SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Based on its records and other information, the company believes that during 2018 all filings with the SEC by its officers,
directors and 10% stockholders timely complied with requirements for reporting ownership and changes in ownership of common stock under Section 16(a) of the Securities Exchange Act of 1934.
TRANSACTIONS WITH RELATED PERSONS
Charles R. Schwab, the companys Chairman, has a daughter, Carolyn (Carrie) Schwab-Pomerantz, who was employed as President of the Charles Schwab Foundation during 2018 (and presently).
Ms. Schwab-Pomerantz earned approximately $815,000 in salary, bonus and benefits during 2018, including a grant of 2,850 RSUs and 6,462 stock options. Ms. Schwab-Pomerantz has been employed by the company for 36 years.
Stephen T. McLin, a director of the company, has a son, Stephen D. McLin, who was employed by the company in a
non-executive
officer,
non-managerial
capacity during 2018 (and presently). Mr. McLin earned approximately $146,000 in salary, bonus and benefits during 2018,
including a grant of 44 RSUs. Mr. McLin has been employed by the company for 25 years.
Some directors, executive officers and entities
with which they are affiliated have credit transactions with the companys banking and brokerage subsidiaries, such as mortgage loans, revolving lines of credit or other extensions of credit. These transactions with directors, executive
officers and their affiliates are made in the ordinary course of business and as permitted by the Sarbanes-Oxley Act of 2002. Such transactions are on substantially the same terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with persons not related to the lender and do not involve more than the normal risk of collectability or present other unfavorable features.
The company has policies and procedures regarding the review and approval of related-person transactions. Such policies and procedures are in writing and have been approved by the Audit Committee. The
transactions covered by the companys policies and procedures include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or
relationships in which the company participates and the amount involved exceeds $120,000, and a director or executive officer of the company has a direct or indirect material interest. The policies and procedures include transactions where the
directors or executive officers children, stepchildren, parents, stepparents, spouse, siblings,
mothers-in-law,
fathers-in-law,
sons-in-law,
daughters-in-law,
brothers-in-law,
sisters-in-law
or members of their household (other than a tenant or employee)
have a personal interest.
Any director or executive officer proposing a transaction covered by the companys related-party transaction
policies and procedures must notify the companys compliance department as soon as practicable after becoming aware of the transaction or proposed transaction and must provide a description of all material details and his or her interest in the
transaction. The Audit Committee will consider the transaction at its next meeting. The Audit Committee may authorize or ratify the transaction only if the Audit Committee determines that the transaction is fair as to the company as of the time of
authorization and in the best interests of the company. The transaction must be approved in good faith by a majority of the disinterested directors on the Audit Committee.
Notice to and approval by the Audit Committee as described above is not required if the transaction involves compensation to an immediate family member of a director or executive officer, and the
employment relationship has been approved in good faith by a majority of disinterested members of the Compensation Committee. As in the case of Ms. Schwab-Pomerantz and Mr. McLin, after initial approval, further approval of the
Compensation Committee is not required if the immediate family member is not an executive officer and all compensation and benefits to him or her, including salary increases, bonuses, incentive awards, perquisites, benefits, severance payments, and
all other forms of compensation, are made in accordance with the companys compensation programs, policies and plans.
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