Charles S. Miller
FASTENALAbout Charles S. Miller
Charles S. Miller is Senior Executive Vice President – Sales at Fastenal (FAST), age 50, employed by Fastenal since 1999 and serving as Senior EVP – Sales since January 2020, with responsibility for sales and operational oversight of the United States business . Fastenal delivered 2024 net sales of $7,546 million (+2.7% YoY), company-wide pre-tax income of $1,508 million (-0.9% YoY), and net income of $1,150.6 million (-0.4% YoY) . Total shareholder return (TSR) for FAST reached $222 (value of initial $100 investment from 12/31/2019) in 2024 versus peer group TSR of $247 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fastenal | Senior Executive Vice President – Sales | Jan 2020 – Present | Sales and operational oversight of the United States business . |
| Fastenal | Executive Vice President – Sales | Nov 2015 – Dec 2019 | Executive sales leadership; progression into broader U.S. oversight . |
| Fastenal | Regional Vice President – Southeast Central Region | Jan 2009 – Oct 2015 | Regional P&L and growth leadership (TN/KY-based) . |
| Fastenal | Various sales leadership roles | Pre-2009 | Successive leadership roles building sales execution capability . |
Fixed Compensation
Multi-year fixed pay and other comp for Miller:
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $430,008 | $430,008 | $450,000 |
| All Other Compensation (401(k) profit-based match) | $3,308 | $3,223 | $2,754 |
Performance Compensation
Structure and Metrics
| Component | Metric | Basis/Target | Payout/Weighting | Notes |
|---|---|---|---|---|
| Primary quarterly cash bonus | Company-wide pre-tax income growth vs prior-year quarter | Minimum target = 100% of prior-year quarterly pre-tax income | Payout % applied to growth; for Miller: 0.25% pre‑July 2024; 0.15% post‑July 2024 on company-wide pre-tax income | Simple, transparent plan; uncapped; paid quarterly . |
| Regional pre-tax income bonus | Geographic area under his leadership | Minimum target = 100% of prior-year quarterly pre-tax income | Payout %: 1.00% pre‑July 2024 (Eastern U.S.); 0.75% post‑July 2024 (U.S.) | Share of company pre-tax attributable to his area was ~48% through June and ~86% through December 2024 . |
| ROA Plan (supplemental) | Asset management improvement (2-quarter average total assets / TTM net sales) | Thresholds at +50, +100, +150 bps improvement | $5k / $10k / $15k per quarter respectively; plus $10k for each new whole percentage threshold | Achieved and paid: Q1 $15k, Q2 $15k, Q3 $5k, Q4 $0; Total $35k (NEOs aggregate) . |
| Long-term equity | Stock options | Annual grants; exercise price rounded up to nearest dollar; 5-year graded vesting | Grant date fair value varies; awards intended for retention and long-term alignment | No re-pricing; acceleration only if awards not assumed in change-in-control . |
Actual Quarterly Performance Context (Company-wide)
| 2024 Quarter | Actual Pre-tax Income | Minimum Target Pre-tax | Actual Net Income | Minimum Target Net Income |
|---|---|---|---|---|
| Q1 2024 | $389,844,000 | $389,734,000 | $297,740,000 | $295,139,000 |
| Q2 2024 | $386,364,000 | $392,640,000 | $292,682,000 | $298,050,000 |
| Q3 2024 | $387,627,000 | $385,389,000 | $298,041,000 | $295,367,000 |
| Q4 2024 | $344,293,000 | $354,226,000 | $262,090,000 | $266,429,000 |
Miller – Multi-year Variable Compensation Outcomes
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Non-Equity Incentive Plan Compensation (quarterly bonuses incl. ROA) | $1,665,442 | $852,813 | $60,173 |
| Option Awards (Grant Date Fair Value) | $189,742 | $312,288 | $334,746 |
| Total Compensation | $2,288,500 | $1,598,332 | $847,673 |
Option Grants, Vesting, and Terms (Outstanding at 12/31/2024)
| Grant Date | Exercise Price | Exercisable (#) | Unexercisable (#) | Vesting Schedule | Expiration |
|---|---|---|---|---|---|
| 1/2/2020 | $38.00 | — | 4,526 | 40% at 2 years, then 20% annually | 12/31/2029 |
| 1/4/2021 | $48.00 | 5,374 | 7,167 | 40% at 2 years, then 20% annually | 12/31/2030 |
| 1/3/2022 | $62.00 | 5,548 | 8,322 | 40% at 2 years, then 20% annually | 12/31/2031 |
| 1/3/2023 | $48.00 | 5,375 | 21,500 | 20% annually over 5 years | 12/31/2032 |
| 1/2/2024 | $64.00 | — | 21,093 | 20% annually over 5 years | 12/31/2033 |
Option exercise activity (2024): 58,146 shares exercised; value realized $2,571,744 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 50,140 shares, including stock options immediately exercisable to acquire 36,773 shares and ~13,367 shares in 401(k) . |
| Shares outstanding (context) | 573,434,554 (Feb 1, 2025) . |
| Ownership as % of shares outstanding | ~0.0087% (50,140 / 573,434,554) . |
| Stock ownership guidelines | Senior Section 16 officers must reach 1.0x base salary in 5 years and 1.5x in 10 years; all directors and Section 16 officers currently in compliance . |
| Hedging/Pledging | Hedging prohibited for directors and Section 16 officers; securities trading policy adopted and disclosed . No pledging disclosure identified in proxy . |
Employment Terms
- No employment, severance, or change-in-control agreements with executive officers; stock option plan accelerates vesting/exercisability only if awards are not assumed or replaced by the acquirer; also accelerates upon dissolution/liquidation .
