I love those videos. It really does tell the story. Probably could cut our meeting real short by just listening to that, and that is about it. We love our customers. Welcome to the 2019 annual meeting. Happens to be our 32nd one since going public. Seems like yesterday. Can't believe it. I am just in the middle of writing a book about the memoirs of Schwab, but I forgot to put in the first annual meeting. It was huge at the very time. We had just the public offering, and we were over one of the auditoriums. Sort of shrunk down with our really long-term investors are right here in this room, and thank you. Thank you for those on the website. I am happy to have you join. I think you will, obviously, be in a position to ask questions later when we get to that point in the meeting.
I am personally very happy to be here for our 32nd, and I am sure you are, too. This meeting will give you an opportunity, as it always does, to review our progress over the last year and get a little inkling of what is happening right now, as well as what we hope for through the year of 2019 and a little bit into the future. It is also a chance for us to hear from you with some questions. Walt and I will be up stage here trying to give some answers to our stockholders. Our agenda today is pretty much the same as it has been the last 32 years. No surprises there. First, Joe Martinetto, who is our Chief Operating Officer now, will cover the business agenda, including going over a number of the proxy proposals. Following him, we will hear from Peter Crawford, our CFO.
As you remember, last year, Peter became our new CFO. We are thrilled to have Peter in that role, and I know Joe is, too. He will cover the spectacular results we had in 2018. It really was a record in every number you could point to. Peter will also go over some of the things about 2019. Notes here. After Peter's presentation, Walt will give a CEO report first, then he will share his perspective on what is going on now and some of our strategies coming up and our plans on how to execute on those plans. Following that, Walt and I will take a few questions from the audience, as many as you want, as long as you limit it to an hour. Maybe less than that. I would like to recognize our board of directors. These people work tirelessly.
They come out here many times, nights before, sometimes committee meetings the day before, and it goes on a long, long time. Their interest is really to make sure this company is run properly and with all the things you would expect of us employees of the company, to make sure that we are trustworthy and follow all the things that we have said we would do. They do a fantastic job, and I would like to have them be recognized. They are a stellar group of people with great backgrounds themselves, and their wisdom has really been very helpful to me and the management team. I would like to read each of your names if I could. As I do, stand up, and we will recognize you as a group, not individually. John Adams. Walt Bettinger is over here. Walt will be here. John Day. Hi, John. Chris Dodds.
You remember him. He used to be our CFO years and years ago. Steve Ellis. Steve. Mark Goldfarb. Bill Haraf. I always mispronounce it. Frank Herringer. Steve McLin. Charles Ruffel. He is brand new just this year. Arun Sarin, who could not be here. Very familiar to all of you, I'm sure. He's been on the board a long time and great service to the company. Paula Sneed. Paula. Roger Walther. How about a big round of applause for them? You don't know how important a great board is. I tell you, it really helps the company through the thick times, the thin times, and so forth, and give that great wisdom when we need it most. We have another group that's very important and outstanding in our dedication to our service. That was the board.
We have five of the board members, including myself, are up for re-election and part of the proxy that was sent to all of you. John Adams, who you've just met, Steve Ellis, Arun Sarin, Paula Sneed, and myself. We want to thank you for your positive votes and withhold your negative votes. We don't want to hear about those. Thank you. That will be on the proxy, and we'll hear the results in a few moments. Our executive committee is with us today, and I'd like to have them. Well, you can stand them now. How about a round of applause for our executive committee? Let's stand up. They work tirelessly. Let me tell you, 2018 was such a fantastic year. It's amazing, we have almost 100% attendance. Some, I would think, be in the hospital, they work so hard. It was an unbelievable year.
I'd like to also thank our employees generally. Some are probably watching in on the video and a few are here. We now have almost 20,000. It's hard to believe that when we started this little company a few years back, we had started with four people, and now we're 20,000. I think we're doing something right for our clients, our customers, and so forth. I'd like to thank each of our employees for their contributions this last year to making such a record time, and I love their dedication to what they do every day in helping our clients do a better job about investing and taking care of that financial part of their life. How about a round of applause for our employees? Of course, most important, I want to say my thank yous to our clients.
