Executive Compensation and Other Information
Going forward, future advisory votes on executive compensation will serve as an additional tool to
guide the Board and the Compensation Committee in evaluating the alignment of the Companys executive compensation program with the interests of the Company and its stockholders.
2019 Executive Compensation Process
Role of the Compensation Committee. Under its charter, the Compensation Committee is responsible for (i) reviewing and approving our executive
compensation program, (ii) administering our long-term incentive plan, (iii) reviewing the Companys compensation programs in light of best practices and good corporate governance, (iv) reviewing and approving the Compensation
Discussion and Analysis section of our proxy statement, and (v) monitoring the Companys compensationrelated risk. As part of its evaluation process relating to NEO compensation, the Compensation Committee reviewed information
compiled by our compensation consultant as well as data compiled by the Company. At meetings held in October and November 2018 and February 2019, the Compensation Committee approved, and recommended to our Board of Directors for its ratification,
the 2019 executive compensation program, which included setting 2019 base salaries, approving the 2019 Corporate Incentive Plan, and approving equity incentive awards to be granted in 2019.
Role of Executives. Our CEO and General Counsel, as well as members of our Legal, Human Resources, and Finance Departments, assisted the Compensation
Committee and the Board in gathering the information needed for their respective reviews of our 2019 executive compensation program. The Compensation Committee and the Board also considered our CEOs recommendations for our executive officers
(other than himself) with respect to the 2019 executive compensation program.
Role of the Board of Directors. The Board of Directors is responsible
for reviewing and ratifying the decisions and recommendations of the Compensation Committee regarding our executive compensation program. In February 2019, after considering the decisions and recommendations of the Compensation Committee, the Board
ratified the 2019 executive officer compensation program.
Role of Compensation Consultants. Under its charter, the Compensation Committee is
authorized to engage independent outside advisors to assist it in discharging its responsibilities relating to executive compensation. In 2018, the Compensation Committee retained Meridian Compensation Partners, LLC (Meridian) to perform
a comprehensive review of our executive compensation program and to conduct market compensation comparisons for our executive officers in order to assist the Compensation Committee in designing our 2019 executive compensation program. The
Compensation Committee determined that Meridian is independent under applicable SEC rules. While the Compensation Committee takes Meridians advice on compensation matters into consideration, the Compensation Committee has the authority and
responsibility to make final decisions on our executive compensation program.
Market Comparisons. The Compensation Committee periodically examines
the competitiveness of our executive compensation program to determine how our compensation levels compare to our overall philosophy and target markets. In 2018, the Compensation Committee retained Meridian to assist in updating our Peer Group
(defined below) list for purposes of reviewing market compensation comparisons. In our case, peer selection is somewhat difficult due to the lack of publicly-traded companies with whom we compete and the absence of available data for privately-held
competitors. Therefore, we have expanded our Peer Group to include additional publicly-traded companies of generally similar size that serve additional end markets to provide a proxy for the market in which we compete for executive talent. Peer
selection is primarily focused on size based on revenues because that metric provides a reasonable point of reference for comparing similar positions and scope of responsibility. As a result of Meridians work, the Compensation Committee
updated the compensation Peer Group to include eight additional companies and to remove nine others. The Compensation Committee believes this revised Peer Group better reflects the pool of companies that we compete against for management talent as
well as the size of our business.
30 Builders FirstSource,
Inc. | 2020 Proxy Statement
Executive Compensation and Other Information
The following sections describe in greater detail each of the elements of our executive
compensation program, why they were selected, and how the amounts of each element were determined.
Base Salary
Base salary is designed to compensate the executive officers for their roles and responsibilities and to provide a stable and fixed level of compensation that serves as
a retention tool throughout the executives career. In determining base salaries, we generally consider each executives role and responsibilities, unique skills, the salary levels for similar positions in our Peer Group companies, and
internal pay equity.
For 2019, in expectation of a flattening housing market and as part of our ongoing cost control program, the Compensation Committee and our
executive team decided to freeze the salaries of most managers making over $100,000, including our executive officers. Accordingly, none of our NEOs received a salary increase in 2019.
