No Time for Hubris

No Time for Hubris

The Merriam-Webster Dictionary defines humility as “freedom from pride or arrogance; the quality or state of being humble.”

As I summarize my thoughts in this, my 14th, opportunity to share a CEO letter with you, I feel a deep sense of humility. In 2021, we achieved historic records by virtually every measure:

   • New brokerage accounts of 7.3 million

   • Total brokerage accounts of over 33 million

   • Core net new client assets of $558.2 billion

   • Total year-end client assets of $8.1 trillion

   • Full-year revenue of $18.5 billion

   • Full-year earnings of $5.9 billion

   • Stock price on December 31 of $84.10

   • Year-end market capitalization of over $150 billion

To some, this might seem like a time to celebrate. A time for congratulations. A time for pride. But that is not who we are at Schwab. Rather, it is our deep sense of humility that guides the way we operate and has led to these record results.

Following the example set by our founder, Chuck Schwab, we strive to build trusting relationships with the four key constituencies we rely on for our success:

   1. Our valued clients

   2. Our dedicated employees

   3. Our long-term stockholders

   4. The communities where we live and work

So, while some might see the end of a year of record results simply as cause to celebrate, we see it as a chance to humbly express our gratitude and to recommit ourselves to our longstanding strategy of seeing everything we do “Through Clients’ Eyes.” For if we truly serve others in the way we would want to be served, the results will speak for themselves. Over time, the only winning business strategy is to be honest, honorable, and transparent and to follow the Golden Rule.

As in past years, my goal for this annual letter is to be clear and straightforward—to write with minimal jargon, corporate speak, or trendy buzzwords. The litmus test for my letter is whether it reads as if I were corresponding with a business partner who has been out of touch for the past year. And as always, please let me know if I’ve achieved this goal or if I have fallen short.

"If we truly serve others in the way we would want to be served, the results will speak for themselves."

Our Valued Clients

Our Valued Clients

In 2021, investors opened more accounts and entrusted us with more of their hard-earned money than in any other year in our nearly 50-year history.


Although we clearly benefited from strong investor engagement and interest in the equity markets, we believe the primary answer is rooted in our commitment to the Golden Rule. As I have said many times, when we serve clients and prospects the way we would want to be served, they invariably choose to do more business with us and recommend Schwab within their circles of influence. In practice, we refer to this approach as “Through Clients’ Eyes.” Put simply, it means that we try to operate your company by considering our potential actions from the perspective of those entrusting us with their investments and their futures.

Although we strive to apply this approach in everything we do, this by no means implies that we are perfect in our execution. In 2021, there were times when we were overwhelmed by the volume of client phone calls—volumes of calls that were many times higher than the highest levels ever received in the past. And in 2021, we accrued approximately $200 million in connection with our efforts to resolve a matter with the Securities Exchange Commission involving certain historical client disclosures that were in place between 2015 and 2018 for one of our most popular investment offerings.

Despite challenges throughout 2021, our employees continued their extraordinary efforts. This included efforts to integrate several key acquisitions, with TD Ameritrade being the most significant. This complex, multi-year effort will yield tremendous benefits to our clients. In most large acquisitions, the acquiring company simply moves the clients of the acquired company onto the platforms of the acquiring company. But that approach is inconsistent with a “Through Clients’ Eyes” strategy. Instead, our approach has been to objectively study and evaluate the platforms from both Schwab and TD Ameritrade and strive to deliver the best from each company to our combined clients going forward. In the short run, this approach is somewhat more costly and takes more time. But in the long run, it is more aligned with our commitment to always seeing everything “Through Clients’ Eyes.”

In January 2022, Fortune magazine named us one of the 50 most admired companies in the world for the fifth consecutive year. And we received a variety of other honors and recognition from third parties. But as I said last year, despite our gratitude for these honors, we know recognition like this is fleeting. Our real reputation with each client is only as good as our last interaction with that client, and we are committed to delighting every client, of every size, every time they engage with us.

As we move into 2022, our commitment to our “Through Clients’ Eyes” strategy is as strong as ever. We have more than 3,000 open positions for new hires, many of which will be dedicated to enhancing the quality of service our clients receive when they engage with us via one of our multiple channels: online, on the mobile app, by phone, or in our branches. In 2022, we will again spend over $2 billion on efforts designed to bolster our systems availability, strengthen our information security, and improve the ease of doing business with us. We will continue our efforts to integrate our acquisition of TD Ameritrade—delivering world-class investing, trading, and custodial services to all our clients. And our three long-term strategic priorities of scale and efficiency, win-win monetization, and segmentation remain intact.


CAGR = compound annual growth rate
Financial results include TD Ameritrade from October 6, 2020, forward.

"When we invest in our employees, our clients benefit. The two are inseparable."

Our Dedicated Employees

Our Dedicated Employees

As the famed management consultant Peter Drucker once said, “Culture eats strategy for breakfast.” We agree. It is, after all, our employees who ultimately see the world “Through Clients’ Eyes” every day. Honoring our employees, treating them with respect, and valuing and promoting the power of a diverse and inclusive environment all contribute to a culture that attracts employees with a passion for and commitment to serving others.

