The CEO who was told he’d never run American Express has made Amex cool again—and is beating JPMorgan, Visa, and the S&P 500

Stephen Squeri appeared to check all the boxes as the next CEO of American Express. By 2016 he had spent three decades at the credit card colossus, reshaped tech operations, headed the corporate and merchant franchises, and orchestrated a spectacularly successful restructuring. But the Queens, N.Y., native had a giant liability in his quest to succeed the crisply tailored, cuff-link-sporting Ken Chenault: He didn’t dress like a Wall Street CEO.

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A year or two earlier, Squeri had appeared at a board meeting, held during a New York Jets playoff game, wearing his lucky Curtis Martin jersey under a suit jacket as a “go get ’em” shout-out to his prized team. “Some directors were a bit put off,” he told Fortune. “People judged a book by its cover, and my cover wasn’t all that good.” Coworkers took notice as well. Years earlier, recalls Squeri, “one fellow manager asked me, ‘Where did you get that suit?’ and I said, ‘I’ve got five more just like it I bought for a couple hundred dollars, total.’” The colleague’s rejoinder: “Therein lies the problem.”

As the board pondered Squeri’s qualifications, the head of HR advised him, “You need to dress like a CEO,” and proposed a solution: A clothing expert from a fancy store in Connecticut would come to Squeri’s New Jersey home on a Friday afternoon to orchestrate a sartorial reengineering. “The guy drives three hours in heavy traffic, and goes through my entire closet,” says Squeri. “And I say, ‘How much of this is going to work?’ and he says, ‘None of it.’” Squeri relates that the pair then spent hours picking out fabrics for shirts, suits, sports jackets, and overcoats, and selecting elegant shoes, socks, and belts. Before the haberdasher headed home, Squeri put a king’s ransom for the new wardrobe on his Amex card.

The makeover helped get him the top job—and presaged the corporate makeover he has spent the past near decade enacting. Squeri has forged one of the top growth engines in financial services by luring lovers of luxe as never before, and trending exclusive and young in a big way. The success of Squeri’s highly original, against-the-tide strategy is something of a revelation. Though he heads the eighth largest U.S. player in financial services by market cap ($200 billion), and a fabled institution that ranks as Warren Buffett’s second largest holding at Berkshire Hathaway behind Apple, the Amex chief is little known to the public and keeps a far lower profile than, say, JPMorgan Chase’s Jamie Dimon or Goldman Sachs’ David Solomon.

Yet surprisingly, since Squeri took the helm in early 2018, Amex boasts the highest returns among the largest U.S. commercial banks and payment providers. In that eight-year span, its stock has generated total yearly returns of 16.6%, a record that beats all its major peers and the benchmarks (save for Goldman Sachs which barely edges it out over that timeframe).

Squeri’s innovation: shifting sharply away from the “start folks cheap then upgrade them” policy that Amex and its competitors had long followed. He saw that affluent young people would happily pay up for premium cards, as long as the perks were right. “The reality is,” intones Squeri, uncorking one of his favorite phrases, “these Gen Z and millennials love premium, they love getting something that’s luxe. I viewed them as educated consumers who love luxury. They also love value. I said, ‘Wait a minute, these kids are smart.’”

Says Howard Grosfield, chief of U.S. consumer services at Amex: “Steve was determined to sharpen our focus on segments where we could truly differentiate and win. He doubled down not just on premium, but on attracting millennial and Gen Z customers who could deliver 20 more years of lifetime value.”

Amex’s Platinum Card “refresh” in September raised the fee from $695 to $895, but added sweeteners Squeri says are worth an extra $1,500 a year (including credits for Resy, Uber One, and hotel stays). The relaunch proved the most successful in Amex history, the company says. To wit: In the three weeks following the refresh, new account acquisitions on U.S. Platinum doubled, and retention rates stayed high since, despite the fee increase.

Squeri has more than proved he can crack the upper echelons—both as a CEO and diviner of what high-earners want. Now, he just has to do what’s arguably even harder: keep those millions of millennials and Gen Zers happy and charging against the backdrop of an economy where everything is highly uncertain.

It’s 9 a.m. on a brisk day in mid-March, and the six-two Squeri appears in his top-floor Manhattan office, fresh from a workout in the building’s gym. Today he’s attired in a gray hoodie over a white T-shirt. The nod to his now elevated taste can be seen in the Brunello Cucinelli logo embossing the sweatshirt and the Zegna shoes that he describes as “triple-stitch”—“I have 12 pairs of them”—as well as his Breitling watch. “We’ve partnered by providing offers on Breitling watches,” he declares, “I’ve