Schwab has sacked its CEO David Pottruck and replaced him with company chairman and founder Charles Schwab in an attempt to halt a decline at the discount brokerage, which has posted a 10% fall in second quarter profit.
Pottruck became CEO of Schwab in 1998 but was ousted following three year's of disappointing results at the firm.
In a statement, Pottruck says: "The last few years have been difficult in the securities markets, and I accept the Board's decision that it's time for me to step aside."
Charles Schwab will continue to serve as board chairman.
The move follows declining profits at Schwab, which posted a 10% fall in the second quarter ending June 30 2004. The company reported net income of $113 million for the quarter, down from the $126 million earned in the same period last year. However second quarter revenue was up to $1.11 billion from $1.02 billion. Daily commission from trades fell 20% from the first quarter.
In contrast to Schwab, rival online trading firms Ameritrade and E*Trade both posted a rise in quarterly profits. Ameritrade posted a 25% earnings increase from the same quarter last year. The firm reported net income of $62.3m for its fiscal third quarter, up from $49.9m a year ago. Net revenue was up 16.7% to $220m.
E*Trade also reported a second quarter profit rise, helped by a gain from the sale of its ATM operating unit. The New York-based company reported net income of $123m for the second quarter ending 30th June 2004, compared to $13m in the same period last year. Net revenue rose three per cent to $381m.