They make this company a wonderful company in so many different ways. Our clients really are, I have to say, the purpose of Schwab. You saw what was up there. We live and die for our clients, and that's what we do every day. Thank you for trusting us and being loyal to us. We really appreciate that so much. Now, how about a round of applause for all those employees here and clients? I know there's some clients in here also. Let's move on to the business portion of the meeting, and I'll have Joe come up and take the podium.
All right. Thank you, Chuck. I don't want you to worry unnecessarily. We won't get to the official results for a little bit, but I have a sneaking suspicion you're going to be okay. The first order of business, I'd like to introduce our Inspector of Elections and our independent auditors. The Board of Directors appointed the Inspector of Elections to conduct the voting for this meeting. This year, our Inspector of Elections is Equiniti Trust Company. A representative from Equiniti, Brad Kreager, is with us today. Mr. Kreager has filed an oath of Inspector of Elections. He's also informed me that based on a preliminary count, we have a quorum for this meeting because more than 93% of the company's approximately 1.3 billion shares that are entitled to vote are represented by proxy at this meeting. Our independent auditors are Deloitte & Touche LLP.
Ms. Carol Larsen of Deloitte & Touche is here at the meeting and will be happy to respond to your questions during the question and answer period. The polls are now open for voting on the proposals. If you were a stockholder as of March 18th of this year and you have not returned your proxy card, voted by telephone or voted on the internet, or if you'd like to change the instructions in your proxy card or your telephone or internet vote, you may vote at this time. For stockholders in the room, please raise your hand and one of our representatives will give you a ballot. For those attending our virtual meeting, you may click on Vote Now on the webcast console to cast your ballot. I'd like to present the three proposals we're asking stockholders to vote on this year.
The first proposal is to elect five directors. This year, John K. Adams Jr., Stephen A. Ellis, Arun Sarin, Charles R. Schwab, and Paula A. Sneed have been nominated for election to the Board of Directors. The second proposal is to ratify the selection of Deloitte & Touche LLP as the company's independent auditors. The third proposal is for advisory approval of named executive officer compensation. The Board of Directors has recommended that you vote in favor of each of the proposals to elect directors, ratify the independent auditors, and provide advisory approval of named executive officer compensation. Each of these proposals is described in the company's 2019 proxy statement. If you'd like to review the 2019 proxy statement, you can pick up a copy at the registration desk. We've also been notified that a stockholder intends to present a proposal for your consideration at this meeting.
Tamara Sells, representing the New York City Employees' Retirement System, the New York City Teachers' Retirement System, the New York City Police Pension Fund, and the New York City Board of Education Retirement System, will present the stockholder proposal requesting annual disclosure of EEO-1 data. Ms. Sells, will you please step forward to the microphone?
Thank you, Joe. Good afternoon, everyone. My name is Tamara Sells, I'm here on behalf of the New York City Comptroller, Scott M. Stringer, and the trustees of the New York City Pension Funds. I am pleased to introduce the fund's proposal number four, which asks the company to disclose its EEO-1 data that break down its workforce by race and gender, which it currently provides to the Equal Employment Opportunity Commission. The Sustainability Standards Board, also known as SASB, lists employee diversity and inclusion as materiality metrics for the asset management and financial industry, of which the company is a part of. Despite this materiality, the industry is characterized by persistent and pervasive under-representation of minorities and women, particularly in senior positions. Commissioner Aguilar argues, the industry must do substantially better. Some companies in the industry are striving to improve the situation.
Absent comprehensive disclosure of quantitative data, it is difficult for share owners to evaluate the benchmark and the effectiveness and progress of these efforts. We commend Charles Schwab for adopting diversity-related policies, the best way to evaluate the effective implementation of these policies and the company's commitment to diversity is to examine data which the company does not currently disclose, for which SASB recommends disclosure as a financially material issue to the company's industry. Charles Schwab, according to Glass Lewis, significantly lags its peers with respect to disclosure of information concerning diversity and inclusion. Peers T. Rowe Price and Bank of New York Mellon disclose their EEO-1 data, along with a growing list of companies in the financial industry. A number of organizations are also calling for enhanced human capital disclosures. The Human Capital Coalition recommends fundamental disclosure around workforce demographics and composition.
