American Express Co will cover legal costs incurred by directors facing a civil or criminal lawsuit, the company said in documents filed with regulators Friday. The bylaw amended by American Express' board of directors follows settlements early this month which had WorldCom and Enron Corp directors using their own money to settle lawsuits.
"We made the change to formalise in a bylaw what had essentially been our practice," said American Express Company spokeswoman Judy Tenzer. She would not say if this move by the American Express directors was in response to news that Enron and Worldcom directors used their own money to settle suits.
Separately, American Express documents filed with regulators revealed that the company awarded its chairman and chief executive officer, Kenneth Chenault, a $100,000 raise for his 2005 base salary. Chenault, who now makes $1.1 million annually, also saw his 2004 annual incentive award increased to $6 million from 2003's $3.5 million. The company's CEO also received 390,000 stock options and 76,693 restricted shares.