Okay. Good morning. Welcome to our 2018 Annual Meeting of Shareholders. I'm Steve Squeri, Chairman of the Board and Chief Executive Officer and I'll be presiding at this meeting. Before I get started, I just wanted to say how honored I am to be CEO of American Express.
For many, if not most of you, the only American Express CEO you've ever known is Ken Chenault. Leading this great company and following Ken is a tremendous responsibility and it's one that I accept with humility, determination and total commitment. I've been with American Express for most of my career, 32 years in fact, starting with the Travelers Check business in 1985. Over my career, I've had the opportunity to run 2 of the company's major business lines, merchant services and commercial services. Over the past few years, I've been involved in the company's major realignments and restructuring activities.
I worked with Ken on overall company strategy as we navigated through a period of significant transformation. I'm very pleased that you could join us today. With me on stage is Tangela Richter, Corporate Secretary and Chief Governance Officer of the company who will assist me in conducting the meeting. Before we begin, I remind you that the order of business and the rules of the meeting are set forth in the printed agenda handed out when you came in. Now before I comment on the company's financial performance, Tangil will read a statement called for under securities laws.
The discussion today contains certain forward looking statements about the company's future financial performance and business prospects, 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 presentation slides for today's meeting as well as the company's 2017 annual report and other reports on file with the SEC. The discussion today also contains certain non GAAP financial measures. Information relating to comparable GAAP financial measures may be found in today's presentation slides as well as the earnings materials for prior periods that may be discussed, all of which are posted on our website atir.americanexpress.com. We encourage you to review that information in conjunction with today's discussion.
Thanks, Angela. At this point, I'll provide an overview of our performance. 2 years ago, we set out to transform our business in the face of renewed competition, a shifting regulatory environment, and technological change. Our game plan was clear, accelerate revenue growth, reset our cost base, and optimize investments. As we executed this plan, we added new products and benefits for both consumers and businesses and a refresh of our Platinum card.
At the same time, we redesigned many of our marketing, customer service and risk management capabilities with a leaner, more agile technology infrastructure and cutting edge data science. We ended 2017 with strong momentum and closed out the 2 year game plan having surpassed the financial objectives we laid out in early 2016. In 2017, we accelerated revenue growth, generating revenues of $36,900,000,000 which on an adjusted basis grew by 7% for the full year. Excluding the impacts of the Tax Act, earnings per share were $5.89 On a reported basis, earnings per share for the full year were 2.99 dollars As you can see, our 2017 earnings were heavily impacted by the U. S.
Tax Cuts and Jobs Act, which led us to take a $2,600,000,000 charge in the 4th quarter. Overall, we believe the new tax law will benefit the U. S. Economy and our company, and we expect it will significantly reduce our effective tax rate in 2018 and beyond. Our business metrics also reflect our continued growth and positive performance.
Global billed business on an adjusted basis was up 8%, reflecting strong momentum across each of our business segments. Total loans rose by 14%, significantly outpacing the industry even as we reported best in class write off rate of 1.8%. Our performance in 2017 was also marked by a number of highlights. We grew total cards in force by more than $2,900,000 during the year. Worldwide spending on our cards reached a record $1,100,000,000,000 Our loan growth continued to outpace the industry while maintaining strong credit performance.
We continue to grow our global merchant network, adding an additional 1,500,000 new locations in the U. S. In 2017. We expanded our strategic co brand partnerships with Hilton and Marriott. We continue to strengthen our customer service capabilities and we're honored to win the 2017 J.
D. Power Award in their annual U. S. Credit card satisfaction study for the 9th time. During the year, we used our capital strength to repurchase $4,300,000,000 worth of shares and returned an additional $1,200,000,000 in common stock dividends to our investors.
Overall, 2017 was a very strong year for the company and we continued that momentum into the start of 2018. In the Q1 of 2018, we generated earnings per share of $1.86 reflecting steady growth across the company's businesses. Revenues accelerated during the quarter, up 10% on an FX adjusted basis. Global bill business, FX adjusted, grew by 10%. Our loan portfolio grew by 16%.
Our global net write off rate was 2%, in line with our expectations. And finally, as you've hopefully seen, we launched a brand a new brand platform in early April. The global platform reinforces the relationships we have with our customers, which builds on our heritage of service, security and trust, while acknowledging that we need to show up differently given our customers' deeply intertwined work and personal lives. In closing my discussion on our performance, let me say a few things. My focus is to appropriately position our company for future growth in 2018 and beyond.