The International Organization for Standards published a human capital report recommending disclosure on diversity, recently, SEC Chair Jay Clayton recognized the importance of human capital to the performance of firms has gone way up compared to 40 years ago. We urge Charles Schwab to recognize the increasing support for the proposal over time, to reveal its EEO-1 data to reassure share owners that it is leveraging diversity to enhance long-term value creation and to minimize reputational harm. With that, I'd like to thank you for your time and respectfully request a preliminary vote count as well.
Thank you.
Thank you very much.
The board of directors has recommended that you vote against this stockholder proposal. The statement against this proposal is contained in the 2019 proxy statement. If you've completed a ballot, please hand it to one of our Schwab representatives now. If you're participating in the virtual annual meeting, please click on Vote Now to cast your ballot electronically through the internet at this time. If you've completed a ballot during the meeting, your vote will be counted at the end of the meeting and reflected in the final report of the Inspector of Election and in the minutes of the annual meeting. The polls are now closed. The Inspector of Election has completed a preliminary count of the proxies that were voted during the weeks leading up to this meeting.
The preliminary count shows that more than 95% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of each of John K. Adams, Jr., Stephen A. Ellis, Arun Sarin, Charles R. Schwab, and Paula A. Sneed. They've been elected to the board of directors. More than 96% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of the ratification of the selection of Deloitte & Touche LLP as the company's independent auditors, that proposal has been approved. More than 94% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of approval of named executive officer compensation, that proposal has been approved.
Less than 40% of the shares voting on the proposal and present at the meeting by proxy have been voted in favor of the stockholder proposal requesting annual disclosure of EEO-1 data, that proposal has been defeated. This adjourns the business portion of the meeting. Thank you very much for your attention. We'll now hear from our CFO, Peter Crawford.
All right. Well, thank you very much, Joe. It is a great privilege. Chuck said thrilled. I am thrilled to be here with all of you today for our stockholder meeting and to have the opportunity to talk about our financial performance, both our historical financial performance as well as how we look at 2019. Before I get into the meat of the presentation, we have this always very exciting, eagerly anticipated, if I can get this to work, forward-looking statements page. The intent of which is to remind you that those of us on stage today will be talking about the future, and to the extent that the future may unfold in ways that are different than the way we predict, make sure you stay in touch with the latest information, our latest disclosures and other information on aboutschwab.com.
Before we talk about the future, I want to talk about the past, and specifically about 2018, which was a remarkable year on many fronts, and a year in which Schwab delivered both record financial results and record business momentum. A year ago at this meeting, it seems like a long time ago, but you may recall there was a lot of uncertainty in the market, a lot of uncertainty about the future path of interest rates, about Fed policy. Given that uncertainty, we did something a little different. I laid out not one, but two different scenarios to describe our financial outlook for the year. The scenarios varied. One assumed a single Fed increase, and the other one assumed three rate increases.
What they had in common was assumptions about modest market appreciation, somewhat of a flattening of the yield curve, and a slight increase in trading activity or DART year-over-year. In that three-rate hike scenario, we anticipated that our revenue would grow 13%-15% year-over-year, that we would achieve 200 to 400 basis points of operating leverage, meaning our revenue would grow 200 to 400 basis points higher than our expense growth, and that we would achieve pre-tax margins of at least 43%. Now the year unfolded, in general, better than even that three-hike scenario had contemplated. The equity markets were the biggest headwind, as they fell actually 6%, thanks to the late in the year sell-off that we saw. The Fed hiked rates four times rather than three. Interest rates, longer-term interest rates, stayed elevated for much of the year.
Perhaps the biggest surprise to the upside was that we saw a real surge in client engagement, driving trading activity up over 30% year-over-year. Given that strong macro backdrop, the strong client engagement, our success in gathering assets over the course of the year, we were able to significantly outperform even that three-rate hike scenario with revenue growth of 18% year-over-year. We capitalized on the favorable environment to move forward on some really important investments to help drive the profitable growth of the franchise over the long term. Even so, we were able to deliver 550 basis points of operating leverage and achieve a pre-tax margin of roughly 45%.