- Compensation forfeiture, recovery, and true-up (clawback) policy adopted October 11, 2023 in compliance with Nasdaq/SEC 10D; no restatements or clawbacks reported for 2024 .
- Anti-hedging policy for directors and Section 16 officers; securities trading policy governing insider transactions filed with 2024 10-K .
Change-of-Control Economics (Hypothetical at $71.91/share on 12/31/2024)
| Grant Date | Options Outstanding (#) | Exercise Price | Payment Value (if accelerated and fully exercised) |
|---|---|---|---|
| 1/2/2020 | 4,526 | $38.00 | $153,477 |
| 1/4/2021 | 12,541 | $48.00 | $299,855 |
| 1/3/2022 | 13,870 | $62.00 | $137,452 |
| 1/3/2023 | 26,875 | $48.00 | $642,581 |
| 1/2/2024 | 21,093 | $64.00 | $166,846 |
| Total | 78,905 | — | $1,400,211 |
Performance & Track Record
- Scope expansion: approximate share of company pre-tax income attributable to his leadership area rose from ~48% through June 2024 to ~86% through December 2024, reflecting increased U.S. remit mid-year .
- Company TSR vs peers: FAST TSR values for a $100 investment (2019 base) were $137 (2020), $183 (2021), $138 (2022), $196 (2023), and $222 (2024); peer group TSR: $126, $169, $147, $218, $247 .
- Financial context: 2024 net sales $7,546 million (+2.7%), pre-tax income $1,508 million (-0.9%), net income $1,150.6 million (-0.4%); mix headwinds from national accounts/Onsite and non-fastener growth pressured gross margin .
Company TSR vs Peer Group (Value of initial $100 investment)
| Year | FAST TSR | Peer Group TSR |
|---|---|---|
| 2020 | 137 | 126 |
| 2021 | 183 | 169 |
| 2022 | 138 | 147 |
| 2023 | 196 | 218 |
| 2024 | 222 | 247 |
Governance, Compensation Committee, Say-on-Pay
- Compensation philosophy: simple, transparent, quarterly cash incentives tied to profit growth; long-term incentives via stock options with extended vesting; no perquisites; salaries below median; no re-pricing .
- Peer group benchmarking (2024/2025): AIT, DCI, GPC, IEX, MSM, NDSN, ORLY, TSCO, WCC, GWW; FAST NEO pay levels below median peers in base, cash incentive, and total in 2024 reflective of pay-for-performance outcomes .
- 2024 say-on-pay: ~93% approval at 2024 annual meeting for 2023 NEO compensation ; advisory vote scheduled annually .
Investment Implications
- Pay-for-performance alignment: Miller’s quarterly bonus tied to pre-tax income growth and ROA improvement, with sharp reduction in 2024 non-equity incentives ($60k) consistent with modest profit trajectory and quarterly misses on minimum targets in Q2/Q4 . Long-dated options (5–10 year terms) with graded vesting support retention and long-term alignment; no employment/severance agreements limit parachute risk .
- Insider selling pressure: 2024 option exercises of 58,146 shares with $2.57 million value realized indicate monetization; continued vesting through 2033 and conditional acceleration on change-in-control could create periodic exercise windows and potential supply, though hedging is prohibited and ownership guidelines are met .
- Ownership alignment: Beneficial ownership includes immediately exercisable options and 401(k) shares; compliance with stock ownership guidelines reduces misalignment risk; no pledging disclosures noted; trading policy in place .
- Execution risk: Expanded remit to U.S. (86% of company pre-tax by year-end) increases accountability to national account/Onsite growth and mix-led margin pressures highlighted in 2024; sustained TSR premium depends on profit growth and SG&A leverage recovery .