The Charles Schwab Corporation (SCHW) Earnings Call Transcript & Summary

All right. Well, good morning, and good afternoon, everyone, and welcome to the Charles Schwab Corporation's 2022 Annual Meeting of Stockholders. This is Rich Fowler, Head of Investor Relations for Schwab, and we want to thank you for joining us today. I have just a quick word on our agenda, and then we'll get going. Today's meeting follows our traditional course. Chuck Schwab will start us off and guide us into the rest of the day. And then we'll have time for questions later on. There is a box, I believe, on your webcast console for submitting them. And with that, it's my honor to introduce our Founder and Chairman, Chuck Schwab.

Well, thanks very much, Rich, and good afternoon, everyone. This is your Chairman, Charles Schwab, making the presentation today, which I'm always pleased to do. I wish I was doing it in person. Hopefully, next year, it will be not virtual, but it will be in person. But thanks for joining us for our 35th Annual Meeting of the Charles Schwab Corporation. We've had great, great growth in those 35 years. I want to thank you for your participation. And many of you I know are not only shareholders but also clients. Our agenda today will cover the following things. It's very typical of prior meetings. First, Peter Morgan, who is our General Counsel and Corporate Secretary, will cover the business agenda. And then following him, we'll hear from Peter Crawford, our Chief Financial Officer, who will talk about the business results in '21 and how things, we think, are going to go through the remainder of this year. After Peter's presentation, Walt, our CEO, will provide his report and he'll share his perspectives on the company's strategy going forward. Then Walt and I will take a few of your questions following that. And I think you need to send those in by e-mail. I'm sure you've been given instructions about how to do that. But first, I'd like to recognize our Board of Directors, people who, all throughout the year, help us, in so many ways, bringing wisdom to your management team. And I hope next year, we'll be together. But I just want to say we had our first Board meeting last April, all in person. It was really a pleasant thing in this now hopefully post-COVID pandemic period. Anyway, looking forward to in-person events, including our annual meetings. Also, they'll be joining us today remotely, unfortunately, so you can't see them in person, but they are such important contributors to our success. Our Board members are, and normally, I would say, please stand up but you can remain stated, John Adams, Walt Bettinger, Marianne Brown, Joan Dea, Chris Dodds, Steve Ellis, Mark Goldfarb, Bill Haraf, Frank Herringer, Brian Levitt, Gerri Martin-Flickinger, Bharat Masrani, Todd Ricketts, Charles Ruffel, Arun Sarin and, of course, Paula Sneed. I just want to thank you personally for your service to the company, and just I really appreciate you bringing your talent and your wisdom to all of us. Six Board members are up for reelection this year: John Adams is, Steve Ellis, Brian Levitt, Arun Sarin and myself as well as Paula Sneed. I told you that in an alphabetical order. You'll have a chance to cast your vote in a few minutes. You have normally done so. I also want to acknowledge our management team at Schwab and our tens of thousands of employees who, together, have made 2021 a wonderful year for Schwab and our millions now of clients after our very successful merger with TD Ameritrade. Now on with the business portion of our meeting. Peter Morgan, would you take over, please?

Thank you, Chuck. As the first item of business, I would like to introduce our inspector of election and our independent auditors. The Board of Directors appointed the inspector of election to conduct the voting for this meeting. This year, our inspector of election is Equiniti Trust Company. A representative of Equiniti, Kaili Roff, is with us today. Ms. Roff has filed an oath of inspector with me and has certified that Notice of this Meeting was mailed beginning on April 1, 2022, to all shareholders of record as of the record date. She also has informed me that based on preliminary count, we have a quorum for this meeting because 90% of the company's approximately 1.8 billion shares that are entitled to vote are represented by proxy at this meeting. Our independent auditors are Deloitte & Touche LLP. Ms. Diane Wallace of Deloitte & Touche is here at the meeting and will be happy to respond to your questions during the question-and-answer period. The polls are now open for voting on the proposals. If you were a stockholder as of March 18 of this year and have not returned your proxy card, voted by telephone or voted on the Internet, or would like to change the instructions in your proxy card or your telephone or Internet vote, you may vote at this time. For those of you attending our virtual meeting, you may click on the Vote Now button on the webcast console to cast ballot. [Voting]

