Charles Schwab 2010 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2010 Charles Schwab annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 135

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135

THE CHARLES SCHWAB CORPORATION
Notes to Consolidated Financial Statements
(Tabular Amounts in Millions, Except Per Share Data, Option Price Amounts, Ratios, or as Noted)
Employee Stock Purchase Plan
Under the Company’s Employee Stock Purchase Plan (ESPP), eligible employees can purchase shares of CSC’s common stock using
amounts withheld through payroll deductions, subject to limitations. Payroll deductions are accumulated during six-month offering
periods that start each year on February 1 and August 1 . Beginning in 2011, share purchases are made on the last trading day of
each three-month purchase period within the offering period. The three-month purchase periods end on January 31 , April 30 ,
July 31 , and October 31 of each year. The purchase price for each share of common stock is 85% of the fair market value of the
shares on the last trading day of the offering period. At December 31, 2010, the Company had 47 million shares reserved for future
issuance under the ESPP.
Other Deferred Compensation Plans
The Company sponsors deferred compensation plans for eligible officers and non-employee directors. The Company’s deferred
compensation plan for officers permits participants to defer the receipt of certain cash compensation. The deferred compensation
liability was $139 million and $142 million at December 31, 2010 and 2009, respectively. The Company’s deferred compensation
plan for non-employee directors permits participants to defer receipt of all or a portion of their director fees and to receive either a
grant of stock options, or upon ceasing to serve as a director, the number of shares of CSC’s common stock that would have resulted
from investing the deferred fee amount into CSC’s common stock.
Retirement Plan
Upon completing three months of consecutive service, employees of the Company can participate in the Company’s qualified
retirement plan, the SchwabPlan Retirement Savings and Investment Plan. The Company may match certain employee contributions
or make additional contributions to this plan at its discretion. The Company’s total contribution expense was $50 million, $49 million,
and $53 million in 2010, 2009, and 2008, respectively.
20. Money Market Mutual Fund Charges
In the third quarter of 2010, the Company decided to cover the net remaining losses recognized by Schwab money market mutual
funds as a result of their investments in a single structured investment vehicle that defaulted in 2008 and recorded a charge of
$132 million.
21. Taxes on Income
Income tax expense on income from continuing operations is as follows:
The excess tax benefits from the exercise of stock options and the vesting of restricted stock awards, which for accounting purposes
are recorded in additional paid-in capital, were $3 million, $8 million, and $50 million in 2010, 2009, and 2008, respectively.
-78 -
Year Ended December 31, 2010 2009 2008
Current:
Federal
$ 326
$ 400
$ 584
State
50
73
117
Total current
376
473
701
Deferred:
Federal
(43)
12
79
State
(8)
4
18
Total deferred
(51)
16
97
Taxes on income
$325
$489
$798
s
t
s
t
s
t
th
s
t
s
t
®