corporate citizenship at schwab · “america’s largest discount broker.” since then, schwab...

Corporate citizenship at Schwab

2

At Charles Schwab, our vision is to be the most trusted leader in investment services.

To achieve this long-term vision, we know we must meet the high expectations that our employees, clients, stockholders and the public have of us. We do this not only through the services we provide, but also by seeking to bring our values to life, conducting our business with integrity, and actively engaging with the many stakeholder groups that help drive our ongoing success.

3

As a responsible organization, we seek to operate in ways that help:

• Provide greater access to investing and saving for more people

• Ensure people have the information they need to invest and save successfully

• Give back to the communities in which we live and work

• Create an environment in which our 16,000+ employees can thrive

• Leave as small a footprint on the environment as possible

• Safeguard the information that is in our care

• Advocate for policy solutions that benefit investors

• Govern our company responsibly

How do we do this?

It starts with our purpose

Our purpose is to champion every client’s goals with passion and integrity. This purpose drives us to help our clients take ownership of their financial futures, helping people at all levels of income and every stage of life, because investing for the future is one of the most important things people can do for themselves and their families. We believe it is critical to the health of our communities and to our society.

It is reinforced in our company’s values

• Earn our clients’ trust by treating clients in an ethical, empathetic, and proactive way

• Constantly improve the investing experience through innovation that benefits clients

• Respect fellow employees and reinforce the power of teamwork

• Be good stewards of our brand, reputation and stockholder value

It comes to life through our actions

Investing has the power to transform people’s lives. By doing what we do, we help people build wealth. Wealth creation helps individuals and families achieve their potential. It turns aspiration into reality. It lets people control their future and improve prospects for future generations.

Investing also has positive impacts beyond individuals. When people invest, it helps businesses grow and economies expand. This helps provide for more jobs and better incomes. Those enhance the ability for communities to invest in services and infrastructure, which boosts the well-being of citizens. Investing is part of how communities and economies thrive, and society benefits as a result.

It is important to note that building wealth is not just for the wealthy. By doing what we do the way we do it—making investing more widely accessible, breaking down barriers like high costs and complexity, improving efficiency— we believe we create the opportunity for more people to access the tools to build wealth and achieve better outcomes in the future.

Our responsibility as a corporate citizen goes beyond the value we provide by serving clients. We also have a responsibility to conduct our business in ways that make a positive impact on our employees and the communities where we live and work.

It is this responsibility that leads us to invest in programs across several key areas that help us live up to our commitment to good corporate citizenship:

• Access to investing

• Financial education

• Corporate giving and community service

• Investing in our people

• Environmental stewardship

• Security

• Public policy and corporate governance

Access to investing

5

We have long taken the approach that offering innovative, low-cost solutions in products, services and advice would enable more Americans to reap the benefits of investing and successfully build wealth. This was the motivation that inspired Chuck Schwab to set out more than 40 years ago to challenge Wall Street with his vision to create a better investing experience. In those early days, access to the markets was limited and costly. With the May 1, 1975, deregulation of brokerage commissions by the Securities & Exchange Commission, Chuck Schwab emerged as the leader of a revolution. While many brokerage firms took the opportunity to raise commissions, Chuck was busy creating a new kind of brokerage firm—offering brokerage services to individuals at a discount to Wall Street prices. The company he founded defied conventional wisdom by focusing on lowering costs and making investing accessible to a wider array of people. The company became known as “America’s Largest Discount Broker.”

Since then, Schwab has grown and evolved into a full-service investment firm offering an industry-leading array of products, services, education and advice for all aspects of wealth creation and management, for investors large and small, while never losing sight of Chuck’s original vision.

Today, we continue Chuck’s mission to challenge Wall Street on behalf of investors, employers, and independent investment advisors with the goal of helping investors and those who serve them achieve their financial dreams.

Launched “discount brokerage,” offering lower-cost access to the capital markets for average Americans

Introduced Mutual Fund Marketplace,™ with 140 no-load, no-transaction-fee funds. Today, there are more than 3,000 funds on the platform.1

Rolled out SchwabPlan—an innovative bundled 401(k) plan product offering corporate plan sponsors and their employees access to more than 1,300 mutual funds

Offered 24/7 order entry and quote service, becoming the first brokerage firm to do so

Launched Schwab.com, creating a new channel for investors to access their accounts, get information and manage their money

1975 1984 1996

1982 1995

Innovations to benefit investorsA few highlights of Schwab’s innovations over the years to create better access and more choice and convenience for investors include:

6

Innovations to benefit investors (cont’d)

Introduced Schwab Advisor Network, a customized referral service for clients with complex wealth management who need comprehensive, personalized management provided by a local independent investment advisor2

Launched Schwab Intelligent Portfolios,® sponsored by Schwab Wealth Investment Advisory, Inc., an automated advisory service that uses sophisticated computer algorithms to build, monitor and rebalance diversified investment portfolios based on investors’ stated goals, with low minimums and no advisory fees5

Launched Schwab ETF OneSource,™ a platform that features commission-free online trades on ETFs from most of the major ETF providers3

Instituted a broad-reaching Satisfaction Guarantee for clients, unique among brokerage firms. If a Schwab client is not satisfied for any reason, Schwab will refund your fee or commission and work with you to make things right.7

First major firm to launch a patent-pending, full-service 401(k) program based on low-cost exchange-traded funds as an additional version of Schwab Index Advantage® that fully integrates exchange-traded funds as core investments within the plan, including commission-free intraday investing along with the ability to process partial share interests

Introduced Schwab Intelligent Advisory, a hybrid advisory service that combines live credentialed professionals and algorithm-driven technology to make financial and investment planning more accessible to consumers10

Debuted Schwab Index Advantage, the one-of-a-kind 401(k) plan offer featuring a lineup of index funds, designed to offer lower costs, provide personalized portfolio advice and simplify the retirement investing process4

Launched Schwab Target Index Funds, a new series of index-based target date mutual funds constructed with low-cost Schwab ETFs™ as underlying investments. The new funds are the lowest-cost target date mutual funds available to employer-sponsored retirement plans and also among the lowest-cost target date mutual funds available to individual investors.6

Rolled out Schwab OpenView Mobile, a customizable app that independent advisors can use to create a turnkey, branded mobile presence for their firms

Lowered standard online equity and ETF trade commissions from $8.95 to $4.95,8 and reduced expenses on Schwab market cap-weighted index mutual funds, while eliminating their investment minimums, ensuring that even the smallest investor can invest at low costs historically available only to large institutions

2002

2015

2013

2017

2014

2017

2012

2016

2014

2017

7

Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can request a prospectus by calling Schwab at 800-435-4000. Please read the prospectus carefully before investing

1 Schwab’s short-term redemption fee of $49.95 will be charged on redemption of funds held for 90 days or less. Schwab reserves the right to exempt certain funds from this fee. Trades in no-load mutual funds available through the Mutual Fund OneSource service ( including Schwab Funds), are available without transaction fees when placed through Schwab.com or our automated phone channels. For trade orders placed through a broker, a $25 service charge applies. Schwab reserves the right to change the funds we make available without transaction fees and to reinstate fees on any funds.