Those financial results, coupled with the benefits of tax reform in 2018, allowed us to grow earnings per share year-over-year by over 50% and achieve a return on equity for the full year of 19%. I say to my colleagues at Schwab, many of whom are sitting here, that our stock price is not the only barometer or certainly in the short term, even the best barometer, the most accurate barometer for our success in executing on our strategy. Rarely has that been more true, I think, than in 2018, and particularly the latter part of 2018. Because even as we were successfully executing on our strategy, winning with clients, winning against a number of our competitors, our stock price obviously suffered in the latter part of the year. Needless to say, we're aware of this dichotomy.
At the same time, we're convinced that our strategy is the right strategy at the right time, and that our stockholders will be rewarded as we execute on this strategy over the longer term. Our success in 2018 paves the way for what we expect will be strong financial performance in 2019 as well. In addition to the usual variables this year around equity markets and interest rates and trading activity, we have an additional uncertainty around cash balances. Cash balances are influenced by a lot of factors, influenced by the markets, influenced by volatility, influenced by interest rates. We described this year a range of possible outcomes depending on how those cash balances grow over the course of the year.
On the one hand, we could see an environment where strong equity markets, low volatility, higher interest rates where our balance sheet could shrink by 8% or 9%. On the other hand, we could also see cash balances actually increase. Our balance sheet actually increase by 3% or 4%. Depending on what happens with that balance sheet growth, we could see our revenue growth range from 7%-11%. We expect we'll increase our expenses year-over-year by roughly 6% or 7%, meaning that even if our balance sheet actually shrinks this year by 8% or 9%, we could still achieve pre-tax margins at the same or even a higher level than they were last year. We can't control the environment, but we can control our approach to spending.
We're planning for expense growth this year of 6% or 7%, with a big portion of that focused on initiatives and investments that will drive greater efficiency across our whole business. That 6% or 7% is a slower growth rate than what we did in 2018, but still a bit above what we view as the longer-term average in the low-to-mid single-digit level. A big portion of that spending is on application modernization, business process transformation, digital transformation. These are investments that we believe will help us get to that low-to-mid single-digit level of expense growth and also help us drive down expense on client assets, or what we call EOCA. It's a really, really important metric. It measures our overall cost structure and efficiency, and our cost structure, our scale is a huge competitive advantage for us.
We're very, very focused on continuing to drive that measure down. Really importantly, want to do so in a way that doesn't come at the expense of our clients. That's what's really exciting about these initiatives. Digital transformation, for example, creates a better client experience at the same time that it lowers the cost to serve those clients. How are we doing so far in 2019? Well, the first quarter was very, very strong. We had a 14% growth in revenue year-over-year, buoyed in large part by an increase in net interest revenue, a function of higher interest rates and higher balances. Expenses grew 5% year-over-year.
With that 900 basis points of operating leverage in the first quarter allowed us to increase our pre-tax margins by 4.5 points versus the first quarter of 2018 and achieve a return on equity of 20% for the third consecutive quarter. We have the opportunity this year and beyond to be that rare company that's driving both strong top-line growth as well as returning capital to our stockholders. With the transfers behind us, we should be in a position over the coming quarters and years to be generating excess capital. As our earnings increase, our dividend should increase. It's been on the lower end of our 20%-30% payout ratio over the last several years as we wanted to conserve that capital, support the balance sheet growth.
I would expect it'll trend up towards the middle part of that range, and potentially even the upper part of that range in the coming quarters and years. To the extent that we have capital in excess of what's needed for the dividend and what's needed to drive the growth of the business, our focus will be on utilizing the $4 billion buyback authorization that the board approved back in January and moving our tier one leverage ratio closer to that 675 to 7% operating objective. Let me close with just a few thoughts. First, our strategy is working, producing strong business momentum and strong financial results.
