man of American Express in 1961, having worked for the company since 1948. Under Clark, the company kept a low profile and concentrated its efforts in the highly successful TRS business segment. Until 1965, American Express was operated as a joint-stock association in which shareholders were directly responsible for losses. The company was not immune to scandal under Clark's tenure: it suffered through a salad oil swindle involving a warehousing subsidiary in 1963, but Clark was able to show an operating earnings increase through his retirement in 1977. At that time, the company had posted operating earnings increases each year for 30 years (Teitelman, 1992, p. 38).
James Robinson III succeeded Clark in 1977 and it was under Robinson that the company went through its most tumultuous years. Robinson was a graduate of the Georgia Institute of Technology and the Harvard Business School. He worked at Morgan Guaranty Trust, then at an investment bank, and he joined American Express in 1968. Robinson began his career with American Express in charge of the American Express Bank. After two and a half years, he moved to the travel unit where, two years later, he was promoted to president of the company. In 1977, he assumed the role of chairman. Robinson was to oversee the company through scandal and its first operating loss, and analysts consider his presence to be as significant a factor in the company's performance during the 1980s and early 1990s performance as nearly any other influence (Spiro and Byrne, 1992, p.รก31).
When Robinson assumed the helm in 1977, some considered that the charge card business was in a maturation phase while others cited the volatility and cyclical nature of the Fireman's Fund operation as a potential problem. At the time, Fireman's Fund contributed half of the company's earnings (Teitelman, 1992, p. 41). The company was cash-rich at the time and, like other large companies at the time, moved to ...