held over the firm loosened with time. Joe Ricketts retired as CEO in 2001, saying he was firing himself to put the company in more capable hands. He left the board of directors completely in 2011, though other members of the Ricketts family have continued to hold at least one board seat since that time.
Tapping its TD Ameritrade fortune, the Ricketts family in 2009 acquired the Chicago Cubs baseball team. Joe Ricketts became one of the largest funders of conservative politics and libertarian thought. He saw his son, the firm's former chief operating officer, win the Nebraska Governor's Office in 2014.
But over the years, Ricketts also continued to own huge amounts of TD Ameritrade stock, despite the persistent advice of financial advisers that he should do more to diversify. TD Ameritrade remained his baby.
To this day, he and his wife hold 8.6% of TD Ameritrade's shares, and his children own sizable stakes as well. Before word of the Schwab merger leaked, Joe and Marlene Ricketts' shares were worth almost $2 billion. Based on the premium they and other shareholders will receive from the sale, those shares are currently worth $2.5 billion.
Joe Ricketts rode his company's stock through highs and lows over the years. He also watched as the firm gobbled up competitors and in 2013 moved into its new headquarters, a green-tinted tower meant to resemble a ticker tape that rises over Interstate 680 and West Dodge Road.
But in recent years came an industry challenge that finally proved the company's match.
An upstart called Robinhood in 2014 began offering no-commission trading on a phone app, causing all the traditional players to start ratcheting down their commission rates.
On Oct. 1, Schwab announced it was eliminating all sales commissions on U.S. stocks and exchange-traded funds. Within hours, TD Ameritrade and other competitors were forced to match the move.
Schwab was completing the "race to zero," and it appears to have been a strategic play, as it disproportionately hurt Schwab's chief competitors.
For Schwab, the lost commissions reportedly amounted to less than 5% of revenue. For Ameritrade, the loss was 15%, nearly $1 billion a year. TD Ameritrade's stock price plummeted by almost one-third.
At some point, Schwab and TD Ameritrade began merger talks. And when they got serious, TD Ameritrade officials provided Joe Ricketts and his family a "voting support agreement." Such documents are common in business mergers and acquisitions, signed statements that bind major shareholder to vote stock in favor of the merger.
Such an agreement wasn't needed for the deal to go forward. The considerable Ricketts family holdings were still just a fraction of TD Ameritrade's shares.
And Ricketts actually fully backed the merger. According to the source close to the transaction, Ricketts believed that in a zero-commission world, having a company of significant scale would be critical to future success. Marrying TD Ameritrade with Schwab would provide that scale.
But Ricketts simply wasn't interested in signing the voting support agreement. He just wanted to vote his stock the same way any other common shareholder would, later when TD Ameritrade schedules the shareholder vote.
While the reason is unclear, the fact Ricketts declined to sign the agreement apparently was not communicated by Ameritrade officials to Schwab until just hours before the planned Nov. 21 announcement.
Schwab's leadership balked. They weren't comfortable going forward without the Ricketts agreement.
It's not exactly clear why Schwab officials hesitated. But it's conceivable they were concerned that Ricketts owned enough stock he could cause difficulties for the merger if he suddenly decided the deal was a bad one and worked against it before the official shareholder vote.
Nebraskans in recent years have seen firsthand the power that can be wielded by a significant minority shareholder like Ricketts. Sidney-based outdoor outfitter Cabela's was forced to merge with a competitor in 2016 after an activist investor owning 9% of its stock vocally objected to the firm's financial performance and led a campaign for major change.
With the announcement suddenly off, the source said Schwab officials reached out to Ameritrade's founder. Ricketts' representatives explained that he simply didn't want to sign the agreement. But they said he'd be willing to do so if Schwab made a commitment to preserve jobs in Omaha.
"Joe is a businessman," said the source. "If you're going to ask something from him, he's going to ask something from you. The only thing he asked for was the jobs language."
Ricketts was certainly realistic that the elimination of redundancy between the two companies will require job losses in Omaha. He wasn't going to ask for blanket protection. But he still wanted to pursue language that would make Omaha jobs "top of mind" for Schwab - potentially easing the impact, the source said.
Schwab officials were "thoughtful and respectful" and took the request by Ricketts seriously, the source said. It was considered at the most senior levels of Schwab. It's unclear to what degree Chuck Schwab himself, as Schwab's chairman, participated in the considerations.
With some tweaking, the language was officially agreed to on Sunday, Nov. 24. The merger was announced the next morning.
Though it's clear the language offers no guarantees, the source called it an important commitment from Schwab - one that bodes well for how that firm will approach Omaha jobs in the merger.
What the combined Schwab-TD Ameritrade ultimately looks like will be a long game that will play out over years. The deal is not expected to close until next year, with Schwab officials saying the full integration of the companies could take up to three years after that.
The Omaha agreement isn't the only geographic consideration. With the merger, Schwab announced that the combined headquarters will be in the Dallas-Fort Worth metro area, where both TD Ameritrade and Schwab already have significant operations.
While Schwab declined to comment on the Ricketts agreement, TD Ameritrade officials acknowledged it, but said it's premature to talk about how it will impact the firm's more than 9,000 employees nationwide.
"Omaha has been, and we hope may continue to be, an important employment center for our company," said spokesperson Kim Hillyer. "But it would be a disservice to our people — in Omaha and in other cities across the country — to speculate on what staffing in Omaha may ultimately look like."
Fox, the Creighton professor, said the Ricketts agreement won't keep Schwab from creating the efficiencies that shareholders expect when two firms merge. But she said the agreement could help shape where the combined operations end up. And the firm in many cases will have multiple cities to choose from, as both companies have operations spread around the country.
For example, about half of TD Ameritrade's 2,300 Omaha workers are part of its clearing operations, making sure trades get posted to the proper accounts, at the right price and according to federal regulations. TD Ameritrade also has clearing operations in Dallas.
For its part, Schwab has clearing operations in both Dallas and Colorado. It would seem quite likely the merged company will continue to have clearing jobs in more than one location.
While Omaha is officially the home of TD Ameritrade's corporate headquarters, company employees say the reality is most of its top executives have been based in New Jersey for the past decade. In effect, Omaha lost most of those jobs years ago.
Besides clearance, the balance of TD Ameritrade's Omaha workforce is largely a mix of certified stockbrokers who handle trades by phone and information technology workers who operate the trading platform. There are such workers in other locations around the country, too.
George Morgan, a former stockbroker who teaches finance at the University of Nebraska at Omaha, said Omaha has lots of business advantages that should be appealing to Schwab. The city offers low operating costs, is home to one of the industry's most user-friendly trading platforms, and has some of the nation's best technology infrastructure, part of its legacy as the strategic home of the nation's nuclear arsenal.
"From the perspective of Schwab, maintaining a presence in Omaha makes a lot of business sense," he said.
But he said the Ricketts-Schwab agreement certainly won't hurt matters, either. "I really commend Joe 100 percent for taking care of what he has built," Morgan said.
Indeed, beyond the legal significance of the jobs agreement, Fox said there's a practical effect, too. She doubts Schwab and its leaders would take a pledge they made to the founder of TD Ameritrade lightly.
"It is in the interest of Chuck Schwab to have Ricketts on board with the merger," she said. "It is in everyone's best interest to assure a smooth transition."