Second, we see the opportunity for strong financial performance top line, as well as a strong increase in earnings per share, even without a lot of help from the Fed, without a lot of help from the market environment, without a fundamental shift in our clients' behavior with regard to their cash. Third, we're really bullish on the longer-term opportunity. We have 7% share of the U.S. investing wealth with a leading position in the two fastest-growing segments, the RIA channel and online brokerage. We're benefiting from some really important long-term secular trends. Trends towards lower price, trends towards more of a fiduciary model of delivering advice, trends towards greater transparency. Our competitive position has never been stronger, allowing us to take share from a wide range of competitors.
We have a lot of opportunities to drive greater efficiency across our whole business, but do so in a way that's actually good for clients. We have a track record of following through on our commitments, the most important of which is seeing the business Through Clients' Eyes. That also means managing risk appropriately, acting with discipline, and meeting or exceeding the expectations of our clients, of our employees, our regulators, and of all of you, our stockholders. With that, thank you very much, and let me bring up Walt Bettinger for the CEO report.
Good afternoon, everyone. Thanks for joining us today. As Peter said, it's a thrill and an honor to be able to spend time with you again. It seems like I've done this for a long time. I particularly need that thrill today because I have to admit, I'm still in a little bit of mourning, given my beloved Cleveland Cavaliers did not succeed in the NBA lottery draft last night, and instead will have to settle for the fifth choice in the draft. No, it's a great honor to be with all of you again this year. One of the things that's special about this annual meeting is the opportunity to hear from our founder and my close colleague, Chuck Schwab.
45 years ago, he started this firm. He really started the firm on a very simple concept, the concept of the golden rule, that we would treat others the way we would want to be treated if we were investing. Today, that golden rule manifests itself through what we call the virtuous cycle. This slide here illustrates an example of the virtuous cycle. It really starts by challenging the status quo for investors at the very top. Of course, that's what Chuck did 45 years ago, and what we still do today. Looking at the investing world and utilizing the knowledge that we have about investing to figure out ways to serve our clients in a better manner. Lower cost, better service, more responsiveness.
Along with that means that as our company grows because clients entrust us with more of their money, we share back with them the benefits of that growth and scale. In 2018 alone, we shared back with clients proactively almost $400 million in the form of lower pricing. That starts the virtuous cycle. Of course, as we share with our clients, they reward us, and they reward us by entrusting us with more of their assets. Last year, over $225 billion in net new money. Even when I say that, it's remarkable to think about. The Wall Street Journal recently did an article on Schwab and talked about how almost $700 million in net new money is entrusted to us each and every calendar day of 2018.
A tremendous recognition of the fact that investors will reward us for operating with the golden rule, by serving them the way we'd want to be served. Bring that together, it totaled over $10 billion in revenue last year. As Peter mentioned, over a 50% growth in our earnings per share, and we invested in the business relatively aggressively with about a 12% increase in expense, which is balanced among both ongoing investing in serving clients as well as projects for the long term. That starts the cycle all over again. That cycle has been at play for 45 years, and that's what driven the success to where we are today, almost $3.7 trillion in client assets at Schwab. Rather amazing. I was looking back at some numbers from one of the first times I had the opportunity to share with you about a decade ago.
We were just over $1.1 trillion then. From $1.1 trillion to $3.7 trillion in 10 years. Last year was a very interesting year in terms of client engagement. Client engagement was at record levels almost all the way across the firm. Of course, I mentioned the $225-plus billion in net new assets, engagement occurred in trading. DARTs is our code word. DART stands for Daily Average Revenue Trades. I realize that we would've done a nice job to have spelled that out. Trading was up. Brokerage accounts grew. Investing in ETFs continues to grow very rapidly with over $115 billion in Schwab-managed ETFs that lead the industry, by the way, in terms of great pricing. Of course, investments in some of our low-cost cash products, like money market funds, grew almost 200%.
