Morningstar Selects Mark Miller of Stericycle Inc. as its 2009 CEO of the Year
January 06 2010 - 9:58AM
PR Newswire (US)
CHICAGO, Jan. 6 /PRNewswire-FirstCall/ -- Morningstar, Inc.
(NASDAQ: MORN), a leading provider of independent investment
research, today named Mark Miller, chairman, president, and CEO of
Stericycle Inc. as its 2009 CEO of the Year. Morningstar's annual
award 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. Stericycle is a medical waste disposal firm that provides
business and consulting services to customers worldwide. Based in
Lake Forest, Ill., the company has operations in the United States,
United Kingdom, Ireland, Canada, Mexico, Argentina, Chile, and
Romania. "With such an eclectic group of nominees this year, we're
proud to present the award to Mark Miller, whose entrepreneurial
spirit and personal sacrifices helped Stericycle become the
industry titan it is today," said Paul Larson, equities strategist
and editor of Morningstar StockInvestor. "When Miller took over the
financially strapped company in 1992 after a 16-year career at
Abbott Laboratories, he took a 50 percent pay cut, mortgaged his
home, and cashed out his retirement account to keep the firm
afloat. Although the company didn't post a material profit for
another five years, this difficult start emphasizes the managerial
skill Miller exercised to transform the company in a relatively
short span of time." Miller has deftly guided Stericycle during his
tenure at the firm: -- By shifting the company's focus from large
hospitals to smaller, higher-margin customers, earnings per share
have compounded at 32 percent annually; revenue and operating
income have seen a 16 percent compound annual growth rate;
operating profit has reached more than $300 million over the past
12 months; and the company is currently generating free cash flow
at an annual rate in excess of $225 million. -- Stericycle has
acquired more than 170 companies since 1993 and opted to bundle
traditional medical waste disposal services with expanded offerings
including OSHA compliance training, safety product sales, and
pharmaceutical recall and retrieval services. These moves have
solidified the company's dominance of this small, but profitable,
industry. -- The company's growing 440,000 customer base is a far
cry from the 12 customers Stericycle had when Miller took the
reins. -- In addition to posting 10-year annualized returns of 28
percent, the firm's diversified and essential business model has
been largely unaffected by the recent market downturn, making
Stericycle a recession-resistant investment. Morningstar considers
Stericycle to have a wide economic moat--possessing a set of
sustainable competitive advantages--because of its uncontested
scale, its low-cost advantage, and the industry's high barriers to
entry. The company has established a sound reputation for remaining
in compliance with stringent government disposal guidelines and has
secured an edge over competitors by patenting environmentally
friendly electro-thermal deactivation (ETD) treatment technology.
These factors helped the company reach sales of more than $1
billion in 2008 and, along with the company's corporate stewardship
practices, keep it well positioned for future growth. Executives
receive a majority of their compensation in the form of stock and
other long-term incentives, and all executives are required to have
equity ownership equal to three to five times their base salary,
depending on years of service. "Miller manages Stericycle with an
eye to the future. He's been willing to part with unprofitable
businesses and forego higher revenue in an effort to increase
profitability and returns on capital, which we think proves his
focus on shareholder value," Larson added. "Miller's offer to pay
any fines for customers found in violation of OSHA's blood-born
pathogens standards demonstrates his belief in Stericycle's value
proposition, which employees also embrace. Employee equity in the
company has created more than 30 millionaires over the years. In
fact, Stericycle's compensation structure is so attuned to
long-term value creation and long-dated incentives that 2008 was
the first time in five years that executives received modest
increases in base salaries. Plus, in a decade where major stock
indices ended near where they started, common shareholders at
Stericycle have enjoyed a total return in excess of tenfold." The
three other nominees for Morningstar's 2009 CEO of the Year award
were Hunter Harrison of Canadian National Railway; Lonnie Smith of
robotic surgery pioneer Intuitive Surgical; and Jim Skinner of
McDonald's. The Morningstar CEO of the Year award was introduced in
January 2000. Winners are chosen by Morningstar stock analysts
based on Morningstar's independent research. For Morningstar's
article about the winner, go to:
http://www.morningstar.com/goto/ceo2009. For the complete list of
past winners, go to:
http://corporate.morningstar.com/CEOhalloffame. About Morningstar,
Inc. Morningstar, Inc. is a leading provider of independent
investment research in North America, Europe, Australia, and Asia.
The company offers an extensive line of Internet, software, and
print-based products and services for individuals, financial
advisors, and institutions. Morningstar provides data on more than
325,000 investment offerings, including stocks, mutual funds, and
similar vehicles, along with real-time global market data on more
than 4 million equities, indexes, futures, options, commodities,
and precious metals, in addition to foreign exchange and Treasury
markets. The company has operations in 20 countries and minority
ownership positions in companies based in two other countries.
©2010 Morningstar Inc. All rights reserved. MORN-C Media Contact:
Carling Spelhaug, 312-696-6150 or DATASOURCE: Morningstar, Inc.
CONTACT: Carling Spelhaug of Morningstar, Inc., +1-312-696-6150,
Web Site: http://www.morningstar.com/
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