Good morning, and welcome to American Express Company's 2021 Annual Meeting of Shareholders. Please note that this audio cast will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without American Express' consent. I will now turn the call over to Mr. Steve Squarey, Chairman of the Board of Directors and Chief Executive Officer.
Please go ahead.
Thank you and good morning. This is Steve Squire and welcome to American Express's 2021 Annual Mirror Holders. As Chairman of the Board of Directors and Chief Executive Officer, I will provide with the meeting. To begin, in light of public health concerns regarding the ongoing COVID-nineteen pandemic, we are holding our meeting solely by virtual communications and would like to thank everyone for joining us today via audio cast. The meeting agenda and rules of today's meeting are available on our virtual annual meeting portal.
Please review them as they are now in effect. If we encounter any technical difficulties that prevent us from continuing the meeting, we will ask shareholders and guests to stand by and allow us time to provide an update relating to the meeting. Now I'd like to begin by providing an overview of how our meeting will proceed. First, I'll call the meeting to order. Then I'll turn the meeting over to Christina Fink, our Deputy Corporate Secretary.
Christina will go over some procedural matters necessary for our corporate record keeping and describe some of the rules for the meeting. I'll introduce the 5 items up for vote and the polls will be open for voting on these items. After the polls are closed, Christina will report on the preliminary voting results. Following that, I'll adjourn the meeting and present an overview of our business. Immediately following this presentation, we will use the remaining time to take general questions from shareholders through our meeting portal.
For any financial or business matters relating to your card accounts, I encourage you to contact our customer service representatives directly for personalized assistance. With that, I now call the meeting to order and would like to start by introducing the other members of the Board of Directors who are joining us through the audio cast today. Tom Baltimore, Charlene Barshevsky, Jack Brennan, Peter Chernin, Ralph de la Vega, Mike Levitt, Ted Leonsis, Karen Parkhill, Charles Phillips, Lynn Pike, Dan Vasella, Lisa Wardell, Ron Williams and Chris Young. I want to add a few words about our newest directors, Charles, Tom and Lisa, who are joining us now for their first American Express Annual Meeting. Charles is currently co founder and managing partner of Recognize, a technology investing and transformation company.
Prior to Recognize, Charles served as the Chairman and CEO of In for, an enterprise software applications provider. Tom is the Chairman and CEO of Park Hotels and Resorts, a spin off of Hilton Worldwide and the 2nd largest publicly traded lodging real estate investment trust in the United States. Lisa is Chairman and CEO of Adalum Global Education, a leading provider of workforce solutions and educational services. We're extremely pleased to welcome Charles, Tom and Lisa to our Board. Also joining us through Audiocast today is Rob Endicott, a partner at our outside audit firm, PricewaterhouseCoopers.
The proxy holders for this meeting are Lorene Seeger, Richard Starr and Christina Fink. I will now turn the meeting over to Christina to review the meeting rules. Christina, please go ahead.
Thank you, Steve. I would like to note that today's audio cast may contain forward looking statements, which are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these forward looking statements are set forth in the company's Q1 Form 10 Q, 2020 Annual Report and other reports on file with the SEC. We encourage you to review that information in conjunction with today's discussion. Today, we will consider 5 items for shareholder vote, 3 management proposals and 2 shareholder proposals, all of which are described in our 2021 proxy statement.
Shareholder proponents will have up to 4 minutes to discuss their proposals. After the proposals have been presented, we will close the voting, tabulate the votes and announce the preliminary vote results. Please note that this meeting is being recorded. However, no one attending via the audio cast is permitted to use any audio recording device. Shareholders may submit questions at any time during the meeting through our meeting portal.
Similar or related questions may be grouped and answered together to avoid repetition. To allow us to answer questions from as many shareholders as possible, we will limit each shareholder to 2 questions. You may vote the shares you hold through our meeting portal until the polls are closed. However, if you've already submitted your proxy to vote on these matters, you do not need to vote again unless you want to change your vote. Notice of today's meeting and related proxy materials or a notice of Internet availability of these materials were mailed beginning March 19, 2021 to all shareholders of record as of March 8, 2021.
