DEF 14A of Fastenal Co
Filed Mar 6, 2024 · FY20230000815556-24-000015
PROXY STATEMENT
| General information about the meeting and voting | 2 | | Proposal #1 – Election of directors | 5 | | Corporate governance and director compensation | 9 | | Proposal #2 – Ratification of appointment of independent registered public accounting firm | 20 | | Audit and related matters | 20 | | Proposal #3 – An advisory vote on a non-binding resolution to approve the compensation of our named executive officers disclosed in this proxy statement | 22 | | Executive compensation | 22 | | Proposal #4 – Approval of an amendment to our Restated Articles of Incorporation to delete Article VI regarding supermajority approval of business combinations with certain interested parties | 43 | | Proposal #5 – Shareholder proposal relating to simple majority vote | 45 | | Security ownership of principal shareholders and management | 46 | | Additional matters | 48 | | Householding | 48 | | Deadlines for receipt of shareholder proposals and nominations for the 2025 annual meeting | 49 |
PROPOSAL #1—ELECTION OF DIRECTORS
PROPOSAL #1—ELECTION OF DIRECTORS
CORPORATE GOVERNANCE AND DIRECTOR COMPENSATION
CORPORATE GOVERNANCE AND DIRECTOR COMPENSATION
Compensation of Our Directors
Compensation of Our Directors Our compensation committee makes recommendations regarding director compensation to the full board and the board makes the final decision regarding director compensation after consideration of such recommendations. All of our directors, including our chief executive officer, reviewed and approved director compensation for 2023. In January 2023, the committee chairs received an annual cash retainer of $20,000. Each of our non-employee directors, other than the board chair and Ms. Quarshie, received an annual cash retainer of $100,000. Ms. Quarshie who was elected to the board effective June 9, 2023 received a cash retainer of $50,000 (or 50% of a full year's non-employee director retainer) upon her election. The board chair received an annual cash retainer of $120,000. The Fastenal Company Non-Employee Director Stock Option Plan permits all non-employee directors to elect up to 100% of such annual cash retainer to be paid in stock options. As set forth in the table below, certain non-employee directors made this election for 2023. Mr. Florness, an employee director, received an annual cash retainer of $50,000. Ms. Wisecup, who retired as an employee in February 2023, received a pro-rated annual cash retainer of $125,000, reflecting her partial year of service as an employee director and non-employee director. The annual cash retainer of $20,000 for committee chairs is paid in the form of a lump sum at the beginning of the year. All other annual cash retainers are paid quarterly. Annual stock option grants are made at the beginning of the year. All non-employee directors, other than the board chair and Ms. Quarshie, received stock options valued at $50,000. Ms. Quarshie who was elected to the board effective June 9, 2023 received $25,000 in cash (or 50% of the value of a full year's non-employee director stock options) upon her election. The board chair received stock options valued at $80,000. Each of our non-employee directors was also entitled to be reimbursed for reasonable expenses incurred by such non-employee director in the performance of his or her services as a director or committee member, including reasonable expenses of attendance at board and committee meetings. The following table sets forth information with respect to the 2023 compensation paid to each of our directors, in their capacity as directors, other than any of our directors who are named executive officers (as defined below in 'Proposal #3 – An Advisory Vote on a Non-binding Resolution to Approve the Compensation of our Named Executive Officers Disclosed in this Proxy Statement'). The compensation of our named executive officers, in their capacity as directors and executive officers of Fastenal, is set out in the Summary Compensation Table under 'Executive Compensation-Summary of Compensation' later in this proxy statement.
Compensation of Our Directors
| Name | Fees Earned or Paid in Cash ($) (1) | Stock Awards ($) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Scott A. Satterlee | 120,000 | — | 80,000 | — | — | 200,000 | | Michael J. Ancius | 20,000 | — | 150,000 | — | — | 170,000 | | Stephen L. Eastman | 80,000 | — | 90,000 | — | — | 170,000 | | Rita J. Heise | 20,000 | — | 150,000 | — | — | 170,000 | | Hsenghung Sam Hsu | — | — | 150,000 | — | — | 150,000 | | Daniel L. Johnson | 100,000 | — | 50,000 | — | — | 150,000 | | Nicholas J. Lundquist | 100,000 | — | 50,000 | — | — | 150,000 | | Sarah N. Nielsen | 50,000 | — | 100,000 | — | — | 150,000 | | Irene A. Quarshie | 75,000 | — | — | — | — | 75,000 | | Reyne K. Wisecup | 125,000 | — | — | — | — | 125,000 |
Compensation of Our Directors
(1)Mr. Ancius, Mr. Eastman, Ms. Heise, Mr. Hsu, and Ms. Nielsen elected to receive all or a portion of their annual cash retainer as stock option awards pursuant to the Fastenal Company Non-Employee Director Stock Option Plan. (2)The amounts reported in this option awards column represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board ('FASB') ASC Topic 718 of option awards that our non-employee directors elected to receive during the fiscal year pursuant to the Fastenal Company Non-Employee Director Stock Option Plan in lieu of annual cash retainer payments. The number of shares subject to each option award was determined by dividing (i) the portion of the annual retainer amount that each director would have otherwise received in cash on the grant date of the option by (ii) the Black-Scholes value as of the grant date of each share subject to the option award and rounding down to the nearest whole number. We calculated the grant date fair value in accordance with generally accepted accounting principles utilizing the assumptions set forth in the notes to our consolidated financial statements included in our 2023 annual report on Form 10-K. As of December 31, 2023, our non-employee directors held outstanding (and unexercised) stock option awards under the Fastenal Company Non-Employee Director Stock Option Plan as follows: Mr. Ancius - 25,036; Mr. Eastman - 14,323; Ms. Heise - 61,123; Mr. Hsu - 32,753; Mr. Johnson - 16,430; Mr. Lundquist - 7,956; Ms. Nielsen - 12,259; Ms. Quarshie - 0; Mr. Satterlee - 56,624; and Ms. Wisecup - 0. All elements of director compensation remain unchanged for 2024 from those in effect during 2023.
Executive Summary
(1)Pre-tax and net earnings targets were calculated as 100% of the prior year's actual pre-tax or net earnings. Stock option grants were made in 2023 to all of our named executive officers. Mr. Owen's 2023 stock option grants were forfeited in connection with his resignation effective October 31, 2023. In deciding to continue our existing executive compensation practices in 2023 in a manner largely consistent with 2022, our compensation committee took into account the fact that the holders of approximately 93% of the shares voted at our 2023 annual meeting of shareholders approved, on an advisory basis, the compensation of our named executive officers in 2022 as disclosed in the proxy statement for the 2023 annual meeting.
Mitigation of Compensation-Related Risk
Mitigation of Compensation-Related Risk The company's compensation committee, in concert with management, has examined the company's compensation policies, plans, and practices to determine if they create incentives or encourage behavior that is reasonably likely to have a material adverse effect on the company. In conducting this examination, the compensation committee and management have reviewed the company's compensation plans and programs, including incentive bonus and equity award plans, and evaluated the impact of such plans and programs in terms of business risk and the mitigating controls in place to manage those risks. Such controls include: •Approval by our board of directors and the compensation committee of significant compensation plans and programs; •Oversight by the compensation committee of compensation plans and programs for executive management employees, including approval of incentive plan goals, review of actual performance against goals, and approval of award payouts; •Regular scrutiny of performance and compliance with policies and procedures by senior executive managers responsible for specific business areas; •Ongoing monitoring of specific asset areas by regional finance managers, and by internal audit and finance department personnel; •The design of our executive cash incentive arrangements, which (i) by focusing on quarterly growth in profits, provides executives with the immediate feedback necessary to take prompt action to correct unacceptable financial results and the motivation to take such action, and (ii) by using actual profits in current periods, rather than projected profits, as the basis for setting the minimum performance targets in future periods, reduces the incentive to manipulate results, as any overstated profits, giving rise to increased bonuses, in one year would result in overstated minimum targets, giving rise to reduced bonuses, in the next year; and •Longer than typical vesting periods for equity-based compensation that encourage long-term perspectives among employees. Because of the controls in place, we have concluded that there are minimal unmitigated risks created by the company's compensation policies, plans and practices that create incentives or encourage behavior that are reasonably likely to have a material adverse effect on the company.
How Employees are Compensated
How Employees are Compensated Approximately 71% of our employees interface directly with customers on a daily basis. Our goal with respect to compensation of these employees is simple: a significant portion of their pay should be based on how well they have grown their piece of the business and served our customers. Typical pay arrangements provide a base amount paid periodically during the month, along with a major opportunity to earn bonus amounts, paid monthly, based on growth in sales, gross profit achieved, the opening of new accounts, increase in sales to active accounts, prudent management of inventory levels, and collections of accounts receivable. We believe our combination and mix of base and bonus pay motivates our people to high levels of individual and company success, as the goals and objectives have been repeatedly demonstrated to be achievable with superior effort. Of the remaining approximately 29% of our employees, many are similarly compensated for their contribution to attaining predetermined departmental or project and cost containment goals, most focused on either customer service or better execution of company-wide activities. In these cases, the incentives are paid as soon as possible upon attainment of the goal. Again, the goals and objectives are clearly communicated and the resources for success are provided. Because we believe the growth in the company's stock value should be the reward for achieving long-term success consistent with being an owner, we have a stock option plan. Since certain of our foreign employees are unable to receive stock options due to legal restrictions, we also have a stock appreciation rights plan for those foreign employees. Stock appreciation rights granted under that plan are settled in cash. All employees are eligible to receive stock option grants or stock appreciation rights. However, in order to ensure that such grants are sufficiently meaningful so as to incentivize performance, they have traditionally been awarded to employees who have achieved the level of District Manager or equivalent within our organization. We believe our combination of short and long-term rewards and incentives has proven successful as reflected in our historic performance and acceptable levels of employee retention and turnover.
Change in Control Arrangements
Change in Control Arrangements We have no employment, severance, or change in control agreements with any of our executive officers. Our stock option plan provides that if the company is not the surviving or acquiring corporation in the event of a merger or similar transaction, then the vesting and exercisability of outstanding stock options will be accelerated only if the surviving or acquiring corporation does not assume or replace the outstanding options. The vesting and exercisability of outstanding options will also be accelerated in the event of a dissolution or liquidation of the company. The change in control provisions in our stock option plan are designed to ensure maximum flexibility for the company in the event of a merger or similar transaction, in that we can provide for the continuation of options if that is more attractive to potential acquiring companies or can provide for acceleration of vesting of options if we believe doing so would facilitate retention of critical employees during acquisition discussions, would better motivate management to obtain the highest price possible by aligning their interests more closely with those of our shareholders, or would otherwise benefit our shareholders and be fair to our employees.
Elements of Executive Compensation
| Compensation Component | Form of Compensation | | Purpose | | Base Salary | Cash | • | Compensate each named executive officer relative to individual responsibilities, experience, and performance. | | | | • | Provide regular cash flow not contingent on short-term variations in company performance. | | Quarterly Incentives | Cash | • | Align compensation with our quarterly corporate financial performance. | | | | • | Reward achievement of short-term profit growth. | | | | • | Provide executives with a meaningful total cash compensation opportunity (base salary + quarterly bonuses). | | Long-term Incentives | Stock Options | • | Encourage long-term retention. | | | | • | Create a long-term performance focus. | | | | • | Align compensation with our long-term returns to shareholders. | | | | • | Provide executive ownership opportunities. | | Other Compensation | Benefits | • | Provide competitive retirement and health and welfare benefit plans generally available to all of our employees, including executive officers. |
Quarterly Incentives
Quarterly Incentives Our executive officers are eligible for cash incentives through individual bonus arrangements based on improvements in the overall financial performance of the company and/or their respective areas of responsibility. The bonus arrangements provide our executive officers with the opportunity to earn a cash bonus for each quarter during a year when we increase our earnings above a predetermined minimum target. The primary cash bonuses for all of our named executive officers are based on growth in pre-tax earnings of the company and/or the officer's area of responsibility. The compensation committee selected pre-tax earnings as the appropriate metric for calculating cash bonuses for those officers because of the committee's belief that the focus of the named executive officers should be on profitability, which is the primary driver of shareholder value. The cash bonus for our chief financial officer also includes a component based on growth in company-wide net earnings because his responsibilities allow him to affect our entire financial position including our tax position. The compensation committee believes that no named executive officer should earn a cash bonus under this program for a quarter unless financial performance has improved and therefore sets minimum targets for each quarter that are equal to the earnings achieved for the same quarter in the prior year. The compensation committee requires growth in earnings before any bonuses can be earned due to its belief that growth is achievable with superior effort and will generate the cash necessary to expand the company's operations in accordance with our business plans and increase shareholder value. The payout percentage used to calculate the amount of each named executive officer's primary quarterly cash bonus reflects the officer's track record in his or her current position (i.e., newly promoted executives historically have had to prove themselves in their new positions before earning higher payout percentages) and relative ability to impact profitability. Cash bonus payments to our named executive officers are tied directly to our financial performance so that they increase only if and to the extent the company's profitability grows; therefore, we do not believe it is necessary for payouts under our primary executive cash incentive program to be capped. We believe the current design of our executive bonus arrangements, along with our other controls, adequately mitigates risk and the use of multiple metrics would not be in furtherance of our goal of keeping our compensation programs simple, understandable, and transparent, and would risk keeping our executives focused on things other than profitability, thereby depriving them of the clear feedback and motivation necessary to improve our bottom line. Therefore, we do not base these cash incentives on multiple metrics. Our named executive officers are each eligible for a supplemental bonus program. The supplemental bonus program, known as the ROA (Return on Assets) Plan, is intended to encourage better management of accounts receivable, inventory, and vehicles and provides cash incentive amounts on a quarterly basis for asset management improvement over the same quarter in the prior fiscal year and is described in more detail below. 2023 Incentive Program The bonus arrangements for our named executive officers for 2023 were approved by our compensation committee at its last meeting in 2022. Consistent with prior years, the bonuses for 2023 were based on growth in pre-tax earnings or net earnings of the company and/or the officer's area of responsibility. The bonuses for each quarter were determined by applying a payout percentage to the amount by which pre-tax earnings or net earnings exceeded 100% of pre-tax earnings or net earnings for the same quarter in 2022. The compensation committee determined that the payout percentages for each of the named executive officers for 2023 would remain unchanged from those in effect at the end of 2022, except that Mr. Lewis' bonus arrangement was updated to include a component for growth in pre-tax earnings, in addition to growth in net earnings. In May 2023, when Mr. Watts was appointed to Chief Sales Officer, his bonus arrangement was updated to reflect growth in company-wide pre-tax earnings. Prior to May 2023, his bonus arrangement included growth in pre-tax earnings of our international business units and a smaller component of company-wide pre-tax growth. The specific bonus opportunities for our named executive officers are summarized in the table below. Each named executive officer's cash bonus for each quarter during 2023 was determined by applying the payout percentage listed opposite his or her name below to the amount by which pre-tax earnings or net earnings of the company and/or the officer's area of responsibility for that quarter exceeded 100% of such earnings in the same quarter of 2022 (the 'minimum target').
Quarterly Incentives
| Name | Earnings Type | Payout Percentage | | Mr. Florness | Company-wide pre-tax earnings | 1.75% | | Mr. Lewis | Company-wide pre-tax earnings / Company-wide net earnings | 0.50% / 0.35% | | Mr. Miller (1) | Pre-tax earnings | 1.00% / 0.25% | | Mr. Watts (2) | Company-wide pre-tax earnings | 1.00% | | Mr. Soderberg | Company-wide pre-tax earnings | 0.65% | | Mr. Owen (3) | Company-wide pre-tax earnings | 1.00% |
Quarterly Incentives
(1)The bonuses for Mr. Miller were based on growth in pre-tax earnings for the geographic areas under his leadership (Eastern United States), with the payout percentage applied to that growth of 1.00%, as well as growth in company pre-tax earnings, with the payout percentage applied to that growth of 0.25%. (2)Prior to May 2023, the bonuses for Mr. Watts were based on growth in company-wide pre-tax earnings for the geographic areas under his leadership (which were all areas outside of the United States), with the payout percentage applied to that growth of 2.20%, as well as growth in company pre-tax earnings, with the payout percentage applied to that growth of 0.30%. (3)Mr. Owen resigned on October 31, 2023. The following table sets out, for each quarter in 2023, our actual and minimum target pre-tax earnings and net earnings on a company-wide basis for that quarter, in each case rounded to the nearest thousand. (As indicated above, the 'minimum target' amount in 2023 was 100% of such earnings in the same quarter of 2022.)
Quarterly Incentives
| Improvement Amount Exceeded | Bonus Payout | | 150 basis points | $15,000 | | 100 basis points (but less than 150 basis points) | $10,000 | | 50 basis points (but less than 100 basis points) | $5,000 |
Quarterly Incentives
| 2023 | Improvement Amount Exceeded | Bonus Payout | | First quarter | 150 basis points | $15,000 | | Second quarter | 150 basis points | 15,000 | | Third quarter | 150 basis points | 15,000 | | Fourth quarter | 150 basis points | 15,000 | | Fourth quarter | Whole percentage improvement (38.0% and 37.0%) | 20,000 | | Total | | $80,000 |
Long-term Incentives
Long-term Incentives We tie a portion of our employee compensation to the market price of Fastenal's common stock by granting stock options pursuant to the Fastenal Company Stock Option Plan, as amended and restated (the stock option plan). The equity-based incentives that can be granted under that plan are limited to stock options in an effort to further our goal of keeping our compensation system simple and easy to understand, and because stock options deliver value to our employees only if our shareholders realize appreciation in the value of their shares held over the same period. Due to legal restrictions, we are unable to grant options under our stock option plan to certain of our foreign employees. As a result, those employees (none of whom are executive officers) are instead eligible to receive stock appreciation rights under a separate plan. The stock appreciation rights have been designed to mirror the economic rewards of our stock options in all material respects. All of those stock appreciation rights are settled in cash. All of our employees are eligible to receive equity-based grants. When making grants, including to named executive officers, we consider an employee's contribution to the company, including the employee's responsibility for revenues and profits, responsibility for managing others, possession of special skills, and length of service. We regularly assess the effectiveness of further expanding the number of persons receiving equity-based grants. Any expansion will be based on a determination that further employee ownership will result in a deepened employee commitment and likely improvement to overall shareholder value. During 2023, our compensation committee granted stock options to our employees under our stock option plan for a total of 1,001,381 shares of our common stock with an exercise price of $48.00 per share. The exercise price of our stock options is determined by rounding the closing stock price on the effective date of the grant up to the nearest dollar. Of these grants, options to purchase an aggregate of 197,551 shares were awarded to our named executive officers. Stock option grants were made in 2023 to all of our named executive officers. Our stock option grants have been made at levels designed to provide recipients with an attractive capital accumulation opportunity should earnings and shareholder values grow at acceptable rates and to facilitate retention of critical employees. Of the 28,704,008 total shares subject to stock options granted by the company under our stock option plan since April 2007, options covering an aggregate of 3,485,475 shares are either held by, or have been exercised by, our current executive officers. The stock options granted to executive officers vest and become exercisable over a period of five or eight years from the date of grant, with such staggered vesting designed to ensure continuity of leadership. At its last meeting in 2023, the compensation committee granted to our employees, effective January 2, 2024, options to purchase a total of 764,195 shares of our common stock at an exercise price of $64.00 per share. Of those grants, options to purchase an aggregate of 139,568 shares were awarded to our named executive officers. We have stock ownership guidelines for our non-employee directors and executive officers, which require each to hold minimum levels of investment in the company. The stock ownership guidelines are further described below.