Throughout 2021, we placed additional priority on the safety and health of our employees because of the COVID-19 pandemic. Other than in our branches, which largely reopened with stringent safety precautions late in the first quarter of 2021, most of our employees continued working remotely. As we transition into 2022, we will continue making decisions that serve our dual mandate of protecting the health of our employees and their families while serving our clients. When we do begin returning to the office in larger numbers, we will implement one of the most flexible approaches to work location in our industry.

We also took additional steps to recognize how hard our employees have worked over the past several years and how critical they are to our success. Last fall, we invested several hundred million dollars in providing a 5% base salary increase for virtually all our employees. And as a result of our financial performance, bonuses accrued for employees for the 2021 year are at the highest level we have paid in 13 years—over 135% funding for the corporate bonus plan, based on our exceeding the performance target we established for the year. When we invest in our employees, our clients benefit. The two are inseparable.

Our Long-Term Stockholders

Throughout my almost 14 years as CEO of Schwab, one constant has been the long-term orientation of our board of directors. When making significant strategic or financial decisions, our directors have supported our focus on long-term value creation and the acceptance of short-term consequences.

This long-term approach aligns perfectly with our “Through Clients’ Eyes” strategy because, at times, the only way to act on what we see through our clients’ eyes is to make a decision that will negatively impact our profitability in the short run. A perfect example is when we decided to lead the established investment services industry in 2019 by eliminating brokerage commissions for most equity and exchange-traded fund transactions.

For stockholders who believe in the Golden Rule, who believe in our “Through Clients’ Eyes” strategy, and who believe in the Virtuous Cycle, our long-term approach has paid off. Our stock, SCHW, began the year at $53.04 and ended the year at $84.10. Stockholder returns were further boosted by our regular dividend payments.

Schwab's Virtuous Cycle

The Virtuous Cycle recognizes and rewards our clients, employees, stockholders, and communities in a way that reinforces the benefits of continuing to work with Schwab over time. This type of long-term thinking defines the way we operate at Schwab. We strive to make decisions that will benefit all our constituencies for years to come.

Note: All growth metrics are 2021 vs. 2016.
Financial results include TD Ameritrade from October 6, 2020, forward.

The Communities Where We Live and Work

The Communities Where We Live and Work

Along with our commitment to serving clients, employees, and long-term stockholders is our commitment to serving the communities where we live and work. This commitment is demonstrated by the financial support we deliver through Charles Schwab Foundation and our nationwide efforts to enhance financial literacy, as well as the volunteer efforts of thousands of Schwabbies every year in local communities across the country.

Volunteerism has been a hallmark of your company for nearly its entire history, and for nearly 20 years we have offered employees paid time off to volunteer in support of non-profit efforts throughout the country. And we back our employees’ volunteer efforts with financial assistance that helps build and strengthen communities, with a particular emphasis on underserved communities and people in need.

Our commitment to the different communities in which we operate is also evident through our resolve to stay neutral on the seemingly endless and challenging political issues of the day. This approach is increasingly unique in the industry and difficult to maintain. But we continue to believe it is the right approach for your company.

Our Purpose at Schwab is to champion every client’s goals with passion and integrity. The statement is quite clear: We aim to serve every client. With approximately 20 million clients with differing political viewpoints, we believe we best deliver on our Purpose by remaining apolitical. We have even gone so far as to close our employee-funded political action committee (PAC), ceasing financial contributions to political candidates on both sides of the aisle. In serving “every client,” we commit to respecting the differing views that exist across our great country and not allowing personal views on politics to cloud our commitment to seeing “Through Clients’ Eyes”—every client’s eyes. Very simply, we want to be focused on helping investors and traders achieve great financial outcomes and giving them greater confidence in their future. Doing so delivers immeasurable benefits to clients, employees, and society more broadly. That has been, and will remain, our focus.

"Our Purpose at Schwab is to champion every client’s goals with passion and integrity."



I opened this letter, my 14th opportunity to share thoughts about your company, by acknowledging the humility I feel in reflecting on 2021. None of your company’s extraordinary successes in 2021 would have been possible without the trust that each of you places in us—whether as a client, an employee, a long-term stockholder, or a member of one of our local communities.

As I humbly express my gratitude for your trust, I also hope you recognize that not every year will yield record results. No one could reasonably commit to that. But you do have my commitment that your company will:

   • Continue to operate in a manner consistent with the Golden Rule.

   • Strive to see the world “Through Clients’ Eyes.”

   • Operate with integrity and transparency.

   • Share the benefits of success from our Virtuous Cycle with clients, employees, long-term stockholders, and the communities where we work and live.

   • Strive to maintain a culture that treats every employee with respect and honor and that ensures every employee is given the opportunity to thrive.

In short, we will continue aiming to be a firm you can feel proud to be associated with.

Thank you.



Walt signature

Walt Bettinger
March 4, 2022

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