Written by Niket Nishant
(Reuters) – Charles Schwab said on Tuesday that President Rick Wurster will replace longtime CEO Walt Bettinger, marking a change of guard for the brokerage firm after 16 years.
The company said Bettinger, who became CEO at the end of 2008, will retire from his role at the end of this year, but will continue to serve as executive co-chair of the company's board.
The move comes at a critical time for the company, as rising interest rates have made deposits and borrowings more expensive, weighing on earnings in the most recent quarter.
Despite the rise, the company's stock price has fallen nearly 6% this year.
“I would have liked Mr. Bettinger to stay on for a little longer, even if it was just another year,” said Michael Wong, director of North American financial services equity research at Morningstar.
“I would have liked to have seen more continuity in management, especially at the CEO level.”
Schwab has made personnel changes in recent months, including appointing a new chief financial officer. In June, Chief Operating Officer Joe Martinet also moved to another role within the company.
Analysts at TD Cowen said the transition was “probably well-anticipated” and “seems natural,” but investors will have questions about its strategy going forward.
Bettor's Legacy
Under Bettinger, Schwab's market capitalization increased to $119 billion from $18 billion at the end of 2008. Customer assets also increased more than eight times over the same period.
He oversaw the company's $26 billion acquisition of TD Ameritrade, eliminated trading fees and helped it reach more retail clients.
He also led the company through last year's banking crisis, when the collapse of three lenders raised concerns about the health of the industry.
In an interview with CNBC on Tuesday, Bettinger said he is targeting 2025 as his retirement date.
“We finished the Ameritrade integration this summer, and it was very important for me to come here and see it through through that integration,” Bettinger told CNBC.
Mr. Wurster, who will take up his position on January 1, joined Schwab in early 2016 and has served as president since 2021.
Andrew Magee, senior analyst at investment research firm Third Bridge, said he needs to focus on “steadying the ship given the volatility the company has faced since the Silicon Valley Bank failure.”
The next CEO will take over one of the nation's largest brokerage firms and will need to navigate new trends and competition to stay at the top of the game.
“Every few years, new innovations occur in the financial sector. charles schwab (NYSE:) had to adapt to things like zero-commission trading,” Morningstar's Wong said.
Still, TD Cowen said the transition may be smooth because Wurster is “well known in the public eye as a consistent contributor to Schwab's quarterly updates.”