In 2019, the salaries of our executive officers were as listed below and were within the following percentage ranges of our Peer Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2018 Salary
|
|
2019 Salary
|
|
Increase
|
|
Peer Group Range
|
Chad Crow
|
|
$ 950,000
|
|
$ 950,000
|
|
0.0%
|
|
25-50%
|
Peter Jackson
|
|
$ 525,000
|
|
$ 525,000
|
|
0.0%
|
|
25-50%
|
Dave Rush
|
|
$ 450,000
|
|
$ 450,000
|
|
0.0%
|
|
Approximately 50%
|
Scott Robins
|
|
$ 434,700
|
|
$ 434,700
|
|
0.0%
|
|
25-50%
|
Don McAleenan
|
|
$ 470,000
|
|
$ 470,000
|
|
0.0%
|
|
50-75%
|
Annual Cash Incentives
We provide annual cash incentive opportunities to our executive officers that are designed to reward the achievement of financial results measured over the current
fiscal year. The Compensation Committee selects the financial performance goals applicable to the annual incentive program, which are based on key financial metrics that are deemed critical to the Companys near-term success.
2019 Corporate Annual Incentive Plan. For 2019, the Compensation Committee decided to implement an annual cash incentive program for our corporate office
managers, including our NEOs, that was similar to the 2018 program. Under the 2019 Corporate Incentive Plan, a target bonus opportunity for each participant was set as a percentage of base salary determined by their position. Actual bonus amounts
that could be earned by our NEOs ranged from 0% (for performance below threshold levels) to a maximum of 200% (for performance above target levels) of their respective target bonus amounts. For 2019, the Compensation Committee set the target bonus
opportunity for each NEO at 100% of his base salary, as provided in each NEOs employment agreement. Under the 2019 Plan, 80% of an NEOs bonus potential was based solely on the Companys achievement of financial goals in 2019, while
the remaining 20% was based on achievement of certain key short-term operational objectives, as described below.
Specifically, the 2019 Corporate Incentive Plan
provided for bonuses for our NEOs based on the following metrics:
|
|
|
Metric
|
|
Weighting
|
Adjusted EBITDA
|
|
65%
|
Working Capital as a Percentage of Sales
|
|
15%
|
Operational Goals
|
|
20%
|
The Compensation Committee chose Adjusted EBITDA (as defined below) and Working Capital as a Percentage of Sales as the financial
performance goals under the 2019 Plan because it believes that these metrics provide an effective incentive to maximize financial performance and closely align management awards with Company performance and the financial interests of stockholders.
32 Builders FirstSource,
Inc. | 2020 Proxy Statement
Executive Compensation and Other Information
Adjusted EBITDA Metric. The 2019 Plan provided that 65% of the bonuses for Messrs.
Crow, Jackson, and McAleenan and 32.5% of the bonuses for Messrs. Rush and Robins were based on the amount of Adjusted EBITDA earned by the Company for the year as compared to the budgeted target amount of Adjusted EBITDA included in the
Companys 2019 AOP. The other 32.5% of the Adjusted EBITDA bonus component for Messrs. Rush and Robins was based on the amount of Adjusted EBITDA earned in 2019 by the regions for which they are operationally responsible as compared to the 2019
AOP. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, as adjusted for other non-recurring and/or non-cash
items.
The 2019 Plan provided that no bonuses would be earned under the Adjusted EBITDA component unless the Company achieved more than 70% of its Adjusted EBITDA
target included in the 2019 AOP, as set by the Board of Directors.