2 Schwab Advisor Network member advisors are independent and are not employees or agents of Charles Schwab & Co., Inc. (“Schwab”). Schwab prescreens advisors and checks their experience and credentials against criteria Schwab sets, such as years of experience managing investments, amount of assets managed, professional education, regulatory licensing, and business relationship as a client of Schwab.

Advisors pay fees to Schwab in connection with referrals. Schwab does not supervise advisors and does not prepare, verify or endorse information distributed by advisors. Investors must decide whether to hire an advisor and what authority to give the advisor. Investors, not Schwab, are responsible for monitoring and evaluating an advisor’s service, performance and account transactions. Services may vary depending on which advisor an investor chooses.

3 Restrictions Apply: Trades in ETFs available through Schwab ETF OneSource™ ( including Schwab ETFs™) are available without commissions when placed online in a Schwab account. Service charges apply for trade orders placed through a broker ($25) or by automated phone ($5). An exchange processing fee applies to sell transactions. Certain types of Schwab ETF OneSource transactions are not eligible for the commission waiver, such as short sells and buys to cover (not including Schwab ETFs). Schwab reserves the right to change the ETFs we make available without commissions. All ETFs are subject to management fees and expenses. Please see the Charles Schwab Pricing Guide for additional information.

4 Schwab Index Advantage® provides a combination of index funds with low operating expenses, built-in independent professional advice available through Schwab Retirement Planner®, and Schwab Bank Savings, an interest-bearing, FDIC-insured savings feature available through Charles Schwab Bank. Schwab Retirement Planner provides participants with a fee-based retirement savings and investment strategy, a major component of which is a discretionary investment management service furnished by independent registered investment advisors GuidedChoice Asset Management, Inc.® (“GuidedChoice”) or Morningstar Investment Management LLC, a subsidiary of Morningstar, Inc. GuidedChoice and Morningstar Investment Management are not affiliated with or agents of Schwab Retirement Plan Services, Inc.; Charles Schwab & Co., Inc., a federally registered investment advisor; or their affiliates. Schwab Index Advantage, including the Schwab Retirement Planner feature, is only available in select retirement plans serviced by Schwab Retirement Plan Services, Inc. The Morningstar name and logo are registered marks of Morningstar, Inc. Remember that cost is only one consideration when making an investment decision and an investor may give up the opportunity to outperform the market by not being in an actively managed fund. Fund operating expenses represent the total of all of a fund’s annual fund operating expenses. Management fees are one component of the fund operating expenses. Index funds generally have low management fees because they don’t have to pay investment managers to actively manage underlying investments.

5 Schwab Intelligent Portfolios is made available through Charles Schwab & Co., Inc. (“Schwab”), a dually registered investment adviser and broker-dealer. Portfolio management services for Schwab Intelligent Portfolios™ are provided by Charles Schwab Investment Advisory, Inc. (“CSIA”), a registered investment advisor. Please refer to the disclosure brochures for details about Schwab Intelligent Advisory. Schwab and CSIA are affiliates and are subsidiaries of The Charles Schwab Corporation.

6 Charles Schwab Investment Management, Inc. (CSIM) is the investment advisor for Schwab Funds and Schwab ETFs. Schwab Funds are distributed by Charles Schwab & Co., Inc. (Schwab), Member SIPC. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). CSIM and Schwab are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation, and are not affiliated with SIDCO.

7 If you are not completely satisfied for any reason, at your request Charles Schwab & Co., Inc. (“Schwab”) or Charles Schwab Bank (“Schwab Bank”), as applicable, will refund any eligible fee related to your concern within the time frames described below. Two kinds of “Fees” are eligible for this guarantee: (1) asset-based “Program Fees” for the Schwab Private Client (“SPC”), Schwab Managed Portfolios (“SMP”), Schwab Intelligent Advisory (“SIA”), and Managed Account Connection (“Connection”) investment advisory services sponsored by Schwab (together, the “Participating Services”); and (2) commissions and fees listed in the Charles Schwab Pricing Guide and the Schwab Bank Deposit Account Pricing Guide (together, “Account Fees”). Program Fee refund requests must be received no later than the next calendar quarter after the Fee was charged. Account Fee refund requests must be received within one year of the date that the Fee was charged.

Program Fees are calculated as a percentage of eligible assets in Participating Service accounts. For more information about Program Fees, please see the disclosure brochure for the Participating Service, made available at enrollment or any time at your request. The Connection service includes only accounts managed by investment advisors affiliated with Schwab: Windhaven Investment Management, Inc., ThomasPartners, Inc., and Charles Schwab Investment Management, Inc. The guarantee does not cover Program Fees for accounts managed by investment advisors who are not affiliated with Schwab or managed by Schwab-affiliated advisors outside of the SPC, SMP, SIA and Connection services.

The guarantee is only available to current clients. Refunds will only be applied to the account charged and will be credited within approximately four weeks of a valid request. No other charges or expenses and no market losses will be refunded. Other restrictions may apply. Schwab reserves the right to change or terminate the guarantee at any time.

(Continues)

http://www.schwab.com/public/schwab/nn/agreements/schwab_pricing_guide_for_individual_investors.html

8

8 Restrictions apply: The $4.95 flat commission does not apply to foreign stock transactions, large block transactions requiring special handling, employer-negotiated commission schedules applicable to equity compensation transactions, or restricted stock transactions. Foreign ordinary shares that trade online in the U.S. over-the-counter (OTC) market and do not settle in the U.S. will have a $50 foreign transaction fee added to the cost of the transaction. All broker-assisted trades are subject to service charges. A minimum deposit of $1,000 is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for details. Employee equity compensation transactions are subject to separate commission schedules.

9 Expense ratios and minimums are subject to change. Charles Schwab Investment Management, Inc. (CSIM), the investment advisor for Schwab Funds, and Charles Schwab & Co., Inc., Schwab, the distributor for Schwab Funds, are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation.

10 Schwab Intelligent Advisory™ is made available through Charles Schwab & Co., Inc. (“Schwab”), a dually registered investment advisor and broker-dealer. Please refer to the disclosure brochures for details about Schwab Intelligent Advisory. Schwab and CSIA are affiliates and are subsidiaries of The Charles Schwab Corporation.

Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value

Charles Schwab & Co., Inc. is an equal opportunity/affirmative action employer committed to diversifying its workforce. All applications are considered without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability, protected veteran status, or based on any individual’s status in any group or class protected by applicable federal, state or local law.

The Charles Schwab Corporation provides a full range of securities, brokerage, banking, money management, and financial advisory services through its operating subsidiaries. Its broker dealer subsidiary, Charles Schwab & Co., Inc. (“Schwab”), Member SIPC, offers investment services and products, including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides deposit and lending services and products. Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support services of Schwab. Independent investment advisors are not owned, affiliated with, or supervised by Schwab. Schwab Retirement Plan Services, Inc provides recordkeeping and related services with respect to retirement plans.

The Charles Schwab Foundation is a 501(c)(3) nonprofit, private foundation that is not part of Charles Schwab & Co., Inc. or its parent company, The Charles Schwab Corporation.