Now I would like to present the 6 proposals we are asking stockholders to vote on this year. The first proposal is to elect 6 directors. This year, John Adams, Steve Ellis, Brian Levitt, Arun Sarin, Charles Schwab and Paula Sneed have been nominated for election to the Board of Directors. The second proposal is for approval of amendments to the certificate of incorporation and bylaws to declassify the Board of Directors. The third proposal is to ratify the appointment of Deloitte & Touche LLP as the company's independent auditors. The fourth proposal is for advisory approval of named executive officer compensation. The fifth proposal is for approval of the 2022 stock incentive plan. And the sixth proposal is for the approval of the Board's proposal to amend the bylaws to adopt proxy access. The Board of Directors has recommended that you vote in favor of each of the proposals to elect directors, provide approval to amend the certificate of incorporation and bylaws to declassify the Board of Directors, ratify the appointment of the independent auditors, provide advisory approval of named executive officer compensation, approve the 2022 stock incentive plan and provide approval to amend the bylaws to adopt proxy access. Each of these proposals is described in the company's 2022 proxy statement. If you would like to review our 2022 proxy statement, you can review it online at www.aboutschwab.com. We have also been notified that stockholders intend to present 2 proposals for your consideration at this meeting. James McRitchie, representing himself, will present the first stockholder proposal requesting amendment to the bylaws to adopt proxy access. Mr. McRitchie, will you please present the proposal?

Thank you. As my proposal #7 on proxy access states, most essential feature requested is that shareholders forming a nominating group not be limited with regard to the number in a participating group. As cited in the proposal, proxy access in the United States, a CFA Institute study, found proxy access would benefit both the markets and corporate boardrooms with little cost or disruption, raising U.S. market capitalization by up to $140 billion. The Schwab Board contends their proposal which allows 20 stockholders, each with 15/100 of 1%, to form an eligible group. However, such a scenario lacks credibility. The vast majority of those top stockholders have a business model based on low-cost indexing. They've never filed a shareholder proposal, so are highly unlikely the form a group to use proxy access, a much more time-consuming and expensive activity. The CFA study estimating $140 billion rise in market cap was based on proxy access having no limit with regard to the number in a participating group. The vast majority of companies have limited groups, unfortunately, to a maximum of 20 members. As a result, proxy access has only been used once, and that was to return a founder and a major shareholder to the Board. The anticipated economic benefits of proxy access have failed to materialize. The deceptive Board opposition statement also notes that the Board's procedural safeguards are missing from my proposal. Shareholder proposals are advisory and limited to 500 words. The Board's proxy access proposal and explanation contain more than 6,000 words, allowing them to go into much more detail. If my shareholder proposal passes, the Board is free to adopt the proposal, reject it or adopt it with amendments. I'm happy if they adopt it with the procedural safeguards that they've outlined. That's not an issue. The key is not to limit participating group members to 20 stockholders. Including a 20-member group limit does not provide a proxy access right, it provides a proxy access illusion. Vote against proposal #6, illusionary proxy access; or proposal #7, real proxy access. Only real proxy access will motivate current directors to work on behalf of shareholders to avoid a contested election. Thank you. This concludes my presentation of proposal #7, adopt real proxy access.

Amy Carr, representing Friends Fiduciary Corporation, will present the second stockholder proposal requesting disclosure of lobbying policy, procedures and oversight, lobbying expenditures and participation in organizations engaged in lobbying. Ms. Carr, will you please present the proposal?