The following grid outlines the scaled bonus payments for this component of the 2019 Plan.
|
|
|
Adjusted EBITDA Targets
(65%
Weighting)
|
Target Levels
|
|
Percentage of Target Earned
|
Under $352 million
|
|
0%
|
$402 million
|
|
50%
|
$452 million
|
|
75%
|
$502 million
|
|
100%
|
$603 million
|
|
150%
|
$653 million
|
|
maximum 200%
|
The Adjusted EBITDA target included in the 2019 AOP was $502 million. As noted above, the Company achieved Adjusted EBITDA of
$516 million for fiscal year 2019, 2.9% above the AOP target. The following chart shows the 2019 performance of each NEO under the Adjusted EBITDA component of the 2019 Plan.
|
|
|
Adjusted EBITDA Actual Performance
(65%
Weighting)
|
Name
|
|
Percentage of Target Earned
|
Chad Crow
|
|
107.1%
|
Peter Jackson
|
|
107.1%
|
Dave Rush
|
|
119.1%
|
Scott Robins
|
|
92.8%
|
Don McAleenan
|
|
107.1%
|
The Adjusted EBITDA-related bonus amounts paid to our NEOs for 2019 are included in the
Non-Equity Incentive Plan Compensation column of the Summary Compensation Table in this Proxy Statement.
Working Capital Metric. Working capital is a measurement of the Companys operating liquidity and includes funds invested in accounts receivable,
product inventories, and accounts payable. The Compensation Committee set the Working Capital as a Percentage of Sales target under the 2019 Plan for the Corporate NEOs at 9.5%, because that matched the Companys budgeted working capital target
included in the 2019 AOP. This working capital target included both the regional working capital results, as well as working capital managed at the corporate level (e.g., checks outstanding, corporate accruals, and prepaid assets). If the actual
working capital percentage for the year was lower than the target, the bonus payment would increase. If the actual working capital percentage was higher than the target, the bonus payment would decrease. Under the 2019 Plan, the Company had to
achieve at least 70% of the 2019 working capital target (or a maximum of 12.2% Working Capital as a Percentage of Sales) to trigger any payment.
The Compensation
Committee set the working capital target for the Regional NEOs under the 2019 Plan as a Working Capital Days improvement over 2018. The two Regional NEOs were measured based on the operating Working Capital Days performance of their
respective regions, with targets set at 45.2 days for the East Region and 48.3 days for the West Region, because that matched the budgeted working capital target for each region
Builders
FirstSource, Inc. | 2020 Proxy Statement 33
Executive Compensation and Other Information
The Compensation Committee, in consultation with our CEO, set these objectives on a company-wide
basis, with the executive officers being responsible for their implementation. The performance of Messrs. Crow, Jackson, and McAleenan against these objectives was based on the overall performance of the Company as a whole during 2019. The
performance of Mr. Rush and Mr. Robins against these objectives for 2019 was based on the performance of the regions for which they are responsible. The following charts show the 2019 performance of each NEO against the various operational
objectives set by the Compensation Committee.
|
|
|
Operational Objectives Actual Performance
(20%
Weighting)
|
Name
|
|
Percentage of Target Earned
|
Chad Crow
|
|
91.5%
|
Peter Jackson
|
|
91.5%
|
Dave Rush
|
|
81.5%
|
Scott Robins
|
|
102.0%
|
Don McAleenan
|
|
91.5%
|
As a result of the Companys 2019 financial performance, as well as the substantial achievement by our executive team of the
operational objectives described above, our NEOs received aggregate bonuses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
2019 Salary
|
|
2019 Target Bonus
|
|
Percentage of 2019 Target
Bonus Earned
|
Chad Crow
|
|
$ 950,000
|
|
100%
|
|
105.9%
|
Peter Jackson
|
|
$ 525,000
|
|
100%
|
|
105.9%
|
Dave Rush
|
|
$ 450,000
|
|
100%
|
|
108.7%
|
Scott Robins
|
|
$ 434,700
|
|
100%
|
|
92.3%
|
Don McAleenan
|
|
$ 470,000
|
|
100%
|
|
105.9%
|
The bonus amounts paid to our NEOs for 2019 are included in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table in this Proxy Statement.
