Schwab’s Retail Head Kallsen Leaves with $4.1 Million Package

Charles Schwab Corp. will pay Terri Kallsen, the former head of its investor services division that works directly with retail investors, $4.1 million as part of her severance package, according to a regulatory filing.

Kallsen, who formally left the discount brokerage pioneer at the beginning of August, will receive a lump-sum payment of $3.21 million in March 2020, on top of  $876,671 she will collect next month that represents 18 months of her base salary, according to the 8-K filing on Wednesday with the Securities and Exchange Commission.

Schwab also awarded her 66,636 stock options that were not scheduled to vest for seven months, as well as 17,698 restricted stock units granted in 2017. The value of the units and the stock underlying the options was $3.1 million,as of the close of trading on Wednesday.

Kallsen, 51,received $3.28 million in total compensation in 2018.

Kallsen ran Schwab’s direct-to-consumer brokerage business since 2014 but exited in late July in a restructuring that eliminated her position.

Jonathan Craig, a senior executive vice president and 18-year Schwab veteran, assumed responsibility for the investor services division. Craig also picked up the responsibilities of chief marketing officer Andy Gill, who also left in the reorganization. Gill’s farewell package was not disclosed in the regulatory filin because he was not one of the firm’s top five “named executive officers.”.

As is customary, Kallsen signed a non-disparagement and non-disclosure agreement as part of her severance package, which also included seven months of health insurance valued at  $14,171 and 10 months of “outplacement” services.

Schwab ended this year’s second quarter with $3.70 trillion of customer assets, 53% of which were in Kallsen’s investors services division and the rest in the advisor services division for independent registered investment advisers.

Assets in Kallsen’s business as of June 30 declined 39% from the end of this year’s first quarter but were up 31% from the end of the 2018 second quarter.