What's important in putting all this together is the impact it has competitively in the marketplace. This slide shows you the growth in clients entrusting us with their hard-earned dollars. The ultimate measure of whether our strategy is succeeding. People often say to me, "Well, isn't the ultimate measure what your stock price has done?" No. The ultimate measure is whether clients entrust us with their money. Stock price comes after the fact. Financial results are a result of doing the right thing and serving others and doing the right thing and serving our clients.
Historically, we've averaged somewhere between a 5% and 8% growth rate in net new assets, you can see in 2018, a year of high engagement, that we are right up at the top of that range, around just under 8% for the full year. Many times people will ask me, "What really is the secret sauce behind Schwab?" Of course, I'll often talk about the strategy that Chuck formulated, the Through Clients' Eyes, the golden rule strategy. There's some very important competitive advantages also worth acknowledging that we leverage today. The first, of course, is size and scale. With almost $3.7 trillion, that makes us the largest publicly traded retail investment services firm in the country.
That scale enables us to make investments that we can leverage across a broad base of clients and a large pool of assets to deliver ever better value to our clients while still being able to reward our stockholders. Second, operating efficiency. Because we are tight when it comes to spending money, and because we believe that every dollar we spend is actually your dollar as our stockholders and treat it that way, we operate substantially more efficiently than any other publicly traded investment services firm. We actually operate our company at a total cost of around 16 or 17 one-hundredths of a percent of client assets. That's our total operating cost. Our nearest publicly traded competitors average at least 50% higher operating costs than we do.
That's all part of that virtuous cycle that puts us in a position to return more to our clients rather than spending more by being an inefficient operating company. Our culture of service, all it takes is spending a couple of minutes with our founder to know that a company like Schwab would have a culture of service to others. We recognize that when we serve others in the way we would want to be served, that's part of that magic sauce that has resulted in our long-term growth. We have a powerful operating structure, combining the ability to offer brokerage services, banking services, as well as asset management services. That operating structure works to our advantage. I'd also want to share one other thing I think works to our advantage that many people may think the opposite of.
I think being a public company works to our advantage in serving our clients, because being a public company ensures transparency. It ensures that we have meetings like this. It ensures that when we talk about our results, we share all of the details behind them, and that you understand the risks that we take, the risk decisions that we avoid making, the way we make decisions. I think a public company is a place that gives me much greater confidence around investing and entrusting my dollars with. Of course, our reputation is very high. We're recognized consistently by third parties. "Fortune" magazine recognizing us as one of the most admired companies in the world, and we receive a lot of third-party accolades. I can mention a bit more about those later.
The last one, core to the Schwab values and core to our culture, we're willing to disrupt. The world doesn't stand still. We're constantly dealing with a changing and evolving competitive landscape. Successful companies are always willing to say, "We've done it this way, and it's worked well, but there's a better way to do it." In the process, we might actually go backwards from a revenue standpoint for a period. That's okay. If it's the right thing to do for our clients, we're always going to take that path and disrupt ourselves. Of course, we know what the alternative to that approach is you sit back and wait for someone else to disrupt you. We've never been that kind of company.
We've always been the kind of company that will take the action ourselves, even if it means short-term financial pain, if it's the right thing to do in serving our clients. These are just some examples of some tactical efforts that we have made in the last year and are ongoing in investing in building for the long-term health of the franchise. Two I'll call out. First, in the upper right-hand corner, you can see the explosive growth in ETFs. We're now up to just over $180 billion in our Schwab ETF OneSource program. You might say, "Why did you do Schwab ETF OneSource?" Schwab ETF OneSource lets our clients invest in ETFs with no commission. You might say, "Well, why does that matter?" It matters because one of the best ways to invest is to invest on a consistent, ongoing basis, dollar cost averaging.
Historically, before we introduced the concept of zero commission ETFs, a regular Main Street investor was not able to do that investing in ETFs, because as they invested their 100 or $150 a month, too much of what went into the ETFs was eaten up in commissions. We said, "There has to be a better way to do it." The way we came up with was we will not charge any commissions on now over 500 ETFs, and that has taken us from almost nowhere in the ETF industry to really the leader of retail investing in exchange traded funds. The lower left, I just want to mention something that we recently introduced, and this is the first significant organization to offer subscription pricing for financial planning. What we know is that investors who do planning for their future make better decisions.