©2017 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. IAN (0717-YTK3) MKT97912-00 (06/17)

00196524

http://www.sipc.org/

Financial education

10

We believe that everyone should have the opportunity to achieve great financial outcomes, so we extend our focus beyond championing investors and those who serve them, and devote considerable resources to developing free financial literacy programs that serve all individuals, regardless of age and background.A lack of understanding of the basics of personal finance—living within one’s means, managing debt, saving and investing—is an issue that affects people from all walks of life and all income levels. That’s why we focus on building financial literacy. It is where we believe we can make an important impact in our communities, and in a way that’s true to the premise on which our company was founded—breaking down the barriers that keep people from making the most of their money, and creating more access to investing for more Americans.

For a teen on the verge of independence or a senior struggling to make ends meet, financial education can mean the difference between poverty and prosperity, between feeling

helpless or hopeful. In classrooms and community centers from coast to coast, a lesson in budgeting or saving for college can inspire hope and give people tangible ways to take action —and control.

In today’s complex financial world, people of all ages and backgrounds are seeking help on the basics of personal finance. That’s why Schwab tackles the topic of money management with hands-on tools, programs and language that are clear, straightforward and engaging and why training and education are a key focus of our industry events. For example, independent advisors earn over 3,000 educational credits at our annual IMPACT conference.

11

SchwabMoneyWise.com

Our SchwabMoneyWise.com website provides resources for people of all ages who want to learn (and teach) the basics of personal finance. With clear, straightforward explanations and hands-on tools, Schwab MoneyWise is a comprehensive resource for unbiased help. And our SchwabMoneyWise on Campus program, currently offered through UCLA, UC Irvine and Colorado University-Denver, reaches college students at a pivotal point in their lives.

Money Matters: Make it CountSM

The Charles Schwab Foundation’s long- standing alliance with Boys & Girls Clubs of America (BGCA) is one example of how our programs make a difference.

Knowing that we’d have the opportunity to make a meaningful impact on the younger generation at a critical point in their lives, we teamed up with BGCA to create the financial education program, Money Matters: Make It Count to teach teens the ABCs of personal finance.

Since 2003, nearly a quarter of a million club teens have successfully completed the program. According to a third-party, evidence-based evaluation, the program results in tangible behavioral change, with teen participants demonstrating improvement in the following areas:

82%

33%

46%

0% 20% 40% 60% 80% 100%

Managing credit and debt11

Budgeting

Improvement in saving

But even more notable is the profound impact it has made on so many lives, from the teens that bring the lessons of Money Matters home to share with their families, to those who ultimately choose to pursue a career in financial services themselves.

Money Matters: Make it CountSM:

• Results to date—Approximately 725,000 teens have completed the program

• 1,700 Boys & Girls Clubs offer the program across the U.S. and on military bases worldwide

• More than $516,000 awarded in college scholarships to close to 300 Club teens through 2016

• 86% of American teens say they want to learn about personal finance before makingmistakes in the real world12

Awards

• 2011: Jump$tart’s William E. Odom Visionary Leadership Award

• 2010: FSR’s Leadership in Financial Literacy award

• 2009: CECP (CEO Organization) Award for Excellence

• 2006: Partnership was recognized as a best practice by the U.S. Department of the TreasuryCommunity Impact

11 Inference LLC, May 201312 2011 Charles Schwab Teens & Money Survey

12

Finances50+™

Low-income seniors seeking financial help can acquire the skills and tools to reduce debt, repair credit, and build savings with Finances 50+™, a program co-sponsored by Charles Schwab Foundation and AARP Foundation.13 This program is designed for the 20 million people over the age of 50 who are struggling to make ends meet.

Making financial planning accessible Since 1995, the Foundation for Financial Planning14 (FFP) has provided more than $6 million in grants to nonprofit programs that link financial planners to people in need. Through the Foundation for Financial Planning nearly 380,000 people have been served. In 2016, Charles Schwab & Co., Inc. and Charles Schwab Foundation became the first organizations to surpass a combined contribution milestone of $2 million to the Foundation for Financial Planning.

Supported by a grant from the Charles Schwab Foundation, the Financial Planning Academy is the first of its kind, a summer camp-style program to offer immersive curriculum delivered by professors, college students, and independent financial advisors designed to increase financial literacy, sharpen money management skills and generate early interest among students in careers as financial advisors. Over the past several years, Schwab has contributed millions of dollars in support to universities and has developed programs to help mentor, train and provide hands-on learning experiences for future financial services professionals.

University grants It is our vision to be the industry-leading champion for the development of world-class independent registered investment advisor (RIA) talent. Since 2007, we’ve sparked progress in the development of RIA talent through over $3.4 million in grants, positioning universities with valuable tools and resources, and creating awareness of the RIA profession.

The Charles Schwab Personal Financial Planning Technology Complex at Texas Tech, originally constructed in 2009 partially through grants from Schwab, is used today by more than 300 undergraduate and graduate students in the university’s Personal Financial Planning Department. It is an approximately 4,500 square foot facility that now includes two state-of-the-art classrooms, a 16-unit technology lab, a high-tech conference room, and a recording room to produce high-quality distance education modules.

Schwab has worked closely with UC Irvine (UCI) Paul Merage School of Business and its Center for Investment and Wealth Management, which includes the Charles Schwab Trading and Technology Lab which is designed to help students understand the technology and resources used in the RIA industry.

Schwab is also involved in two student financial literacy programs with UCI, LifeVest and Schwab MoneyWise on Campus. LifeVest is a week-long residential program for underprivileged ninth grade students, giving them an opportunity to learn about the basics of financial management and develop a life plan that includes college and career planning.

13 AARP Foundation is unaffiliated with the Charles Schwab Foundation and the Charles Schwab Corporation and its affiliates.

14 The Foundation for Financial Planning is unaffiliated with the Charles Schwab Foundation and the Charles Schwab Corporation and its affiliates.

13






00196525


Corporate giving and community service

15

A strong commitment to philanthropy and volunteer service is part of Schwab’s culture and history. To support this dedication, Schwab offers a variety of programs to help employees give to their communities and contribute to causes that are important to them. Some employees do it with money, and some with their time and expertise. All do it with a heartfelt desire to make a difference.

16

Enhancing employee charitable giving and involve-ment with matching giftsSchwab employees can count on Charles Schwab Foundation to match the donations they make to their favorite charities dollar for dollar up to $1,000 per year. In 2016, 28% of employees participated, versus a 9% industry average. If they give of their time by also serving on a charity’s board, the match is doubled; in 2016, over 500 Schwab employees served on nonprofit boards.

Offering paid time off to encourage volunteerismWe reinforce our spirit of volunteerism by offering employees paid time off to volunteer. Collectively, they donate thousands of hours of service to local nonprofits and organizations throughout the year. And every year during Schwab Volunteer Week, thousands of Schwab employees across the U.S. team up to work in classrooms, boardrooms, neighborhoods and food banks across the country for organizations and causes that matter to them. In 2016, 42% of Schwab employees took advantage of their Time to Volunteer hours. This is up 5% over 2015, 11% over 2014, and well above the industry average of 30%.