Yes. Thank you. Good afternoon, fellow shareholders and members of the Board. My name is Amy Carr. I'm a shareholder advocate at Friends Fiduciary Corporation. We invest on behalf of Quaker faith communities, schools and other organizations across the country, and we are long-term shareholders of Charles Schwab. I hereby move proposal 8, asking our company to prepare a report on direct and indirect lobbying activities and expenditures to assess whether its lobbying is consistent with the expressed goals and in the best interest of stockholders. Company transparency and accountability are in the best interest of Schwab shareholders. This proposal would allow shareholders to evaluate the company's direct and indirect lobbying through third-party lobbying spending and ensure that sufficient internal accountability structures are in place to manage and minimize risk. Our proposal asks the company to disclose membership in and payments to their various trade associations and 501(c)(4) social welfare groups the company support. Corporate payments to these groups have no restrictions. This means that companies can give unlimited amounts to third-party groups that spend millions on lobbying and, often undisclosed, grassroots activity. For example, Schwab serves on the Boards of Investment Company Institute and Securities Industry and Financial Markets Association, which spent over $130 million on lobbying from 2010 to 2021. Schwab has consistently lagged peers in disclosures and the enhanced disclosures referenced in the Board's opposition statement continue to fall short of peer disclosures and fall short of best practice. Schwab has a broad lobbying footprint. And the company's spending information is difficult to obtain, limited and is not consolidated. Our company does not provide investors a central and comprehensive source where they can learn relevant corporate spending on direct or indirect lobbying activities, relationships, priorities and how those efforts are supportive of or aligned with the company's strategy and investor interest. Any misalignment can pose significant reputational risk. Without sufficient disclosure of contributions to trade associations and 501(c)(4) social welfare groups, shareholders have no way of knowing whether and to what extent Schwab is exposing itself to reputational risk. Proxy adviser ISS supports this proposal, noting that additional information on the company's trade association memberships, payments and oversight, along with direct lobbying expenditures, would enable shareholders to better assess the company's comprehensive lobbying-related activities and management of related risks and opportunities. Share owners need complete disclosure to be able to evaluate the use of corporate assets for lobbying and any risks that spending can pose. The company could easily and inexpensively provide this information. We urge share owners to vote for proposal 8. Thank you. I'm finished presenting the stockholder proposal.

The Board of Directors has recommended that you vote against these stockholder proposals. The statements against these proposals are contained in the 2022 proxy statement. If you are participating in the virtual annual meeting, please click on the Vote Now button to cast your ballot electronically at this time. If you have completed a ballot during the meeting, your vote will be counted and reflected in the final report of the inspector of election and in the minutes of the annual meeting. [Voting]

The polls are now closed. The inspector of election has completed a preliminary count of the proxies that were voted before this meeting. The preliminary count shows that: John Adams, Steve Ellis, Brian Levitt, Arun Sarin, Charles Schwab and Paula Sneed have all been elected to the Board of Directors. The proposal for the approval of amendments to the certificate of incorporation and bylaws to declassify the Board of Directors have not been approved. The proposal to ratify the appointment of Deloitte & Touche LLP as the company's independent auditor has been approved. The proposal for the advisory approval of named executive officer compensation has been approved. The proposal for the approval of the 2022 stock incentive plan has been approved. The Board's proposal to amend the bylaws to adopt proxy access has been approved. The stockholder proposal requesting amendment to the bylaws to adopt proxy access has not been approved. The stockholder proposal requesting lobbying disclosure has not been approved. Following the meeting, we will publicly announce the official voting results on Form 8-K in accordance with the applicable SEC rules once all the verifications have been completed by the inspector of election. This adjourns the business portion of the meeting. Thank you very much for your attention. We will now hear from our Chief Financial Officer, Peter Crawford. Peter?

