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Fastenal’s Oberton Named Morningstar CEO of the Year

Jason Sandefur

Fastenal Co. CEO Will Oberton received independent investment research provider Morningstar’s annual “CEO of the Year” award, which recognizes a chief executive who exhibits “exemplary corporate stewardship, demonstrates independent thinking, creates lasting value for shareholders, and has put his or her stamp on an industry.”
“Oberton and Fastenal may not be as well-known as our other nominees this year, but they are no less impressive,” observed Patrick Dorsey, director of stock analysis for Morningstar. “Under Oberton’s stewardship, the company has produced a superior financial track record and a remarkable history of shareholder value, and it still holds a great deal of growth potential.
“Fastenal built its strong track record by recognizing a simple insight — time really is money in industrial America.”
Soon after taking the helm in 2002, Oberton initiated a store overhaul program to increase store traffic and sales growth has resulted in a 30% increase in sales per employee. Over the past five years, Fastenal has increased sales 15% annually. Oberton has also invested in two other high-impact programs, centralizing accounts-receivable collection and bringing more of the company’s trucking needs in-house.
“Some of these initiatives have hurt the company’s margins over the past few quarters — which may be why Wall Street has soured on Fastenal’s shares a bit this year — but they’re all smart long-term moves, Dorsey advised.
This focus has contributed to Fastenal’s “consistent record of financial success” over the past few decades.
“Without acquisitions or external capital, Fastenal has compounded earnings at almost 30% annually over the past 20 years.”
Dorsey also touted Fastenal as a “model citizen” of corporate governance.
“Fastenal is proof positive that a company can generate superior long-term wealth for shareholders without issuing a ridiculous number of options, without lard-filled executive compensation packages, and without a rock-star CEO who has a higher profile than the company itself,” Dorsey wrote.

Oberton is not the first Fastenal CEO to receive national recognition. In 1997 Inc. magazine named then-CEO Robert Kierlin the cheapest chief executive in America. Inc. reporter Marc Ballon wrote that Kierlin “is to cheapness what Michael Jordan is to basketball: the best ever.”
Kierlin was elected to the Minnesota state senate in 1999 and did not seek reelection in 2005.
Oberton, who replaced Kierlin in 2002, told FastenerNews.com in 2002 that he would continue Kierlin’s frugal legacy.
After joining Fastenal in 1980, Oberton climbed the ranks, eventually winning the title of COO in 1997, joining the board in 1999 and being made president in 2001.
In addition to Oberton, the finalists for the award included: John Chambers, CEO of Cisco Systems; American Express CEO Ken Chenault; George Roche, chairman and president of T. Rowe Price Group; and NYSE Group CEO John Thain.
Introduced in January 2000, the winner of the Morningstar “CEO of the Year” award is chosen by Morningstar stock analysts based on Morningstar’s independent research. Web: fastenal.com �2007 FastenerNews.com