Long-Term Equity Incentives
A key component of our executive compensation program consists of rewards for long-term strategic accomplishments and enhancement of long-term
stockholder value through the use of equity-based incentives. We believe that long-term incentive compensation performs an essential role in attracting and retaining talented executives and providing them with incentives to maximize stockholder
value. Restricted stock unit (RSU) awards and stock options have historically been the primary long-term incentive vehicles that we use in our executive compensation program. In 2019, the Compensation Committee decided to grant PRSUs and
TRSUs, consistent with our practice in recent years. These award vehicles were selected by the Compensation Committee due to their retention value and the performance link to our stock price.
Effective March 1, 2019, the Compensation Committee and the Board approved RSU awards to key managers, including our NEOs, in order to promote retention and
provide incentive to management to maximize the Companys financial performance over an extended period. 50% of the RSU grants are time-vesting and the other 50% vest contingent on the achievement of performance metrics, as described below:
|
|
|
Time-Vesting. The TRSUs vest over three years in equal annual installments.
|
|
|
|
Performance-Vesting. The PRSUs vest in full on the third anniversary of the grant date based on
the Companys achievement of annual and three-year ROIC targets, with the payout subject to a modifier in the event that the Companys TSR significantly outperforms or underperforms the TSR of our Peer Group over the three-year measurement
period.
|
The Compensation Committee chose the above performance metrics for 50% of the RSU grants to each NEO in order to (i) incentivize our
executive team to grow the Companys ROIC in conjunction with the Adjusted EBITDA and Working Capital financial metrics applicable to our 2019 Corporate Incentive Plan, and (ii) ensure that our
Builders
FirstSource, Inc. | 2020 Proxy Statement 35
Executive Compensation and Other Information
For each tranche, payout would begin at 50% at the minimum performance goal, would increase to
100% at the full payout target, and would be capped at 200% at the maximum target. There will be no payout for a tranche where the minimum goal is not met. Payout percentages between targets would be determined by linear interpolation. The payout
scale is set forth in the following table.
|
|
|
|
|
|
|
Tranche
|
|
Minimum
(50% Payout)
|
|
Full
Payout
(100% Payout)
|
|
Maximum
(200% Payout)
|
2019 ROIC
|
|
2018 Actual ROIC
|
|
2018 Actual ROIC
+ 7.5% Improvement
|
|
2018 Actual ROIC
+ 17.5% Improvement
|
2020 ROIC
|
|
2019 Actual ROIC
|
|
2019 Actual ROIC
+ 7.5% Improvement
|
|
2019 Actual ROIC
+ 17.5% Improvement
|
2021 ROIC
|
|
2020 Actual ROIC
|
|
2020 Actual ROIC
+ 7.5% Improvement
|
|
2020 Actual ROIC
+ 17.5% Improvement
|
3-year Avg. ROIC
|
|
2018 Actual ROIC
+ 7.5% Improvement
|
|
3-year Avg. Minimum Target
+ 7.5% Improvement
|
|
3-year Avg. Minimum Target
+ 17.5% Improvement
|
As shown in the above grid, for each of the annual tranches, (i) minimum payout requires hitting the actual ROIC performance for
the prior year, (ii) target payout is based on achieving the actual ROIC performance for the prior year plus a 7.5% improvement, and (iii) maximum payout would require generating a 17.5% improvement over the actual ROIC performance for the
prior year. For the three-year average tranche, (i) the minimum payout threshold is a 7.5% improvement over actual 2018 ROIC, (ii) the target payout is a 7.5% increase over that minimum target, and (iii) the maximum target is a 17.5%
increase above the minimum payout threshold.
As mentioned above, the Companys TSR measured over the three-year vesting period of the awards will be used as a
modifier rather than a primary metric. If the Companys TSR is in the bottom two of the selected peer group of eight companies, the payout based on the ROIC percentage will be reduced by 10%. If the Companys TSR is in the top two of that
group, the payout based on the ROIC percentage will be increased by 10%. For this purpose, the peer group will not be the same as the Peer Group used for executive compensation and shown earlier in this Proxy Statement. It will be focused on
companies whose businesses are the most similar to ours and, correspondingly, have stock prices that should perform more like the Companys stock price relative to general fluctuations in the economy.