They tend not to bail out when the market goes down. They tend to be more likely to meet their goals. They tend to stay with a plan. Here's the problem. If the cost of the planning outweighs the benefit, it's hard for the client to make the progress that they would otherwise make. We introduced, again, a first-time subscription model where for a single $300 fee, followed by $30 a month, any client can have unlimited access to a certified financial planner whenever they want to have that interaction. It's a unique idea in the market. It's the right thing for clients, and that's why we were excited to introduce it. I mentioned earlier third-party recognition. After a series of years of being recognized by J.D. Power as the highest quality service for full service brokerage, this year we flipped over and won for self-directed investors.
Of course, we are also recognized by Fortune as one of the most admired companies in the world, and rated by Investor's Business Daily, one of the most credible organizations evaluating investment firms, as the number 1 overall broker. I mentioned earlier that we've grown, in the last decade that I've had the opportunity to stand on this stage and speak with all of you, from $1.1 trillion to $3.7 trillion. I think what's maybe most important, more important than the growth and more important than the change in that asset, is what hasn't changed. That is the guiding principles that we use to execute on our strategy. We call our strategy, as Peter referred, Through Clients' Eyes. Very simple. We try to look at every decision we face, what would be in the best interest of our clients?
If we take that action, they've proven to us over the years that they'll reward us with more in the way of their assets. Five principles we stand by. I just want to quickly run through them because these are so important to anyone looking to understand what Schwab stands for and how we strive to operate. Trust is everything. Earned over time, lost in an instant. Price matters more than ever, and in our industry, more than most. It's our clients' money. The less they pay us, the more that stays in their pocket. Clients deserve efficient experiences every time. It's one of the reasons why we are investing tens of millions of dollars in digital servicing the capability for investors to work with us in the manner that they want to.
Every prospective or existing client is critical to our future growth, no matter how large or small. At Schwab, we think that the beginning investor or even the small investor is just as important to us as the largest investor. That's why when most of the industry charged often four and five times as much to a small investor for asset management as they would charge to a large investor, we wiped out that whole concept. We said the fee we charge the largest investor will now be the same fee for managing, for example, a mutual fund that we charge the smallest. There should be no barriers to the smallest investor. That's often the way this company started, with the smallest of investors back 45 years ago. Last, maybe summarizing most important a lot of these guiding principles, actions matter more than words.
Clients, press, influencers, employees, they'll give credit to what we do, not what we say. It's important that we share with you our beliefs and how we operate the company, but what is maybe even more important than the words that we share with you today are the actions that we take, and we look to be held accountable to those actions. Let me go ahead and share a few thoughts as we move to our Q&A session. Before I invite Chuck onto stage, just a couple of guidelines. Again, those of you who've been to our meeting know these guidelines before. Out of respect to the folks in the meeting and on the webcast, we really like this to be a forum for questions, not for statements. There's plenty of opportunity for people to make statements, but this is an opportunity to ask questions.
If you have a question, we have microphones here in the room. If you're on the web, you can type your question and we have an individual who will relay those to us. Please share your name, city, state of residence, whether you're a stockholder or a proxy for a stockholder. We'd really like to limit questions to one per person if possible, so that we can be honorable and respectful to everyone who might have questions. I'd just like to encourage you to ensure the questions are about Schwab. That's what this meeting is for. It's an opportunity for us to share together about the company, about the things that we're working on, and if we do that, I think we're going to have a wonderful session.
If you have specific questions on your account, Jeremy Hoover is here with you, I believe, from our Post Street branch, would be able to talk to you about questions you might have there. With that, Chuck, it's my honor to welcome you on stage again.
Thank you, Walt. Great performance. Thank you very much, and thank you, Peter, over there for your performance. You now have all the questions probably answered. Anyway, we'll take a few that may have not been covered.
All right. Wonderful. Yes, sir.
Hello. Thank you for the beautiful presentation. You have an amazing company. You have all the indices from sales, return on investment. What is Wall Street missing? Do we need a Schwab whisperer and tell those Wall Street people that your stock is undervalued?
