Charles Schwab founder stepping down
I have been honored to get to know Chuck Schwab the man, the philanthropist, and the giver, and not just the successful businessman, as he chairs the U.S. President's Council on Financial Literacy, where I serve as vice chairman. A class individual and a standout business leader with an impeccable reputation, worldwide. That is saying a lot in this day and age where corporate leaders seem to be focused on "the me," over "the we."
My personal guess (and no, I do not know this to be a fact) is that Chuck is not so much "retiring" as "rewiring." And if he decides to focus even half of his powerful intellect on solving some of America's most pressing social problems and economic challenges in coming years, such as the massive lack of financial literacy in this country, there is simply no easy formula to calculate the amount of good he can do for both society and nation.
Irrespective of what else he decides to do (and he has earned the right at this point in his life to do as he pleases), the Operation HOPE family, the Bryant family, and myself personally, wish him nothing but the best in this next "dimension" of his amazing life of leadership, accomplishment, giving and service.
Below you can read the full official story of Mr. Schwab's transition from chairman and CEO, to chairman of his immensely successful company. What a classic American success story, and an inspiring one at this particular time in America's corporate history.
Honored to follow his lead as Chairman of the U.S. President's Council on Financial Literacy.
Onward with HOPE
John Hope Bryant
Bettinger has been chief operating officer at the company -- which has a market cap of more than $26 billion -- since February 2007.
Schwab said in a statement: "I will continue to serve as a very active chairman and look forward to continuing the strong partnership that Walt and I have developed."
The move was long-anticipated but could weigh on investors' confidence in the firm, given the uneasy financial environment and the tumultuous circumstances the last time Schwab stepped down from the top post.
Schwab headed the company until 1998, when he became co-CEO with David Pottruck during the boom and bust of the dot-com era. In the midst of a decline, Schwab stepped down and Pottruck was named CEO in January 2003.
But that was short-lived.
The founder returned in July 2004 to re-inject confidence in the brokerage, which was seen as straying from the business model Schwab had established.
The return was successful in reversing the revenue declines, profit warnings and job cuts at the San Francisco-based company.
Schwab now provides online brokerage services, banking and financial advice, and has recently delivered a string of solid quarterly earnings as retail investors stream into markets. Last week, the company's results topped expectations.
LEADING THE CHARGE
A spokesman said management had planned for a successor since 2004. "The company is doing very well and the strategy is moving forward, so it seemed to the board and to Chuck that it was the right time," said Schwab's Greg Gable.
Charles Schwab was not available to comment.
Adam Honore, senior analyst at Aite Group, called Schwab "the guy that led the change in the business model" since the 1970s, when new U.S. rules deregulated the commissions charged by brokerages.
While others raised fees, Schwab lowered them, undercutting competitors and helping to establish the discount model.
Rivals have since been scrambling to mirror that model, which in recent years has come to rely heavily on the accumulation of clients' assets to turn a profit.
TD Ameritrade <AMTD.O> and E*Trade Financial Corp <ETFC.O> have also managed to grow their asset base.
"Given everything else that's going on, the Street may hit Schwab a little bit because the brand name is leaving, but when you look under the covers it's not that big a deal," Honore said.
"It's the picture of stability as far as transitions go."
Schwab's shares, which closed up 4.5 percent at $22.85 on Tuesday, have managed to duck much of the damage the credit crunch has brought on the rest of the financial sector.
Separately, the company said it would increase its quarterly cash dividend, payable in August, by 20 percent to 6 cents a share.
(Reporting by Jonathan Spicer, editing by Phil Berlowitz, Gary Hill)
Copyright 2008 Reuters. Click for restrictions.
Schwab, 70, will remain executive chairman of Charles Schwab Corp <SCHW.O>, which he launched in 1973. He will be replaced as CEO by Walter Bettinger, effective October 1, the company said on Tuesday.
NEW YORK (Reuters) - Charles Schwab, a pioneer of the discount brokerage, has stepped down for the second time in less than six years as chief executive of the company that bears his name.