Well, thank you very much, Peter. It is always a pleasure and a privilege for me to speak to our stockholders this year coming to you from our new headquarters in Texas. With our campus here looking a little more lively now that many of our employees are starting to return to the office with a lot more expected in the near future. So speaking of the future, that brings us to our ever important forward-looking statements page, the intent of which is to remind you all that Walt and I will be communicating our thoughts on the future. And of course, the future is inherently uncertain, and outcomes can differ from expectations. So please check in with us and review our periodic updates, including our quarterly webcast, to make sure you have the latest information and perspective on the company. So before we talk about the future, let's talk about the past, and specifically 2021, another remarkable, challenging and, ultimately, very productive year. 2021 marked our first full year as a combined company with Ameritrade, a year which began to demonstrate the promise of what this union can mean for our clients and stockholders; a year where we faced a number of challenges but met those challenges head on, supporting our clients and employees even as we pressed ahead on our strategic agenda; and a year during which we delivered record financial results despite interest rates that remained at historically low levels for most of the year. The biggest storyline, I think, was the huge surge in trading and client engagement in the first quarter driven by an unprecedented influx of new investors, new clients and heightened interest among our existing clients in the markets. While trading activities fell from the first quarter's unsustainable level, it remained very robust throughout the year. This resulted in 6.5 million daily average trades, or DATs, and a 12% increase in total brokerage accounts. The equity markets marked higher throughout the year, helping total client assets exceed $8 trillion, while interest rates remain very low through most of the year before climbing somewhat in Q4. Our financial performance reflected those environmental dynamics, the strong client engagement and our all-weather business model. Since we closed the Ameritrade acquisition in the fourth quarter of 2020, year-over-year comparisons aren't as meaningful. So we're instead showing you, on this page, our full year 2021 performance relative to our fourth quarter of 2020 annualized. Revenue grew 11% to nearly $18.5 billion, while adjusted expenses grew only 7%. That combination produced a 47.5% adjusted pretax margin; a 22% return on tangible common equity; and $3.25 of adjusted EPS, 10% higher than the fourth quarter of 2020 annualized. The strong business momentum we enjoyed throughout 2021 continued throughout the first quarter of 2022, but the macroeconomic environment has been slightly mixed with some tailwinds and some headwinds. On the positive side is, first and foremost, the progress in the battle against COVID and then also the rise in long-term interest rates as well as continued robust trading activity. On the other hand, our financial performance was negatively impacted to varying degrees by rapidly rising inflation; a Fed funds rate which, of course, is expected to continue to rise dramatically over the next several quarters but which remain near 0 for most of the quarter; a decline in the equity markets; and a less exuberant attitude among investors. Notwithstanding these crosscurrents, we sit here today in a very strong strategic and financial position. I make 4 key points. First, with the acquisition of Ameritrade, Schwab's revenue is more influenced by investor sentiment. This is good long term as it creates a more diversified and resilient financial model, even if we can potentially see a bit more volatility from 1 quarter to the next, as we saw in the first quarter. Second, Schwab is positioned to benefit significantly from higher rates in the quarters ahead. Our net interest margin, or NIM, should expand dramatically this year as rates rise and the yield on rate-sensitive assets reflect those increases. While higher long-term rates should be helpful as we continue to grow our mortgage portfolio and make opportunistic fixed rate investments. Third, with higher rates, we expect a return, what we call, client cash sorting. This is the tendency of some clients to move a portion of their cash off our balance sheet into higher-yielding alternatives such as purchase money funds. And we encourage this behavior. We want our clients to have access to a broad array of solutions and utilize those that best support their financial goals. And to support that activity, we are maintaining a higher level of cash and ensuring new purchases provide ample liquidity. And fourth and finally, while we cannot control the environment, we can control our spending levels. And we're as committed as ever to operating with fiscal discipline, balancing near-term results while continuing to invest for the long term. Now at Schwab, we try not to put an undue focus on the stock price, recognizing that it's influenced by a number of factors outside of our control. What is more in our control is our financial performance. And over the last several years, we are quite gratified by the dramatic improvement in those results, with adjusted earnings per share more than doubling from 2017 to 2021, a 19% annual growth rate. And despite the recent selloff in our stock price, we are pleased that our stockholders have been awarded with an annual growth rate and a stock price of roughly 13% over the last 5 years as well. Our #1 priority for capital management is enabling the continued growth of our business, supporting our clients who choose to entrust us with their cash allocation. Our capital ratios are below our operating objective but are well above the regulatory minimums and supported a greater than 20% growth in our balance sheet over the last year. Earlier this year, we increased our quarterly dividend to $0.20, keeping it within our target range of 20% to 30% of our earnings. And the client cash sorting I mentioned earlier may lead to a slowing or even reversal of balance sheet growth in the near future, which should speed the time at which we return to more normal capital ratios and accelerate our ability to return excess capital to stockholders via higher dividends, preferred redemptions and/or buybacks. With all the moving pieces this year, we thought it would be helpful to remind everyone about our long-term financial formula. Assuming a continuation of 5% to 7% organic growth and average market appreciation, we'd expect client asset growth of high single digits. Through our diversified revenue model and ongoing win-win monetization efforts, we should be able to convert that high single-digit growth in client assets into a comparable level of revenue growth or even a bit better. By maintaining long-term expense growth in the mid-single-digit range, we should be able to expand margins and, through ongoing capital return, deliver even stronger growth in earnings per share. Now as we proceed through the integration and navigate a changing interest rate and equity environment as well as shifting investor behavior, the individual elements may play out a bit differently. But we think this formula is every bit as relevant today as it was years ago, a long-term equation that delivers for our stockholders and doesn't rely on increases in interest rates. Let me close with a few thoughts. We're very gratified by the financial and operating performance of the company in 2021: continued strong organic growth, as Walt will discuss in more detail; a 33% increase in adjusted EPS; nearly 48% adjusted pretax margin; and 22% return on tangible common equity. These results are the product of decades of executing our Through Clients' Eyes strategy and the hard work of our talented group of over 30,000 employees and also provide an early demonstration of the considerable potential of the combination of Schwab and Ameritrade. And despite our success last year and the improving rate environment, it's obviously been a turbulent start to the year for our stock. And we're cognizant of the impact this has on all of you, our owners. At the same time, we continue to focus on the things that we can control. And the measures that we look at as indicators of the value of the business have stayed remarkably consistent: organic growth, whether you measure it by net new assets or new accounts; our Net Promoter Scores or, what we call, Client Promoter Scores, which have reached new highs despite the market turbulence; our transfer account ratio and the wins we see from competitors; and the progress we're making on our strategic agenda. Those are the most important barometers regarding the health of the business and are all giving us confidence that we remain on the right track. Walt, let me turn it over to you.

