RESOLVED: Charles Schwab Inc. ("Company" or ?Schwab?) shareholders, including James McRitchie of CorpGov.net, ask that our Company take all steps necessary to reorganize the Board of Directors into one class with each director subject to election each year for a one-year term so that all directors are elected annually. Although our management can adopt this proposal topic in one year, and one-year implementation is a best practice, this proposal allows the option to be phased in. Supporting Statement: Fully 90% of S&P 500 companies have declassified boards. Annual elections are widely viewed as a best practice. Annual election of each director makes directors more accountable, improving performance and increasing company value. According to ?What Matters in Corporate Governance? by Lucien Bebchuk, Alma Cohen, and Allen Ferrell of the Harvard Law School, classified boards like ours are one of six entrenching mechanisms negatively related to company performance. Diligent?s Market Intelligence database includes the voting record of 24 shareholder resolutions to declassify boards during the period 2020 ? 11/1/2024. They averaged 74% support. Only one proposal on this topic out of seven is reported to have received less than 50% of the vote in 2024. BlackRock states, "Directors should be elected annually to discourage entrenchment and allow shareholders sufficient opportunity to exercise their oversight of the board." Vanguard generally votes for proposals to declassify an existing board and votes against management or shareholder proposals to create a classified board. According to Equilar, a trusted leader for corporate leadership data: A classified board creates concern among shareholders because poorly performing directors may benefit from an electoral reprieve. Moreover, a fraternal atmosphere may form from a staggered board that favors the interests of management above those of shareholders. Since directors in a declassified board are elected and evaluated each year, declassification promotes responsiveness to shareholder demands and pressures directors to perform to retain their seat. Notably, proxy advisory firms ISS and Glass Lewis both support declassified structures. The annual election of each director gives shareholders more leverage if management performs poorly. For instance, if management approves excessive or poorly incentivized executive pay, shareholders can soon vote against the Chair of the management pay committee instead of waiting for three years under the current setup. Consider our Company's overall corporate governance: According to Diligent?s Market Intelligence, directors can only be removed for cause with an 80% vote, we cannot call special meetings, act by written consent, or nominate directors through proxy access. There is no requirement to have an independent Board Chair or even a Lead Director. Changing many bylaw provisions requires an 80% vote. Our directors have served an average of 11 years. Minorities constitute 17% of the Board, while women constitute 28%. Freefloat Analytics estimates Charles Robert Schwab holds 64% of ?board influence? and categorizes the board type as ?totalitarian.?