Market Competitiveness Review
Market Competitiveness Review In making executive compensation decisions, both with respect to total compensation and individual elements of compensation, our compensation committee annually reviews executive compensation data based on external reports for a peer group of companies in order to stay informed of practices and executive pay levels in the marketplace. However, it does not establish specific compensation parameters based on such data, nor does it set the levels of compensation for our executive officers, or individual elements of that compensation, by applying any specific mathematical calculation to peer group compensation data. 2023 Compensation Review 2023 Peer Group. As part of the decision-making process with respect to 2023 executive compensation, our compensation committee reviewed the executive compensation data of a peer group consisting of the following ten companies (the 2023 peer group):
Market Competitiveness Review
The companies included in our 2023 peer group are similar to our business in terms of the end markets they serve and/or their operating characteristics (e.g., using similar methods of sourcing, distributing, and selling) and they are reasonably expected to be competing for a similar pool of potential employees. The median revenue of the 2023 peer group was greater than Fastenal's and the median market capitalization of the 2023 peer group as of December 31, 2022 was less than Fastenal's. Benchmarking for 2023. In comparing Fastenal's executive compensation levels to those of its 2023 peer group, the compensation committee looked at base salary, cash incentives, other compensation (which includes stock options, other types of equity compensation, pensions, and perquisites), and total compensation. In December 2022, when the committee made decisions with respect to 2023 executive compensation, the most recent year for which executive compensation data for the 2023 peer group was available was 2021. Based on the latest available data, the compensation committee determined that (i) the base salaries of Fastenal's named executive officers for 2023 were lower than the median base salary of the named executive officers of the 2023 peer group, (ii) the cash incentive pay of Fastenal's named executive officers for 2023 was higher than the median cash incentive pay of the named executive officers of the 2023 peer group, and (iii) the total compensation of Fastenal's named executive officers for 2023 was lower than the median total compensation of the named executive officers of the 2023 peer group. The total compensation of Fastenal's named executive officers for 2023 was lower than the median total compensation of the 2023 peer group due to the lower base salary and lower grant date fair value of the equity compensation awarded to Fastenal's executives, only partly offset by higher cash incentive pay. In making compensation decisions for the named executive officers, the compensation committee does not focus on the grant date fair value of equity awards. Rather the committee makes its own internal judgments regarding the value of those awards and has concluded that the opportunity at the company for the creation of long-term stock value, driven by achieving consistent outstanding growth over an extended period of time, is significant. The company has historically achieved outstanding growth and the expectation of the committee in granting option awards is that, with superior efforts from our executives and other employees, outstanding growth can continue in the future. Accordingly, the committee believes the aggregate annual compensation paid to our named executive officers can reasonably be expected to result in significant wealth creation. 2024 Compensation Review 2024 Peer Group. As part of the decision-making process with respect to 2024 executive compensation, our compensation committee reviewed executive compensation data of a peer group consisting of the following ten companies (the 2024 peer group):
Market Competitiveness Review
Benchmarking for 2024. In December 2023, when the compensation committee made decisions with respect to 2024 executive compensation, the most recent year for which executive compensation data for the 2024 peer group was available was 2022. Based on the committee's review of all factors, including the latest available 2024 peer group compensation data, the committee believes the aggregate annual compensation to be paid to our named executive officers for 2024 can reasonably be expected to result in significant overall incentives for strong performance, and the committee believes our 2024 compensation programs for our named executive officers will be fair, competitive, and sufficient to motivate them to achieve personal success and success for the company and its shareholders.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Daniel L. Florness | 2023 | 750,000(4) | — | — | 847,284 | 1,515,000 | 3,223 | 3,115,507 | | President and | 2022 | 750,000(4) | — | — | 617,802 | 4,068,500 | 3,308 | 5,439,610 | | Chief Executive Officer | 2021 | 717,500(4) | — | — | 538,313 | 1,165,000 | 2,801 | 2,423,614 | | Holden Lewis | 2023 | 430,000 | — | — | 286,259 | 728,350 | 3,223 | 1,447,832 | | Senior Executive Vice President and | 2022 | 430,000 | — | — | 142,313 | 1,624,000 | 3,308 | 2,199,621 | | Chief Financial Officer | 2021 | 400,008 | — | — | 119,625 | 633,100 | 2,801 | 1,155,534 | | Charles S. Miller | 2023 | 430,008 | — | — | 312,288 | 852,813 | 3,223 | 1,598,332 | | Senior Executive Vice | 2022 | 430,008 | — | — | 189,742 | 1,665,442 | 3,308 | 2,288,500 | | President - Sales | 2021 | 430,008 | — | — | 171,456 | 545,858 | 2,801 | 1,150,123 | | Jeffery M. Watts | 2023 | 451,503(5) | — | — | 268,713 | 749,716(5) | — | 1,469,932 | | Chief Sales Officer | 2022 | 358,631(5) | — | — | 163,271 | 1,167,365(5) | — | 1,689,267 | | | 2021 | 368,205(5) | — | — | 139,559 | 1,008,853(5) | — | 1,516,617 | | John L. Soderberg | 2023 | 400,008 | — | — | 217,875 | 613,000 | 3,223 | 1,234,106 | | Senior Executive Vice | 2022 | 380,000 | — | — | 125,760 | 1,514,300 | 3,308 | 2,023,368 | | President - Information Technology | 2021 | 360,000 | — | — | 107,663 | 527,500 | 2,801 | 997,964 | | Terry M. Owen (6) | 2023 | 432,055 | — | — | 363,125 | 703,333 | — | 1,498,513 | | Former Chief Operating Officer | 2022 | 500,004 | — | — | 220,645 | 2,327,000 | 3,308 | 3,050,957 | | | 2021 | 500,004 | — | — | 199,372 | 790,000 | 2,801 | 1,492,177 |
SUMMARY COMPENSATION TABLE
(1)This column sets out the grant date fair value of all option grants made during each respective year, without regard to subsequent forfeitures of those grants. We calculated this value in accordance with generally accepted accounting principles utilizing the assumptions set forth in the notes to our consolidated financial statements included in our 2023 annual report on Form 10-K. (2)This column sets out cash bonuses earned (rather than paid) in the respective year. (3)This column sets out our annual profit-based matching contribution under our 401(k) plan. (4)This amount includes $50,000 paid to Mr. Florness in both 2023 and 2022, and $42,500 in 2021 in his capacity as one of our directors. See 'Corporate Governance and Director Compensation – Compensation of Our Directors' earlier in this document. (5)Mr. Watts' base salary and cash bonuses in 2023, 2022, and 2021 were paid in Canadian dollars. These amounts were converted into United States dollars using the exchange rate in effect at the time each payment occurred. The exchange rates used (expressed as the amount of United States dollars purchasable with one Canadian dollar) ranged from 0.7204 to 0.7580, and averaged 0.7424 in 2023, ranged from 0.7197 to 0.7995, and averaged 0.7660 in 2022, and ranged from 0.7797 to 0.8310, and averaged 0.7988 in 2021. (6)Mr. Owen resigned on October 31, 2023.
Grant of Plan-Based Awards
Grant of Plan-Based Awards Set out in the following table is information with respect to awards, if any, for 2023 to our named executive officers under our cash incentive and stock option plan.
GRANT OF PLAN-BASED AWARDS
GRANT OF PLAN-BASED AWARDS
GRANT OF PLAN-BASED AWARDS
| | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) (4) | Exercise or Base Price of Option Awards ($ / Sh) (5) | Grant Date Fair Value of Stock and Option Awards ($) (6) | | Name | Grant Date | Threshold ($) (2) | Target ($) (3) | Maximum ($) (2) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Daniel L. Florness | 1/3/2023 | — | 4,068,500 | — | — | — | — | — | 72,916 | 48.00 | 847,284 | | Holden Lewis | 1/3/2023 | — | 1,732,650 | — | — | — | — | — | 24,635 | 48.00 | 286,259 | | Charles S. Miller | 1/3/2023 | — | 1,665,442 | — | — | — | — | — | 26,875 | 48.00 | 312,288 | | Jeffery M. Watts | 1/3/2023 | — | 1,931,058 | — | — | — | — | — | 23,125 | 48.00 | 268,713 | | John L. Soderberg | 1/3/2023 | — | 1,514,300 | — | — | — | — | — | 18,750 | 48.00 | 217,875 | | Terry M. Owen (7) | 1/3/2023 | — | 2,327,000 | — | — | — | — | — | 31,250 | 48.00 | 363,125 |
GRANT OF PLAN-BASED AWARDS
(1)The awards under the cash bonus arrangements for each of the named executive officers were payable at the end of each fiscal quarter based on financial results for that fiscal quarter, and none of those awards could result in future payouts. The cash bonus formulas for each of the named executive officers are described above in 'Compensation Discussion and Analysis – Quarterly Incentives – 2023 Incentive Program'. The actual amounts earned during 2023 under these cash bonus arrangements by the named executive officers are reported in the 'Summary Compensation Table' column captioned 'Non-Equity Incentive Plan Compensation'. (2)There were no thresholds or maximum payouts under the 2023 cash bonus arrangements. (3)The target payouts were calculated by applying the payout percentages for the named executive officers in effect at the end of each quarter of 2023 to the amount by which pre-tax and net earnings in the same quarter of 2022 exceed 100% of pre-tax and net earnings in the same quarter of 2021. (4)This column sets out the number of shares subject to options granted during 2023. The options will vest and become exercisable over a period of five years, with 20% of such options vesting and becoming exercisable each year following the grant date. The options will terminate, to the extent not previously exercised, approximately ten years after the grant date. (5)The exercise price of our stock options is determined by rounding the closing stock price on the effective date of the grant up to the nearest dollar. (6)This column sets out the grant date fair value of all options granted during 2023. We calculated this value in accordance with generally accepted accounting principles utilizing the assumptions set forth in the notes to our consolidated financial statements included in our 2023 annual report on Form 10-K. (7)Mr. Owen resigned on October 31, 2023. Mr. Owen's 2023 stock option grant was forfeited in connection with his resignation.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option Awards | | | | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options (#) | Number of Securities Underlying Unexercised Options (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Grant Date | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | | Exercisable | Unexercisable | | | | | | | | | | Daniel L. Florness | 95,744 | — | — | 23.50 | 1/3/2017 | 12/31/2026(1) | — | — | — | — | | | 81,818 | — | — | 27.50 | 1/2/2018 | 12/31/2027(1) | — | — | — | — | | | 73,844 | 18,462 | — | 26.00 | 1/2/2019 | 12/31/2028(1) | — | — | — | — | | | 42,632 | 28,420 | — | 38.00 | 1/2/2020 | 12/31/2029(1) | — | — | — | — | | | 22,500 | 33,750 | — | 48.00 | 1/4/2021 | 12/31/2030(1) | — | — | — | — | | | — | 45,161 | — | 62.00 | 1/3/2022 | 12/31/2031(1) | — | — | — | — | | | — | 72,916 | — | 48.00 | 1/3/2023 | 12/31/2032(2) | — | — | — | — | | Holden Lewis | 51,064 | — | — | 23.50 | 1/3/2017 | 12/31/2026(1) | — | — | — | — | | | 20,000 | — | — | 27.50 | 1/2/2018 | 12/31/2027(1) | — | — | — | — | | | 18,460 | 4,616 | — | 26.00 | 1/2/2019 | 12/31/2028(1) | — | — | — | — | | | 9,474 | 6,315 | — | 38.00 | 1/2/2020 | 12/31/2029(1) | — | — | — | — | | | 5,000 | 7,500 | — | 48.00 | 1/4/2021 | 12/31/2030(1) | — | — | — | — | | | — | 10,403 | — | 62.00 | 1/3/2022 | 12/31/2031(1) | — | — | — | — | | | — | 24,635 | — | 48.00 | 1/3/2023 | 12/31/2032(2) | — | — | — | — | | Charles S. Miller | 11,590 | — | — | 27.50 | 1/2/2018 | 12/31/2027(1) | — | — | — | — | | | 18,460 | 4,616 | — | 26.00 | 1/2/2019 | 12/31/2028(1) | — | — | — | — | | | 13,579 | 9,052 | — | 38.00 | 1/2/2020 | 12/31/2029(1) | — | — | — | — | | | 7,166 | 10,750 | — | 48.00 | 1/4/2021 | 12/31/2030(1) | — | — | — | — | | | — | 13,870 | — | 62.00 | 1/3/2022 | 12/31/2031(1) | — | — | — | — | | | — | 26,875 | — | 48.00 | 1/3/2023 | 12/31/2032(2) | — | — | — | — | | Jeffery M. Watts | 3,452 | — | — | 21.00 | 4/21/2015 | 5/31/2024(3) | — | — | — | — | | | 15,968 | — | — | 23.50 | 1/3/2017 | 12/31/2026(1) | — | — | — | — | | | 16,362 | — | — | 27.50 | 1/2/2018 | 12/31/2027(1) | — | — | — | — | | | 13,844 | 3,462 | — | 26.00 | 1/2/2019 | 12/31/2028(1) | — | — | — | — | | | 11,053 | 7,368 | — | 38.00 | 1/2/2020 | 12/31/2029(1) | — | — | — | — | | | 5,833 | 8,750 | — | 48.00 | 1/4/2021 | 12/31/2030(1) | — | — | — | — | | | — | 11,935 | — | 62.00 | 1/3/2022 | 12/31/2031(1) | — | — | — | — | | | — | 23,125 | — | 48.00 | 1/3/2023 | 12/31/2032(2) | — | — | — | — | | John L. Soderberg | 19,564 | — | — | 23.00 | 4/19/2016 | 5/31/2025(4) | — | — | — | — | | | 19,148 | — | — | 23.50 | 1/3/2017 | 12/31/2026(1) | — | — | — | — | | | 16,362 | — | — | 27.50 | 1/2/2018 | 12/31/2027(1) | — | — | — | — | | | 13,844 | 3,462 | — | 26.00 | 1/2/2019 | 12/31/2028(1) | — | — | — | — | | | 7,579 | 5,052 | — | 38.00 | 1/2/2020 | 12/31/2029(1) | — | — | — | — | | | 4,500 | 6,750 | — | 48.00 | 1/4/2021 | 12/31/2030(1) | — | — | — | — | | | — | 9,193 | — | 62.00 | 1/3/2022 | 12/31/2031(1) | — | — | — | — | | | — | 18,750 | — | 48.00 | 1/3/2023 | 12/31/2032(2) | — | — | — | — | | Terry M. Owen (5) | — | — | — | — | | | — | — | — | — |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
(1)This option has a vesting period of five years with the following vesting schedule: 40% vested and exercisable two years following the grant date and the remainder exercisable in proportional increments of 20% each year thereafter. (2)This option has a vesting period of five years with the following vesting schedule: 20% vested and exercisable one year following the grant date and the remainder exercisable in proportional increments of 20% each year thereafter. (3)This option has a vesting period of eight years with the following vesting schedule: 50% vested and exercisable four years following the grant date and the remainder exercisable in proportional increments of 12.50% each year thereafter. (4)This option has a vesting period of five years with the following vesting schedule: 50% vested and exercisable at two and one-half years, 20% vested and exercisable at three and one-half years, 20% vested and exercisable at four and one-half years, and 10% vested and exercisable at five years. (5)Mr. Owen resigned on October 31, 2023. Any unvested stock options were forfeited as of his resignation date.
Option Exercises
Option Exercises Set out in the following table is information regarding options to purchase Fastenal stock, if any, that have been exercised by our named executive officers during 2023.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Daniel L. Florness | 50,000 | 1,857,171 | — | — | | Holden Lewis | — | — | — | — | | Charles S. Miller | 744 | 32,141 | — | — | | Jeffery M. Watts | — | — | — | — | | John L Soderberg | — | — | — | — | | Terry M. Owen (1) | 281,998 | 10,332,304 | — | — |
OPTION EXERCISES AND STOCK VESTED
(1) Mr. Owen resigned on October 31, 2023.
Pension Benefits
Pension Benefits SEC regulations state that we must disclose information in this proxy statement, in a tabular format, regarding any plans that provide for retirement payments or benefits other than defined contribution plans. We have never had any such benefit plan and do not anticipate creating any such plan in the future. As a result, we have omitted this table.
Non-Qualified Deferred Compensation
Non-Qualified Deferred Compensation SEC regulations state that we must disclose information in this proxy statement, in a tabular format, regarding defined contribution or other plans that provide for deferral of compensation on a basis that is not tax-qualified. We have never had any such benefit plan and do not anticipate creating such a plan in the future. As a result, we have omitted this table.
