Welcome to the Visa Conference Call. Today's call is being recorded. If you have any I would now like to turn the call over to Jack Ogarski. Thank you. You may begin.
Thanks, Jen. Good afternoon, everyone, and thank you for joining us. This call is currently being webcast over the Internet a replay of this webcast will be archived on our site for 30 days. Let me just remind you that this call may include forward looking statements. These statements aren't guarantees of future performance and our actual results could materially differ as a result of a variety of factors.
Additional information concerning those factors is available in our most recent reports on Forms 10 ks and Q, which you can find on the SEC's website of the questions and the IR section of our website. I'll now turn the call over to Bob.
Welcome and thank you for joining us on short notice. I appreciate you taking the time out of your busy day as it's important for us to speak to our investor community directly. I'm Bob Matchelot, Chairman of the Board of Visa, and I'm here with Charlie Sharp, Visa's current CEO and Al Kelly, who has just been named to replace Charlie. Both Charlie and Al will speak to you directly followed by a Q and A session. As you've all seen from this afternoon's release, As of today, the Board of Directors has accepted Charlie's resignation as Chief Executive Officer and member of the Board and has unanimously voted to appoint Al as CEO effective December 1, 2016.
As part of the transition, he will join the company on October 31 as CEO designate. Charlie informed the Board That he decided to resign his position today. It was an entirely personal decision and not business related, Technology driven digital commerce company, while also leading a strategy that will benefit this company for years to come. The Board of Directors is extremely grateful for his leadership of Visa for the last 4 years. During that time, Visa saw Total shareholder return increased by more than 130%, outperforming both the overall stock market and our peer group.
Of under Charlie's stewardship, Visa has strengthened its position in global electronic payments and has been a leader in bringing innovation to the industry. In addition, the company successfully completed the acquisition of Visa Europe in June of this year and delivered strong financial results With operating income climbing to $9,100,000,000 in fiscal 2015. For all of that, all that he has accomplished, we would like to thank Charlie. We are extremely fortunate to have Al of as our incoming CEO with his world class expertise and knowledge in payments. As the leader of this fast pace And dynamic industry, Visa will need to continuously adapt to keep up with the rapidly changing business.
Of Al's proven track record in the industry, great strategic acumen and intimate knowledge of Visa will enable us to continue to excel of the questions, please press star and press star in
the years to come.
The Board conducted a rigorous internal and external search and believes that we have selected the right person for the additional questions, our search was very extensive and examined a diverse set of potential candidates from all relevant sectors, including financial services, technology and digital media as well as payments related companies. The Board unanimously agrees that Al is the right leader for this company and we expect a seamless transition. Because of his 23 years at America Express and the groups he led there, including the Global Consumer Group And the Consumer Card Services Group, Al has a very broad and deep knowledge of the payments industry. What's more, as a member of the Board, he is very familiar with and knowledgeable about Visa's current strategy of and has strong relationships with Visa's talented management team. For all those reasons, he was a unique candidate And we have the utmost confidence that he will lead Visa to continued success without missing a beat.
We couldn't have found a better candidate. We are certainly sad to see Charlie go, but we are more than confident in Al's ability to continue building on the success of Visa. Now I'd like to pass the call over to Charlie. Thanks, Bob, and I'd like to reiterate Bob's thanks All
of you for joining us on short notice. My decision is entirely personal and that I can certainly tell you it was not an easy one to make. For almost 4 years, I've worked hard to balance the time needed to travel the globe to see our employees, clients and government officials of the family, we're all settled on the East Coast. Now we need to be on the East Coast more than we are able and therefore I don't feel like I can spend the time necessary in San Francisco to do this job properly. While I love working and running It has been an incredible privilege to be CEO of Visa.
Working with so many talented colleagues has been great fun and a great honor. They are the best in the business and are the reason that we're the leading global payments provider. I will miss them. I also feel good that the direction and focus of the questions, please press star and I've enjoyed the time we spent together talking about the Visa journey. I'd like to extend my personal thanks to you for the support you've given me, your interest in Visa, Your confidence in the management team and most importantly the confidence you have in the opportunities ahead of us.
