UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

Notice of Annual Meeting

of Stockholders and

20202021 Proxy Statement

The Annual Meeting of Stockholders

of Builders FirstSource, Inc. will be held:

Wednesday,Tuesday, June 17, 202015, 2021 at 9:00 a.m. local time

Builders FirstSource, Inc.Sheraton Dallas Hotel

2001 Bryan400 North Olive Street Suite 1600

Dallas, Texas 75201

To our Fellow Stockholders,

You are cordially invited to attend the annual meeting of stockholders of Builders FirstSource, Inc., which will take place at the corporate headquarters of Builders FirstSource, Inc. at 2001 BryanSheraton Dallas Hotel, 400 North Olive Street, Suite 1600, Dallas, Texas 75201 on Wednesday,Tuesday, June 17, 2020,15, 2021, at 9:00 a.m., local time. Details of the business to be conducted at the annual meeting are given in the Notice of Annual Meeting of Stockholders, Proxy Statement, Notice Regarding the Availability of Proxy Materials, and form of proxy.

We demonstrated resilience throughout 2020 despite the unprecedented challenges of the COVID-19 pandemic, and ultimately we emerged as a stronger company. We are proud of the way our management team and team members responded to this challenging environment to meet the evolving needs of our suppliers, customers, and communities. Our Board of Directors was also actively engaged in these endeavors, consulting frequently with executive management and providing robust oversight and guidance as we navigated these complexities, while remaining focused on delivering long-term value to our stockholders.

We also completed our transformational strategic merger with BMC Stock Holdings, Inc. (“BMC”) on January 1, 2021, which created the nation’s premier supplier of building materials and services. As a result of the merger, we welcomed five former BMC directors to our Board of Directors, including Dave Flitman, who succeeded Chad Crow as our chief executive officer on April 1, 2021. We believe that our company will benefit significantly from a combined leadership team and Board of Directors that brings together the best of both BMC and Builders FirstSource. Our mission is to be the leading supplier of building materials and services to homebuilders by promoting a people-first culture that delivers exceptional customer service and innovative solutions to help build more efficiently, thereby creating superior value for stakeholders. While meaningful work remains, we have made significant strides in laying the foundation for a successful integration as we enter the next chapter of growth.

Your vote is important to us. Even if you intend to join us in person, we encourage you to vote in advance so we will know we have a quorum of stockholders for the meeting. When you vote in advance, please indicate your intention to personally attend the annual meeting. Please see the Question and Answer section on page 43 of the Proxy Statement for instructions if you plan to personally attend the annual meeting.

Whether or not you are able to personally attend the annual meeting, it is important that your shares be represented and voted. Your prompt vote over the internet, by telephone via toll-free number, or, for stockholders who elect to receive their proxy materials by mail, by written proxy, will save the Corporation the expense and extra work of additional proxy solicitation. Voting by any of these methods at your earliest convenience will ensure your representation at the annual meeting if you choose not to attend in person. If you decide to attend the annual meeting, you will be able to vote in person, even if you have previously submitted your proxy. Please review the instructions on the Notice Regarding the Availability of Proxy Materials, the proxy card, or the information forwarded by your bank, broker, or other stockholder of record, as applicable, concerning each of these voting options.

On behalf of the Board of Directors Iand the executive management team, we would like to express our appreciation for your continued interest in the affairs of Builders FirstSource, Inc.

Paul S. Levy

Chairman of the Board

David E. Flitman

Chief Executive Officer and President

April 28, 202029, 2021

2001 Bryan Street, Suite 1600, Dallas, Texas 75201

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To our Stockholders:

The annual meeting of stockholders of Builders FirstSource, Inc. will take place at the corporate headquarters of Builders FirstSource, Inc. at 2001 BryanSheraton Dallas Hotel, 400 North Olive Street, Suite 1600, Dallas, Texas 75201⁽¹⁾ on Wednesday,Tuesday, June 17, 2020,15, 2021, at 9:00 a.m., local time, for the purpose of considering and acting upon the following:

Only stockholders of record at the close of business on April 24, 202023, 2021 will be entitled to vote at the meeting.

Directions to be able to attend the meeting and vote in person may be obtained by contacting the Corporation’s legal department at (214)880-3500.

By Order of the Board of Directors,

Donald F. McAleenanTimothy D. Johnson

Corporate Secretary

April 28, 202029, 2021

IMPORTANT:

Please see the Question and Answer section on page 43 of this Proxy Statement for instructions on what you need to do to attend the annual meeting in person. Please note that the doors to the annual meeting will open at 8:30 a.m. and will close promptly at 9:00 a.m. Whether or not you expect to personally attend, we urge you to vote your shares at your earliest convenience to ensure the presence of a quorum at the meeting. Promptly voting your shares via the internet, by telephone via toll-free number, or, if you elect to receive your proxy materials by mail, by signing, dating, and returning the enclosed proxy card, will save us the expense and extra work of additional proxy solicitation. Because your proxy is revocable at your option, submitting your proxy now will not prevent you from voting your shares at the meeting if you desire to do so. Please refer to the voting instructions included on the Notice Regarding the Availability of Proxy Materials, proxy card, or voting instructions forwarded by your bank, broker, or other stockholder of record, as applicable.

