Schwab Boosts CEO Bettinger’s Compensation 3% to $16.1 Million
Charles Schwab Corp. paid its chief executive Walter W. Bettinger II $16.1 million in 2019, up 3% from $15.6 million in the prior year, according to a preliminary proxy filing on Monday.
Bettinger, who has been president and CEO of Schwab since 2008, also received a $1.3 million salary, and a cash bonus of $4.8 million for his 2019 performance. Next year, he will get his second consecutive $125,000 increase in base salary and another $1 million increase in long-term incentive targets, according to the filing.
“The Compensation Committee believes that Mr. Bettinger’s leadership is a key factor in growing the long-term strength of our franchise by focusing on serving clients, operating in a disciplined manner and building a leadership team for the future,” the company said.
The median compensation for Schwab’s 16,000 employees, excluding Bettinger, was $105,565 in 2019, bringing his pay to a ratio of 153 to 1, according to the calculation that firms require public companies to report.
Bettinger’s pay exceeds the $14.7 million that Jones Financial paid its chief executive, Penny Pennington, 56, for running Edward Jones, the more narrowly focused retail brokerage firm, but trailed that of big bank CEOs. Morgan Stanley Chairman and CEO James Gorman, 61, was paid $27 million in 2019.
Schwab’s eponymous 82-year-old founder Charles R. Schwab received $6.1 million for his 2019 performance, up 1.5% from $6 million the prior year.
The discount broker pioneer’s literary performance was less stellar. The company owns the copyright and receives royalties from sales of the book, and agreed to donate net profits received from the publisher to The Charles R. Schwab Foundation for Financial Freedom, a non-profit foundation devoted to financial literacy. Proceeds as of yearend 2019 “have not exceeded the threshold for donations to the foundation,” the proxy said.
The proxy also lists shareholder proposals to require Schwab to disclose more information on the diversity of its employees and on its lobbying efforts.
The New York City Employees’ Retirement System refiled a proposal denied in the previous six years to require the company to disclose a breakdown of its workforce by race and gender, with corresponding pay levels.
Philadelphia-based Friends Fiduciary Corporation asked shareholders to require Schwab to disclose federal and state lobbying payments to assess whether money it spends directly and through trade associations are consistent with the company’s public positions. “Schwab supports protecting the interests of investors by holding the financial industry to a high standard, yet Schwab, SIFMA and the Chamber [of Commerce, where Chuck Schwab was a board member] reportedly lobbied ‘to quash various aspects’ of the Department of Labor fiduciary rule to require investment advisers to put their clients’ interests ahead of their own,” the proposal says.
As is typical of public companies, Schwab recommended that shareholders reject both proposals.
The San Francisco-based company acknowledged that after reviewing the 2019 shareholder vote on diversity it took steps to improve disclosure on its website of race and gender statistics, noting that what it shows is “more relevant” than the Equal Employment Opportunity Commissions data the shareholder requested. “Although there is still work to do at our company and across the industry, we are proud of the progress we continue to make at Schwab” regarding diversity and inclusion,” the proxy said.
Regarding the lobbying data, the board said the cost and effort required to compile the requested lobbying information would “outweigh its limited value to stockholders.”
Votes on the proposals and approval of executive compensation will be tallied at Schwab’s May 12 annual meeting, which will be held virtually this year rather than in San Francisco as in years’ past. Seven counties in the Bay area on Monday imposed rigorous “shelter-in-place” restrictions seeking to limit spread of the coronavirus.
—Jed Horowitz contributed to this story.