Many of you know Al. I've rarely met anyone with such a great following amongst those who worked with him in the past. I've seen firsthand why he has that following. He's a great leader And his knowledge and judgment have been important assets for our Board and our management team. I and our senior management team have had the opportunity to work closely with him And those relationships that he's built along with his depth and breadth of payments knowledge will enable him to step in quickly without missing a beat.
And with that, I'll turn it over to Al. Thank you, Charlie and Bob. I am extremely honored and excited to take on this role come December 1st And build upon the work that Charlie and the entire Visa team has done. Charlie has indeed been a world class CEO. Extremely well positioned for continued success and I look forward to joining this preeminent global organization.
As Charlie alluded to since joining the Board in January of 2014, I have been struck by the incredible commitment this company has to its clients and merchants who are of Certainly very important partners of Visa. I've also been thoroughly impressed with the quality of the people in the company and their commitment to technology and innovation. I've had the pleasure of getting to know the management team. They are a terrific group and a very strong group, and I look forward to working with all of them, Including especially Ryan McInerney, Visa's President. For Visa employees that are listening, I have the greatest respect for you in everything you do.
I look forward to meeting you and working with you. Same for our investors, some of you who I already know. I success and as I look forward to this next chapter, I again thank him profusely for his leadership. I'd now like to pass it back over to Bob for closing remarks.
This is a bittersweet announcement for us. We are sad to see Charlie leave, but we are thrilled to have found someone of Al's caliber. His knowledge Expertise is close to unparalleled in the industry and Al is extremely knowledgeable about Visa and his strategy. As part of the transition, Charlie will serve as an advisor to Al beginning December 1, 2016 for a few months. Again, we appreciate the time you've taken to join us.
Now, I'd like to open the call up to questions. Operator?
Thank First question, it's from the line of Jason Kupferberg of Jefferies. Your line is now open.
Thank you, guys. Charlie, Best of luck to you and Al, welcome aboard. Just a couple of real quick ones. I guess, first, when exactly was of the Board informed, just trying to get a sense of how much time you actually had to do the rigorous search that you talked about. And We've seen some headlines on Bloomberg.
I guess, Al, are you not going to be based in San Francisco? You'll be based in New York and traveling as needed? Is that accurate?
I'll be anywhere I am needed to be. I expect to spend a significant amount of time in San Francisco. But As you know, we just bought Visa Europe. I expect to spend a lot of time in Europe making sure that Visa Europe is properly integrated into Visa, I expect to spend time in China where we're trying to increase our presence in that marketplace and we've got very strong businesses in dozens and dozens of countries around the world and I expect to be in all of them as well.
In terms of the timing, Charlie initially discussed this with the Board in mid September that he was Considering this. And since then, the Board has been working on a potential succession plan, Should Charlie decide to leave, which obviously today he did. And So we've had this time to look at it while Charlie was making a final decision and that allowed us to do the extensive search I mentioned And end up with exactly the right person to run this company after Charlie.
Next question, please.
Update on the queue. Next question is from the line of Sanjay Sakhrani of KBW. Your line is now open.
Yes. Thanks and congrats again to Charlie as well and Al for your new role. Al, could you just talk about some of the things you might of the questions you may have. You've obviously had a front row seat to many of the successes, but maybe you could just talk about some of your priorities as Charlie did when he entered the role. Thanks.
Well, thank you. I think it would be Colossal mistake for me to come in and think that there's a number of things that I ought to go change. I think this company is doing extremely well and has and Charlie has built a world class leadership team. I view my job to support The people of Visa around the world and help them take advantage of the many opportunities that the company faces around the world as well as deal with of the challenges, the reality is that certainly not Charlie and over time I'll figure out how to put my own stamp On the organization, but I'm not looking to make wholesale changes as I assume the role of CEO on December 1st.
Sanjay, this is Charlie. Let me just add, I think one of the very unique situations we find ourselves in is, It's very rare that you have the opportunity to have a transition where you have someone with several decades' worth of experience in the industry At the same time that they have intimate knowledge, of the company itself. And that's exactly what we have with Al, Having his experience before joining the Visa Board and then the 2.5 to 3 years that he's been part of the Visa Board, Myself and the senior management team have just hugely valued his knowledge and experience and have used him as a tremendous resource. So It's for those reasons, I certainly feel like Alice has the opportunity to what's the expression, start from a it's not a standing start, it's a running start.
Thanks, Sanjay Chen. Next question?