In addition, I have in my possession the oath subscribed to by the inspectors of election. I also have in my possession certified list of the shareholders of the company as of the close of business on March 8, 2021. A copy of the list of shareholders entitled to vote at this meeting is available for inspection by any certified shareholder attending this meeting through our meeting portal. Peter Deskevich and Matt Crescenzo of Broadridge have been appointed as inspectors of election and are participating in today's audio cast. They have advised that holders of shares representing over 89% of the shares entitled to vote are present in person or represented by proxy, which constitutes a quorum.
Votes represented by proxies received this morning as well as those to be voted virtually during this meeting will be included in the Inspector's report, which will be filed with the records of the meeting. I will now turn the meeting back over to Steve.
Thank you, Christina. I declare that a quorum is present. The meeting is now convened. We're now ready to consider the 5 items that are up for shareholder vote. We'll take questions on the proposals after all the proposals have been presented.
The polls are now open to vote on these proposals. The management proposals are 1st to elect our director nominees, 2nd to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for 2021 and third to approve our executive compensation through an advisory non binding say on pay resolution. There are also 2 shareholder proposals to be presented that are included in the proxy statement. The first shareholder proposal relates to action by written consent and was submitted by John Chevedden on behalf of Kenneth Steiner. Mr.
Chevedden is on the line to present this proposal. Mr. Chevedden, as a reminder, you have 4 minutes to present your proposal. You may now present your proposal.
Okay.
Yes, we hear you.
Proposal 4, adopt a mainstream shareholder right written consent, sponsored by Kenneth Steiner. Shareholders request that our Board of Directors take the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action item meeting at which all shareholders entitled to vote thereon were present in voting. This proposal topic won 95% support at Dover Corporation and 88% support at AT and T. I do not understand why management is not in favor of this proposal. Written consent is a super democratic process for shareholders to take action between annual meetings.
Written consent is a super democratic process because if a shareholder does not support the written consent topic, the shareholder does not have to do anything and it accounts against the topic. This is in contrast to a shareholder meeting where shareholder support or shareholder opposition counts for nothing unless a shareholder makes the effort to vote. Plus written consent can be structured so that all shareholders receive notice. And there is no limit to the amount of material that management can distribute to shareholders on the topic of written consent. And contrary to the management text, with written consent, there is absolutely no incentive to confuse shareholders, because shareholders who are confused vote with management.
Written consent depends on substantial majority support, because any action taken by written consent would still need impressive 62% approval from the shares that normally cast ballots at the American Express Annual Meeting to equal a majority from the American Express shares outstanding. Please vote yes. Adopt a mainstream shareholder write written consent proposal for.
Thank you, Mr. Shevig.
I just wanted to just had a point of order. I just object to all this background noise. So while I'm trying to present the proposal, it's very inconsiderate.
My apologies. I moved a piece of paper. Thank you, Mr. Chevedden. The 2nd shareholder proposal relates to an annual report on diversity was submitted by As You Sow on behalf of Betsy Krieger.
Meredith Benton has prepared a prerecorded statement on this proposal. Please play the recording now.
Hello. I am Meredith Benton. I am speaking on behalf of the nonprofit advocacy organization, As You So, and I'm also the CEO of the consultancy, We Silk Stop Capital. I formally moved proposal number 5 asking for American Express to report on how it assesses the company's diversity, equity and inclusion efforts. The process that the Board follows for determining the effectiveness of its diversity and inclusion programs and how it assesses goals, metrics and trends related to recruitment, promotion and retention are important to shareholders.
Reports linking diversity and inclusion to outperformance come from ECG, McKinsey, Credit Suisse, Stanford's Graduate School of Business, The Wall Street Journal and others. The data demonstrates that diversity and inclusion matter, that diverse teams strengthen companies. Best practices for diversity and inclusion reporting exist and are increasingly in use across companies. Publishing the company's EEO-one form, a governmentally mandated form providing basic workforce composition details is the first step, one American Express recently committed to. The release of workforce composition data is akin to a balance sheet, detailing diversity at a single point in time.