Deepening impact for nonprofitsOur Pro Bono Challenge is a unique volunteer experience in which teams of Schwab employees offer consulting sessions to help dozens of nonprofit organizations solve business and operational challenges in areas such as technology, marketing, operations and human resources. By sharing their professional skills, our employees enable these nonprofits to expand their services to reach a greater number of people.

Pro bono challenge

2015 pro bono challenge

• 51 projects in 6 cities

• Employees’ volunteer consultinghours were valued at a total of

$401,8002016 pro bono challenge

• 59 projects in 8 cities

• Employees’ volunteer consultinghours were valued at a total of

$445,000

Schwab and our employees support our communities through ongoing programs in our service centers and branch network. We provide in-kind donations to nonprofits in our communities in the form of excess office supplies, refurbished computer equipment and office furniture. Employees host bake sales, food, equipment, blood drives, and host other fundraising activities at Schwab facilities. We also provide administrative help; our employees help prepare and stuff envelopes for various nonprofits’ programs and make our facilities available for community groups to conduct events. In 2016, Schwab sponsored approximately 100 nonprofit and community groups’ programs and events across the firm.

Supporting employee fundraising effortsSchwab employees walk, run, climb, cycle and enthusiastically participate in other activities to help rally people, raise money and spread optimism for a range of causes from health services to environmental issues to animal rights.

17

Social impact scorecard FY16

Employee volunteering

Time to volunteer

Business impact

Branch engagement Financial capability

27,349 222750,000+ 3,000+

97% 90%

42%

50,194 Hours / 41,348 (2015)

$540 Average gift amount in 2016

2,352 Nonprofit recipient organizations

of Employees Volunteered on Company Time

(37% in 2015)

$1,539,618 Value1 / $1,290,564 (2015)

Employee giving (2016)

Hours Value

5% 30%

70%95%Hands-On Skills-Based

1. Hourly rate based on type of volunteering: $175/hour for Pro Bono Challenge;$23.07/hour for all other volunteer service. 2. Unaudited information as of 2/21/2017

Increased employee engagement3

Food collected duringSeason of Giving drives (pounds)

Branches that participated inSchwab Volunteer Week

Boys & Girls Club teenscompleting Money Matters5

Schwab employees volunteering with BGCA6

Social impactIncreased nonprofit capacity4

Percentage of employees who volunteered in 2015–2016

100% of nonprofits were satisfied with their experience and said itbuilt capacity in one or more of the following ways:

Improved organizationalcapacity

Saved resources or time

Increased ability to servemore clients

3. 2016 SVW Survey Responses 4. NPO Survey Respondents from SVW 2016 and Pro Bono Challenges 2016.

5. Data from 2004 through 2015 as reported by BGCA. 6. Cumulative since 2009.

Employees that say SchwabVolunteer Week makes them

more likely to recommendSchwab as a great place

to work

Employees that say SchwabVolunteer Week makes themdifferentiate Schwab from

other financial services firms

Donations via Employee Gifts& Foundation Match ( inmillions)2

% Employee participation

2015

28%

$3.88 $3.96

28%

2016

30%

5

4

3

Mill

ions

of d

olla

rs

2

1

0

25%

20%

15%

10%

5%

0%

33%39%

48% 45% 48%

18%

44%

53%

64%

32%38%

51%46%

34%

48%

35% 36% 34%37%

By Region

28%

Austin Denver Chicago El Paso Indy Phoenix Orlando Richfield SF Field0%

10%

20%

30%

40%

50%

60%

70% 2015 2016

SVW Pro Bono Challenge

22%

20%

47%80%

25%

33%

2015 2016

18

Corporate philanthropy and employee giving

Charles Schwab and Charles Schwab Foundation provide financial support to a variety of charities and community events selected by Schwab employees.

• $7+ million given annually to directly support nonprofit organizations

• 2,800+ nonprofit organizations received financial support in 2016

• $3.96 million given in employee gifts and matching donations in 2016

• Approximately $170,000+ given in employee board-service grants in 2016

DonorsChoose.org: Funds for financial literacy projects in public schoolsThe Charles Schwab Corporation is piloting a program of matching individual donations for classroom projects, prekindergarten through 12th grade, designed to build financial literacy for today’s youth through the nonprofit organization DonorsChoose.org. Any public or charter school teacher across the U.S. can apply for grants to fund personal finance education projects through the DonorsChoose.org website. Financial education projects with a total cost of up to $1,500 are eligible for the matching donation.

Boys & Girls Clubs of America Charles Schwab Foundation’s (CSF) partnership with Boys & Girls Clubs of America (BGCA) illustrates our strategic approach to community engagement. CSF funded and co-developed BGCA’s Money Matters program, designed to promote money management skills among teens, ages 13-18. The program consists of fun, interactive activities on topics such as prioritizing needs vs. wants, budgeting responsibly, using credit wisely and saving for college. The program is targeted primarily at teens from underserved communities. Nearly 750,000 youth in over 1,700 teen Boys & Girls Clubs across the U.S. have participated in Money Matters since it launched in 2004. To date, CSF has provided BGCA with $15M+ in financial support and over 3,000 Schwab employees have contributed their time and expertise to the Money Matters program at their local Clubs. More than a dozen employees serve on local Club Boards of Directors. We are proud to have leveraged all of our resources—from grants to employee time and talent to leadership—to foster this stellar relationship.

College2CareersFocusing on diversity and inclusion is not just part of our culture—it makes good business sense. Created by the Orlando Black Professionals at Charles Schwab (BPACS) Employee Resource Group (ERG), the College to Careers program partners Schwab employees and location leaders with students from regional universities to provide students with valuable development tools including coaching on career skills, relationship building strategies, and guidance on positioning themselves to be competitive in the current job market. During the four- to six-week program, students also learn about career opportunities at Schwab, are exposed to the Schwab culture and connect with Schwab Employee Resource Group leaders, business leaders, hiring managers and talent acquisition team members.

Since the program’s launch in 2012, we’ve worked with students from Indiana Wesleyan University, University of Central Florida, Bethune Cookman University, and Metropolitan State University of Denver. Student participants have gone on to careers with Schwab and elsewhere.

19






00196526


Investing in our people

21

At Schwab, above all else, we care about the clients we serve and each other. We believe that when our employees are at their best, so is Schwab. With the goal of being an employer of choice, we strive to inspire and empower our employees to own their futures. We offer competitive compensation along with professional, personal, and financial programs that support the well-being and advancement of our employees and their families. This isn’t just good business—helping our employees feel whole and happy is important to the health of our communities and society as a whole.

22

Delivering opportunities for a rich work life and professional advancement for all employeesEmployees come to Schwab for a variety of reasons, but they stay because this is a place where they can change people’s lives and help them realize their dreams. Having a career with purpose and enjoying what you

do each day are critically important. So is the opportunity to grow professionally. To that end, we offer a variety of programs to support employee advancement.

Recognition

Our unique culture and approach have been recognized regionally and nationally.

FORTUNE most admired companyIn 2016, Schwab was ranked first in industry, Securities and Asset Management, for Innovation, and second overall.

HRC best places to work for LGBT equalitySince 2004, Charles Schwab has received a 100% rating on the Human Rights Campaign’s Corporate Equality Index, which recognizes companies based on LGBT equality.