Today, we have a diverse and growing set of businesses, attractive opportunities for future growth as the global opportunity in payments continues to grow both from a consumer and commercial perspective as the use of cash and checks continues to decline. And we have a differentiated business model which has been instrumental to our competitive advantage and which we will believe become even more important in the future. We will build on our existing strengths by focusing on 4 strategic priorities that extend across our businesses to drive growth: strengthening our leadership in the premium consumer segment, extending our leadership in commercial payments, strengthening our global network to provide unique value to all our constituents, consumers, business clients, merchants and partners, and playing a more essential role in the digital lives of our customers. When you put it together, our commitment to shareholder value, our financial strength, our unique competitive advantages, the strength of our brand, and most importantly, the quality, character and commitment of our people, I am confident that we can take advantage of the diversified growth opportunities we have across all our businesses and continue to generate value for our investors. Now let's turn to the official business of our meeting.
Because this is a meeting of shareholders, only shareholders should speak and the comments should relate to the company's business. To permit shareholders who could not be here to listen to these proceedings, we are providing a live audio webcast of today's meeting. As Chairman, I will be responsible for the conduct of today's meeting. I will seek to have an orderly informative session in which we get our business done, complete the voting and tabulating and give shareholders the opportunity to ask questions that are relevant to the company's business. To accomplish this, I ask that each shareholder keep his or her remarks brief and to the point and not to interrupt other shareholders.
Please keep your remarks to 2 minutes unless you are presenting a proposal. Our goal is to assure that all persons who wish speak get a chance to do so in an orderly manner. Privacy considerations prevent me from discussing questions relating to any specific card member. If you need help with any personal card matters, please go to the literature table outside the room after the meeting adjourns. We have Jessica Pierre present to address any questions that you may have.
Jessica, will you please stand? Thank you, Jessica. I will now introduce our slate of directors. I will ask each to stand briefly while I mention their names. Please hold your applause until all have been introduced.
In addition to myself, with us today are Charlene Barshevsky, Jack Brennan, Peter Chernin, Ralph De La Vega, Anne La Barjang, Michael Levitt, Ted Leonsis, Rick Levin, Sam Palmisano, Dan Vasella, Ron Williams, and Chris Young. Please join me in applauding this outstanding group of directors. I just want to add a few words about Chris Young, who is our newest Director. Chris joined our Board earlier this year and this is his first annual meeting. Chris is the CEO of McAfee, 1 of the world's leading independent cybersecurity companies.
Chris has significant cybersecurity, product development and marketing expertise along with experience in national security and emergency preparedness. We are very pleased to welcome Chris to our Board. Also with us today is Lisa Zwicky, our partner at our outside audit firm of PricewaterhouseCoopers. I will now turn the meeting over to Tangela.
Steve, I present a copy of the notice of annual meeting of shareholders dated March 19, 2018, an affidavit showing that notice of this meeting was duly given. A copy of this notice and affidavits will be filed with the minutes of this meeting. All shareholders of record at the close of business on March 9, 2018 are entitled to vote at this meeting. A certified list of the company's shareholders of record is also present at today's meeting and will remain open for inspection during the meeting. The minutes of the last annual meeting of shareholders are also here and available for inspection.
The company has designated Peter Dzkevic and James Diaforli of Broadridge Financial Solutions to act as inspectors of elections. The inspectors have taken their oath to faithfully and impartially execute their duties.
Thanks, Tangela. Do we have a quorum and may we proceed?
Yes. The inspectors of elections have determined that holders of over 89% of the common staff of the company entitled to vote at this meeting are present or represented by proxy and constitute
a quorum. Thank you. This meeting is now duly convened for the purpose of transaction business properly before it. At this point in the proceedings, we will move to the various proxy proposals. Please limit any comment at this time to matters relating to the proposals.
We will have time later in the agenda for general questions. If you have already voted by proxy and do not wish to change your vote, you don't have to do anything further. For those of you who haven't voted by proxy or for those of you that wish to change your vote, ballots will be handed out to you. Will any shareholder who wants a ballot please raise your
hand?
If you are voting today by ballot, please vote on all items as submission of a ballot will now revoke your prior proxy. We will now introduce the proposal. The first item of business is the election of the Board of Directors. Tangela, please introduce the proposal.
I propose that 13 director nominees whose names and biographies appear on Pages 11 through 17 of the proxy statement be elected as directors of the company to hold office until the next annual meeting of shareholders and until their successors are duly elected and qualified.
The next matter is the proposal to ratify the appointment of PricewaterhouseCoopers to audit the company's accounts in 2018. The company's Audit and Compliance Committee has appointed PricewaterhouseCoopers as the company's independent registered public accounting firm for 2018 and the Board asked the shareholders to ratify the commitments appointment. Tangela, would you please introduce the resolution?