We agree.
That was a perfect response. Yes. We agree. As Peter said, we're building a company, not a stock, and we really believe if we take the long-term view and serve clients in the way we'd want to be served, the stock ultimately reflects that over time. It always has for 30 some odd years since we went public, and we're confident that it will in the future.
I didn't really mean we answered all the questions. You must have a few things. Why don't you ask Walt, what's he planning for the future after what he just described there? He's got some. Oh, we have a questioner coming in.
There you go.
Bravo, Walt. That was a good speech.
Thank you.
My concern is. Well, we need to buy back some stock. For a decade, we were diluting our shares like 3% a year, issuing shares without the stockholder proposal to do that. Now it's time to buy back those 3% a year. That's one idea. Another idea is we have the employees who cannot apply for food stamps. We have to do a better job there. A third question is a popular stockholder proposal is proxy access. What percent of our stock is necessary to obtain proxy access? Thank you.
Thank you.
Thank you.
I'll address the buyback part. Our board of directors, earlier this year, authorized, I believe, $4 billion buyback opportunity. We are implementing your advice, Dirk. Thank you for that. In terms of compensation for our employees, what we want to try to do at Schwab is always ensure that anyone working at Schwab is appropriately compensated, recognizing the importance and what comes from a self-esteem of being self-supporting, and try to also share with our employees. I didn't put it up on the chart that showed the virtuous cycle, but we try on a regular basis to not just compensate our employees appropriately, but also to provide special additional compensation to them. We did that in the form of a stock grant to our employees in 2018.
December
with the idea that.
As a Christmas present.
Exactly. With the idea that every employee would be able to benefit from the long-term success of being at Schwab, and they would be in an ownership position.
What was the third one?
Proxy %. What's the % required for proxy access?
Proxy access, we proposed it last year. It required 80%, it did not pass.
It did not pass at the vote last year. Thank you, Dirk. Do we have other questions from the audience?
Oh, here's our little friend here. Is it your third or fourth year now?
This is my third year.
Third year.
Third year.
You're going to be really a smart investor, I know.
Messiah, is that right?
Yes.
Yes, sir.
That's a nice grip.
Hi, Mr. Walt, and hi, Mr. Chuck.
Hi.
I am so happy to be a part of this Schwab story.
Do you think the virtuous cycle will continue the next 10 years? This will be for my college funds.
Messiah, I can assure you that we are highly committed to the virtuous cycle. It really started, as I mentioned, 45 years ago. I can be very confident that you're safe for the next 10 years as you save along with your parents for college. We will continue to operate our strategy based on the virtuous cycle. Thank you.
Thank you very much.
I would have to say, let me add one thing about the virtuous cycle. I think you're absolutely correct. This virtuous cycle will continue for a long period of time, as long as people are working, saving, and earning financial assets for their future. I hope you do a lot of that. I know you're already started on that program. We all have to, in our system of America, we have Social Security, which is really important to all of us, for sure. Beyond that, we have to save enough money so when we retire, now we're all, even look at me, living longer than you ever would've thought. Many years ago, average person would live until 65, and now they're living until 80, 90, 100 even.
Those years from 65 on up, you've got to live on your Social Security plus your other assets that you've earned so well. When you earn retirement, enjoy yourself. Those are the golden years. You can look at me, see I'm playing my golf game and things like that. I think the virtuous cycle will continue to be there as long as we take care of our customers with great low prices and great service, which we think we do pretty well at. As long as our customers perceive that that is true and we're competitive, this cycle will continue going. We have wonderful employees that make it all happen.
Thank you, Mr. Chuck and Mr. Walt.
Thank you. There is no way I would've had that kind of courage when I was Messiah's age. Good for you. Any other questions from the audience or questions from the web console? Okay. Well, if we don't, we'd like to thank all of you for joining us today, for being in attendance at our annual 32nd? Is that right?
That was amazing, yeah.
32nd annual meeting.
32nd.
Thank you so much for joining us, and we hope you have a wonderful year. We look forward to seeing you next year. Thank you.
Thank you.