In a surprise notice to regulators, Fastenal Co. announced that Leland Hein will step down as president and CEO and resume his previous role as chief operating officer, effective immediately.
Chairman Willard Oberton, who resigned as CEO in December, will resume his previous roles as president and CEO, the company said in the Monday filing. He will retain his role as chairman. Oberton, 57, joined the Winona, Minn.-based supplier of fasteners, construction and industrial products in 1980 and served as chief executive from 2002 to December 2014.
The notice to the Securities and Exchange Commission did not give the reason for the change. Analysts noted that the stock is down 11 percent since January but that the company exceeded earnings expectations the past two quarters. Company officials could not be reached for comment.
"It's not very clear what is going on. But the change is definitely strange," said Edward Jones equity research analyst Logan Purk. The company strategy didn't change under Hein, he said, noting that Fastenal has been on a tear for the past few years to cut costs and boost operating efficiencies. At the same time, the company has closed several retail stores, installed more factory vending machines and been pleased as profits rose even as sales growth slowed.
While the company is "clearly transitioning" from its dependence on big sales growth, that does not explain the leadership change, Purk said.
Some Wall Street analysts have speculated that something may have happened in Oberton's personal life that necessitated him taking some time off, Purk said. Now he's back, and "he never did leave as chairman."
Hein, 54, will oversee operations and sales, "where he is a proven leader," the company notice to the SEC said. Hein joined Fastenal in 1985. He was named president in 2012 and CEO on Jan. 1, 2015.
In his resumed role as CEO, Oberton will oversee financial, information technology and human resources. He will receive a base salary of $570,000 a year plus a quarterly bonus that equals 0.8 percent of the amount that exceeds each of Fastenal's quarterly pretax earnings in 2014.
Last year, Oberton received a salary of $597,500, bonus pay of $867,564 and other compensation of $3,879. Under his new contract as CEO, he will not receive stock options and will no longer receive a monthly retainer for serving as board chairman, the SEC filing said.
Fastenal's stock rose 33 cents a share to close Monday at $42.19. The stock has dropped since January, where it had been trading above $47.40 a share. A year ago, the stock was trading at $50 a share.