Any payouts generated by the 2019 and 2020 tranches would be subject to additional time-based vesting requirements such that they would vest in each of the annual 2019,
2020, and 2021 tranches upon the conclusion of the three-year performance period based on achievement of the ROIC and TSR performance goals for each tranche, provided that our NEOs remain employed by the Company for the full three-year period of the
grant.
Executive Benefits and Perquisites
The Company seeks to maintain an egalitarian culture in its facilities and operations. The Company does not provide its executive officers with perquisites or special
benefits that are not available to other employees. Company-provided air travel for officers is for business purposes only and is by commercial air carriers. The Companys health care, insurance, 401(k) plan (including Company matching
contributions), and other welfare and employee-benefit programs are the same for all eligible employees, including the NEOs, except that employees making over $100,000 annually make higher monthly contributions for their health insurance benefits.
The benefits provided to our named executive officers during 2019 are set forth in the All Other Compensation column of the Summary Compensation
Table later in this Proxy Statement.
Builders
FirstSource, Inc. | 2020 Proxy Statement 37
Executive Compensation and Other Information
2019 Option Exercises and Stock Vested
The following table provides information regarding the vesting of restricted stock awards and the exercise of stock options held by our NEOs in 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
Number of
Shares
Acquired
on Exercise
(#)
|
|
|
Value Realized
on Exercise
($)(1)
|
|
|
Number of
Shares
Acquired
on Vesting
(#)
|
|
|
Value Realized
on Vesting
($)(2)
|
|
M. Chad Crow
|
|
|
76,423
|
|
|
|
674,724
|
|
|
|
107,647
|
|
|
|
1,362,574
|
|
Peter M. Jackson
|
|
|
|
|
|
|
|
|
|
|
11,163
|
|
|
|
156,617
|
|
David E. Rush
|
|
|
12,000
|
|
|
|
202,316
|
|
|
|
14,295
|
|
|
|
176,607
|
|
Scott L. Robins
|
|
|
|
|
|
|
|
|
|
|
13,800
|
|
|
|
173,974
|
|
Donald F. McAleenan
|
|
|
116,327
|
|
|
|
1,222,182
|
|
|
|
36,200
|
|
|
|
446,569
|
|
1.
|
Reflects the value as calculated by the difference between the market price of our Common Stock at the time of the
exercise and the exercise price of the stock options, multiplied by the number of options exercised.
|
2.
|
Reflects the value as calculated by multiplying the number of shares of stock by the closing market price of our Common
Stock on the date of vesting.
|
Potential Payments Upon Termination or Change in Control
As described above in Employment Agreements, we entered into employment agreements with our NEOs, which, among other things, provide benefits to them in the
event of a termination of employment under certain circumstances.
Termination by the Corporation Without Cause; Certain Terminations by the
Executive; Non-Renewal of Employment Agreement; Mutual Consent to Termination. Under each of these employment agreements, in the event that (i) the
executives employment is terminated by us without cause (as defined in the employment agreement), (ii) the executive terminates his employment because of a material adverse diminution in job title or responsibilities or a
relocation of his principal place of employment more than 100 miles from its current location without his consent, (iii) we notify the executive of our intent not to renew the employment agreement and the executive delivers a notice
of resignation (as defined in the employment agreement) within 90 days of receipt of the notice of non-renewal, or (iv) the executives employment is terminated by mutual consent and the
parties enter into an agreement whereby the executive agrees to be bound by the post-termination restrictive covenants in the agreement (described below), the executive will be entitled to continuation of his base salary and health benefits for one
year after the date of termination plus payment of an amount equal to his average bonus compensation (defined in the employment agreements as an amount equal to the average of the annual bonus amounts earned by the executive under the
Corporations annual incentive plan during the two most recent fiscal years ended prior to the executives date of termination).
Termination by
Reason of Executives Death or Disability. The employment agreements also provide that, upon the executives termination of employment by reason of his death or disability, the executive (or his beneficiaries)
will be entitled to continuation of his base salary and health benefits for one year after the date of termination. In the event of executives disability, this amount will be reduced by the proceeds of any short- and/or long-term disability
payments the executive receives under the Corporations plans.