Thank you so much, Peter, and thank you all for joining us today. I think this is the 13th time that I've had the honor of speaking with all of you about your company and our approach to serving investors and those who advise them. As Peter referenced, our focused and straightforward strategy continued to deliver record-breaking results in 2021. Our Through Clients' Eyes is not simply a phrase, it is the way that we operate your company. We strive to make decisions that reflect our commitment to keeping clients' interest at the forefront. And this approach, which is grounded in the golden rule, has served us well. It contributed to tens of millions of investors entrusting their hard-earned dollars at Schwab. And similarly, our no trade-offs approach where we strive to deliver world-class value, service and investment advice resonates with clients and prospects, and it contributed to the record new client growth that we experienced last year. Now while 2021 was a bit bumpy along the way, it was a strong year overall. We had equity market returns in some indices in excess of 25%. Similarly, long-term interest rates rose during the year, foreshadowing the more dramatic increases in interest rates that we've seen so far this year. The environmental factors in 2021, when combined with our strong market position, led to record results on virtually every client metric. Notably, clients entrusted us with over $0.5 trillion in core net new assets, every time I say that, it is remarkable to me, over $0.5 trillion in net new assets. That's over $150 billion more than in any previous calendar year in our history. And as Peter indicated, by year-end, our total client assets exceeded $8 trillion, and we completed our fifth consecutive quarter of 1 million or more new client brokerage accounts opened. Now this momentum carried forward into the first quarter of this year. We had core net new assets exceeding $120 billion, a relatively remarkable number in my mind given the meaningful decline in investor sentiment as interest rates rose, inflation began to rear its ugly head and equity markets began to fall. We also experienced solid growth in client engagement across many of our offerings as evidenced by our most recent calendar year data. You can see that trade volumes were about 25% higher than in 2020, flows into investment solutions managed by Schwab approximately doubled, loans from Schwab Bank grew by 45% and we saw a 30% increase in client interactions via the phone as well as digitally. From a longer-term strategic view in 2021 and then on into 2022, we continue our emphasis on our 3 key initiatives: scale and efficiency, win-win monetization and client segmentation. Each of these initiatives are designed to not only create better value and results for our clients but also for our stockholders. Just a quick comment on each one of these 3. Under scale and efficiency, we continued progress on the integration efforts with our 2019 acquisition of Ameritrade. Our emphasis on operating efficiency and keeping our operating costs among the lowest in the industry continued to bear fruit in terms of delivering great value to clients and substantial profitability to reward our stockholders. Under win-win monetization, we introduced several new client offerings including direct indexing and a new relationship with T. Rowe Price that allows more investors and advisers to access their quality investment vehicles without having to pay a commission or a transaction fee. And then under client segmentation, we maintained our focus on meeting the diverse needs of different investor types, whether it be traders, investors with an ESG leaning or higher net worth investors who happened to be one of the fastest-growing parts of Schwab. As I mentioned earlier, we are committed to a no trade-offs approach to serving our clients. No trade-offs means that clients can expect great value, combined with industry-leading service, transparent and forthright interactions with us and the trust and confidence that comes from working with a company with almost 5 decades of experience, 33 million client accounts and, again, approximately $8 trillion in client assets. Add all these together, and we remain confident in our ability to continue delivering for clients as well as stockholders over the long term. Our belief in the virtuous cycle, a concept that we began speaking about years ago, lays the path for the past as well as our future success. When you think of Schwab, we suggest that you think of us as an innovative company constantly looking to disrupt the industry in ways that benefit investors. That tends to lead to outsized client growth, which contributes to consistent and solid financial results whereby we can reward our stockholders. Our strong financial results can then be partially reinvested in manners that lead to even more disruptive actions that benefit investors. And of course, the cycle starts all over again. For all of the 16 years that I've had the honor of speaking with you, I've been consistently asked the same question: now that Schwab is $1 trillion in assets and then $2 trillion and then $3 trillion and so on, all the way up to today at $8 trillion in client assets, how are you going to continue growing? And my answer has always been the same: when you serve clients the way that you would want to be served, Through Clients' Eyes and with the golden rule, clients will choose to do more business with us, no matter our size. And I think the history bears that out. With only 12% estimated market share in the U.S., we believe we've only scratched the surface in terms of the potential to serve many more investors in the coming years. So Rich and Chuck, would you mind rejoining me for the Q&A portion of our Annual Stockholders Meeting?

