The board of Charles Schwab Corp. fired chief executive officer David S. Pottruck this morning after a 2Q 10 percent drop in earnings. Pottruck is being replaced, effective immediately, by Charles R. Schwab, the current chairman of the board and the company's former chief executive officer.

"For nearly 30 years, Schwab's top priorities have been its clients and stockholders," Pottruck said. "And for 20 of those 30 years, I've been privileged to be part of the Schwab team, working with Chuck and some of the most talented, dedicated people in the investment world. But the last few years have been difficult in the securities markets, and I accept the Board's decision that it's time for me to step aside. It's been a great journey. After taking some time off with my family, I'll start thinking about the next step in my career."

Schwab will hold the post for "an indefinite period of time," according to chief financial officer Christopher Dodds. He reportedly said on a conference call that there was no timeline or search committee set for replacing Pottruck permanently.

Schwab founded the company that bears his name in 1971. He has been chairman of the board since Charles Schwab Corp. incorporated in 1986. He was chief executive officer from 1986 to 1997and then co-CEO from 1998 to May 2003, when he handed the reigns over to Pottruck.

Pottruck joined Schwab in 1984. As chief operating officer from 1994 to 1998, he spearheaded the firm's use of the Internet in providing services and making operations more efficient. He was widely regarded as heir apparent to the top job before becoming CEO in May 2003.

Pottruck's decision to step down was first reported Tuesday morning. The announcement about the CEO switch was bundled with the company's earnings report announcement. Earnings per share were $0.08, a penny less than average analyst estimates of $0.09, and 10 percent lower from a year ago. Revenues of $1.11 billion were in line with expectations, but Schwab faces challenges in the marketplace.  

Edited by: Caitlin  Pickall


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE