William J. Drazkowski
FASTENALAbout William J. Drazkowski
Executive Vice President – Sales at Fastenal; employee since 1995. As of the FY 2023 Form 10-K, he was 52 years old and serving as EVP–Sales, with oversight of national accounts, government and industry-specific sales, support, and development teams . He has led Fastenal’s contract portfolio and U.S. sales organization, emphasizing disciplined asset efficiency and sales growth programs (e.g., Focus40) . Company-level performance context over 2020–2024 shows total shareholder return values of $137 → $183 → $138 → $196 → $222 (value of $100 invested), net income of $859.1m → $925.0m → $1,086.9m → $1,155.0m → $1,150.6m, and company-wide pre-tax income of $1,132.7m → $1,207.8m → $1,440.0m → $1,522.0m → $1,508.1m .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fastenal | Executive Vice President – Sales (U.S.) | Jul 2023–present | Oversees U.S. sales; contract portfolio including national accounts, government, industry-specific teams . |
| Fastenal | Executive Vice President – Sales (Western U.S.) | Oct 2019–Jun 2023 | Led Western U.S. business; expanded contract sales programs . |
| Fastenal | Executive Vice President – National Accounts Sales | Dec 2016–Sep 2019 | Led national account growth and portfolio management . |
| Fastenal | Vice President – National Accounts Sales | Oct 2014–Dec 2016 | Scaled national account structures and support . |
| Fastenal | Regional Vice President (Minnesota region) | Sep 2013–Sep 2014 | Regional growth leadership . |
| Fastenal | District Manager | Nov 2007–Aug 2013 | Field sales leadership, branch performance . |
| Fastenal | Various sales leadership roles | Pre–Nov 2007 | Progressive sales and leadership responsibilities . |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus ($) | Actual Non-Equity Incentive ($) | Notes |
|---|---|---|---|---|
| 2024 | 390,000 | 572,000 | 48,800 | Target payout defined via quarterly pre-tax/net income growth; paid quarterly; no thresholds or max . |
| 2023 | 370,000 | — | 486,580 | Quarterly incentive based on growth vs prior-year quarter . |
| 2022 | 370,000 | — | 1,527,888 | Quarterly incentive; above-market incentive design . |
Performance Compensation
| Metric | Weighting | Target Definition | Actuals (2024) | Payout Mechanics | Vesting/Timing |
|---|---|---|---|---|---|
| Company-wide pre-tax income growth | 100% of cash bonus basis | Minimum target = 100% of same-quarter 2023 pre-tax income | Q1: Actual $389,844k; Target $389,734k. Q2: $386,364k; Target $392,640k. Q3: $387,627k; Target $385,389k. Q4: $344,293k; Target $354,226k . | Quarterly bonus = 0.60% of amount by which actual exceeds minimum target; no thresholds or maximums . | Paid quarterly; no equity vesting (cash only) . |
| Company-wide net income | Not applicable to Drazkowski (CFO includes net income) | — | 2024 actuals: Q1 $297,740k; Q2 $292,682k; Q3 $298,041k; Q4 $262,090k; targets equal prior-year amounts . | — | — |
2025 incentive program for NEOs is unchanged from 2024 design, maintaining the simple quarterly growth-based payout framework .
Option Awards (Equity Incentives)
| Grant Date | Securities Underlying Options (#) | Exercise Price ($/sh) | Vesting Schedule | Expiration | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| 1/2/2024 | 18,281 | 64.00 | 20% per year over 5 years (beginning 1 year post-grant) | 12/31/2033 | 290,119 |
| 1/3/2023 | 23,125 | 48.00 | 20% per year over 5 years (beginning 1 year post-grant) | 12/31/2032 | — |
| 1/3/2022 | 11,935 | 62.00 | 40% at year 2, then 20% annually thereafter (5-year schedule) | 12/31/2031 | — |
| 1/4/2021 | 14,583 | 48.00 | 40% at year 2, then 20% annually thereafter (5-year schedule) | 12/31/2030 | — |
| 1/2/2020 | 18,421 | 38.00 | 40% at year 2, then 20% annually thereafter (5-year schedule) | 12/31/2029 | — |
Outstanding and exercisable balances at FY 2024 end:
- Exercisable: 14,737 (2020); 8,749 (2021); 4,774 (2022); 4,625 (2023) .
- Unexercisable: 3,684 (2020); 5,834 (2021); 7,161 (2022); 18,500 (2023); 18,281 (2024) .
Option exercises and realized value (2024):
- Shares acquired on exercise: 45,636; value realized: $2,340,327 .
Equity Ownership & Alignment
| Holder | Beneficial Ownership (shares) | Components | % of Outstanding Shares |
|---|---|---|---|
| William J. Drazkowski | 61,392 | Includes options immediately exercisable to acquire 50,154 shares; approx. 5,241 shares in 401(k) . | Less than 1% (outstanding shares: 573,434,554 as of Feb 1, 2025) . |
- Stock ownership guidelines: Senior Section 16 officers must hold shares equal to 1.0x annual base compensation at 5 years and 1.5x at 10 years; all directors and Section 16 officers are in compliance .
- Hedging is prohibited for directors and Section 16 officers .
- No disclosure of pledging; securities trading policy governs insider transactions .
Employment Terms
- Employment start date: 1995 .
- Years in current role: EVP–Sales since July 2023 .
- Contracts and severance: No employment, severance, or change-in-control agreements with any employees, including executive officers .
- Change-of-control economics: Stock option vesting/exercisability accelerates only if awards are neither assumed nor replaced by the surviving/acquiring corporation; at a $71.91 share price on 12/31/2024, Drazkowski’s options would yield $144,603 if fully accelerated and exercised (by grant: 2020 $624,656; 2021 $348,680; 2022 $118,276; 2023 $552,919; 2024 $144,603) .
- Perquisites: None provided .
- Pension/SERP/Deferred comp: None; no non-qualified deferred compensation plans .
Performance & Track Record
- Strategic programs: “Focus40” emphasizes double-digit sales growth, labor productivity, and asset efficiency (“Drive to 35”); Drazkowski (EVP Sales) fronts contract sales vision and portfolio across government, regional, and national programs, with clear priorities and reset initiatives in 4Q23 .
- Option monetization: 45,636 options exercised in 2024 with $2.34m value realized, indicating some liquidity-taking while maintaining significant outstanding and unexercised exposure for future alignment .
Governance and Shareholder Feedback
- Say-on-pay (April 24, 2025 Annual Meeting): For 438,459,188; Against 28,537,462; Abstain 1,601,891; broker non-votes 53,783,234; resolution adopted .
- Compensation Committee: Independent directors; program emphasizes below-median base, above-median quarterly incentives, long-term stock options with extended vesting, prohibition on repricing, and stock ownership guidelines .
Compensation Structure Analysis
- Cash vs equity mix (2022–2024): Drazkowski’s cash incentive declined as company-level growth moderated, while annual option grants persisted, maintaining long-term alignment. See multi-year totals below .
- Shift in equity vehicle: Fastenal grants only stock options (not RSUs/PSUs) to NEOs, with 5- to 8-year vesting to drive retention and leadership continuity .
- Incentive rigor: Quarterly cash bonus pays solely on pre-tax income growth vs the prior-year quarter; no discretion, thresholds, or caps; CFO adds net income measure; 2025 plan unchanged, supporting consistency and transparency .
- Repricing/modification: Repricing prohibited; exercise price rounded up to nearest dollar on grant date .
Multi-Year Compensation (NEO disclosure)
| Year | Salary ($) | Option Awards ($) | Non-Equity Incentive ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 370,000 | 163,271 | 1,527,888 | 3,308 | 2,064,467 |
| 2023 | 370,000 | 268,713 | 486,580 | 3,223 | 1,128,516 |
| 2024 | 390,000 | 290,119 | 48,800 | 2,754 | 731,673 |
Outstanding Equity Awards at FY 2024 (detail)
| Grant Date | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|
| 1/2/2020 | 14,737 | 3,684 | 38.00 | 12/31/2029 |
| 1/4/2021 | 8,749 | 5,834 | 48.00 | 12/31/2030 |
| 1/3/2022 | 4,774 | 7,161 | 62.00 | 12/31/2031 |
| 1/3/2023 | 4,625 | 18,500 | 48.00 | 12/31/2032 |
| 1/2/2024 | — | 18,281 | 64.00 | 12/31/2033 |
Change-in-Control Option Value (illustrative at $71.91 on 12/31/2024)
| Grant Date | Options Outstanding (#) | Exercise Price ($) | Payment Value ($) |
|---|---|---|---|
| 1/2/2020 | 18,421 | 38.00 | 624,656 |
| 1/4/2021 | 14,583 | 48.00 | 348,680 |
| 1/3/2022 | 11,935 | 62.00 | 118,276 |
| 1/3/2023 | 23,125 | 48.00 | 552,919 |
| 1/2/2024 | 18,281 | 64.00 | 144,603 |
Investment Implications
- Alignment: Heavy use of long-dated stock options with 5-year staggered vesting creates strong multi-year alignment and retention. No employment or severance agreements, no perquisites, and anti-hedging policy reduce governance risk; ownership guidelines are met .
- Incentive sensitivity: Cash bonuses are formulaic and directly tied to quarterly pre-tax income growth vs prior-year quarter, providing near-term signal of operating performance; 2025 plan unchanged supports consistency .
- Selling pressure: 50,154 options immediately exercisable at FY 2024 and 45,636 options exercised in 2024 with $2.34m value realized indicate some liquidity-taking; continued vesting in 2025–2028 could create periodic supply but is balanced by guideline compliance and significant unexercised exposure .
- Change-of-control economics: No individual CIC multiples; only option acceleration if awards aren’t assumed/replaced—limits windfall risk and focuses on market-value realization .
- Shareholder support: Strong recent say-on-pay support (For 438.5m vs Against 28.5m) reduces pay risk and suggests investor confidence in plan design .