Registered Rep
Cultures in Conflict
October 2004

Imagine a business designed specifically to help increase the size of client accounts — but one whose best success stories end in a customer outgrowing the firm and departing for a rival.

Chief Executive
Can Schwab Rescue Schwab?
August/September 2004
With the ouster of David Pottruck, Charles Schwab is once again in the hands of its founder.

Requiem for Charles Schwab's Past
An excerpt from Charles Schwab: How One Company Beat Wall Street and Reinvented the Brokerage Industry, by John Kador

Business Week Online, January 31, 2003. Charles Schwab: How One Company Beat Wall Street and Reinvented the Brokerage Industry (Wiley; $24.95) is, for the most part, a quite flattering portrayal of a company that revolutionized the brokerage industry and the man who built it. Author John Kador traces the company's history from its San Francisco roots as a renegade discount brokerage to its ascendance as the king of online brokerage in the '90s -- and finally to its latest transformation into what is darn close to becoming a full-service brokerage and money-management firm.

Schwab: Pick It While It's Down?
Wall Street pounded the discount-broker king for missing analysts' estimates by a penny. But it looks like a long-term winner

BusinessWeek Online, January 31, 2003. By Amey Stone. Stocks that miss Wall Street's earnings targets typically stumble badly. But they often bounce back quickly, as buyers return hoping to get in at a low price. Charles Schwab (SCH ), the king of discount brokerage, hasn't been so lucky. Yet it's far from clear it totally deserve its recent fate.

Charles Schwab takes a reduced role
Charles Schwab, who founded the company that became the nation's largest discount brokerage and unleashed a revolution in the financial services industry, is reducing his role at the company.

CBS Marketwatch, January 31, 2003. By Jon Friedman. Charles Schwab & Co., which boasts $765 billion in assets, said Friday morning that Schwab would relinquish his co-chief executive officer title and remain as chairman.

Co-CEO David Pottruck, who has held that title for about a decade, will become the company's sole CEO, effective May 9.

"This is a natural, evolutionary move," said Michael Holland, president of Holland & Co., a New York money manager. "Pottruck has been effectively running the company on a day-to-day basis for some time, while Schwab has taken on the status of an elder statesmen, a role which he can do effectively."

Schwab didn't return a phone call seeking comment.

Schwab has expanded grandly beyond its base as a discount brokerage firm. It has become a powerhouse in the business of collecting customers' mutual fund assets, a highly lucrative business. Its online brokerage operation has been a juggernaut as well.

"After years of whispering, the Schwab board has found its voice," Kador said. "Empowered by a mounting sentiment that boards are actually required to lead, the directors acted on the reality that the co-CEO arrangement is dysfunctional and that companies function best when the roles of chairman and CEO are distinct. The position of chairman is a role that reality has tailored for Chuck Schwab. The company is much better off in the hands of a strong CEO who can focus on execution."

Charles Schwab to give up CEO post

George Raine, Chronicle Staff Writer

Saturday, February 1, 2003

San Francisco Chronicle, February 1, 2003. By George Raine.

Charles Schwab, the founder of the San Francisco discount brokerage that bears his name, is relinquishing the title of co-chief executive, making his longtime partner David Pottruck the company's CEO, the company said Friday.

Schwab, 65, will remain chairman of the board of directors, which announced the management shift saying it would be effective May 9, the date of the company's annual stockholders meeting.

In an interview, Schwab said that suggestions from regulators, members of Congress and others that changes are in order in corporate governance structure "are at the center of my judgment" in making the changes.

Registered Rep
Tables Turned on Schwab

I have very little use for lawyers that file nuisance lawsuits hoping for a payoff. In this Registered Rep article describing how Schwab is being sued for running television and other ads that mislead investors, I defend Schwab for doing the right thing and getting out of the IPO business.

Registered Rep
Why Wall St. Hates Charles Schwab

In the book, author John Kador describes a company that is still fighting the “us versus them” battle that might have been appropriate years ago — but might not be today. Schwab still sees itself as the little guy, the David fighting the Goliath of Wall Street. Hasn't anyone told Schwab to check its size? It has become the 800-pound gorilla of the self-directed retail brokerage.

On Wall Street
Looking Inside Schwab

If there's one public figure or firm that annoys brokers, it's Charles Schwab. So is Schwab the company and the man, sitting in the catbird seat? Not quite, says author John Kador in his new book, "Charles Schwab: How One Company Beat Wall Street and Reinvented the Brokerage Industry" (Wiley, 2002). We asked him to explain.

GetAbstract
www.getabstract.com

For busy executives, GetAbstract.com sells summaries of business books. This is their take on Charles Schwab. I’m tickled that they found the book almost too “laudatory” in praise of the company. GetAbstract.com gives the book 8 points out of 10. If you want to see the complete abstract, drop me an email.

Business writer John Kador describes the evolution of Charles Schwab & Comp any, a former discount brokerage blessed with the ability to transform itself through four different incarnations. Kador emphasizes Schwab’s commitment to integrity and customer service, a code that enabled it to prevail despite upheavals and threats. While the book focuses on the comp any, the running portrait of Chuck Schwab gives it a personal core. Kador highlights Schwab’s concern with exercising his values and leading a highly principled business amid an often shady industry he saw as corrupted by greed. Kador’s engaging narrative style is designed to inform and entertain general investors, executives and managers. At times, the discussion of Chuck Schwab and his company sounds almost too laudatory, as if the book is an in-house publicity piece. getAbstract.com recommends that readers should take all that sugar with a grain of salt, given this otherwise compelling dish.

San Jose Mercury News:
Charles vs. Chuck - CANDID PORTRAIT PRESENTS THE REALITIES AND THE MYTHOLOGY December 1, 2002

Robert Yehling of Wordjourneys.com reviews the book and interviews the author

Arizona Republic Worth Your Time Kador presents the realities and the mythology surrounding the rise of . . . November 28 2002