Peter J. Morgan III
SCHWAB CHARLESAbout Peter J. Morgan III
Peter J. Morgan III is Managing Director, General Counsel, and Corporate Secretary of The Charles Schwab Corporation (CSC); he is 60 years old and has served in senior legal and governance roles across CSC, Charles Schwab & Co., Inc. (CS&Co), and Charles Schwab Bank (CSB) since 1999 . He became Managing Director of CSC and CS&Co in 2022 and has been General Counsel and Corporate Secretary of CSC since 2019, building continuity across corporate governance, legal risk, and disclosure processes (including signing 8-Ks and proxy statements) . Operating context for 2024 included company performance of $10.1T in client assets (+19% YoY), net income of $5.9B, diluted EPS of $2.99 (adjusted diluted EPS $3.25), ROCE 15% and ROTCE 35%, with core net new assets of $367B (+20% YoY), anchoring the executive incentive framework Morgan participates in (CEBP and PBRSUs) .
Past Roles
| Organization | Role | Years | Notes/Strategic Scope |
|---|---|---|---|
| CSC | Managing Director; General Counsel & Corporate Secretary | MD since 2022; GC & Corporate Secretary since 2019 | Senior-most legal and governance responsibility at parent; oversight continuity across filings and governance |
| CS&Co (broker-dealer) | Managing Director (since 2022); Executive Vice President & Corporate Secretary (2020–2022); Senior VP & Deputy General Counsel (2009–2020) | 2009–present (various roles) | Led broker-dealer legal, governance, and disclosure processes; corporate secretary for operating subsidiary |
| CSB (bank) | General Counsel since 2009; Senior VP & GC (2015–2019); Executive VP & GC (since 2019) | 2009–present | Bank legal leadership; prudential and regulatory oversight support |
| CSC/CS&Co | Joined Schwab | 1999 | Long-tenured executive with institutional knowledge of Schwab’s legal and governance functions |
External Roles
- Not disclosed in 10-K/DEF 14A for Morgan .
Fixed Compensation
- Executive compensation structure comprises: base salary, annual cash incentives (Corporate Executive Bonus Plan, “CEBP”), and long-term equity incentives (PBRSUs and stock options) .
- Stock options vest 25% annually over four years; PBRSUs cliff-vest at three years against multi-year performance goals .
- Specific base salary, target bonus %, and LTI grant values are disclosed for Named Executive Officers (NEOs) only; Morgan is not an NEO in 2024/2025, so his individual amounts are not disclosed .
Performance Compensation
Annual Cash Incentive (CEBP) – FY 2024
| Metric | Weighting | Target (Adjusted Diluted EPS) | Actual (Adjusted Diluted EPS) | Company-wide Funding Payout | Vesting |
|---|---|---|---|---|---|
| Adjusted Diluted EPS | 100% | $2.76 | $3.25 | 117.69% | Cash (no vesting) |
- CEBP uses a threshold/target/maximum matrix with 0–200% payout range and discretion to reduce funding if risk considerations warrant; none was applied for 2024 .
Long-Term Incentives – FY 2024 Award Design
| Incentive | Weight of LTI | Performance Metric | Performance Period | Vesting | Payout Range |
|---|---|---|---|---|---|
| PBRSUs | 60% | ROTCE divided by COE (AOCI included for 2024 grants) | 1/1/2024–12/31/2026 | Cliff vest at 3 years | 50–200% with defined threshold/target/maximum matrix |
| Stock Options | 40% | Stock price appreciation | 10-year term | 25% per year over 4 years | N/A (options intrinsic value on exercise) |
- PBRSU performance matrix for 2024 grants pays 50–100% from 100–149.9% ROTCE/COE, 100% from 150–470%, and linearly up to 200% from >470–669.99%; 0% if ≤99.99% .
- For the prior 3-year period ended 12/31/2024 (2022 grants), PBRSUs paid 176.84% (average ROTCE 43.57%, average COE 9.10%) .
