Charles R. Schwab

Charles Robert Schwab Sr. (born July 29, 1937) is an American investor and financial executive.

He is the founder and chairman of the Charles Schwab Corporation.

Schwab graduated from Stanford University in 1959 with a Bachelor of Arts in Economics.

In 1961, he graduated from Stanford Graduate School of Business with a Master of Business Administration.

He is a knight of the Sigma Nu fraternity.

In 1963, Schwab and three other partners launched Investment Indicator, an investment newsletter.

At its height, the newsletter had 3,000 subscribers, each paying $84 a year to subscribe.

In April 1971, the firm incorporated in California as First Commander Corporation, a wholly owned subsidiary of Commander Industries, Inc., to offer traditional brokerage services and publish the Schwab investment newsletter.

In November of that year, Schwab and four others purchased all the stock from Commander Industries, Inc. In 1972, Schwab himself bought all the stock from what was once Commander Industries.

In 1973, First Commander changed its name to Charles Schwab & Co., Inc. A decisive turning point came in 1975, when the U.S. Securities and Exchange Commission deregulated the securities industry through the Securities Acts Amendments of 1975, allowing companies like Schwab to charge any fees they wanted.

Schwab had long complained that the established firms showed little concern for the needs of their customers.

In those times securities were not bought by consumers, they were sold by salesmen, who made higher commissions and profits by selling riskier securities regardless of possible disadvantages to the consumers.

Schwab set up a series of radically different policies.

First, charges to consumers were cut in half.

Second, salesmen were (and still are today) paid hourly salaries, rather than commissions on the total sale price.

It set up a toll-free number to take orders nationwide and later set up a 24/7 telephone system that would allow customers to place orders from anywhere, at any time.

Established firms were outraged by these innovations, and tried to block Schwab's expansion.

He pioneered discount sales of equity securities starting in 1975.

His company became by far the largest discount securities dealer in the United States.

In September 1975, Schwab opened its first branch in Sacramento, California.

It expanded across the state and cut its expenses by putting a heavy emphasis on automation.

In 1977, Schwab began offering seminars to clients.

In 1981, Bank of America offered Schwab $53 million in stock for his 37 percent ownership.

He sold, but remained as president of a semi-autonomous unit.

At this point the unit had annual sales of $41 million, 600 employees, and 220,000 customers through 40 branches.

Expansion was rapid, reaching 1.6 million customers in 1986, with sales of $308 million.

Bank of America, however, had its own separate severe problems, and its stock plunged.

The SEC investigated Schwab on the possibility he was selling stock to take advantage of insider information; he denied it, and no charges were filed.

Tensions between the Schwab unit and Bank of America escalated until 1987, when the deal was cut for Schwab to buy back the brokerage company for $230 million.

Schwab took the firm public.

In 1988, however, the company was forced to rebate $2 million to customers whose funds had been illegally used.

He semi-retired from the company in 2008 when he stepped down as CEO, but he remains chairman and is the largest shareholder.

As of May 2021, his net worth is estimated by Forbes to be $10.6 billion, making him the 210th richest man in the world.

Schwab was born in Sacramento, California, the son of Terrie and Lloyd Schwab.

He is one of two children, having a younger sister.

His father was a lawyer and the district attorney of Yolo County, while his mother was a housewife.

Schwab grew up in Woodland, California, before moving to Santa Barbara, California at the age of 12.

In his youth, he worked several jobs, including as a railroad switchman, a roustabout in an oil field, and as a caddie.

He attended Santa Barbara High School and was captain of the golf team.

He attended pre-college school at Holy Rosary Academy in Woodland.