Chairman, president, and chief executive officer, First Data Corporation
Born: 1949, in Connecticut.
Education: Central Connecticut State University, BS, 1971.
Career: Framingham Trust, vice president of operations; First Data Corporation (then owned by American Express), Omaha First Data Resources unit, 1975–1981, director of special projects; American Express Money Order Division, 1981–1985, vice president of finance and planning; American Express Travel Related Services' Data Based Services Group, 1985–1989, executive vice president; First Data Corporation, Integrated Payment Systems subsidiary, 1989–1991, president; 1991–1998, Payment Services businesses, 1997–1998, executive vice president, and Merchant Services businesses (additional responsibilities); First Data Corporation, 1998–2002, president, chief operating officer; January 2002–, chief executive officer; January 2003–, chairman of the board.
Address: First Data Corporation, 6200 South Quebec Street, Greenwood Village, Colorado 80111; http://www.firstdatacorp.com.
■ Electronic commerce and payment company executive Charles T. "Charlie" Fote assumed the title of chief executive officer of First Data Corporation on January 1, 2002, and became chairman of the board effective January 1, 2003, succeeding Henry C. "Ric" Duques, who had been the company's chairman since its inception in 1992.
In 2003 First Data was the country's largest debit- and credit-card transaction processor, the largest merchant processor, and the dominant processor of consumer money transfers. With market capitalization of $26 billion, annual revenues of $7.6 billion, annual earnings of $1.3 billion, and about 29,000 employees worldwide, it handled electronic payment, issuance of credit, debit, smart, and stored-value cards, and merchant transaction-processing services. It provided these services for about 3 million merchants (through the company's subsidiary TeleCheck) and 1,400 card issuers, including such well-known customers as Wal-Mart and J. P. Morgan Chase. These transactions—including more than 11 billion credit- and debit-card transactions each year—were valued at more than $1 trillion at the beginning of 2004.
The global company also handled cash payments (through money transfers and money orders) in 169,000 locations in more than 195 countries and territories through its agent network Western Union, which First Data acquired in 1996. It also provided check processing and verification services throughout the United States, United Kingdom, Australia, Canada, Mexico, Spain, and Germany.
As of 2003 First Data conducted over 1,100 transactions per second while servicing its customers, including its second-largest customer, the U.S. Postal Service. According to Fote, First Data performed tasks that banks did not usually want to do—for instance, sending out bills and organizing checks, selling and servicing point-of-sale terminals, gathering money from merchants, and guaranteeing that money was available at stores around the world. First Data distributed 5.8 million pieces of mail every day and printed 125 million statements every month while providing consumers and businesses with payment validation.
Before joining First Data, Fote was employed as the vice president of operations for Framingham Trust. He first joined First Data—then owned by American Express, the international credit-card leader—in 1975 as director of special projects with the company's First Data Resources unit in Omaha, Nebraska. He became vice president of finance and planning with American Express Money Order Division in 1981 and executive vice president of American Express Travel Related Services' Data Based Services Group in 1985. Fote served as president of First Data's Integrated Payment Systems subsidiary in Englewood, Colorado, from 1989 until 1991, when he was promoted to executive vice president of First Data. In that role, he was responsible for the Payment Services businesses. In 1997 he was given added responsibilities with the Merchant Services businesses. In 1998 he became president and chief operating officer of First Data.
Even before taking over as CEO and chairman, Fote was instrumental in moving First Data's headquarters from Atlanta to the Denver, Colorado, area in 2001 when the company began to concentrate more on its international markets. Fote felt that Denver offered a better location for a global emphasis. At the time of the move, the international component of First Data's business had grown from zero to 25 percent in just ten years. Fote expected that percentage to double over the following decade.
Although Fote sharpened First Data's focus on its core business—handling credit-card transactions for retailers—he consistently looked to innovation in both services and technology. He noted in 2003 that First Data generated more than half its annual revenue from products that had not existed a decade earlier.
First Data's expanded exposure to the credit-card market reflected Fote's belief that this market would grow even more rapidly as PIN-based (personal identification number–based) systems, including credit-card payments, gained reliability. Fote stated that electronic authentication at the point of sale was moving toward a technology that would all but eliminate illicit use of credit cards.
