Charles Schwab 2023. Pay Equity Disclosure is just one of several issues to be voted on before the annual meeting at 9 am Pacific on May 18, 2023. Vote AGAINST Marianne C. Brown, Frank C. Herringer, auditor, pay; FOR Pay Equity Disclosure. Unlike most companies, you can’t just join the meeting with your control number. Instead, you must register in advance.
The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The company operates in two segments, Investor Services and Advisor Services.
I voted with the Board’s recommendations 50% of the time. View Proxy Statement via SEC’s EDGAR system (look for DEF 14A). Read Warnings. Good corporate governance generally results in better profits and a better society. However, I don’t prioritize profits over our natural environment and human needs, especially when companies externalize costs. (see The Shareholder Commons)
Charles Schwab 2023: ISS Rating
The Charles Schwab Corporation’s ISS Governance QualityScore as of May 1, 2023, is 10. The pillar scores are Audit: 8; Board: 7; Shareholder Rights: 10; Compensation: 9. (Yikes!) Corporate governance scores courtesy of Institutional Shareholder Services (ISS). Scores indicate decile rank relative to index or region. For example, a decile score of 1 indicates lower governance risk, while a 10 indicates higher governance risk.
Charles Schwab 2023: How I Voted
| Item | Egan-Jones Recommendation | CorpGov.net Vote |
|---|---|---|
| 1A-1E – Election of Directors | FOR, EXCEPT 1B) FRANK C. HERRINGER | FOR, EXCEPT Marianne C. Brown, Frank C. Herringer |
| 2 – Ratification of the Appointment of Independent Auditors | AGAINST | AGAINST |
| 3′ – Advisory Vote to Approve Executive Compensation | AGAINST | AGAINST |
| 4 – Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation | 1 YEAR | 1 YEAR |
| 5 – Shareholder Proposal – Pay Equity Disclosure | FOR | FOR |
| 6 – Shareholder Proposal – Report on Discrimination Risk Oversight and Impact | FOR | Abstain |
Charles Schwab 2023 Votes Explained
E-J recommended against pay as unaligned, Herringer for over tenured, and being on the compensation committee. Reminded by iconikapp, I also voted against Brown for being overboard. E-J also recommends against auditors that have served longer than seven years. Deloitte & Touche LLP has served 47 years so that independence could be compromised.
Of course, I voted for our proposal on Pay Equity Disclosure #5. I abstained from #6. Experience has shown me that National Center for Public Policy Research proposals often have a hidden agenda of trying to prove discrimination against white men. That problem is less widespread than NCPPR expects. So rather than taking the time to dig through all the language, I abstained.
I had help with my voting from Egan-Jones, my proxy voting policy through
Iconikapp. and by briefly looking and some funds that announce their votes in advance. Note: you can automate all your proxies to be voted according to human values by signing up for the iconik/AYS app. In about two minutes, you’ll vote all your proxies according 
to values that balance environment, social, governance, and profitability. More information at Free Proxy Advisor From As You Sow & Iconikapp. I have a more customized version, so your results with the iconik/AYS app may differ. Now, you can also sign-up for automated voting with iconikapp through Third Act.
Charles Schwab 2023: Pay Equity Disclosure Proposal
This proposal is from me, James McRitchie. Schwab’s refusal to set a timeline for publishing unadjusted pay gap data reflects a need for more transparency and accountability to investors and employees.
Our Company’s opposition statement says a pay equity analysis at Schwab, “conducted in 2022, showed that our female employees earn approximately 99.2 cents for every dollar earned by similarly situated male employees, and our employees who identify as people of color earn approximately 99.9 cents for every dollar earned by similarly situated white employees.” They also discuss many positive DEI efforts, resource groups, and awards
Yes, Schwab is ahead of many firms. However, Schwab has yet to be willing to set a multi-year timeline for disclosing unadjusted median pay gaps. Only unadjusted median pay gaps tell us how our company assigns value to employees through the roles they inhabit and the pay they receive.
Unadjusted pay gaps show “who is swimming naked when the tide goes out,” to borrow from Warren Buffett.
Do minorities and women hold as many high-paying jobs as white men? Unfortunately, we won’t know because many pay gaps can be explained away with the excuse that minorities and women aren’t working at the same level or in Schwab’s terms, aren’t “similarly situated” with white employees. Have you ever heard that before?
The only benchmark to measure if real pay gaps are shrinking is the unadjusted median pay gap. Sure, any company will try to explain away such gaps, but they are also more likely to identify strategies to reduce that gap if they report unadjusted pay gaps.
Schwab’s refusal to commit to eventually publishing unadjusted pay gap data reflects poorly on our company’s reputation. Let’s change that.
Vote FOR Proposal 5. Better reporting will lead Schwab to make better use of all its human resources. That will profit employees and shareholders alike.
Other Recommendations
You might want to see how a few funds voted in our Shareowner Action Handbook.
Charles Schwab 2024: Mark Your Calendar
Pursuant to Rule 14a-8 under the Exchange Act, some proposals by stockholders may be eligible for inclusion in our proxy statement for the 2024 annual meeting. If you want us to consider including such a proposal in our proxy statement next year, it must comply with SEC rules and it must be received at the company’s principal executive offices no later than December 2, 2023.
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