Just as the balance sheet would by itself be insufficient to identify the strength of the company's financials, so too is the EEO 1 by itself insufficient in assessing the effectiveness of American Express's inclusion program. The company's inclusion data, the hiring, retention and promotion rates of diverse employees must be shared for investors to have a full understanding of the workplace experience of American Express employees. In theory, companies should want to share their retention data. If it's a good company to work at, people will want to stay. They should want to share their promotion data in theory.
If it's a company that hires good people, those good people should ascend with mentorship and time. American Express has made extensive admirable commitments about its commitment to diversity. In addition to hosting women's conferences, the company has announced a remarkable $1,000,000,000 action plan intended to advance diversity, equity and inclusion. And announcing its $1,000,000,000 commitment, the company stated that American Express has a comprehensive strategy to attract, develop and retain underrepresented colleagues. American Express identifies these as an essential dataset attract, develop and retain.
It's the dataset that investors need. Failure to share this information may erode trust with key consumer demographics and employees. That American Express is unable to share its own data, it's a problem for the company and it's a problem for its investors. How does American Express show investors and other external stakeholders that its commitments are real, that its statements are not puffery, marketing, performative. We ask that the Board release sufficient information to assure investors that it's providing effective oversight of diversity, equity and inclusion programs at our company.
Silence on internal metrics is out of alignment with American Express's good and amiable deeds. We encourage transparency even in the face of imperfection in order to show that American Express is truly committed to its existing and future employees and to meaningful change, something that is needed across the American landscape. Thank you.
Thank you, Ms. Benton. We will now respond to questions from shareholders on all of the proposals.
Steve, we have a question from the United Brotherhood of Carpenters regarding our executive compensation. As long term investors, we strongly believe that the company's executive compensation plan should be designed primarily to drive the successful execution of the Board's long term strategic business plan. Today's public company executive compensation plans are largely formulaic peer related plans with simplistic annual say on paid voting reinforcing plan homogeneity. Would you or the Chair of the Compensation Committee speak to whether American Express might be better served by an executive compensation plan tailored specifically to the company's particular circumstances and its unique long term strategic business plan? Thank you.
Thank you for the question. We align pay with company performance and to support a long term high performance business model. We link most of our pay for senior executives to long term business strategies and key priorities. In fact, the CEO's pay has added emphasis on performance based incentives, 92% of the CEO pay with a substantial stock holding requirement. We measure performance against challenging goals established at the start of each business performance cycle that are aligned with our key business priorities.
We discourage imprudent risk taking by avoiding undue emphasis on any one metric or short term goal.
Steve, there are no more questions on the proposal.
Since there are no more questions, I will close the polls momentarily. If you have not yet voted and wish to do so, please do so now. I now declare the polls closed and all matters have been voted upon by shareholders. Christina, will you please report the preliminary results?
The preliminary voting results are as follows. All 15 director nominees have been duly elected to the Board of Directors. The appointment of PricewaterhouseCoopers has been ratified. The advisory vote on executive compensation has been approved. The shareholder proposal related to written consent did not receive majority support.
The shareholder proposal related to an annual report on diversity did receive majority support. The final voting results will be reported on a Form 8 ks filed with the SEC within 4 business days of today's meeting. I will now turn the meeting back over to Steve.
Thank you, Christina. That completes the official business of the meeting and the formal meeting is now adjourned. At this point, I'll provide a brief overview of the company's performance. It goes without saying that 2020 was an unprecedented year. Let me start by quickly recapping our key metrics on Slide 5.
As expected, due to the ongoing effects the pandemic had on our customers, the economy and our business, our key financial metrics were lower relative to the same period in 2019. However, we remain profitable throughout the year with earnings per share of $3.77 and revenue of $36,100,000,000 for the full year. An important piece of context is that spending and revenue trends steadily improved since the low point in mid April, but they were still below 2019, largely due to travel and entertainment spending, which has been the slowest to come back. Turning to Slide 6, I'll remind you that at the start of the pandemic, we had very little visibility into the future, but we did have a plan for managing the company through this period of uncertainty, focusing on 4 priorities: supporting our colleagues, protecting our customers and our brand, remaining financially strong and at the same time taking steps to structure our company for longer term growth. I'm not going to mention everything we did.