Table of Contents

TABLE OF CONTENTS

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Table of Contents

ii    Builders FirstSource, Inc.  |  20202021 Proxy Statement

2001 Bryan Street, Suite 1600, Dallas, Texas 75201

PROXY STATEMENT

Annual Meeting of Stockholders

June 17, 202015, 2021

This Proxy Statement is being furnished by Builders FirstSource, Inc. (the “Corporation,” the “Company,” or “Builders FirstSource”) in connection with a solicitation of proxies by its Board of Directors (the “Board of Directors” or the “Board”) to be voted at the annual meeting of the Corporation’s stockholders to be held on June 17, 202015, 2021 (the “annual meeting” or “meeting”). Whether or not you personally attend, it is important that your shares be represented and voted at the annual meeting. Most stockholders have a choice of voting over the internet, by using a toll-free telephone number, or, for stockholders who elect to receive their proxy materials by mail, by completing a proxy card and mailing it in the postage-paid envelope provided. Check the Notice Regarding the Availability of Proxy Materials, your proxy card, or the information forwarded by your bank, broker, or other stockholder of record, as applicable, to determine which voting options are available to you. Please be aware that if you vote over the internet, you may incur costs, such as telecommunication and internet access charges, for which you will be responsible. The internet voting and telephone voting facilities for stockholders of record will be available until 8:00 a.m. eastern daylight timeEastern Time on June 17, 2020.15, 2021. The Notice Regarding the Availability of Proxy Materials will first be mailed on or about May 7, 2020.6, 2021.

SOLICITATION AND RATIFICATION OF PROXIES

If any matters not specifically set forth in this Proxy Statement properly come to a vote at the meeting, the members of the Proxy Committee, comprised of Donald F. McAleenan and Peter M. Jackson, will vote regarding those matters in accordance with their best judgments. If a proxy card is signed and returned, it will be voted as specified on the proxy card, or, if no vote is specified, it will be voted “FOR” all nominees presented in Proposal 1 and “FOR” Proposals 2 and 3. At any time before it is exercised, you may revoke your proxy by timely delivery of written notice to the Corporate Secretary, by timely delivery of a properly executed, later-dated proxy (including by internet or telephone vote), or by voting via ballot at the annual meeting. Voting in advance of the annual meeting will not limit your right to vote at the annual meeting if you decide to attend in person. If you are a beneficial owner, but your shares are registered in the name of a bank, broker, or other stockholder of record, to be able to vote in person at the annual meeting you must obtain, from the stockholder of record, a proxy in your name and present it at the meeting. See “Questions and Answers about the Meeting and Voting” in this Proxy Statement for an explanation of the term “stockholder of record.”

The proxy accompanying this Proxy Statement is being solicited by the Board of Directors. The Corporation will bear the entire cost of this solicitation, including the preparation and delivery of this Proxy Statement, the proxy, and any additional information furnished to stockholders. In addition to using the mail and the internet, proxies may be solicited by directors, executive officers, and other employees of Builders FirstSource or its subsidiaries, in person or by telephone. No additional compensation will be paid to directors, executive officers, or other employees for their services in this regard. Builders FirstSource will also request banks, brokers, and other stockholders of record to forward proxy materials, at the Corporation’s expense, to the beneficial owners of the Corporation’s shares.

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General Information about Proxies and Voting

GENERAL INFORMATION ABOUT PROXIES AND VOTING

Outstanding Stock

The stockholders of record of Builders FirstSource, Inc. Common Stock (“Common Stock”) at the close of business on April 24, 202023, 2021 will be entitled to vote in person or by proxy at the annual meeting. At that time, the Corporation had 116,610,833207,112,585 outstanding shares of its Common Stock. Each stockholder will be entitled to one vote in person or by proxy for each share of Common Stock held. A quorum for the transaction of business shall be constituted by the presence at the annual meeting, in person or by proxy, of a majority of the outstanding shares of Common Stock entitled to vote.vote thereat. All shares for which proxies or voting instructions are returned are counted as present for purposes of determining the existence of a quorum at the annual meeting.

Internet Availability of Proxy Materials

As permitted by the Federalfederal securities laws, Builders FirstSource is making this Proxy Statement and 20192020 Annual Report on Form10-K (the “2019“2020 Annual Report”) available to its stockholders primarily via the internet instead of mailing printed copies of these materials to each stockholder. On or about May 7, 2020,6, 2021, we will mail to our stockholders (other than those who previously requested electronic or paper delivery) a Notice Regarding Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access the Proxy Statement and accompanying 20192020 Annual Report. These proxy materials will be made available to our stockholders on or about May 7, 2020.6, 2021. The Notice provides instructions regarding how to vote through the internet. The Proxy Statement and 20192020 Annual Report are also available on our website at www.bldr.com.