I offer the resolution appearing on Page 45 of the proxy statement, ratifying the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm to audit the accounts of the company and its subsidiaries for 2018.
The next matter is the advisory vote on executive compensation. Tangela, would you please introduce the resolution?
I offer the advisory resolution to approve the compensation of the company's named executive officers as disclosed pursuant to Item 402 of Regulation SK, which appears as Item 3 on Page 49 of the proxy statement.
The next proposal is a proposal submitted by John Chevedden on behalf of William Steiner requesting adoption shareholder action by written consent. It appears on page 89 of the proxy statement. Mr. Christoph Thos Petzilis will now introduce the proposal on his behalf.
To permit written consent by shareholders entitled to cast the minimum number of votes that will be necessary to authorize the action at the meeting at which all shareholders entitled to vote thereon were present and voting. This written concern is to be consistent with the applicable law and consistent with giving shareholders the fullest power to act by written consent. This proposal topic won majority shareholder support at 13 major companies in a single year. This included 67% support at both Allstate and Sprint. 100 of major companies enabled shareholder action by return concern.
Taking action by written consent in a place of a meeting is a means shareholders can be can use the raise important matters outside the normal annual meeting cycle. A shareholder right to act by written concern and to a call aspellian meeting are 2 complementary ways to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. More than 100 Fortune 500 Companies provide for shareholders to act by written concern and to call a special meeting. Written concern is more important to American Express Shareholders because American Express Shareholders do not have the full right to call a special meeting that is available under state law. According to American Express special meeting rules, it will take a more difficult 25% of the shares instead of 10% of shares used by many companies to call a special meeting.
Please vote yes, shareholders' right to act by written concern, proposal 4. Thank you.
Thank you, Mr. Petzilis. The Board of Directors' reasons for opposing this proposal appears on Page 90 of the proxy statement. The next proposal was submitted by John Chevedden on behalf of Myra Young requesting an independent Board Chairman. It appears on Page 91 of the proxy statement.
Mr. Christan Petzilis will now introduce the proposal on her behalf.
Ivan Pan is Independent Board Chairman sponsored by Mira K. Young of Elk Grove California. Shareholders request the Board of Directors to adopt this policy and amend the governing documents as necessary to require that the Chairman of the Board whenever possible to be an independent member of the Board. The Board will have the discretion to face in this policy for the next Chief Executive Officer transition implemented so it is consistent with the existing agreements. If the Board determines that a Chairman who is independent will when selected is no longer independent, the Board shall select a new Chairman who satisfies requirements of the policy within a reasonable amount of time.
Compliance with this policy is waived if no independent director is available and willing to serve as a Chairman. Caterpillar is an example of a company recently changing course and naming an independent Board Chairman. Ironically, Caterpillar had opposed the shareholder proposal for independent Board Chairman recently as its 2016 Annual Meeting. Wells Fargo also changed course and named an independent Board of Chairman in 2016. This proposal Topic 137 support at 2016 American Express Annual Meeting.
This 37 support will have been higher, perhaps 42% if the small shareholders had the same access to corporate governance information as large shareholders. According to proxy insight, 238 funds in their database voted for this proposal topic at the American Express. The yes votes from these funds were 3 to 1 in favor of this proposal topic. Please vote to engage on website of the Chief Executive Officer, Independent Board Chairman. Proposal 5.
Thank you very much.
Thank you, Mr. Petzilis. The Board
of Directors' reasons for opposing this proposal appear on Pages 92 to 93 of the proxy statement. Tangela, are there any other matters to be presented before this meeting?
Steve, there are no further matters to be brought before this meeting.
Okay. Are there any other comments that pertain to the voting matters? If there are no other comments pertaining to the voting matters at this point in the meeting, I ask that you please turn in your ballots so that we can tabulate the votes and the proposals introduced today. I now declare the poll is open with respect to the items of business. My colleagues will now collect the ballots.
Has everyone turned in a ballot that wishes to do so? Since everyone who wishes to do so has voted, I declare the polls closed and ask the inspectors of election to collect and tabulate the ballots. I will now take general questions while the inspectors of elections count the votes. Philip, can
you put it lower? Philip Urban, Portfolio Manager and Shareholders, some comments and questions together. How are we reacting to JPMorgan's Investor Day announcement that they are now planning to go in an all out effort to concentrate on digital payments from here on in? And are you planning to just continue to compete with them? Or are we going to engage them on a joint partnership basis as we've done before?