Thank you. Next question is from the line of James Schneider of Goldman Sachs. Line is now open.
Good afternoon and congratulations to Al and it's been a pleasure working with you with Charlie. I was wondering if you can maybe Maybe one for Bob. Can you maybe talk about as you considered various internal and external candidates, what were the 1 or 2 Main qualities you were looking at in terms of Visa's future leader, whether it be technology, operational expertise, other strategic Values, what's the main thing you wanted to get right in the transition? You
did a good job mentioning a number of them. Obviously, there's some basic things that you would expect in any CEO, things like integrity and leadership quality and experience in leadership and you can go around to people that have worked and been with Al and you'll find out a lot about that As we did. But in addition to that, obviously, this is a dynamic industry that has a lot of fast moving parts. Visa is a leader in that industry and we plan on staying a leader. So we wanted someone who was up and running, to use Charlie's term, and up to speed on Visa and with deep knowledge of this complicated industry.
Technology It was very important. It's a changing industry and technology is changing it. We're a leader in that and we plan on staying there. So there was a combination of That's pretty well. You don't make a lot of mistakes doing that.
So it was a surprise To have Charlie leave, understand and I'm actually very proud of the decisions he's made. But we were incredibly fortunate to have Al where he was, knowing him well with his background, both in technology as well as in payments.
Thanks, Jim. Operator, next question.
Thank you. Next question is from the line of David Taggart from Evercore ISI, line is now open.
Thank you. And let me add my congratulations, Charlie and Al. A quick question on whether, Charlie, you'll have any non compete agreements once your advisory relationship with Visa ends?
I've not signed anything new as part of this and I'm going to do everything I can to help with this transition.
Thank you. Next question please.
Thank you. Next question is from the line of Bryan Keane
Nothing in the release about reiterating guidance or the fundamentals. And with the change in CEO, we're getting some investor questions about the fundamentals. Any changes there that would be helpful if you guys could at least comment on that. Thanks so much and good luck, Charlie.
Thanks. There'll be as you know, there'll be Visa will be releasing earnings next week and just Some of that can be dealt within in that call. This is Al again. I would reiterate that This is a personal decision that was made by Charlie. There's nothing changing For Visa, other than that somebody else is going to be sitting in Charlie's chair come December 1.
The fundamentals of this of the business, the direction of the business, the things the business has been focused on, the strategy of the business, which again, I That was part and parcel of being involved in approving the strategy of the company as a Board member. None of that is going to change. So Investors should understand that this is simply what we're advertising it as. It's CEO A husband, a father and a son ahead of his job title as CEO and for that I have enormous respect for
him. And when you have the earnings call next week, you'll be brought up to speed to the minute on the business.
Thanks, Brian.
Next question?
Your next question is from the line of Craig Maurer of Autonomous. Your line is now open.
Yes, thanks. Congratulations, Al. I look forward to working with you again. And Charlie, best of luck in Whatever is next and I appreciate the interactions we've had. Al, fast question, when you were of the at Amex for 23 years and especially as Head of Consumer for the last 3 or 4 years, The environment was a bit different than the one you're stepping into now in terms of both regulation and relationships with merchants The relationships fees ahead with issuers.
So I was wondering if you could talk about your view of the current environment and the the challenges that you're presenting with now as they're probably quite different than what you had then.
Well, Craig, good to reconnect with you as well. Clearly, the industry has continued to evolve. I view that all for the good. I think that The ecosystem of commerce and the role that Visa plays in it has certainly grown Tremendously and Visa is a global leader. I do think as you rightly so pointed out, I spent the bulk of my career at American Express On the issuing side of the business and I think given that the vast majority of our clients are in fact issuers, I think it gives me an advantage in terms of knowing that side of the business and knowing what our clients are trying to achieve and want to achieve.
There's certainly There's a bit more regulation in the business and certainly, the business as the world has gone increasingly digital, Has changed form factors and other elements of the business, but I think a lot of The fundamentals of what it takes to be successful in this space remain. And So I'm looking forward to making sure the company takes fullest advantages of the opportunities it has around the world as well as of
Thanks, Craig. Next question, please.
Thank you. Next question is from the line of Lisa Ellis from Bernstein. The line is now open.
