Walter W. Bettinger II
SCHWAB CHARLESAbout Walter W. Bettinger II
Walter W. Bettinger II, age 64, is Co‑Chairman of The Charles Schwab Corporation’s board, serving as a director since 2008 and as Co‑Chairman since 2022; he was CEO from 2008 through December 31, 2024 after joining Schwab via its 1995 acquisition of The Hampton Company, which he founded in 1983 . He is not independent under NYSE standards, alongside Charles R. Schwab, CEO Richard A. Wurster, and Carolyn Schwab‑Pomerantz . He also serves as Co‑Chairman of Charles Schwab Bank (CSB) and as a trustee of multiple Schwab-affiliated investment trusts .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| The Charles Schwab Corporation | Co‑Chairman | 2022–present | Board leadership; succession planning |
| The Charles Schwab Corporation | Chief Executive Officer | 2008–Dec 31, 2024 | Led Ameritrade integration; long-term strategy execution |
| The Charles Schwab Corporation | President | 2008–2021 | Senior executive leadership |
| The Charles Schwab Corporation | Chief Operating Officer | 2007–2008 | Operations oversight |
| The Charles Schwab Corporation | Various EVP roles (Investor Services; Individual Investor Enterprise; Corporate Services; Retirement Plan Services) | 2000–2007 | Sales, service, marketing management |
| The Hampton Company | Founder | 1983–1995 (acquired by Schwab in 1995) | Entrepreneurial leadership |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Charles Schwab Bank (CSB) | Co‑Chairman | 2022–present | Bank board leadership |
| Schwab Family of Funds; Schwab Investments; Schwab Capital Trust; Schwab Annuity Portfolios; Laudus Trust; Schwab Strategic Trust | Trustee | Ongoing | Oversight of registered investment companies managed by Schwab affiliate |
Board Governance
- Independence: Not independent; only non‑independent directors are Charles R. Schwab, Walter W. Bettinger II, Richard A. Wurster, and Carolyn Schwab‑Pomerantz .
- Committee assignments: None; he does not sit on Audit, Compensation, Nominating & Corporate Governance, or Risk committees .
- Attendance: The board met eight times in 2024; each director attended at least 75% of applicable board and committee meetings; all directors attended the annual meeting except Bharat Masrani .
- Leadership structure: Board separates CEO and Co‑Chairmen roles; independent directors meet in executive session led by the Nominating & Corporate Governance Chair (Frank C. Herringer) .
- Classified board: Stockholder proposal to declassify the board is on 2025 ballot; board recommends against and notes a 2022 declassification proposal failed to obtain the required 80% approval .
Fixed Compensation
| Component | 2024 Amount | Notes |
|---|---|---|
| Base Salary | $1,500,000 | No change vs 2023 |
| Director retainer | $0 | Employed directors (Schwab, Bettinger, Wurster) receive no additional director pay |
Performance Compensation
| Metric | Target/Grant | Result/Payout | Design Details |
|---|---|---|---|
| Annual Cash Incentive (CEBP) – Adjusted Diluted EPS | Target EPS $2.76 | Actual EPS $3.25; funding 117.69% | Payout curve 0–200% based on threshold/target/max; committee may apply negative discretion (none applied) |
| 2024 LTIs – PBRSUs | $10,950,000 grant date fair value | Earn-out 0–200% based on ROTCE/COE over 2024–2026 | Cliff vest at 3 years; payout matrix scales from 50% at threshold to 200% at maximum |
| 2024 LTIs – Stock Options | $7,300,000 grant date fair value | Time-based vesting | Vest 25% per year over 4 years; 10-year term; exercise price at grant date close |
| 2022 PBRSUs (performance period ended 12/31/2024) | 3-year performance | Payout 176.84% (ROTCE/COE = 478.69%; ROTCE avg 43.57%; COE avg 9.10%) | Committee certified without adjustments |
Other Directorships & Interlocks
| Company | Role | Notes |
|---|---|---|
| None found | — | No current external public company directorships disclosed for Mr. Bettinger |
Expertise & Qualifications
- Financial services, brokerage, banking, asset management, strategic planning, finance, operations, marketing, regulatory, accounting, risk management, international business experience; senior executive leadership over 40+ years .
Equity Ownership
| Item | Detail | As of/Period |
|---|---|---|
| Shares owned (direct/indirect) | 969,351 (includes 2,541 held by spouse) | March 3, 2025 |
| Right to acquire within 60 days | 2,139,508 shares (options/RSUs exercisable/settling) | March 3, 2025 |
| Total beneficial ownership | 3,108,859; <1% of outstanding shares | March 3, 2025 |
| Outstanding equity awards snapshot | Multiple option tranches with exercise prices $26.39–$77.86; PBRSUs scheduled for 3/1/2026 (141,757 units) and 3/1/2027 (165,140 units) | Dec 31, 2024 (awards schedule) |
| 2024 vesting/exercises | Options exercised: none; Stock vested: 251,296 shares; value realized $16,675,048 | 2024 |
| Deferred compensation (DCP2) | Aggregate balance $28,010,532; 2024 aggregate earnings $4,089,890 (no company contributions) | 2024 |
| Hedging/pledging | Company policy prohibits speculative hedging and pledging/margin loans in company securities ; no pledging disclosed in ownership table notes |
Governance Assessment
- Independence and committees: Not independent; no committee memberships. This limits independent oversight by Mr. Bettinger and concentrates influence via Co‑Chairman role alongside Charles R. Schwab. RED FLAG: Non‑independence combined with board leadership .
