Charles Schwab to Split Top Posts

Discount brokerage Charles Schwab Corp. said Friday that it would split the jobs of chairman and chief executive in a bid to guard against concerns over its corporate governance structure.

Charles Schwab, the 65-year-old founder of the world’s biggest discount brokerage, will give up his co-CEO post but remain chairman, helping set strategy and representing the San Francisco-based firm to the public, spokesman Glen Mathison said.

David S. Pottruck, 54, who shared the CEO title and ran day-to-day operations for the last five years, will be president and chief executive effective May 9.

“As many experts have suggested, from regulators to Congress to independent blue-ribbon panels, it is important in today’s environment that the positions of CEO and chairman be distinct and that the chairman play a central role,” said Schwab, who launched the brokerage as an antidote to Wall Street in 1971.

Many corporate governance watchers believe that splitting the chairman and CEO jobs allows for more independent management of companies.

Schwab’s business has been ravaged by the bear market, leading to 9,000 job cuts in the last two years and a 68% drop in the firm’s share price since the end of 2000.

Despite the difficult climate for investment firms, analysts expect a smooth transition in Schwab’s executive suite.

“People like Chuck Schwab a lot,” so their sentimental reaction might be negative, analyst Jeff Harte of Sandler O’Neill & Partners told Bloomberg News. “Fundamentally, things won’t change because David Pottruck has been jointly making high-level decisions with him for a long time.”

Schwab shares rose 8 cents to $9.22 on the New York Stock Exchange.