The Fall and Rise of David Pottruck

The alarm went off at 5 a.m. as usual on Monday, July 19, 2004, even though David Pottruck had stayed up until 2 a.m. preparing for that morning's board of directors' meeting. Also as usual, Pottruck, the CEO of Charles Schwab, hit the snooze button more than once, waking his wife, Emily. Annoyed and overtired, she let him have it. "If you do that to me again, we're sleeping in separate rooms," she yelled.

It was a lousy start to what would be a lousy day. Pottruck trudged off to work, preoccupied with the board meeting, which was sure to be grueling. Schwab's troubles had only deepened in the 14 months since Pottruck, now 57, had become the sole CEO after five years as co-CEO with Charles Schwab, the company's founder. The stock price remained stuck far below its split-adjusted 1999 high of $50.17. The market and dotcom crashes had put an abrupt halt to much of the active trading that had made Schwab a dynamic profit center. The vaunted corporate culture, which Pottruck had taken great pride in helping to build in his two decades at the company, was dissolving in a sea of layoffs. And his aggressive acquisition strategy wasn't bearing fruit. The board knew all of this, of course, but Pottruck wasn't looking forward to rehashing it.

He wouldn't have to. The board suddenly called an executive session, something usually done only at the end of a meeting. "I actually didn't think that was a big deal," says Pottruck, a wan smile playing across his broad face. "It shows how unaware I was." About 30 minutes later, a strained-looking Charles Schwab came into Pottruck's spacious office on the 30th floor of the company's headquarters and asked him to join him in Schwab's office.

The words that followed ended a 20-year corporate career in less than 20 seconds. "I'm sorry," Pottruck remembers Schwab saying, "but the board has met and decided that they have lost confidence in the direction of the company and in your leadership. We've decided to make a change and have me come back to the office." Effective immediately, Pottruck was to step down, and Schwab would become CEO again.

Immobilized, Pottruck felt the words wash over him. I've been fired, he thought. He was stunned, not because it had happened -- he was well aware that the poor performance of the company put his job at risk -- but because of how it had happened. As Schwab's protege and then partner, he'd been sure there would be a warning, a probationary period, a hint of some kind. Pottruck pulled himself together, then asked to speak to the board, intent on handling the news with some grace. "I told them I was sorry things had worked out the way they had and that I would leave with enormous gratitude."

In a heartbeat, David Pottruck's life -- and identity -- was forever changed. He was no longer the CEO of a financial-services giant. He was no longer the gregarious public face of a company that had revolutionized the way stocks are bought and sold. He would no longer sit atop the company he had helped build as president, co-CEO, and finally chief executive. Instead, the self-made son of a factory worker at Grumman Aircraft suddenly had a new, much less appealing, identity; he was just the latest CEO to hit the skids, just another well-paid dotcom acolyte who couldn't hack it when things got tough.

It's easy, pleasurable even, to regard the toppling from power of a chief executive as worthy of little more than scorn. Why have empathy for a man who was paid obscenely well to run a company that ultimately faltered, we say, chops dripping with schadenfreude? What could any of us possibly have in common with a man whose net worth is around half a billion dollars, who lived in a rarefied world of meetings with senators and trips by private jet?

The answer, it turns out, is plenty. Pottruck's yearlong journey through the stages of corporate grief has relevance and resonance for every person, no matter what his or her station. In today's unforgiving corporate environment, dramatic professional takedowns like the one Pottruck suffered have become commonplace. They may not be writ quite as large as they are for a CEO, whose defeat is splashed across every paper in lurid detail. But the feelings and emotions are just as raw, the insecurities just as naked, the challenge of moving on just as great. The story of how David Pottruck dealt with the death of one career and the birth of a new one holds important lessons for anyone facing a sudden bump in the corporate road.