Top workplaceSince 2013, Schwab has consistently been recognized as a top place to work based on employee feedback in major markets where Schwab has significant concentrations of employees, including Austin, Chicago, Cleveland, Denver, Indianapolis, the San Francisco Bay Area, and the state of Arizona. In 2016, Schwab’s recognition expanded to include Central Florida and Charlotte.

Schwab ranks as a top place to work in many of the places we call home

Central FloridaChicago

IndianapolisDenverCleveland

AustinArizona

San Francisco

Charlotte

23

Diversity and inclusion programs

Diversity and Inclusion are a way of life at Schwab, transcending ethnicity, race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability, protected veteran status, and life stages to include diversity of experiences, strengths, perspectives, and thought.

Our commitment to building an inclusive environment where everyone feels valued is what sets us apart. Schwab is dedicated to building and maintaining a dynamic organization and culture that reflect the individual strengths of every person who is a part of the company. Through diversity, we gain a wider range of perspectives and experiences, which benefits everyone and helps us ‘see through clients’ eyes.’

Employee Resource Groups (ERG) and Inclusion Network programs focus on activities that champion Schwab as the company of choice for people from diverse communities to reach their career and investing goals. Diversity and Inclusion programs include the following:

• Employee Resource Groups–EmployeeResource Groups (ERG) are formed byemployees who share characteristics orlife experiences and are committed toenhancing diversity and inclusion atSchwab. ERGs also welcome allies—people who support or collaborate withthe group. Benefits of participation includenetworking, professional development,building business knowledge, andinvolvement with national projects.

• Inclusion Networks–An Inclusion Networkis an umbrella group that unites theseparate and unique Employee ResourceGroups to develop and implement plans toattract diverse talent, develop diverse talentand attract diverse clients. It is a “OneSchwab” approach based on the value thatdiversity matters.

• Accessibility–Affirming our values ofdiversity and inclusiveness, Schwab iscommitted to ensuring equal employmentopportunities to all employees andapplicants. Schwab provides, upon request,reasonable accommodations to qualifiedapplicants or employees with a disability toenable the individuals to perform theessential functions of the job, unless makingthe accommodation would result in anundue hardship or such individuals wouldpose a direct threat to the health and safetyof themselves or others. Schwab also makesreasonable accommodations for pregnantemployees who request an accommodationfor pregnancy, childbirth, or relatedmedical conditions.

Employee resource groups

About 25% of Schwab employees belong to at least one ERG, and 58 ERG chapters have been created to date. Schwab ERGs include:

• The Asian Pacific Islanders Network atSchwab

• Black Professional Associations ofCharles Schwab

• Military Veterans Network

• Schwab Employees for the Environment

• Schwab Lesbian, Gay, Bisexual,Transgender, and Allies Pride Network

• Schwab Organization of Latinos

• Schwab Parents Network

• Women’s Interactive Network at Schwab

24

Leadership@Schwab

Professional growth requires development opportunities. Leadership@Schwab is a multi-year initiative to help our people and our business thrive. It is an opportunity for each employee to focus on his or her own individual development which will in turn help us grow our business. It includes tools and support to help employees develop their leadership style and practice new behaviors. We are investing in every person at Schwab, regardless of title or role, so that together we can:

• Do bigger and better things in our careers

• Spot opportunities first

• Champion our clients’ goals in moreways than ever before

• Move our business further, faster

Employee engagement

We each have the power to do our best work here and have fun doing it. That’s the core of engagement. We know that engagement is more than a survey score. It’s how we show up, every day. That’s why we invest in the latest engagement tools and resources—so teams can learn together and shape work into something that’s both effective and rewarding. Our annual engagement survey gives us invaluable insights into how we are delivering on our commitment to making Schwab a great place to work in service to our clients.

In 2016, Schwab received a fifth consecutive win of the Gallup “Great Workplace” award, placing Schwab among the Top 40 companies recognized for having the most engaged workforces in the world. Schwab was also awarded the “Excellence in Outcomes” award, given to the company with the best “Total Performance.”

Tuition reimbursement

The importance of education is indisputable and we encourage all employees to be lifelong learners. Building knowledge and character, improving earning potential, and broadening one’s world view are just a few of education’s benefits, and they can cause a ripple effect across society, advancing all toward a more empathetic, peaceful, and just coexistence. To support our employees’ continuing education, we offer a tuition reimbursement program for qualifying education and training. This includes:

• Classes required for an approvedundergraduate degree program, ones thatare not business- or career-related

• Business- or career-related undergraduate,graduate, and post-graduate programstaken at an accredited college or university

• Business- or career-related courses takenat an accredited college or university, butnot as part of a degree program

• Certification or professional designationsrequired or recommended for an employee’scurrent position or to prepare for anotherposition at Schwab

• Executive development programs

• External training linked to enterprise-specific plans and business goals

25

Delivering programs that support work-life balance, healthy living, and personal growthSchwab employees are a team of individuals appreciated for their work, respected for their unique strengths, and rewarded for the possibilities they create for our clients and our company. While our culture of service inspires high levels of achievement across our organization, we strive to ensure that employees maintain a work-life balance that supports their professional and personal lives so they can enjoy both to the utmost. The following programs are designed to help employees rest, improve their well-being, focus on family, friends and important interests, pursue their passions, and realize their dreams.

Sick time

Schwab recognizes that employees occasionally may be unable to work due to personal or family illnesses or injuries. Employees can be more focused and productive at work if they know that an illness requiring time away from work does not necessarily create a financial hardship. Employees accrue 1.3 hours of sick time for every 30 hours worked, and unused sick time carries over from year to year with no accrual limit.

Vacation program

Time away from work is an important element in achieving balance between personal and professional lives, and employees tend to be more focused and productive at work if they are able periodically to take time off for their own enjoyment. Eligible employees accrue paid vacation time, and managers and employees are encouraged to schedule and

take vacations so that vacation time continues to accrue and the full annual vacation benefit is used.

Sabbatical program

Eligible employees are invited to take a paid sabbatical after every five years of service. At Schwab, a sabbatical consists of twenty-eight continuous days off during which an employee continues to receive regular pay. It’s in addition to regular accrued vacation time, and is an opportunity to explore new opportunities, add credentials, get a new perspective on life, improve one’s health, or just relax and have fun.

Everyday wellness

Supporting good health is a part of our Schwab culture. We believe that when employees are at their best, so is Schwab and those happier, healthier employees can serve clients better. That’s why we support employee wellness and provide opportunities to earn rewards for participation in our Everyday Wellness program.

• Everyday Wellness Rewards–ThroughEveryday Wellness, eligible employees canearn up to $550 in Wellness Rewards tohelp fund their Health Savings Account.

• Wellness Champions Network–OurWellness Champions Network is madeup of Schwab employees who help createand support wellness efforts tailored to theneeds and interests of employees at thelocal and regional level.

• Smoke- and tobacco-free workplace–Schwab is committed to providing a healthywork environment for our employees,clients, vendors and visitors, and decreasingexposure to second-hand smoke on Schwabproperty. To protect our air quality and tocontribute to the health and well-being ofour employees, Schwab is a smoke- andtobacco-free workplace. This commitment

26

is a natural extension of our purpose and values and is intended to assist employees with improving their overall health.

