The Fall and Rise of David Pottruck

Stage I: Shock and Disbelief

The initial reaction to a loss is a stunned, numb feeling and refusal by the individual to acknowledge the reality of the loss. (From Dr. George Engel, as interpreted in Psychiatric Mental Health Nursing: Concepts of Care, 4th Edition)

Pottruck slowly headed back to his office, his head spinning, unsure of what to say or how to act. He felt embarrassed, ashamed, humiliated. "I felt badly that I had let people down," he says. "I was very concerned about what would happen to the company. I worried about my reputation." It wouldn't be a stretch to imagine Pottruck, a bulky man who fills out every inch of a suit and whose broad face is best described as a mug, smashing every elegant object in his well-appointed office. He'd never been asked to leave any job -- not at Shearson/American Express, where he helped run consumer marketing and advertising, or at Citibank, or anywhere else for that matter. Instead, Pottruck felt eerily calm. He wouldn't flee the office. He'd always been proud of his reputation for dealing with problems head on. It was time to deal with his own downfall the same way.

He picked up the phone and began to make calls, aware that his firing would ripple far beyond his desk. Pottruck's assistant of 15 years, Colleen Bagan-McGill, was driving through San Francisco with her husband and kids at the start of a long-awaited vacation when her cell phone rang. "How are you doing, honey?" she heard Pottruck say, a forced chipper note in his voice. "I need to tell you something. I got fired this morning."

"I really thought he was kidding," says Bagan-McGill. "He told me three times. I said 'Oh my God' three times. It was very emotional." Bagan-McGill turned the car around and went to the office in her flip-flops and sundress. She never took that vacation.

Pottruck reached his wife, Emily, and told her the news in a monotone. "It sounds ridiculous," she remembers, but the first thing she said was, "My God, I would never have yelled at you this morning."

Still acting with the authority of a boss -- it was what he knew best, after all -- Pottruck held a meeting for his administrative staff to explain what had happened. Although the company suggested putting out a press release explaining that Pottruck was stepping down for personal reasons, he rejected the idea. He knew everyone knew he'd been canned. Why sugarcoat it with some crap about "spending more time with his family"?

At about 8:30 that night, Pottruck headed home. Part of him felt, somehow, relieved. As much as he loved being CEO, as much as he loved being responsible and making decisions and BlackBerrying furiously from bed or beach, it had been a terribly stressful time. Although he'd helped build the company from client assets of $25 billion to more than $1 trillion since he became president in 1992, he'd more recently had to lay off more than 8,000 workers, many of whom he'd recruited. He'd clashed with Charles Schwab over the right direction for the company for years. Maybe this really was the best thing.

"I had a bottle of wine opened up," Emily says. "He said 'Really, I'm fine. Things have been hard. I really wanted to turn things around. Maybe someone can do a better job.' " Emily figured he was in denial. "This is going to be a process, David," she told him. "You're in shock."

Everyone told Pottruck to take some time off. But what he knew best was to go to work. So when the press release went out at 5 a.m. the next morning, July 20, he and Bagan-McGill were at their desks, ready to face the coming storm of press calls. Pottruck patiently explained to reporter after reporter that yes, he had been fired, and that yes, as the chief executive he should be held accountable. The release read, in part, "I accept the Board's decision that it's time for me to step aside. It's been a great journey."

Stage II: Developing Awareness

Awareness of the loss creates feelings of emptiness, frustration, anguish, and despair.

For most people who have been abruptly fired, the first reaction is terror that you will no longer be able to provide for your family. This was hardly the case for Pottruck, who accumulated vast wealth as part of the team that bought Schwab back from Bank of America in 1987, and who took home a $10 million-plus severance package, not including stock sales and option exercises. So while he felt some bitterness at how the last chapter was written, he also felt grateful. "We're not crying in our china," says Emily. "Dave has been financially successful in ways he never dreamed possible." He signed his good-bye letter to the staff "David S. Pottruck: private investor, Schwab client, U.S. Trust client."