Citing a 100% increase in new net assets, Charles Schwab Corp. give staff a ‘special’ 5% pay raise that will let a human resources analyst do a double take
As the war for talent rages in call center meccaes like Dallas and business booms, the Westlake, TX company pledges to leap forward
The Charles Schwab Corp. pre-emptively pays most of its 32,500 employees 5% more as it battles Fidelity, Vanguard and even Robinhood in a call center staff grab like the industry has never seen.
The Westlake, Texas-based company will pay an average of an additional $ 4,500 per year per staff member to reflect its aggressive offensive and defensive play after a difficult year of managing during a pandemic. But collectively, he is wildly well rewarded for his efforts. See: Fidelity, Schwab, Robinhood And Even (The Days Are Numbered) TD Ameritrade Hires Thousands Of Employees – Even As Merrill Lynch Has A Problem – What Does That Say About Free Trade?
The increase is roughly in line with the average for private workers in California but more than double the national average, according to the US Bureau of Labor Statistics.
Still, the decision to brag about the increase is unconventional, according to Kelli Cruz, former Schwab staffer and founder of Cruz Consulting Group, a human resources consulting firm in Mill Valley, Calif.
“Why would you do a press release? ” she asks. “Wouldn’t you just want your employees to be happy?
“I think it’s a nice gesture but some employees are going to scratch their heads and say, did I work my tail for a 5% raise?”
Schwab’s average salary is $ 89,000, or about $ 43.45 an hour, according to Zippia. This includes a range of $ 28,000 per year for an administrative assistant to $ 230,000 for an investment advisor at its branch in Corte Madera, California.
Rough calculations suggest that the increase adds about $ 140 million per year to its expenses. Wall Street didn’t like the spending shock.
Schwab shares (SCHW) dropped over a dollar to $ 70 after hours on the press release. It closed at $ 71.06, down $ 0.94 or 1.31% in regular trading, while the NASDAQ, on which it is listed, posted a modest gain.
The hiring frenzy
The increase is effective at the end of September 2021 and excludes the company’s executive board and colleagues already rewarded by Schwab’s incentive compensation plans, the statement added.
“This year, a record number of investors have turned to Schwab to help them navigate unprecedented market conditions,” the company said in its statement announcing the increase.
Schwab previously paid $ 1,000 in one-time bonuses in April 2020 to reward staff for dealing with the new demands of working in a pandemic.
“The company’s new core net assets reached a record $ 257 billion for the first half of 2021, more than double the results achieved during the same period last year.
“During the same period, clients opened 4.8 million new brokerage accounts, which for the Company’s second and third consecutive quarters represents more than one million new accounts.
It’s that latest report from new accounts that compels hiring, as Schwab strives to keep its service levels up to par.
He fights against Fidelity and Vanguard, who are also apparently hiring all the talent that blurs the mirror. See: Fidelity Investments set to make 4,000 new hires as senior executives can accept buyouts, arbitrage to match talent with digital needs
Vanguard, positioning itself for growth, has just moved into Schwab’s backyard in Westlake. See: Vanguard Group to open battlefront against CFP poaching in Schwab-Fido-Pershing backyard, after its human RIA increased 72% to $ 231 billion
Bettinger positioned the increase as a “results” bonus for Schwab’s past success.
“The focus and dedication of our teams has translated into exceptional results for our clients and growth for the company,” said the President and CEO.
“This increase is a way to reward our talented employees for their contributions and unwavering commitment to seeing the world through customers’ eyes, even during the most difficult times. “
The company’s executive board presented the increase as a way to show staff that they are grateful for all of their work in improving their situation and that of all shareholders.
“You have all gone above and beyond to make sure our customers are well looked after, our culture remains strong, and our business remains strong under the most extraordinary circumstances. Thank you once again from us to all members of the Executive Board for helping this company deliver on its promises.
The modest size and inclusiveness of the pay hike can be a double-edged sword, with some staff feeling damned by a slight raise, Cruz adds.
‘Great gesture … but’
Cruz wonders if Schwab wouldn’t do better to spend the hundreds of millions of dollars in the future in a more nuanced and merit-based way.
“Not everyone made the same extraordinary effort. That’s why I don’t like it.”
Schwab also offered an uncompensated award that can be greeted with universal enthusiasm by its staff.
The decision to return to a normal office presence is postponed until at least 2022 but employees can return to the office on a voluntary basis. See: Charles Schwab & Co. takes ‘omnichannel approach’ to fully open 406 branches, while rival Fidelity takes a more cautious approach to COVID
“It’s definitely the right choice,” said Cruz.
Schwab does not have a formal vaccination policy, but he is participating in efforts in suburban Dallas where he is located to help with vaccination efforts.
Texas has one of the worst COVID-19 infection rates in the country and a below-average vaccination rate.
Correction: A previous version of this article indicated that Schwab had 21,000 employees. It is around 32,500.