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control SEC regulations state that we must disclose information in this proxy statement regarding agreements, plans or arrangements that provide for payments or benefits to our executive officers in connection with any termination of employment or change in control of Fastenal. We are not parties to any such agreement, plan or arrangement other than our stock option plan, which provides that, if Fastenal is not the surviving or acquiring corporation in the event of a merger or similar transaction, then the vesting and exercisability of outstanding stock options will be accelerated only if the surviving or acquiring corporation does not assume or replace the outstanding options. The vesting and exercisability of outstanding options will also be accelerated in the event of the dissolution or liquidation of Fastenal. If any such transaction or event had occurred on December 31, 2023 and the price per share of our common stock payable in connection with such transaction or event equaled the closing sales price of a share of our common stock on the Nasdaq Stock Market on such date (which was $64.77 per share), and if the vesting and exercisability of all options had been accelerated in connection with such transaction or event, then each of our named executive officers would have received the following payments in respect of their options (assuming full exercise of the same):
Potential Payments upon Termination or Change-in-Control
| Name | Option Grant Date | Options Outstanding (#) | Option Exercise Price ($) | Payment Value ($) | | Daniel L. Florness | 1/3/2017 | 95,744 | 23.50 | 3,951,355 | | | 1/2/2018 | 81,818 | 27.50 | 3,049,357 | | | 1/2/2019 | 92,306 | 26.00 | 3,578,704 | | | 1/2/2020 | 71,052 | 38.00 | 1,902,062 | | | 1/4/2021 | 56,250 | 48.00 | 943,313 | | | 1/3/2022 | 45,161 | 62.00 | 125,096 | | | 1/3/2023 | 72,916 | 48.00 | 1,222,801 | | Holden Lewis | 1/3/2017 | 51,064 | 23.50 | 2,107,411 | | | 1/2/2018 | 20,000 | 27.50 | 745,400 | | | 1/2/2019 | 23,076 | 26.00 | 894,657 | | | 1/2/2020 | 15,789 | 38.00 | 422,672 | | | 1/4/2021 | 12,500 | 48.00 | 209,625 | | | 1/3/2022 | 10,403 | 62.00 | 28,816 | | | 1/3/2023 | 24,635 | 48.00 | 413,129 | | Charles S. Miller | 1/2/2018 | 11,590 | 27.50 | 431,959 | | | 1/2/2019 | 23,076 | 26.00 | 894,657 | | | 1/2/2020 | 22,631 | 38.00 | 605,832 | | | 1/4/2021 | 17,916 | 48.00 | 300,451 | | | 1/3/2022 | 13,870 | 62.00 | 38,420 | | | 1/3/2023 | 26,875 | 48.00 | 450,694 | | Jeffery M. Watts | 4/21/2015 | 3,452 | 21.00 | 151,094 | | | 1/3/2017 | 15,968 | 23.50 | 658,999 | | | 1/2/2018 | 16,362 | 27.50 | 609,812 | | | 1/2/2019 | 17,306 | 26.00 | 670,954 | | | 1/2/2020 | 18,421 | 38.00 | 493,130 | | | 1/4/2021 | 14,583 | 48.00 | 244,557 | | | 1/3/2022 | 11,935 | 62.00 | 33,060 | | | 1/3/2023 | 23,125 | 48.00 | 387,806 | | John L. Soderberg | 4/19/2016 | 19,564 | 23.00 | 817,188 | | | 1/3/2017 | 19,148 | 23.50 | 790,238 | | | 1/2/2018 | 16,362 | 27.50 | 609,812 | | | 1/2/2019 | 17,306 | 26.00 | 670,954 | | | 1/2/2020 | 12,631 | 38.00 | 338,132 | | | 1/4/2021 | 11,250 | 48.00 | 188,663 | | | 1/3/2022 | 9,193 | 62.00 | 25,465 | | | 1/3/2023 | 18,750 | 48.00 | 314,438 | | Terry M. Owen (1) | | — | — | — |
Potential Payments upon Termination or Change-in-Control
(1) Mr. Owen resigned on October 31, 2023.
CEO Pay Ratio
CEO Pay Ratio We are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Daniel L. Florness, our chief executive officer (our 'CEO'): For 2023, our last completed fiscal year: •the total compensation amount for the median employee identified in 2023 was $46,393 for 2023; and •the annual total compensation of our CEO, as reported in the Summary Compensation Table included in this proxy statement, was $3,115,507. Based on this information for 2023, we reasonably estimate that the ratio of our CEO's annual total compensation to the annual total compensation of our median employee was 67:1. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K. We determined our median employee's total compensation, including any perquisites and other benefits, in the same manner that we determine the total compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above. The total compensation amount for our median employee for 2023 was determined to be $46,393. This total compensation amount was then compared to the total compensation of our CEO disclosed above in the Summary Compensation Table, of $3,115,507. The elements included in the CEO's total compensation are fully discussed above in the footnotes to the Summary Compensation Table. The methodology that we used to identify the median of the annual total compensation of all our employees in 2023, and the material assumptions, adjustments, and estimates that we used for the identification of our median employee were as follows: We determined that, as of October 31, 2023, our employee population consisted of 23,231 individuals (including full-time and part-time employees, other than the CEO, who were employed on October 31, 2023, including employees on leave) working at Fastenal together with our consolidated subsidiaries. Of these individuals, 18,554 were located in the U.S. and U.S. territories, and 4,677 were located in 26 other countries around the world. The scale of our operations in many of these foreign countries is smaller, and in aggregate we employed less than 5% of our total workforce in 22 of these 26 countries, primarily as sales staff in our international branches or Onsite locations. Given the limited scale of this portion of our international operations, we chose to exclude all 952 of our employees in these countries as follows:
CEO Pay Ratio
| Country | Employees (#) | Country | Employees (#) | Country | Employees (#) | Country | Employees (#) | | Austria | 10 | Germany | 55 | Panama | 21 | Switzerland | 4 | | Belgium | 13 | Hungary | 14 | Poland | 39 | Taiwan | 32 | | Brazil | 86 | Ireland | 17 | Romania | 36 | Thailand | 20 | | Chile | 17 | Italy | 82 | Singapore | 22 | United Kingdom | 148 | | Czech Republic | 93 | Malaysia | 128 | Spain | 19 | | | | France | 54 | Netherlands | 38 | Sweden | 4 | | |
CEO Pay Ratio
In total, we excluded 4.10% of our workforce from the identification of the 'median employee', as permitted by SEC rules. Our employee population, after taking into consideration the permitted adjustments described above, consisted of 22,279 members. In making this determination, we annualized the compensation of all employees included in the sample who were hired in 2023 but did not work for us or our consolidated subsidiaries for the entire twelve month period described below. Our adjusted employee population consisted of 18,554 employees in the U.S. and U.S. territories and 3,725 employees located in Canada, China, Mexico, and India. We identified our median employee based on the total cash compensation paid during the twelve month period ended October 31, 2023. For purposes of determining the total cash compensation paid, we included: the amount of base salary (or, in the case of hourly workers, base wages including overtime pay) the employee received during the twelve months ended October 31, 2023, and the amount of any cash incentives paid to the employee in such period (which include sales commissions as well as cash incentives that are generally paid for performance during the prior month or quarter), as reflected in our payroll records. For purposes of identifying the median employee, we applied the same exchange rates we used for financial statement conversion purposes at October 31, 2023, which are U.S. dollars to Canadian dollars 1.3865 CAD; U.S. dollars to Chinese Yuan 7.3168 CNY; U.S. dollars to Dominican Peso 56.2314 DOP; U.S. dollars to Indian Rupee 83.2674 INR; and U.S. dollars to Mexican Peso 18.0231 MXN.