Restrictive Covenants. During the executives employment
with us and for one year thereafter, the executive may not disclose confidential information and may not directly or indirectly compete with the Corporation. In addition, the executive may not solicit or hire any employees of the Corporation or any
of its subsidiaries during his employment with us and for two years thereafter.
44 Builders FirstSource,
Inc. | 2020 Proxy Statement
Proposal 2 Advisory Vote on Executive Compensation
PROPOSAL 2 ADVISORY VOTE ON
EXECUTIVE COMPENSATION
As required by Section 14A of the Securities Exchange Act, this proposal provides stockholders with an opportunity to cast a
non-binding, advisory vote on the 2019 compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the disclosure rules of the Securities and Exchange Commission. This
proposal, commonly known as a say on pay proposal, gives stockholders the opportunity to approve, reject, or abstain from voting with respect to our fiscal 2019 executive compensation program.
At the 2019 annual meeting of stockholders, over 98% of the shares represented at the meeting in person or by proxy and entitled to vote were voted in support of the
Corporations compensation program. At the 2017 annual meeting of stockholders, the Corporations stockholders selected, on a non-binding, advisory basis, an annual vote for the frequency at which the Corporation should include a say on
pay vote in its proxy statement for stockholder consideration. In light of this result and other factors considered by the Board, the Board determined that the Corporation will hold say on pay votes every year until the next required non-binding,
advisory vote on the frequency of such votes, which is required to be held no later than the Corporations 2023 annual meeting of stockholders.
As discussed
in the Compensation Discussion and Analysis section of this Proxy Statement, our 2019 executive compensation program has been designed to provide a total compensation package that allows us to attract, retain, and motivate executives who
have the talent to capably manage our business.
Our compensation program is intended to:
|
|
|
Provide total compensation opportunities at levels that are competitive for comparable positions at companies with whom we
compete for talent,
|
|
|
|
Provide incentives to our executive officers to achieve key financial objectives set by the Board,
|
|
|
|
Provide an appropriate mix of fixed and variable pay components to establish a pay-for-performance oriented compensation program,
|
|
|
|
Align the financial interests of executives with stockholder interests by providing significant compensation opportunities
in the form of equity awards, and
|
|
|
|
Emphasize direct pay components such as cash and equity and avoid indirect compensation such as benefits and perquisites
that are not available to employees generally.
|
This proposal allows our stockholders to express their opinions regarding the decisions of the
Board and the Compensation Committee on the annual compensation for the NEOs in 2019. This advisory vote will serve as an additional tool to guide the Board and the Compensation Committee in evaluating the alignment of the Corporations
executive compensation program with the interests of the Corporation and its stockholders. Approval of this proposal requires the affirmative vote of the holders of a majority of the shares represented and entitled to vote on this proposal at the
annual meeting.
Because the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any NEO and will not be
binding on or overrule any decisions by the Board. The Compensation Committee and the Board will consider the outcome of the vote when setting future compensation arrangements for our NEOs.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR APPROVAL OF THE 2019 EXECUTIVE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
Builders
FirstSource, Inc. | 2020 Proxy Statement 47
Other Matters
OTHER MATTERS
The Board of Directors knows of no other matters to be acted upon at the meeting, but if any matters properly come before the meeting that are not specifically set
forth in the Notice, on the proxy card, and in this Proxy Statement, it is intended that the persons voting the proxies will vote in accordance with their best judgments.
By Order of the Board of Directors,
Donald F. McAleenan
Corporate Secretary
April 28, 2020
Builders
FirstSource, Inc. and the Builders FirstSource logo are trademarks or service marks of an affiliate of
Builders FirstSource, Inc. © 2020 Builders FirstSource, Inc. All rights reserved.