Schwab’s health plans also offer resources to help employees improve their health and reduce their healthcare costs.

• Employee Assistance Program–Whenemployees need help dealing with stress,chemical dependency, relationship and/orfamily issues, mental illness, job burnoutor other problems, they can get helpfrom a licensed counselor through a referralfrom Schwab’s Employee AssistanceProgram (EAP).

• Health plans–Our employees’ health isimportant and so is their financial health.That’s why Schwab offers employees andtheir families comprehensive medicalcoverage with an HSA, so they can get thecare they need when they need it, and saveand pay for their expenses along the way.

Schwab’s medical plan is designed withthe lowest deductible allowed by the IRSand a Health Savings Account that Schwabcontributes to, helping employees save andpay for their medical expenses now and inthe future.

Paid parental leave

Time for parental bonding after the birth or adoption of a child helps form a firm family foundation, and paid time off eases the financial worry that might otherwise keep people from taking that time.

Schwab’s Paid Parental Leave pays 100 percent of an employee’s base pay for six weeks if they are the primary caregiver, and one week if they share in the care for the child, but are not primarily responsible (the non-primary or secondary caregiver). This paid leave is available to all eligible employees regardless of their gender, and employees in regular full- or

part-time positions who are regularly scheduled to work at least 20 hours per week.

Dependent care contributions

Schwab offers dependent care flexible spending accounts (FSA) so employees can set aside pre-tax dollars to pay for eligible child- and elder-care expenses incurred while working at Schwab. Additionally, Schwab makes a contribution of up to $200 per month to FSA accounts that meet eligibility requirements.

Adoption assistance

Eligible employees who adopt a child under the age of 18 can receive reimbursement of up to $2,000 per eligible child for adoption fees through our Adoption Expense Reimbursement Program. Reimbursements cover legal and agency fees, medical expenses for the birth mother and adopted child, and transportation and/or immigration fees for the adopted child.

Leave of absence

We recognize that reasonable periods of time away from work may sometimes be necessary for employees to deal with certain medical, family-related, or personal issues, so we seek to provide leaves that are responsive to employee and business needs. The company’s leave policies are designed to comply in all respects with applicable federal and state laws and, in some circumstances, offer benefits beyond those mandated by law. All employees with six months of continuous employment are eligible to apply for a Personal Leave. Employees on Personal Leave continue to receive paid group healthcare benefits on the same terms and conditions as during regular employment for the duration of the Personal Leave. Employees are required to continue to pay any employee portion of the contribution to premiums for group healthcare benefits or coverage may be affected.

27

Empowering employees to own their futures by providing financial guidance, tools and services Wealth management is not just for Schwab clients—our employees have big dreams and financial goals too, and we are committed to helping them transform their lives through the power of investing. We offer all employees the opportunity to maintain their financial wellness by offering them dedicated service, customized financial planning and relevant education. Every employee is entitled to a no-cost financial planning session that is specific to his or her needs. Consultations can include but are not limited to:

• Retirement Planning• Investment Advice• Debt Management• Education Planning• Mortgage Planning• Estate Planning

This discussion can also include employee-specific advice that is often overlooked, like benefit maximization and overconcentration in company stock. Additionally, employee accounts are eligible for the same profes-sionally managed products and services that Schwab offers retail clients and, in some cases, may receive a discount and possible rebate off the managed fee.

Recruiting American heroes Schwab believes that veterans represent some of the very best talent in the country, and we are proud to be an employer of choice for many who have served and those who continue to serve. We know the distinctive value service members bring to the workplace—devotion to teamwork, discipline, tenacity, and proven leadership—all of which help bring our values to life. Schwab is dedicated to an ongoing relationship with this community of America’s heroes.

Military veteran awards

• Military Times Edge “Best for Vets Employer2015” for the sixth consecutive year

• U.S. Veterans Magazine 2015 “Best ofthe Best” employers for the fourthconsecutive year

• G.I. Jobs 2016 “Top 100 Military FriendlyEmployers” for the fourth consecutive year

• Military Spouse’s 2016 “Military SpouseFriendly Employers” for the fourthconsecutive year

• Civilianjobs.com’s “Most ValuableEmployers” (MVE) for Military

• Profiles in Diversity Journal’s “Top 25 MostInfluential Companies for Veterans Hiring”

Alliances

Schwab has alliances with more than a dozen organizations dedicated to supporting our country’s service men and women, including but not limited to:

• 100,000 Jobs Mission

• Joining Forces

• Employer Support of the Guardand Reserve

• Hiring Our Heroes

• Veterans on Wall Street (VOWS)

• Hero 2 Hired

• U.S. Department of Veteran Affairs

• Veterans Business Network

28






00196527


Investing in our communities

2

Charles Schwab Bank is committed to investing in to the communities in which we work and live, and to helping people take ownership of their financial futures. Our commitment to supporting our local communities is guided by the Schwab principles of service, collaboration, innovation, and client loyalty to create and preserve sustainable outcomes that promote economic security.

The Bank’s Community Development Group (CDG) oversees our Community Reinvestment Act program, which serves the credit needs of the communities in which we operate, including low- and moderate-income neighborhoods, consistent with safe and sound operations. Our thoughtful program offers loans, investments, grants and services that

support affordable housing, small business and sustainable job creation, and financial education. By collaborating with some of the most innovative and dedicated community partners, we are creating financial security and stability for under-resourced families and helping transform historically marginalized communities in California and Nevada.

Since its inception in 2004, Charles Schwab Bank has invested, lent and granted nearly $1.8 billion to underserved communities, including:

• $1 billion to affordable housing

• $46 million to small business and job creation

• $7.5 million to financial education and other causes

• $734 million home mortgage loans to low- and moderate-income households

SALE

3

Pathways to entrepreneurship The Bank supports the creation of sustainable jobs and businesses through our robust Community Development Financial Institution (CDFI) lending platform. CDFIs are specialized mission-driven financial intermediaries that take a market-based approach to delivering new sources of capital into lower-income and underserved neighborhoods that have historically lacked access to conventional financing.

We actively seek CDFI partners that are pioneering innovation in the small business lending industry. In 2015, the Bank provided a $10 million loan used to support the micro and small business lending activities of the award-winning and innovative Opportunity Fund, a leading microfinance provider in California. Opportunity Fund believes that access to credit and a reason to save build pathways to entrepreneurship and education that break the cycle of poverty.

In 2016, the Opportunity Fund:

• Lent $65 million in 2,188 new small business loans

• Created and sustained 31,494 jobs through its small business lending program

• Lent $31 million in community based real estate projects

• Granted $1 million in matching funds for 500 new savings accounts for low-income students pursuing a college degree

Founded in 1994, Opportunity Fund helps residents of underserved communities by driving economic mobility and building stronger communities through entrepreneurship, education, and sound financial habits. Opportunity Fund is a California nonprofit corporation and CDFI whose mission is to create and sustain jobs and businesses by providing micro and small business loans and matched savings programs to low-income entrepreneurs and businesses located in low- and moderate-income areas that cannot qualify for traditional bank loans.

