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Kathy Panagopouloskathy.panagopoulos@morningstar.com
Morningstar Names 2004 CEOs of the Year: Herbert and Marion Sandler of Golden West Financial Corporation

CHICAGO, Jan. 04, 2005 – Morningstar, Inc. today named as its 2004 CEOs of the Year the husband-wife management team of Golden West Financial Corporation (GDW), Herbert and Marion Sandler. The 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.

“Golden West may be one of the largest and most successful companies that few people have ever heard of,” said Patrick Dorsey, director of stock analysis for Morningstar. “Herb and Marion Sandler have created a phenomenal track record during the past four decades in a tough industry that is both commoditized and unpredictable. They run their business efficiently, allocate capital carefully, treat shareholders respectfully with excellent financial disclosure, and are compensated reasonably. It’s easy to see why we are delighted to name the Sandlers our 2004 CEOs of the Year.”

The Sandlers founded Golden West Financial Corporation, a thrift-holding company based in Oakland, Calif., in 1963. It operates 506 offices in 38 states, and its principal asset, World Savings Bank, is one of the nation’s largest savings institutions and home mortgage lenders. Golden West provides typical banking services--checking, savings, money market accounts, mutual funds, and annuities. Yet its focus on adjustable-rate mortgages (ARMs), which the company has been originating for more than 20 years, sets it apart from others because it helps the firm better manage interest rate sensitivity. In addition, Golden West stands out because it retains on its balance sheet the loans it originates in order to minimize volatility and increase profits.

The Sandlers have grown Golden West to become the nation’s second-largest savings and loan, behind Washington Mutual, with more than $100 billion in assets, and profits of more than $940 million during the first nine months of 2004.

In addition:

  • Golden West’s stock boasts an average total return of more than 20 percent for the past 20 years, compared with about 13 percent for the SandP 500 Index.
  • The company’s efficiency ratio (expenses as a percentage of revenues) of 29 percent is about half of the industry average of 57 percent.
  • Earnings per share have increased nearly 20 percent per year during the past 37 years.
  • The company is one of eight Fortune 500 companies with a female CEO, and one of two Fortune 500 companies where women constitute a majority of board members.

“Scrupulous corporate governance has recently come into vogue, yet for the Morningstar CEO of the Year contenders, it never went out of style,” Dorsey said. “The Sandlers of Golden West have created a company that is a paragon of corporate governance.”

In addition to the Sandlers, short-list contenders for Morningstar’s 2004 CEO of the Year award included: John Mackey, CEO of Whole Foods Market (WFMI); James Sinegal, co-founder, president and CEO of Costco (COST); and Richard Kinder, co-founder and CEO of Kinder Morgan Energy Partners (KMP) and Kinder Morgan (KMI). This is the third time Morningstar has considered Kinder for its CEO of the Year award.

The Morningstar CEO of the Year award, introduced in January 2000, recognizes leaders who maximize shareholder value and demonstrate independent thinking. Winners are chosen by Morningstar analysts, based on Morningstar’s independent research.

For the complete report, 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 the United States and in major international markets. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar tracks more than 100,000 investment offerings, including stocks, mutual funds, and similar vehicles. The company has operations in 16 countries.

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©2005 Morningstar, Inc. All rights reserved.

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