Thank you. And Charlie, you'll be missed and welcome. I look forward to working with you too. I know you said that the Strategy for Visa will remain intact as you've played a critical role in helping shape that with Charlie. Just in your own words, how would you characterize the top 2 or 3 strategic priorities for Visa over the next 3 to 5 years?
Well, I think number 1, we want to make sure that we Continue to be very, very focused on being a terrific partner To the people that we work with around the world, the nature of the ecosystem of payments is that There is not just there is not one company that gets it all done. And we have issuing partners and merchant partners and technology other questions around the world and making sure that we're in lockstep with all of them continues to be extraordinarily important. Obviously, the digital space And the role that payments is playing in this increasingly digital world will be Continue to be a very, very important focus of the company and we want to make sure that as the world becomes more and more digital that We are as much of a leading player as we were and are in the more traditional world. The third point I would say is that I think that all of my life experience would suggest that winning organizations are winning organizations because they've of the best talent and I have been always and will be in this role maniacally focused on making Sure that we attract and retain the best possible talent and that we develop them well and we coach them well and We communicate to them well and that certainly will be a centerpiece of what I'll make sure I'll be focused on as well.
Thanks, Lisa. Next question, please.
Thank you. Next question is from the line of Chris Brendler from Stifel. Line is now open.
Hi, thanks. Good afternoon. And Charlie, great working with you as well. Best of luck. Sorry to see you go.
Al, I just I think I remember from our days past that I think one of the hallmarks of the American Express model was Being close to the merchant and providing value for the payment services you provide to the merchant. And I think when Charlie came in, I think he echoed that a little bit as well. Is it fair to say that Continue to focus on the merchant side of the Visa relationship under your leadership?
Absolutely. I mean, as I said in my answer to the prior question, This is not an industry where one company can be an island and be successful. We will absolutely view the merchant world as extraordinarily important and we will be Very, very focused on making sure that we're an excellent partner to big and small and medium sized merchants around the globe.
This is Charlie. I just want to add something if it's okay, which is, because that was an important part of our strategy That we really initiated when I got here, but I just want to make sure that we're also perfectly clear. We're not focused on merchants at the expense focused on all of our other clients. We had a specific need to get focused on merchants because we hadn't been. But When you come inside this organization, we have people that come in every day and think about how to solve how to work with issuers, how to work with acquirers, how to work with merchants And how to work with 3rd parties who can enable all of our clients within the 4 party model.
So, working with merchants It's not at the expense of everyone else, it's in addition to everyone else. And if we get that balance right, as Al says, it's good for everyone. Next
question, please.
Thank you. Next question is from the line of Tom Crowhan from CLSA. Your line is now open.
Hi, thanks. Charlie, you'll be missed. I wish you the best of luck and look forward to meeting and spending some time with you Al as well. Going forward, Al, you kind of talked about traveling a lot to China and Europe. I'm just kind of curious on the Europe side.
How much time And how intimately involved were you with the Visa Europe transaction?
Well, I think the obviously, a transaction of that magnitude Got an enormous amount of airtime in Board meetings. And from the very first meeting that I We talked about Visa Europe and as we got closer to the reality of that transaction, not only did we have Very elongated discussions in regularly scheduled board meetings, but we had other board calls. And besides That I would spend time 1 on 1 with Charlie talking about it as well. We are in the early innings of the integration, but there's Tremendous team in Europe that we have in place as well as our team primarily in San Francisco of It's going to work very, very closely together to make sure that we integrate the Visa Europe Organization, the employees as well as our clients and our merchant partners as quickly as we can, but making sure that there's a Real focus on making sure it's done in a high quality fashion. I have obviously not Crossed the line into management as a Board member.
So it's not as if I've been to Europe and kicked the tires on this deal, but that's certainly something that I will be doing and recognize how important it is. And so I do expect to spend of good deal of time on the integration of Visa Europe.
And let me just mention real quick, when Vasant and I host The investor call on Monday of next week, we intend to obviously talk about the quarter, but we'll talk about of our views on next year as we traditionally have done. And obviously, a big part of that, we'll be talking about an update on of The European integration and so we'll make sure we cover that.
I want to thank everybody again for being with us on short notice. It's a very obviously important constituency to say the least. And so thank you for that. And I hope you'll be listening in a week from today for the earnings call.
If anyone has any follow-up questions, feel free to call myself or Victoria. Thanks very much.