San Francisco (July 21, 2004) – After announcing a 10 percent drop in earnings for the second quarter Tuesday, discount brokerage Charles Schwab also announced that chief executive David S. Pottruck would be stepping aside in favor of company founder and chairman Charles R. Schwab.
Pottruck, who had served as co-CEO with Schwab from 1998 to 2003, was not due to step down until 2006. “The last few years have been difficult in the securities markets,” he said in a statement, “and I accept the board’s decision that it’s time for me to step aside.”
With investors wary and competition fierce, the discount brokerage has experienced rough times recently, cutting more than 10,000 jobs in the past four years. Chief financial officer Christopher Dodd told analysts Tuesday that the company would look for ways to reduce expenses by $150 million to $250 million a year, suggesting the possibility of more cuts.
The company reported second quarter income of $113 million, down from the previous quarter’s $161 million. Its stock, which had been weak of late, rose on the news of Pottruck’s departure.
“As I see the opportunities ahead,” new CEO Schwab said in a statement, “I want to underscore my confidence in the strength of our franchise, the value we provide clients, the dedication of our employees, and the depth of our management team.”
-- WebCPA staff
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