This slide reflects just some of the highlights and why I'm optimistic about where we stand. Our progress in managing a company through 2020 confirms the strength and resilience of our differentiated business model and the solid foundation it provides us to build on as we move forward. As we saw throughout 2020, our customers have been resilient and adaptive. Goods and services spending by consumers, which is all spending excluding travel and entertainment, was up slightly year over year with particularly strong growth in online spend at 18%. In addition, our value propositions and brand continue to resonate with both existing and prospective customers.
Attrition rates in our proprietary products were lower than 2019. And our customer satisfaction levels were above pre COVID levels. We again ranked number 1 in J. D. Power's annual credit card satisfaction study of U.
S. Consumers, the 10th time in 14 years the study has been conducted. Throughout the year, our merchant network continued to grow globally. We sustained virtual parity coverage in the United States and we added more than 3,700,000 merchant locations internationally in 2020. Credit performance continued to be outstanding, thanks to our robust risk management practices, the premium nature of our customer base as well as the unprecedented level of government stimulus and forbearance programs.
Our business model has also helped to strengthen our already strong capital and liquidity positions during 2020. And our colleagues have proven to be even more agile and highly engaged in moving the company forward despite dealing with disruptions the pandemic has brought to their lives at work and home. ESG has and will continue to be a priority for us. We have continued to make progress on our ESG initiatives, including in the areas of enhancing our ESG and diversity disclosures. We are extremely proud of our diversity track record and are committed to remaining a leader in this area.
This month, we will disclose our full EE-one form and we will release a broader diversity report later this year. I'm proud to share that in 2020, we achieved 100% pay equity for our colleagues across genders globally and across race and ethnicity in the U. S. And are committed to maintaining this goal going forward. We will continue to assess opportunities to bring even more transparency to this area.
Additionally, we created the Office of Enterprise Inclusion, Diversity and Business Engagement to mobilize our collective resources to support our DE and I strategy and develop new initiatives that will have meaningful and lasting change. We also announced our $1,000,000,000 action plan to promote racial, ethnic and gender equity for our colleagues, customers and communities. We are fully committed to fostering a diverse, equitable and inclusive workplace and are focused on ensuring representation at all levels of the company from the Board of Directors on down. All in all, I feel good about all that we accomplished in 2020 despite the impacts of the pandemic. Turning to 2021.
I'm even more confident that our strategy is the right one to position us for growth going forward as we are starting to see some green shoots as evidenced by our Q1 performance on Slide 7. We reported 1st quarter revenues of $9,100,000,000 and earnings per share of 2.74 dollars I'm pleased to say that our overall core business performance was slightly better than our expectations with credit performance continuing to be best in class. Q1 marks our 3rd straight quarter of year over year growth in spend in goods and services, which represents the vast majority of our volumes. The spend exceeded our expectations growing 6% over year and 11% versus 20% on an FX adjusted basis. Travel and A and M spend, though still down versus pre COVID levels, improved steadily throughout the 1st 3 months of the year.
We are looking at 2021 as a transition year. And while I feel good about our results for the Q1, what I really feel good about is the progress we're making to rebuild momentum by firing up our core business, scaling next horizon opportunities and retaining financial flexibility. As I sit here over a year since the global COVID pandemic started, I'm optimistic that hopeful signs we're seeing will continue as vaccine distribution accelerates. Of course, we're still cautiously keeping an eye on progression of the virus and its impact on local lockdowns and cross border travel restrictions in certain areas. But there are clear indicators that the economy is improving, particularly in the U.
S. And I believe this will translate into continued steady improvements for American Express. Given all of this, we remain firmly committed to executing our 2021 investment strategy for rebuilding growth momentum for the longer term. I'm particularly proud of our colleagues who have remained nimble and focused through the uncertainties of the past year. Their dedication and hard work along with the flexibility of our business model, the loyalty of our customer base and the strength of our partnerships and the value of our brand make me feel very good about our future.
As I said earlier, we're now going to answer questions about American Express that was submitted by our shareholders. As a reminder, the rules of the meeting remain in effect. Please note that we'll attempt to answer as many questions as time allows, but only questions that are germane to the meeting will be addressed. Let's start with the first question.