Pay Versus Performance Table
Pay Versus Performance Table The following table sets forth additional compensation information of our principal executive officer (PEO) and our other named executive officers (NEOs) (averaged) along with total shareholder return, net income, and company-wide pre-tax earnings performance results for our fiscal years ending in 2023, 2022, 2021, and 2020:
Pay Versus Performance Table
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year | Summary Compensation Table Total for PEO (1) (2) ($) | Compensation Actually Paid to PEO (1) (2) ($) | Average Summary Compensation Table Total for Other NEOs (1) (2) ($) | Average Compensation Actually Paid to Other NEOs (1) (2) ($) | FAST Total Shareholder Return (3) ($) | Peer Group Total Shareholder Return (3) (4) | Net Income (5) ($ in millions) | Company-Wide Pre-Tax Earnings (6) ($ in millions) | | 2023 | 3,115,507 | 5,360,613 | 1,449,743 | 1,757,205 | 196 | 218 | 1,155.0 | 1,522.0 | | 2022 | 5,439,610 | 3,307,940 | 2,408,942 | 1,793,142 | 138 | 147 | 1,086.9 | 1,440.0 | | 2021 | 2,423,614 | 5,572,876 | 1,358,039 | 2,295,107 | 183 | 169 | 925.0 | 1,207.8 | | 2020 | 2,539,150 | 5,321,725 | 1,316,849 | 2,067,665 | 137 | 126 | 859.1 | 1,132.7 |
Pay Versus Performance Table
(1) Our PEO and Other NEOs for each reported fiscal year were:
Pay Versus Performance Table
| Fiscal Year | PEO | Other NEOs | | 2023 | Daniel L. Florness | Holden Lewis, Charles S. Miller, Jeffery M. Watts, John L. Soderberg, and Terry M. Owen (i) | | 2022 | Daniel L. Florness | Holden Lewis, Terry M. Owen, Charles S. Miller, and Reyne K. Wisecup | | 2021 | Daniel L. Florness | Holden Lewis, Jeffery M. Watts, Terry M. Owen, and William J. Drazkowski | | 2020 | Daniel L. Florness | Holden Lewis, Terry M. Owen, Jeffery M. Watts, and Reyne K. Wisecup | | (i) Mr. Owen resigned on October 31, 2023. | | |
Pay Versus Performance Table
(2) SEC rules require certain adjustments be made to the Summary Compensation Table (SCT) totals to determine 'compensation actually paid' (CAP) as reported in the Pay Versus Performance Table. CAP does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. The PEO and NEOs do not participate in a defined benefit plan, so no adjustment for pension benefits is included in the table below. The following table details these adjustments from the SCT total compensation to determine CAP in 2023:
Pay Versus Performance Table
| Adjustments | PEO ($) | Average of Other NEOs ($) | | Total Compensation from SCT | 3,115,507 | 1,449,743 | | Adjustments for Stock and Option Awards | | | | Subtract SCT amounts of stock and option awards | (847,284) | (289,652) | | Add fair value as of the year-end of awards granted during 2023 that are outstanding and unvested at the end of 2023 | 1,691,588 | 433,290 | | Plus (Minus) change in fair value of awards between the end of 2022 and the end of 2023 for awards granted in any prior fiscal year that are outstanding and unvested at the end of 2023 | 1,393,590 | 269,996 | | Add vesting date fair value of awards granted and vesting during 2023 | — | — | | Plus (Minus) change in fair value from the end of 2022 to the vesting date of awards granted in any prior fiscal year which met all vesting conditions during 2023 | 7,212 | 4,134 | | Subtract fair value at end of 2022 for awards granted in any prior fiscal year that fail to meet the applicable vesting conditions during 2023 | — | (110,306) | | Add dividends or other earnings paid on stock or option awards in 2023 prior to vesting if not otherwise included in the SCT for the covered year | — | — | | Compensation Actually Paid (as calculated) | 5,360,613 | 1,757,205 |
Pay Versus Performance Table
(3) Total shareholder return is calculated based on a fixed investment of one hundred dollars measured from the market close on December 31, 2019 (the last trading day of the fiscal 2019) through and including the end of each fiscal year reported in the table. (4) Our peer group used for the TSR calculation is the Dow Jones US Industrial Suppliers Index, which is the industry index used to show our performance in our Form 10-K. In our pay versus performance disclosures for 2022, we used the S&P 500. Pursuant to SEC guidance, we have changed the index used for our peer group. A comparison of our TSR, the S&P 500 TSR, and the Dow Jones US Industrial Suppliers Index TSR is below:
Pay Versus Performance Table
| TSR | FAST ($) | S&P 500 ($) | Dow Jones US Industrial Suppliers Index ($) | | 2023 | 196 | 158 | 218 | | 2022 | 138 | 125 | 147 | | 2021 | 183 | 152 | 169 | | 2020 | 137 | 118 | 126 |
Pay Versus Performance Table
(5) The "net earnings" line item in our consolidated statements of earnings is equal to both "net income" and "company-wide net income," and is calculated in conformity with U.S. GAAP. (6) Our company-selected measure, which is the measure we believe represents the most important financial performance not otherwise presented in the table above that we use to link CAP to our NEOs for fiscal 2023 to our company's performance, is company-wide pre-tax earnings. The "earnings before income taxes" line item in our consolidated statements of earnings is equal to "company-wide pre-tax earnings" and is calculated in conformity with U.S. GAAP.