Be happy to. I'll come up to the podium with you.

All right. Thank you, gentlemen. So we have now reached today's final segment, the Q&A session with Chuck and Walt. As I mentioned earlier, questions can be submitted via our webcast consoles. A number of questions have been pre-submitted during the registration process. Some of these and potentially others sent in during the session will be addressed individually due to length, technical nature, narrow focus or other factors. We do have a couple ready to go. And I'd like to start with Chuck. Chuck, here's one. Let's see. You have experienced quite a few market cycles before. So could you talk a little bit about your assessment of this one and what you're advising clients to do this time around?

Well, Rich, yes, I have experienced many cycles before and I'm sure I will run in a few in the future here. But certainly, we're definitely in a down cycle right now, and that's pretty obvious to all of us investors. And what do we do about it? Well, first, I always try to figure out how I can help a client. And of course, sticking to your financial plan is certainly a #1 thing you should do for yourself and your family. If you don't have one or you have questions about the one you do have, certainly talk to your Schwab financial consultant. But my own personal view about this right now is I would hold on to your balanced portfolio of, obviously, great stocks and bonds that you've worked so hard to put together over the last few years. Yes, you'll see them go down in some value but just make sure through this time period, it might be a year, it might be 2 years, we don't know because we've got the federal reserve working on bringing inflation, trying to tame it down at least; we've got government policies, some are good, many are not; and some are exacerbating the situation. We also have, unfortunately, a terrible war going on in part of Europe, Ukraine. That does not help with a lot of things as supplies and, certainly, inflation add to that. But don't panic. Even if the good ones go down further than you thought, just hang on to them. It just has always proven to be the case, great companies will persevere and will come back. And it's amazing how fast when they do turn, how they accelerate. And if you leave them, you'll never have a chance to get back into them at those low prices. You might even think about adding to them, that's always a good idea. But certainly do not panic. And it always seems to be that recoveries come when you least expect it. Lots of anticipation is always available in the stock market. It's probably the premier place for things to anticipate the future more than you might even think so. So when you least expect it, things will improve. But hang in there with a solid plan.

Okay. All right. Thank you, Chuck. The next one, I think, is for Walt. So Schwab, like many companies, has finally embarked on a general return to office across the country. How would you say that's going?

Thank you, Rich, and thank you to the questioner. Of course, throughout the pandemic, we worked very hard to achieve our 2 primary objectives, which were to serve our clients well and protect the safety and health of our employees and their families. And I believe we effectively were able to deliver on those objectives. Now that we've begun a form of return to office, we really maintain those 2 objectives as we move forward. We began in late April a staged return to office. At the same time, it's combined with what we believe is the premier work location flexibility approach in our industry where our employees, generally speaking, are offered what works out to about 2 days a week of work location flexibility as a base for everyone. And at the same time, people are empowered to apply for more flexibility than that. And about half of our employees have requested more than that standard amount, and we've been able to meet their requests. So the wonderful thing about our technology is the ability to deliver great service to clients consistent with our no trade-offs philosophy while, at the same time, again, ensuring the safety of our employees and their health and their families and enabling some of the enhanced work-life benefits of being able to reduce commutes and have more flexibility. So we're incredibly pleased. Maybe importantly, most importantly, our clients and our dedicated employees are very pleased with the program that we've put in place and excited as we move forward.

Okay. Let's see. I think also for Walt, we closed the acquisition of TD Ameritrade, let's see, back in the fall of 2020 at this point. So it's been a bit of time. We've obviously been working through our integration process since then. Could you talk about how that's going and how we feel about our schedule at this point?

