Charles R. Schwab and David S. Pottruck want to do more than just operate the nation's largest online brokerage. Don't get them wrong: Providing discount trading services for Middle America has been satisfying, not to mention financially rewarding. But the co-CEOs of Charles Schwab Corp. (SCH) think the firm can do better. They'd like to cater to an upmarket clientele, folks with a few million to invest. They want to court serious online traders, and keep their Main Street customers happy. "We're trying to address all kinds of needs," says Pottruck.
No one ever said Schwab and Pottruck lack ambition. They've been co-CEOs for three years, an arrangement that both investors and analysts say works surprisingly well. Schwab, 63, sets the direction of the company with the passion you'd expect of a man who has been building his namesake firm for almost three decades. Pottruck, 52, is Schwab's heir apparent and runs the day-to-day operations with the energy that befits the honorary captain of the U.S. wrestling team at the Sydney 2000 Olympics.
The pair surprised rivals in 2000 by shelling out a cool $2.7 billion for U.S. Trust Corp., a 147-year-old company that is a top estate planner for the wealthy. Three weeks later, Schwab and Pottruck said they would pay $488 million for CyberCorp Inc., a Texas brokerage that offers active online traders sophisticated quotes and stock screening tools.
The pair isn't afraid to move fast when conditions change, either. In mid-December, with the market tanking, Schwab and Pottruck took swift action. They slashed their own salaries in half, cut executives' salaries for two months, and encouraged employees to take unpaid leave. With the market in turmoil, 2001 is likely to be an even bigger test of this pair's management prowess.