Thank you, Mr. Berman, for the question. We continue to compete very vigorously across not only digital payments, but traditional payments as well. We've never really entered into a partnership with JPMorgan other than from a merchant acquiring perspective. So we believe the assets that we have and the products that we have and our strategies going forward will enable us to vigorously compete with JPMorgan.
Okay. Creative, profitable, new product developments is very important to us. How has the new enhanced American Express Hilton Rewards branded card done since its recent release?
So, as you know, we obtained the right to be the exclusive provider of Hilton co brand cards last year and we've just launched those into the marketplace and we're very happy with our progress so far. Globally,
the market for American Express is nowhere near the saturation level. How do you plan to increase American Express' foreign footprint?
So we continue to invest on a global basis. We continue to invest in coverage. We continue to invest in our small business activities and our consumer activities across the globe through both proprietary means and through our partnerships that we have with our G and S partners.
Wells Fargo has developed a new strategy to prospect new credit card customers that they would have never have considered previously. What is your standing on this and how does this affect your strategy at American Express?
So we've has been evolving over the years and we've moved from a card acquisition strategy, which originally was a direct mail strategy and we've moved to many other different ways to acquire card members today from member get member to digital acquisition to using affiliates to continue to use our customer care professionals to acquire card members as well and to new products and services and we feel pretty good with where we are.
One last question. Any thought given to AllianceBernstein's corporate move outside of New York for American Express?
No thought at all.
Thanks.
Any other questions?
Yes.
Yes, good morning. My name is Howard Taim, I'm a shareholder. I just have 2 sets of related questions. First of all, you had mentioned in your shareholder report briefly about the Tax Act that you're going to be suspending the stock buyback program. What exactly you plan to do with the incremental savings with the tax act?
What do you plan to do with the extra cash? And my second related set of questions is regarding cybersecurity, both internally as our company as well as the customers. Can you go into more detail what how much it's we plan to spend as a company for not only our internal cybersecurity but on behalf of customers and how exactly it's going to be implemented and where?
Thank you. So as far as the first question goes in terms of what we're going to do with the extra cash, the Tax Act had a hit to our regulatory capital. So the reason we suspended our share buybacks was to rebuild our capital base, which is what we are doing. As far as the second question related to cyber, I'm not going to give any dollar figures on how much money that we spend, but I will say this, we continue to spend more and more on cyber on an ongoing basis. Our data and our customers' privacy and the integrity of our systems is really at the heart of our overall brand reputation and we will continue to take steps to make sure that we are completely secure as much as we can be in this environment against cyber attacks.
Thank you.
Any other questions?
It's an honor to be here today. Thank you for taking our question. We are a small private investor based out of Princeton, New Jersey. American Express is our largest holding and we want to thank the leadership and management of American Express for its exceptional performance and leadership over the last 2 years post Costco. The one question we had is about the multiple of American Express.
Despite the actions being taken over the last 2 years, what specific actions American Express is taking to restore its multiples to historic levels? Thank you.
So, what we can do to restore the multiple is to continue to grow our revenue and grow earnings. How the market reacts to it is a different story, which was out of our control. And so, as you've noticed, our revenue growth has been in double digits for the Q1 and our earnings, we continue to exceed expectations from an earnings perspective. So, we'll continue to work hard on our end to grow revenue and grow profits and we'll wait for the market to react. Any other questions?
Okay. This now concludes our question and answer session. Tangela, as the inspectors of election have completed their tabulation, will you please report the results?
The votes I'm about to announce are preliminary. In accordance with SEC rules, we will file a report on Form 8 ks with the SEC within 4 business days and that 8 ks will contain the final vote results. On the election of directors, the inspectors of election report that each of the 13 nominees of the Board of Directors listed in the proxy statement received a plurality of the votes cast. On the ratification of PricewaterhouseCoopers, the inspectors of election report that a majority of the votes cast were voted to ratify the appointment. On the advisory vote on executive compensation, inspectors of election report that a majority of the votes cast were going to approve the compensation paid to the company's named executive officers.
On the proposal relating to action by written consent, the inspectors of election report that the proposal was not approved by majority of the votes cast. On the proposal relating to independent board chairperson, the inspectors of election report that the proposal was not approved by majority of the votes cast.
As a result of this morning's voting results, I declare the slate of 13 director nominees recommended by the Board of Directors are elected for a 1 year term. The company's shareholders have approved and ratified the company's appointment of PricewaterhouseCoopers for 2018. The company's shareholders have approved the compensation paid to the company's named executive officers. The shareholder proposal relating to action by written consent did not pass and the shareholder proposal relating to independent Board Chair did not pass. There being no further business to come before the meeting, I declare the meeting adjourned at 9:27 on May 7, 2018.
Thank you very much.