Sure. Thank you, Rich. I think it would be difficult to outline a more challenging scenario than to have closed on this transaction in what turned out to be the early stages of a pandemic and, therefore, making it very difficult to spend time together in person, getting to know each other, develop the kind of relationships that are very important in executing on this combination. At the same time, I'd say, through the dedication and commitment and hard work of so many Schwab employees and former Ameritrade employees, we are very much on track. It's important to keep in mind that this is the largest combination of this type in the history of the brokerage space. So this is a meaningful task. But we're confident the scale that we will gain the operating expense leverage from this transaction are going to be very substantial. I think we estimated somewhere between $1.8 billion and $2 billion in ultimate annual expense saves as we're able to consolidate platforms and technology by the time we're done. I believe we'd achieved about half of that already by the end of 2021 with the balance coming principally once we have completed that integration. And beyond the expense savings, we're anticipating somewhere in excess of $2.5 billion in revenue synergies. Again, that will be achieved principally over the course of the next decade as we move certain assets onto our balance sheet. But overall, if I were to evaluate the integration, I'm very pleased. I'm confident that we are on track. It is a challenge. Nothing of this size goes perfectly, and I wouldn't expect it to go perfectly. But we are making the right decisions, identifying the best platforms from Ameritrade, the best platforms from Schwab and looking to bring the best of each of those to all of our valued clients.

Okay. All right. Thank you. I think we have one more that we'll take in the session here, and it's from one of our younger shareholders who has participated in prior annual meetings. And Chuck, I think I'm going to ask you to start, and maybe both of you will chime in on this one. So basically, the question is around what steps is the Board taking to improve stockholder value and to improve investor confidence in the firm and its prospects. Chuck, can you start us off on that?

Sure. Obviously, the #1 thing I always worry about is making sure that we, as a firm, are of the highest integrity, that we make sure we have the highest liquidity and that we always take the interest of our clients first. Then we go from there to what are the best kinds of services that might make their life better as investors, improve their returns and improve their speed, improve reporting, all those kinds of things that make us an efficient company to keep our costs down and keep your costs down with that. So we're always targeted on keeping our prices as low as possible, and hopefully, we remain a leader in that category. Some of the new services coming up are very interesting, and I think will be beneficial for people. I think personalized index investing, that's something that you should all investigate over time. It will be, I think, something more advanced than even straight index funds. I think there's some real benefits, tax benefits and so forth. It will be very valuable to many of our clients over the long term. I think that in the category for our younger investors, the slices that we've introduced last year is particularly an important thing. We let you buy into the greatest companies in the country at a fraction of their actual trading price. It be just 1/10 or 1/5 or 1/20 even. And that's a way to participate in the great companies that America has to offer. Has nothing to do with meme stocks or those things that there was a flash in the pan about a year ago in that category. We had no interest in that. We want to give you the right to buy the things like IBM and Microsoft and so forth. So those are just a couple of things. I think Walt might have a few others on his list, too.

Thanks, Chuck. I'm guessing this is a question from Mesai which we're grateful for your participation again, and I hope you're doing well and look forward to seeing you in person at some point. I have to give a shout out to his annual efforts also to provide holiday gifts for those less fortunate. So Mesai, thank you for your efforts there. I think Chuck summarized it very well. And I would just say, from a client standpoint, we are in the trust business. We are in the business of doing the right thing for our clients, Through Clients' Eyes. And as we build trust with our clients, as I had referenced earlier, they choose to do more business with us. And from a stockholder standpoint, we take a long-term view. We're pleased when our stock value goes up. And obviously, we can be disappointed in the short run when it doesn't. But we have to operate the company in a long-term view and the stock will take care of itself. And I think it's done that over a 50-year period. If we serve our clients well, and we serve them in a manner that they choose to do more business with us then, ultimately, our earnings grow, our stock price grows over time and we create that benefit across the board. But we focus on the things we can control, we look to build trust and we take a long-term perspective in operating the company.

All right. Well, thanks to both of you. I think we'll leave it there. If we weren't able to cover your question on the call, IR will follow up with you. So that concludes our 2022 Annual Meeting of Stockholders. I'd like to thank Chuck, Walt, Peter Crawford, Peter Morgan, the members of our Board and all of our attendees for joining us today. Please take care, everyone, and we'll see you in a year. Thank you.