Morningstar Selects Mark Miller of Stericycle Inc. as its 2009 CEO of the Year

Jan 06, 2010, 09:58 ET from Morningstar, Inc.

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:

For the complete list of past winners, go to:

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.

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