Builders
FirstSource, Inc. | 2020 Proxy Statement 57
ANNUAL MEETING OF BUILDERS FIRSTSOURCE, INC. Annual Meeting of Builders
FirstSource, Inc. Date: Wednesday, June 17, 2020 to be held on Wednesday, June 17, 2020 Time: 9:00 A.M. (Central Daylight Time) for Holders as of April 24, 2020 Place: 2001 Br yan Street, Suite 1600, Dallas, Texas 75201 See Voting Instruction on
Reverse Side. This proxy is being solicited on behalf of the Board of Directors VOTE BY: Please make your marks like this: Use dark black pencil or pen only INTERNET TELEPHONE Call The Board of Directors recommends a vote FOR the election of the Go
To 866-490-6854 director nominees in proposal 1 and FOR proposals 2 and 3. www.proxypush.com/BLDR • Use any touch-tone telephone. • Cast your vote online. OR Directors • Have your Proxy Card/V oting Instruction Form ready. 1:
Election of Directors Recommend • View meeting documents. For Withhold • Follow the simple recorded instructions. MAIL 01 Paul S. Levy For For 02 Cleveland A. Christophe • Mark, sign and date your Proxy Card/V oting Instruction
Form. OR • Detach your Proxy Card/V oting Instruction Form. 03 Craig A. Steinke For • Return your Proxy Card/V oting Instruction Form in the For Against Abstain postage-paid envelope provided. 2: Advisory vote on the compensation of the
For The undersigned hereby appoints Donald F. McAleenan and Peter M. Jackson, and each of them, as the true and named executive officers. lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes each of
them to vote all the shares of capital stock of Builders FirstSource, Inc. that the undersigned is entitled to vote at said 3: Ratification of the appointment of For meeting and any adjournment thereof upon the matters specified and upon such other
matters as may be properly PricewaterhouseCoopers LLP as our brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys independent registered public accounting to vote in their discretion on such
other matters as may properly come before the meeting and revoking any proxy firm for the year 2020. heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED FOR THE ELECTION
OF THE DIRECTOR NOMINEES IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. All votes must be received by 8:00 A.M., Eastern Daylight Time, June 17, 2020. PROXY TABULATOR FOR BUILDERS FIRSTSOURCE, INC. To attend the meeting and vote your shares P.O. BOX 8016
in person, please mark this box. CARY, NC 27512-9903 Authorized Signatures - This section must be completed for your Instructions to be executed. Please Sign Here Please Date Above Please Sign Here Please Date Above Please sign exactly as your
name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer
signing the proxy. *As part of the precautions taken by Builders FirstSource, Inc. (the “Company”) regarding the coronavirus or COVID-19, the Company is planning for the possibility that the Annual Meeting may be held by means of remote
communication only (i.e., a virtual meeting). If the Company takes this step, or if the time, date or place of the Annual Meeting will be changing, the Company will announce the decision to do so in advance, and details on how to participate will be
available on the investor relations page of the Company’s website (https://investors.bldr.com). Please separate carefully at the perforation and return just this portion in the envelope provided.ANNUAL MEETING OF BUILDERS FIRSTSOURCE, INC.
