By Niket Nishant
(Reuters) -Charles Schwab said on Tuesday that President Rick Wurster will succeed longtime CEO Walt Bettinger, marking a changing of the guard at the brokerage firm after 16 years.
Bettinger, who became CEO in late 2008, will retire at the end of the year but continue as executive co-chairman of the board, the company said.
The transition comes at a crucial time for the company as high interest rates have made deposits and debt expensive, putting pressure on profits in the most recent quarter.
The company’s shares are down nearly 6% this year despite a stock rally.
“I had hoped Bettinger would stick around a little longer, even just another year,” said Michael Wong, Morningstar’s director of Financial Services Equity Research for North America.
“I would have liked to see more continuity, especially at CEO level.”
Schwab has reshuffled its ranks in recent months, including appointing a new CFO. In June, Chief Operating Officer Joe Martinetto 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 the future strategy.
THE LEGACY OF WEDDER
Under Bettinger, Schwab grew its market cap from $18 billion at the end of 2008 to $119 billion. Client assets also grew more than eight times over the same period.
He oversaw the company’s $26 billion acquisition of TD Ameritrade and eliminated commissions on trading activities, a move that helped the company win more retail customers.
He also steered the company through the banking crisis last year, when the collapse of three lenders raised concerns about the health of the sector.
In an interview with CNBC on Tuesday, Bettinger said he had intended 2025 as the time to retire.
“We completed the integration of Ameritrade last summer. It was very important for me to be here through that integration and see it through to the end,” Bettinger told CNBC.
Wurster, who takes over on January 1, joined Schwab in early 2016 and has been president since 2021.
He “will have to focus on steadying the ship after the volatility the company has faced since Silicon Valley Bank collapsed,” said Andrew McGee, senior analyst at investment research firm Third Bridge.
The incoming CEO inherits one of the country’s largest real estate firms and will have to navigate emerging trends and competition to stay on top.
‘Every few years there are new innovations in the financial sector Charles Schwab (NYSE:) has had to adapt to a kind of zero-commission trading,” said Morningstar’s Wong.
Still, the transition can be smooth because Wurster “is well known on the Street as a consistent contributor to Schwab’s quarterly updates,” according to TD Cowen.