4

Seeding savings for youthSince day one, the Bank has been committed to making investing more accessible and promoting financial literacy to help people take ownership of their futures. The Bank’s commitment to helping youth establish good financial habits led to a partnership with MyPath, a San Francisco-based nonprofit that incorporates savings, banking and credit-building pathways to help under-resourced youth open bank accounts and establish savings plans.

Since 2011, the Bank has funded $265,000 in grants to MyPath, including $45,000 in two seed grants to further expand the program beyond the San Francisco Bay Area to communities in Reno and Las Vegas, Nevada. MyPath also received two Bank-sponsored grant awards totaling $52,000 through a

Federal Home Loan Bank of San Francisco competitive grant program to establish the infrastructure to further scale online financial education opportunities in Reno and Las Vegas.

In 2016 MyPath:

• Served 4,500 youth

• Partnered with 50+ employment partners and six credit unions

• Operating in eight cities in Missouri, Nevada, Washington, and California

• Helped 96% of youth participants reach their savings goal

• Youth participants saved 34% of their income

5

Creating affordable housing opportunitiesA high priority for the Bank is addressing the persistent lack of affordable housing, particularly in high cost areas. Even properties originally created to assist and house low-income renters can become unaffordable over time after affordability covenants, made in connection with the property’s development, expire. As a result, long-time lower income residents are slowly displaced and families are forced to seek new housing, often in places far from their support network and places of employment. This cycle occur repeatedly over time, particularly in gentrifying neighborhoods in our nation’s cities.

To both create and preserve affordable housing for lower income populations, the Bank seeks out innovative investments that deliver on our commitment to the communities in which we live and work, such as our investment in Housing Partnership Equity Trust (HPET). In 2016, the Bank invested $10 million in HPET, a mission-driven private Real Estate Investment Trust. Formed in 2013 by 12 of the nation’s strongest nonprofit affordable housing developers, HPET creates a perpetual capital source that can compete with for-profit investors to purchase multifamily residential properties.

These nonprofit developers have always had an advantage due to their local market knowledge and presence, and having the Bank’s capital available for rapid deployment helps them purchase properties that are located near jobs, schools, transportation, and other critical community services. Following

the purchase, HPET commits to maintaining long-term affordability and provides services to tenants to expand educational opportunities, provide financial security, and offer access to health and wellness resources.

To date, HPET has invested $67 million in 12 multifamily residential properties, providing 2,600 homes for low-income families.

The Housing Partnership Equity Trust has enabled nonprofit affordable housing developers to:

• Provide affordable housing to 2,600 families

• Purchased 12 multifamily residential properties

• Secured 14 investors

• Invested $67 million into preserving affordable housing opportunities

6


Charles Schwab & Co., Inc. is an equal opportunity and affirmative action employer committed to diversifying its workforce. All applicants are considered without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, age, disability, protected veteran status, or based on any individual’s status in any group or class protected by applicable federal, state or local law.

The Charles Schwab Corporation provides a full range of securities, brokerage, banking, money management, and financial advisory services through its operating subsidiaries. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (“Schwab”), Member SIPC, offers investment services and products, including Schwab brokerage accounts. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides deposit and lending services and products. Schwab Advisor Services™ serves independent investment advisors and includes the custody, trading, and support services of Schwab. Independent investment advisors are not owned, affiliated with, or supervised by Schwab. Schwab Retirement Plan Services, Inc provides recordkeeping and related services with respect to retirement plans.

Charles Schwab Bank and Charles Schwab & Co., Inc. are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Brokerage products offered by Charles Schwab & Co., Inc. are not insured by the FDIC, are not deposits or obligations of Charles Schwab Bank, and are subject to investment risk, including the possible loss of principal invested. Charles Schwab & Co., Inc. does not solicit, offer, endorse, negotiate, or originate any mortgage loan products and is neither a licensed mortgage broker nor a licensed mortgage lender. Deposit and other lending products and services are offered by Charles Schwab Bank, Member FDIC and an Equal Housing Lender. Charles Schwab Bank is not acting or registered as a securities broker-dealer or investment advisor.

The Charles Schwab Foundation is a 501(c)3 nonprofit, private foundation that is not part of Charles Schwab & Co., Inc. or its parent company, the Charles Schwab Corporation.

©2017 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. IAN (1217-7A8L) MKT100703-00 (12/17)

00205033

Environmental stewardship

30

Schwab employs environmentally friendly practices in order to leave as small an environmental footprint as possible.

Our objective is to pursue operational practices that are good for the environment, good for our clients and employees, and good for our business. Stakeholders across our organization take appropriate actions to incorporate sustainability into all practical aspects of operations.

31

Schwab’s carbon and energy trends, 2011-2016

Schwab has reduced its carbon emissions and improved energy efficiency even as our real estate footprint has grown.

Carbon emissions, tonnes CO2-equivalent:

From 2011 to 2016, we reduced our carbon emissions by 12% while increasing our real estate footprint and employing more people.

This is roughly equivalent to removing 2,000 passenger cars from our roads, according to EPA estimates.

1 Scope 1 and Scope 2 emissions

Efficency–2016: 101 kBtu/square foot

Using the time-tested strategy of measuring energy performance, benchmarking, and making targeted investments in efficiency, we are proud to have reduced our energy use steadily over time.

From 2011-2016, we have increased our energy efficiency by 28%. This efficiency means that we consumed 8% less energy in 2016 compared with 2011, even while our real estate footprint has grown.

Developing sustainable real estateSchwab operates an energy management program that impacts all corporate real estate, branches, service centers, and data centers.

Our energy management program rests on the principle of continuous improvement—with goals established for each region and progress reported on a regular cycle. Examples of our energy management activities include:

• Each major site benchmarked using theUS EPA Energy Star program

• Regular goal-setting and progress reporting

• Discovering, researching, and implementingenergy savings projects that producefavorable return on investment as well ashigh impact to our energy use and carbonemissions

Design and construction of new facilities and branches follow guidelines from the US Green Building Council. The LEED rating system provides strategies for site selection, materials, and technologies that help us create environmentally responsible and healthy places to work and conduct business.

increase in efficiency since 2011

28%

2011 2012 2013 2014 2015 2016

https://www.energystar.gov/buildings

http://www.usgbc.org/

http://www.usgbc.org/

32

Practicing responsible purchasing and recyclingOur vendors provide a number of recycled-content and environmentally preferable products for use in our business.

• Our purchasing practice is to sourcerecycled and environmentally responsibleproducts wherever feasible, including paperstock that contains post-consumer recycledcontent and/or is FSC (Forest StewardshipCouncil) certified

• All client, stockholder, and employeecommunications are printed using productswith high recycled content

• All business cards, letterhead and businessenvelopes, annual reports, and newsletterscontain post-consumer recycled paper

• Schwab is aggressive about recycling inour service centers and branches.

• All employees are provided with recyclingand compost bins where available

• Cell phones, computers, office equipment,and all other electronic equipment arerecycled appropriately through authorizedrecyclers when they cannot be donated;we also hold electronics recycling drives inwhich our employees can bring in theirpersonal items and appliances for recycling

• Confidential paper is shreddedand recycled

Creating a paperless environmentSchwab continues to pursue a “paperless” work environment for employees.