Equity Ownership & Alignment
- Stock ownership guidelines: CEO must hold ≥5× base salary; all other executive officers ≥3× base salary; PBRSUs count toward ownership, options do not .
- Insider Trading Policy prohibits hedging (short sales, options to open, selling uncovered options), short-term trading (except ESPP/vesting transactions), and pledging/margin loans using Schwab securities—mitigating misalignment and selling pressure risk .
- Individual beneficial ownership for Morgan is not separately disclosed in the Security Ownership table (NEOs and directors are listed; Morgan is not among those with individual disclosure) .
Employment Terms
| Topic | Provision | Applicability |
|---|---|---|
| Severance Plan (job elimination) | Lump-sum base salary equal to 15 business days × years of service (min 7 months, max 12 months) + salary during 60-day notice; lump-sum COBRA contribution | Executive officers (other than Mr. Schwab) |
| Equity on Severance | Options/RSUs that would vest during severance period vest; PBRSUs continue to vest subject to performance | Executive officers |
| Change in Control / Death / Disability | Options fully vest; RSUs and PBRSUs vest/pay at target as of termination | Executive officers |
| Recoupment (Clawback) | Section 16 Officer Incentive Compensation Recovery Policy (mandatory, NYSE-compliant) and broader Executive Council policy (restatement, fraud, misconduct) | Executives (mandatory for Section 16; broader policy covers executives/former executives) |
- Equity award timing policies prohibit manipulation around material nonpublic information; grants occur on set schedules (e.g., March 1) .
Risk Indicators & Red Flags
- Hedging/pledging prohibited (reduced alignment risk) .
- Robust clawback and incentive risk oversight, including caps and multi-year vesting .
- Say-on-Pay support: ~91% approval at 2024 meeting; ~92% approval at 2023 meeting, indicating investor acceptance of pay design .
- No delinquent Section 16 filing noted for Morgan in the proxy’s disclosure (late filings were noted for other individuals) .
Compensation Peer Group (for benchmarking program design)
- Asset Management: Ameriprise Financial, BlackRock, Franklin Resources, Goldman Sachs, Northern Trust, T. Rowe Price Group .
- Brokerage: Fidelity Investments, LPL Financial Holdings, Morgan Stanley, Raymond James Financial .
- Banking: Fifth Third Bank, PNC Financial Group, Truist, U.S. Bancorp .
- Custody & Processing: Bank of New York Mellon, Discover Financial Services, Mastercard, PayPal, State Street, Visa .
- Target percentile and any changes to peer composition for 2024/2025 were not disclosed beyond confirming 2024 continuity .
Say-on-Pay & Shareholder Feedback
| Year | Approval % | Notes |
|---|---|---|
| 2024 | ~91% | Compensation Committee maintained program consistent with prior year |
| 2023 | ~92% | Added PBRSU threshold (50% minimum) and maintained mix; strong support |
Expertise & Qualifications
- Legal/governance executive with 25+ years at Schwab; roles span CSC, CS&Co, and CSB (Deputy GC, GC, Corporate Secretary) .
- Age 60; current title Managing Director, General Counsel, Corporate Secretary; embedded in disclosure controls (proxy/8-K signatory) .
Investment Implications
- Compensation alignment: As an executive officer, Morgan’s incentives are tied to company-wide metrics (adjusted EPS in CEBP; ROTCE/COE in PBRSUs), reinforcing pay-for-performance against earnings power and cost of equity—especially pertinent as rates change and balance sheet dynamics affect EPS and ROTCE .
- Retention risk: Severance provides limited cash duration (max 12 months) and equity continues to vest subject to performance, which balances retention with performance discipline; no separate employment contract disclosures for Morgan (Mr. Schwab’s are unique) .
- Trading signals: Insider policy prohibits pledging and hedging, lowering forced-sale risk; absence of disclosed individual ownership/option positions for Morgan limits visibility into personal selling pressure or alignment magnitude .
- Governance robustness: Strong clawbacks, risk review, equity timing controls, and consistent shareholder support on Say-on-Pay suggest lower governance risk translating to more predictable incentive outcomes under CEBP/PBRSUs .