Fote also helped organize eOne Global, a research and development partnership with Goldman Sachs, Boston Consulting Group, and General Atlantic Partners. Its first project was CashTax, a tax-payment project that as of 2003 processed 40 million payments annually for corporate customers. Fote countered domestic e-payment companies, such as PayPal, with First Data's own MoneyZap, which is an international venture.
In addition, Fote focused on new sources of revenue, such as retail establishments where credit cards were not currently accepted. His expansion plans included the debit-card market, the nation's fastest-growing transaction segment. Fote grew First Data into the largest PIN-based debit-card processor in the country, servicing more than 95,000 automatic teller machines.
Fote used First Data's Western Union subsidiary to launch a string of innovative new products to make electronic transactions faster and easier. A new service called PayCash let customers make Internet purchases in cash: Western Union forwarded money to the merchant at the point of purchase. Fote said future product innovations would allow merchants and customers to make and track transactions through mobile applications such as cell phones.
With U.S. payments in cash and checks down to about 70 percent and expected to drop below 40 percent by 2010, Fote was also preparing for the transition from a cash to a cashless society. First Data processed about $425 billion in electronic payments in 2001, including $20.7 billion in Internet transactions.
Fote believed not only that technological change was occurring faster and faster, but also that it was becoming more widely distributed around the world, as opposed to being merely concentrated in a few advanced countries. In this increasingly challenging environment, he judged that his company would achieve its goals by attracting smart, talented people who liked to compete.
One of Fote's techniques for maintaining his company's technological edge was working with the Fielding Graduate Institute (FGI) to provide a customized e-learning program to sharpen his employees' organizational development skills. Courses approved by the top manager included performance management and coaching, electronic learning, organizational learning, virtual teams, and collaboration.
The FGI program coordinated with a number of initiatives that Fote applied after assuming the helm of First Data. One of these initiatives was the creation of an Organizational Development (OD) Center of Excellence at the corporate level. It provided the company's OD professionals with their own dedicated staff and specialized reporting structure.
Fote had a reputation for being sophisticated, yet also down-to-earth. Colleagues credited him with "street smarts" and noted his hands-on style of management. He insisted on daily conference calls with upper managers to create and maintain accountability. He was not averse to doing the job—whatever that job might be. For instance, when he sat on the board of directors of the South Metro Denver Chamber of Commerce in the early 1990s, the chamber moved to new offices. The chamber's president, Brian Vogt, recalled that "Charlie was one of the board members who showed up to carry boxes. He epitomizes the CEO as leader. He's bigger than life, but there he was helping us out one afternoon" (Moore).
Former First Data chairman and CEO Henry "Ric" Duques said of Fote upon Fote's nomination as chairman of First Data: "Charlie has proven himself to be a truly exceptional leader. He brings a combination of superior operating expertise as well as strong strategic vision of where we want First Data to be in five, ten years. I know he will take First Data to new levels of excellence" (press release, February 7, 2001). Brian Vogt aptly summarized Fote's personality: "He's savvy, he's bright, he's funny, and he's tough. He's pretty much an ideal when it comes to the kind of business leader we really need in this time" (Moore).
In substantial part due to Fote's vision and abilities, First Data ranked as the 43rd-best-performing company in the nation, according to BusinessWeek magazine, and Fortune , in its 2003 list of "Most Admired Companies," rated the company as first in its industry. Forbes' s "2003 Top 500 Companies" listed First Data as America's 84th-largest corporation based on its composite scores for sales, profits, assets, and market value.
See also entry on First Data Corporation in International Directory of Company Histories .
"First Data Announces Chief Executive Officer Succession Plan," PRNewswire, company press release, February 7, 2001, http://www.prnewswire.co.uk/cgi/news/release?id=62667 .
Moore, Paula, "Fote Brings First Data Headquarters to Denver," Denver Business Journal , October 12, 2001, http://denver.bizjournals.com/denver/stories/2001/10/15/focus4.html .
—William Arthur Atkins