represent the diversity within the communities where we work and live. Our senior executives take responsibility for delivering on our commitments and seeking diverse representation at all levels. Our Company scorecard, which is used to measure our performance and progress on our business priorities, includes a clear set of diversity goals and overall talent metrics. We set our scorecard metrics annually and review our progress against them regularly to hold ourselves accountable. For more information, please refer to the Compensation Discussion Analysis section of this proxy statement.

2020 Global Workforce

We value having a diverse workforce that brings broad perspectives to our Company and helps meet the diverse needs of our stakeholders.

of our Executive Committee is female or from diverse races and ethnic backgrounds		of our total global workforce is female		of our U.S. workforce is from diverse races and ethnic backgrounds4

100% Pay Equity

At American Express, we have a longstanding commitment to pay all colleagues equitably and that our compensation practices are free from bias. To help meet that commitment, we regularly review our compensation practices to ensure they support pay equity and transparency.

Additionally, each year, American Express works with an independent third-party to conduct a comprehensive pay equity review. The review assesses pay on a statistical basis and considers a multitude of factors known to impact compensation, including but not limited to, tenure, role, level, geography and performance. In recent years, this review has covered our entire global colleague base. The review process identifies inconsistencies in pay based on gender globally and based on race and ethnicity in the United States. Where necessary and appropriate, salary adjustments are made to address these inconsistencies.

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In 2019, the goal of our review and subsequent adjustments was to achieve pay parity, meaning differences in pay were statistically insignificant. In 2020, we went even further and made additional investments to achieve 100% pay equity for colleagues across genders globally and across races and ethnicities in the United States. All necessary and appropriate salary adjustments were made to achieve 100% pay equity. The Company is committed to this goal going forward.

Our Workplace Culture

Our colleagues are instrumental in enabling the Company to deliver on its vision to provide the world’s best customer experience every day. To attract and retain the best talent, we continuously invest in programs, benefits and resources to ensure our colleagues can grow in their careers and thrive professionally and personally. Our focus has helped us build a reputation for being an employer of choice, earning a spot among the top 20 companies on Fortune’s ranking of the World’s Most Admired Companies for the last eleven years. In addition, we were recently ranked number nine on the 2020 Fortune 100 Best Companies to Work For list in the U.S.

Expanding our Blue Box Values

Our Blue Box Values guide how we operate as a company. In 2020, we made some important changes to be more explicit about our efforts to create an inclusive and diverse workforce, adding two new values: “We Embrace Diversity” and “We Stand for Inclusion.” These updated values are designed to make clear that we do not tolerate bias of any kind and to reinforce our commitment to ensuring we have a welcoming and inclusive culture.

Backing our Colleagues During COVID-19

Throughout the pandemic, we have worked to provide our colleagues with the flexibility and resources needed to stay safe, healthy and productive. We expanded our extensive health benefits and well-being programs to provide virtual counseling, wellness coaching, meditation classes, exercise programs and more to help colleagues cope with the challenges and stress of the pandemic. For colleagues enrolled in one of our U.S. medical plans, we provided coverage for all out-of-pocket medical and pharmacy service costs related to COVID-19 testing and treatment. We quickly moved to work-from-home arrangements in virtually all locations around the world, during which we completely transformed our brick-and-mortar call centers to virtual, home-based servicing.

Decisions to reopen offices are being made on a location-by-location, floor-by-floor and colleague-by-colleague basis and are not happening all at once. As offices open, we are implementing appropriate safety protocols such as increasing janitorial servicing, limiting the number of people in elevators and on floors and staggering arrival and departure times, where necessary. We are also providing colleagues with the option to continue temporarily working from home through September 6, 2021.

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Prioritizing Colleague Health and Well-Being

The health and well-being of our colleagues plays an integral role in their ability to thrive at work and at home. We take a holistic approach to well-being, providing resources that address the physical, financial and emotional health of our colleagues and their families. We want our colleagues and their loved ones to be and feel at their best. Through our award-winning health and mental well-being program, Healthy Living, we provide health and well-being benefits and supportive company policies. From the healthcare we provide through our on-site Wellness Centers to one-on-one coaching and counseling, we seek ways to help our colleagues and their families stay safe and foster healthy lifestyles. Our health and well-being programs provided opportunities and resources for colleagues to stay engaged and healthy while at home and dealing with the global pandemic. For National Mental Health Awareness Month in May 2020, our Chief Colleague Experience Officer launched “Make Space,” a campaign that encouraged colleagues to continue to carve out time for their total well-being by focusing on making space to care, connect and contribute. We have hosted several wellness webinars, bringing in subject matter experts to discuss topics such as ergonomics, nutrition, managing stress and caregiving. We developed and continue to update a variety of health and financial well-being resources, tips and benefits. Our Healthy Living well-being coaches hold regular livestreamed workout sessions, posting an at-home workout plan for those who are not able to attend. We introduced an online virtual meditation program and offered colleagues free memberships to a mindfulness and meditation app. Through our Healthy Minds program, we rolled out a new Grief and Loss Support program, providing colleagues with one-to-one counseling from licensed therapists as well as access to numerous articles on coping with loss. In addition, we have continued to enhance programs and policies to keep up with changing realities.

Providing Learning and Development Opportunities

We place a strong focus on continuous professional development as the ability to constantly learn is critical to the success of our people and our business. We provide learning opportunities in many forms, including tools and guidance for maximizing learning on the job; cross-border and cross-business unit assignments; career coaching, mentoring, and professional networking; rotation opportunities; virtual learning sessions; and formal classroom instruction. Through our internal leadership program, we provide training and development experiences tailored to individuals at all levels of the Company that are designed to instill specific behaviors that drive successful leadership.

List of Awards and Recognition

Our commitment to be a great place to join, stay and grow a career continues to earn us industry awards and recognition. Here are some of the recognitions from 2020 that make us most proud:

Learn More about Environmental, Social and Governance Matters at American Express

Please visit http://about.americanexpress.com/corporate-responsibility-reports for our 2019-2020 ESG report and to learn more about our ESG activities. This report, or any other information from the American Express website, is not incorporated by reference into this proxy statement.

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Audit Committee Matters

Item 2: Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit and Compliance Committee has sole authority to appoint and replace the Company’s independent registered public accounting firm, which reports directly to the Committee, and is directly responsible for its compensation and oversight of its work. The Audit and Compliance Committee conducted its annual evaluation of PricewaterhouseCoopers LLP (PwC) and, after assessing the performance and independence of PwC, the Committee believes that retaining PwC is in the best interests of the Company. The Audit and Compliance Committee reappointed PwC as our independent registered public accounting firm for 2021.

We are asking you to ratify this appointment. If shareholders fail to ratify the appointment, the Audit and Compliance Committee will consider it a directive to consider other accounting firms for the subsequent year. One or more representatives of PwC will be present at the meeting, will be given the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.

RESOLVED, that the appointment by the Audit and Compliance Committee of the Company’s Board of Directors of PricewaterhouseCoopers LLP, as independent registered public accounting firm for the Company, to audit the financial statements of the Company and its subsidiaries for 2021, is hereby ratified and approved.

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Actions Taken by the Audit and Compliance Committee to Support its Recommendation

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PricewaterhouseCoopers LLP Fees and Services

Fees for 2020 and 2019

The following table sets forth the aggregate fees billed or to be billed by PwC for each of the last two fiscal years (in thousands):