A 1998 CNN article captured the moment: “The addition of AOL to the S&P 500 may be an attempt to update the image of the venerable index by adding a red-hot Internet stock and giving it more of a technology slant.” While AOL has long since disappeared from the index, Blitzer’s willingness to include an internet company in the S&P 500 arguably opened the investment floodgates for web-based business.


One of the committee’s more dramatic decisions was its choice not to remove AIG from the S&P 500 when the US Treasury Department bailed out the troubled financial firm during the financial crisis. Blitzer explained the committee’s thinking in a 2014 blog post:

Shortly after Lehman filed for bankruptcy [on September 15, 2008], the news broke that the US Treasury was bailing out AIG, one of the world’s largest insurance companies. Suddenly the Treasury owned over 90% of the company. The S&P 500 guidelines require that any company in the index have a public float of at least 50%. Under the rules, the index would have removed AIG. In those scary moments, dropping AIG would have sent the markets tumbling yet again. Given market conditions and investor fears, the Index Committee quietly set the 50% float rule aside. No trading was required. Fast forward a few years, the Treasury sold its shares back to the company and the 50% float rule was okay.

General Electric

Perhaps the most memorable decision of Blitzer’s tenure, though, is one of the committee’s more recent ones—the deletion of General Electric from the Dow. GE was the index’s last remaining original member.

“As economies change, some companies become old. You no longer want the buggy whip factory in the S&P 500 and GE is now seen as a declining conglomerate,” explains John Coffee, director of the Center on Corporate Governance at Columbia Law School. “So it goes and you want to bring in the new people like the Amazons of this world, and that’s been going along at a gradual pace.”

The removal of GE from the Dow also stands out because it was replaced by Walgreens, a retailer, rather than another industrial group. “If you have to delist something because it’s no longer representative… you’re not going to replace it with the nearest identical company,” says Coffee. “You’re going to look to see which sector is underrepresented in terms of its share of overall US market capitalization.”

Indeed, as American business has changed, the S&P and Dow have changed along with it. While Blitzer dealt with plenty of disruption during his time, Murphy may face even thornier challenges as his successor. For example, the money-losing business models and convoluted corporate governance of recently listed and soon-to-IPO tech giants will present difficult decisions on index eligibility. It’s not that much of an exaggeration to say that our financial future depends on what the committee decides.

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