This reduces costs, saves trees, and increases productivity by eliminating manual tasks, decreasing printing costs and streamlining workflow. It also reduces the need for physical office space since many Schwab employees can gain access to work documents electronically from any location.

We also encourage our clients to go paperless by signing up for electronic trade confirmations, account statements, and tax reporting documents, all of which we archive for 10 years.

Overall paperless adoption continues to trend upward and plays a key role in decreasing mail volume. Not only is this good for the environment but it enables clients to receive important information electronically—even if they’re away from home—and reduces the threat of mailbox theft, which continues to be one of the greatest areas of vulnerability with respect to I.D. theft and fraud.

33

Supporting alternatives for employee commutingSchwab offers a Commuter Tax Savings Plan, administered by WageWorks®, which allows employees to pay for public transportation using pre-tax dollars. Other commuting measures include:

• Guaranteed ride home (paid cab ride homefor unplanned emergencies)

• Preferential parking for carpools andvanpools

• Bike parking

• Supporting the annual Bike to Work Day

• Employee commuter alternativeawareness fairs

• Telecommuting opportunities forqualified employees

Reporting our environmental performance and disclosuresIt is Schwab’s practice to collect and report environmental performance data on a regular basis.

• Schwab Corporate Real Estate tracks andmanages performance data such as carbonemissions, energy and water consumption,Energy Star Scores, and volume ofenvironmentally favorable purchases

• Performance is managed internally usingdata-based investment and decisionstrategies

• Environmental performance is disclosedannually to the CDP including carbonfootprint, energy management results, andcorporate activities that impact carbonemissions

• Schwab is a participant in the NewsweekGreen Rankings of the top 500 U.S. firms,and aims for continual improvement ofstandings






00196528

https://www.cdp.net/


Security

35

Schwab’s security measures are designed to keep clients’ accounts safe. Client accounts at Schwab are protected in multiple ways, and our security program brings together complementary tools, controls and technologies to safeguard client accounts and data. We continuously monitor our systems, and we work collaboratively with government agencies, law enforcement and other financial services firms to address potential threats. We have a strong culture of risk management.

Like other firms, we try to keep our behind-the-scenes security measures and practices private—to make it more difficult for fraudsters to gain an edge by understanding the tools and techniques we apply. But here are some of the important things we are doing.

36

Using technology to protect our clientsTechnology features that protect Schwab accounts include advanced encryption technology to secure communications on schwab.com. Our sites use multilayered protections beyond login name and password before granting access to an account. In the event unauthorized account activity is suspected, the user is prompted to answer additional security questions, and failed login attempts are limited.

Schwab.com also uses Extended Validation Certificates to help clients verify that they are accessing our authentic site, and not a “spoofed” site masquerading as schwab.com. Look for the green bar in front of the web address at the top of your browser to confirm that you’re on Schwab’s official, secure site. The “https://” and padlock icon in the address bar will additionally confirm you are on our secure site.

Automated alerts and other actions also play a behind-the-scenes role in our authentication and monitoring processes. We use pattern analysis and other advanced analytical systems to detect suspicious account activity and deter unauthorized access. Schwab’s fraud teams monitor activity to detect suspicious behavior. This allows us to spot attempted intrusions and act on them quickly.

Providing strong operational controlsWe limit the number of employees who have access to clients’ personal information, and we enforce internal authentication measures to protect against the potential for social engineering. All employees who handle sensitive information are trained in privacy and security. Those employees are held to high standards in adhering to established protocol in order to ensure that client data is kept private.

All of the channels through which clients have access to Schwab are protected. When you call us by phone, our representatives ask for several pieces of identifying information before you are authenticated and can conduct transactions. When you visit a branch, we ask you for a state-issued photo I.D. (such as a driver’s license) or federal government-issued I.D. (such as a passport).

When sensitive transactions occur in your account(s), such as money being moved in or out, or a purchase or sale of a security, or when personal information is changed or updated, we provide you with an alert. Certain criteria cause various transactions to be reviewed by specialists. In this process, highly trained individuals review transactions for indications that they may be fraudulent.

Playing an important role in industry-leading groupsWe participate in industry-leading forums and organizations designed to collaborate on emerging technology and security challenges facing the global financial services sector, as well as to coordinate critical infrastructure and homeland security activities. These groups include the Financial Services Information Sharing and Analysis Center (FSIAC), the Financial Services Sector Coordinating Council (FSSCC), and BITS, the technology policy division of the Financial Services Roundtable.

Offering the Schwab Security Guarantee

At the end of the day, it’s all about trust. To give our clients peace of mind, we provide the Schwab Security Guarantee, which states: Schwab will cover 100% of any losses in any of your Schwab accounts due to unauthorized activity. Conditions apply. Click here for further information.

http://www.schwab.com/public/schwab/nn/legal_compliance/schwabsafe/security_guarantee.html

http://www.schwab.com/public/schwab/nn/legal_compliance/schwabsafe/security_guarantee.html

37






00196529


Public policy and corporate governance

39

Schwab’s stated purpose is “to champion every client’s goals with passion and integrity.” With that purpose as our guide, Schwab actively advocates on regulatory and legislative issues that have a direct impact our clients’ ability to achieve their investment goals or our ability to serve them effectively in meeting those goals.

40






00196530

Office of Legislative and Regulatory AffairsThe mission of the Schwab Office of Legislative and Regulatory Affairs is to encourage and support the creation of responsible government policies that help our clients achieve their financial dreams and our company grow and be successful. The office works to educate policymakers at the international, federal, state and local level about the effect of public policy proposals on the individual investor, and to educate our employees and clients about the important role they can play in the public policy process. The Legislative and Regulatory Affairs team’s primary responsibilities are to:

• Inform policymakers about changes in ourindustry, Schwab’s role in the financialservices sector as a champion of individualinvestors, and Schwab’s history ofinnovating to make our client experiencethe best it can be;

• Proactively encourage legislation andregulations that benefit our clients andindividual investors generally;

• Educate lawmakers, regulators andexecutive branch officials about Schwab,its practices, policies, and goals;

• Actively participate in the legislative processby communicating the company’s views onpolicy proposals that affect our clients andthe company.

Corporate GovernanceSchwab’s long-term vision is to be the most trusted firm in investing services. To reach this goal and accomplish our purpose of championing our clients’ goals with passion and integrity, we are committed to the highest standards of ethical conduct. Our decisions and behavior have far-reaching implications: reflecting on our credibility, the Schwab brand, and the financial services industry as a whole. The trust we earn from our clients and communities in which we operate depends on our reputation for integrity and obeying the law.

Information on The Charles Schwab Corporation’s policies on General Corporate and Personal Standards of Conduct; Conflicts of Interest; Confidentiality of Information; Employment Practices; Business Practices; and Compliance Procedures are available here.

The Charles Schwab Corporation has a single class of voting common shares and each share is entitled to a single vote. Stockholders can vote at stockholder meetings by mail, telephone, internet or in person.


https://www.aboutschwab.com/images/uploads/inline/code09.pdf

41






00196523


corporate citizenship at schwab · “america’s largest discount broker.” since then, schwab...

Documents