Steve, our first question comes from Scott Sheppard with the National Center For Public Policy Research. American Express joined the rush to condemn Georgia's voting integrity law, a law designed to stop election fraud by requiring voters to show IDs, which are provided for free in Georgia. Could you explain in detail how requiring voters to show ID when they vote makes it harder to vote in a free and clean election? Or is it an effort to suppress voting? Which other specific provisions of the bill you object to and why?
And since you will agree that if requiring ID is wrong to ensure honest and clean voting, it's wrong to ensure honest interactions with American Express. Can you provide the timeline by which you will apply your objections to American Express's policies and procedures?
Let me go through what we stated and what we believe. We firmly believe that the right to vote is the cornerstone of our democracy, and it should be equally and securely accessible for all eligible voters. Therefore, access to voting is a fundamental rights issue, not a partisan one. Voting in the U. S.
Is voluntary and the level of participation is key to maintaining a vibrant democracy. Currently, there are numerous voting related bills under consideration in multiple states across the U. S. This is not about one state, one piece of legislation or one party. This is about the values and principles that govern our democracy and about all Americans having the right to vote.
We're advocating for policies that ensure every eligible voter has an equal, fair, secure and convenient opportunity to cast a ballot in each state.
Steve, our second question comes from the United Brotherhood of Carpenters. The topic of stakeholder capitalism as an alternative to shareholder capitalism has received considerable attention recently. As long term pension fund investors, the Carpenter Funds appreciate the sentiments embodied in the stakeholder capitalism perspective, but feel that execution could be complicated. Can you discuss the Board's perspective on the concept of stakeholder capitalism and what principles the Board would use to balance the interests of varied stakeholders as it develops and implements the company's long term business strategy?
At American Express, we believe the fundamental purpose of the corporation is to serve the needs of society and that backing our colleagues, customers and communities so that they can thrive is critical to our success. These beliefs have been our North Star for 170 years and through many challenging times from helping evacuate travelers during world wars to ensuring the safety of our customers' funds during the Great Depression to creating the shop small movement to help small businesses recover from the financial crisis to providing aid to communities impacted by natural disasters and so much more. These core beliefs are also what guide us today in the face of the current global health crisis. As we navigate through one of these most extraordinary periods in recent history, I'm extremely proud of how American Express colleagues have come together to back our customers, communities, partners, shareholders and one another. And we believe that by backing our communities and by backing society, it will benefit in the long term, not only our customers, but our shareholders as well.
Steve, I believe we have one more question. The question is, does the Board support enlistment of an outside independent law firm to review of an outside independent law firm to review
allegations made in a whistleblower
of systemic failures and process controls and management supervision related to pay over time features. These failures may result in abuse, retaliation and other significant damages with no credible full response from American Express through its General Counsel's organization. I believe they have not acted in good faith and acted in an obstructionist manner at surfacing the truth that threaten the credibility and integrity of American Express's governance. I believe management at senior levels may be complicit in fostering the culture and outcome that poses a substantial risk to American Express and its brand. Again, will the Board enlist independent counsel to investigate these core important issues?
At American Express, we take compliance with all laws and with all of our internal values very, very seriously. And we believe that currently we have the right processes and procedures in place and that our audit, we have three levels of review. We have a first level operational review within the business units. We have a second level of our global risk oversight and we have a 3rd independent level with our audit function as well. And we believe that those three levels are sufficient to review any suspected or any whistleblower events that are brought to our attention.
And I would also like to point out that our auditing team does not report to me, it reports directly to the audit committee of the Board. And we believe that is sufficient at this particular point in time.
Steve, we have another question. And here it goes. Do you have any conversations with our largest shareholder, Warren Buffett of Berkshire Hathaway? What stage advice does he give you?
I have ongoing conversations with Warren, and I have the opportunity to meet in person with Warren on multiple occasions during the year. And I think the sage advice that Warren has given me from day 1 has been make sure that you take care of your customers and you take care of the brand. And if you do that, the shareholder will be taking care of it as well. The most important assets that we have are our customers and our brand. And I think through this pandemic, our colleagues have done a really good job of taking care of both.
Steve, there are no more questions.
Okay. So seeing that there are no more questions, this concludes today's meeting. Thank you very much for attending.