Annual Meeting of Builders FirstSource, Inc. Date: Wednesday, June 17, 2020 to be held on Wednesday, June 17, 2020 Time: 9:00 A.M. (Central Daylight Time) for Holders as of April 24, 2020 Place: 2001 Br yan Street, Suite 1600, Dallas, Texas 75201
See Voting Instruction on Reverse Side. This proxy is being solicited on behalf of the Board of Directors VOTE BY: Please make your marks like this: Use dark black pencil or pen only INTERNET TELEPHONE Call The Board of Directors recommends a vote
FOR the election of the Go To 866-490-6854 director nominees in proposal 1 and FOR proposals 2 and 3. www.proxypush.com/BLDR • Use any touch-tone telephone. • Cast your vote online. OR Directors • Have your Proxy Card/V oting
Instruction Form ready. 1: Election of Directors Recommend • View meeting documents. For Withhold • Follow the simple recorded instructions. MAIL 01 Paul S. Levy For For 02 Cleveland A. Christophe • Mark, sign and date your Proxy
Card/V oting Instruction Form. OR • Detach your Proxy Card/V oting Instruction Form. 03 Craig A. Steinke For • Return your Proxy Card/V oting Instruction Form in the For Against Abstain postage-paid envelope provided. 2: Advisory vote on
the compensation of the For The undersigned hereby appoints Donald F. McAleenan and Peter M. Jackson, and each of them, as the true and named executive officers. lawful attorneys of the undersigned, with full power of substitution and revocation,
and authorizes each of them to vote all the shares of capital stock of Builders FirstSource, Inc. that the undersigned is entitled to vote at said 3: Ratification of the appointment of For meeting and any adjournment thereof upon the matters
specified and upon such other matters as may be properly PricewaterhouseCoopers LLP as our brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys independent registered public accounting to
vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy firm for the year 2020. heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN,
SHARES WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. All votes must be received by 8:00 A.M., Eastern Daylight Time, June 17, 2020. PROXY TABULATOR FOR BUILDERS FIRSTSOURCE, INC. To attend the
meeting and vote your shares P.O. BOX 8016 in person, please mark this box. CARY, NC 27512-9903 Authorized Signatures - This section must be completed for your Instructions to be executed. Please Sign Here Please Date Above Please Sign Here Please
Date Above Please sign exactly as your name(s) appears on your stock certificate. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of
corporation and title of authorized officer signing the proxy. *As part of the precautions taken by Builders FirstSource, Inc. (the “Company”) regarding the coronavirus or COVID-19, the Company is planning for the possibility that the
Annual Meeting may be held by means of remote communication only (i.e., a virtual meeting). If the Company takes this step, or if the time, date or place of the Annual Meeting will be changing, the Company will announce the decision to do so in
advance, and details on how to participate will be available on the investor relations page of the Company’s website (https://investors.bldr.com). Please separate carefully at the perforation and return just this portion in the envelope
provided.
Please separate carefully at the perforation and return just this portion in
the envelope provided. Revocable Proxy — Builders FirstSource, Inc. Annual Meeting of Stockholders June 17, 2020 9:00 a.m. (Central Daylight Time) This Proxy is Solicited on Behalf of the Board of Directors The undersigned appoints Donald F.
McAleenan and Peter M. Jackson, each with full power of substitution, to act as proxies for the undersigned, and to vote all shares of common stock of Builders FirstSource, Inc. that the undersigned is entitled to vote at the Annual Meeting of
Stockholders on Wednesday, June 17, 2020, at 9:00 a.m. at the offices of Builders FirstSource, Inc. at 2001 Bryan Street, Suite 1600, Dallas, Texas 75201, and any and all adjournments thereof, as set forth below. This proxy is revocable and will be
voted as directed. However, if no instructions are specified, the proxy will be voted FOR the election of the director nominees specified in Proposal 1 and FOR Proposals 2 and 3. (CONTINUED AND TO BE SIGNED ON REVERSE SIDE)Please separate carefully
at the perforation and return just this portion in the envelope provided. Revocable Proxy — Builders FirstSource, Inc. Annual Meeting of Stockholders June 17, 2020 9:00 a.m. (Central Daylight Time) This Proxy is Solicited on Behalf of the
Board of Directors The undersigned appoints Donald F. McAleenan and Peter M. Jackson, each with full power of substitution, to act as proxies for the undersigned, and to vote all shares of common stock of Builders FirstSource, Inc. that the
undersigned is entitled to vote at the Annual Meeting of Stockholders on Wednesday, June 17, 2020, at 9:00 a.m. at the offices of Builders FirstSource, Inc. at 2001 Bryan Street, Suite 1600, Dallas, Texas 75201, and any and all adjournments thereof,
as set forth below. This proxy is revocable and will be voted as directed. However, if no instructions are specified, the proxy will be voted FOR the election of the director nominees specified in Proposal 1 and FOR Proposals 2 and 3. (CONTINUED AND
TO BE SIGNED ON REVERSE SIDE)