- Pay-for-performance: Strong linkage; 94% of CEO pay variable and PBRSUs tied to ROTCE/COE; 2024 annual incentive funded at 117.69% and 2022 PBRSUs paid at 176.84% based on multi‑year performance . Positive signal for alignment.
- Director compensation: As an employee director, he receives no separate director fees (non‑employee director program retainer $100,000; equity $215,000 mix 60% RSUs/40% options applies to independent directors, not to Bettinger) .
- Ownership alignment: Significant beneficial ownership and ongoing equity exposure via options and PBRSUs; insider policy bans hedging/pledging, supporting alignment .
- Severance and change‑in‑control terms: Substantial potential acceleration—illustrative values show early vesting of stock options ($3.56M) and RSUs ($39.39M) under retirement/severance/change‑in‑control scenarios, indicating meaningful contingent value. RED FLAG: Large accelerated vesting exposure could weaken downside alignment if triggered .
- Say‑on‑pay and shareholder feedback: 2024 say‑on‑pay approved ~91%, suggesting investor support for executive pay design .
- Related party transactions: No Bettinger-specific related‑party transactions disclosed beyond standard director credit relationships permitted under Sarbanes‑Oxley; board policy governs review/approval by Audit Committee .
- Board structure: Classified board persisted after 2022 declassification vote failed to reach 80% threshold; a new 2025 stockholder proposal seeks annual elections. RED FLAG: Classified structure can impede accountability; Board recommends against declassification .
Director Compensation (non-employee program reference)
| Component | Amount/Structure | Vesting/Timing |
|---|---|---|
| Annual cash retainer | $100,000 (non‑employee directors) | Annual; optional deferral via DCP2 |
| Committee chair retainers | $50,000 (Audit, Risk, Compensation, NCG Chairs) | Annual |
| Committee member retainers | $20,000 (Audit, Risk); $15,000 (Comp, NCG) | Annual |
| Equity grant | $215,000 total value per director; 60% RSUs / 40% options | RSUs vest 25%/25%/50% over 3 years; options 10‑year term |
Note: Mr. Bettinger does not receive the above director program compensation because he is an employee director .
Performance Compensation – Detailed Metrics
| Plan | Metric | Threshold | Target | Maximum | Outcome |
|---|---|---|---|---|---|
| CEBP 2024 | Adjusted Diluted EPS | 50% of target EPS | $2.76 EPS | 200% of target EPS | Actual $3.25; payout factor 117.69% |
| PBRSUs 2024–2026 | ROTCE / COE | 100% = 50% payout; <100% = 0% | 150% = 100% payout | ≥670% = 200% payout (linear interpolation between bands) | In progress |
| PBRSUs 2022–2024 | ROTCE / COE | 100% = 100% payout | 325%–524.99% linear to 200% | ≥525% = 200% payout | 478.69% result; 176.84% payout |
Insider Transactions (Form 4–like outcomes)
| Transaction Type (2024) | Shares | Value |
|---|---|---|
| Option exercises | 0 | $0 |
| Stock vested (PBRSUs/RSUs) | 251,296 | $16,675,048 |
Equity Awards – Snapshot
| Award Type | Key Terms | Illustrative Grants/Counts |
|---|---|---|
| Stock Options | 25% annual vest over 4 years; 10-year expiry; exercise prices at grant date close | Multiple tranches with exercise prices $26.39, $42.99, $52.05, $46.81, $41.98, $64.10, $77.86, $77.41, $66.47; various expirations 2026–2034 |
| PBRSUs | Cliff vest after 3 years; payout 0–200% based on ROTCE/COE; includes AOCI in ROTCE for 2024 awards | 2023 PBRSUs scheduled 3/1/2026: 141,757; 2024 PBRSUs scheduled 3/1/2027: 165,140 |
Governance Assessment Summary
- Strengths: Clear pay‑for‑performance design; robust clawback policies compliant with SEC/NYSE; hedging/pledging prohibited; strong say‑on‑pay approval .
- Concerns: Non‑independent Co‑Chairman with no committee membership; classified board structure; sizable potential accelerated vesting under severance/retirement/change‑in‑control scenarios; concentration of proxy authority including discretionary voting on unlisted items by Schwab/Bettinger/Morgan .
- Engagement/attendance: Board and committee attendance satisfactory (≥75%); executive sessions led by independent chair of NCG; investor engagement noted in CD&A .
Overall signal: As former long‑tenured CEO and current Co‑Chairman, Bettinger’s governance profile emphasizes continuity and strategic oversight rather than independent challenge; alignment mechanisms (PBRSUs, ownership, clawbacks) are solid, but classified board and acceleration features warrant investor monitoring .