If you received a Notice by mail, you will not receive a printed copy of the proxy materials by mail unless you request printed materials. If you wish to receive printed proxy materials, you should follow the instructions for requesting such materials contained on the Notice.

If you receive more than one Notice, it means your shares are registered differently and are held in more than one account. To ensure all shares are voted, please either vote each account over the internet or by telephone or sign and return by mail all proxy cards.

Voting ProceduresMatters and Board Recommendations

Votes cast by proxy or in person at theAt this year’s annual meeting, will be tabulated by representatives from Mediant Communications Inc. Mediant Communications Inc., or such other person that the Chief Executive Officer appoints in their place, will serve as the Inspector of Election at the annual meeting. In addition,we are asking our stockholders to vote on the following voting procedures will be in effect for each proposal described in this Proxy Statement:matters:

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Questions and Answers about the Meeting and Voting

QUESTIONS AND ANSWERS ABOUT THE MEETING AND VOTING

What is a proxy?

A proxy is your legal designation of another person, called a proxy holder, to vote the shares that you own. We designated Donald F. McAleenan,Timothy D. Johnson, our SeniorExecutive Vice President and General Counsel, and Peter M. Jackson, our SeniorExecutive Vice President and Chief Financial Officer, to act as proxy holders at the annual meeting as to all shares for which proxy cards are returned or voting instructions are provided by internet or telephone.

What is a proxy statement?

A proxy statement is a document that the Securities and Exchange Commission (the “SEC”) regulations require us to give you when we ask you to provide a proxy (by voting by phone or internet or, if applicable, by returning a proxy card) designating the proxy holders described above to vote on your behalf.

What is the difference between a stockholder of record and a stockholder who holds stock in street name, also called a “beneficial owner?”

If your shares are registered in your name at our transfer agent, Computershare Investor Services, you are a stockholder of record.

If your shares are registered at Computershare Investor Services in the name ofheld through a broker, bank, trustee, nominee, or other similar stockholder of record on your behalf, your shares are held in street name and you are the beneficial owner of the shares.

How do you obtain admission to the annual meeting?

Stockholders of Record. Stockholders of record must bring a government-issued photo identification card to gain admission to the annual meeting.

Street Name Holders. To obtain admission to the annual meeting, a street name holder must (i) bring a government-issued photo identification card and (ii) ask his or her broker or bank for a legal proxy and must bring that legal proxy with him or her to the meeting. If you do not receive the legal proxy in time, bring your most recent brokerage statement with you to the meeting. We can use that to verify your ownership of Common Stock and admit you to the meeting. However, you will not be able to vote your shares at the meeting without a legal proxy. Please note that if you own shares in street name, and you are issued a legal proxy, any previously executed proxy will be revoked, and your vote will not be counted unless you appear at the meeting and vote in person.

Could COVID-19 or related developments affect the Corporation’s ability to hold an in-person meeting?

We are actively monitoring the COVID-19 situation. In the event that it is inadvisable or not possible to hold our annual meeting in person, we may decide instead to hold a virtual annual meeting that is accessible only through the internet. If we decide to use that format, we will announce the decision to do so in advance via press release, and details on how to participate will be available on the investor relations page of the Corporation’s website (https://investors.bldr.com).

What different methods can you use to vote?

By Written Proxy.Stockholders.Stockholders who elect to receive their proxy materials by mail may vote by mailing the written proxy card.

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Questions and Answers about the Meeting and Voting

By Telephone and Internet Proxy. All stockholders of record may also vote by telephone from the U.S., using the toll-free telephone number provided on the proxy card or in the website listed on the Notice, or by the internet, using the procedures and instructions described in the Notice or proxy card. Street name holders may vote by telephone or the internet if their bank, broker, or other stockholder of record makes those methods available. If that is the case, the bank, broker, or other stockholder of record will enclose the instructions with the Proxy Statement or other notice of the meeting. The telephone and internet voting procedures, including the use of control numbers, are designed to authenticate stockholders’ identities, allow stockholders to vote their shares, and confirm that their instructions have been properly recorded.

In Person. All stockholders may vote in person at the meeting (unless they are street name holders without a legal proxy, as described in the foregoing question).

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Questions and Answers about the Meeting and Voting

What are your voting choices on the advisory vote to approve the 20192020 compensation of the Corporation’s named executive officers, including the Corporation’s compensation practices and principles and their implementation?

In thenon-binding vote to approve the 20192020 compensation of the Corporation’s named executive officers, including the Corporation’s compensation practices and principles and their implementation, as discussed and disclosed in this Proxy Statement, stockholders may:

This proposal requires the affirmative vote of a majority of the votes represented and entitled to vote at the annual meeting. Accordingly, abstentions have the effect of a vote “against” Proposal 2. This is an advisory vote, and, as such, is not binding on the Board or the Compensation Committee. However, the Board and the Compensation Committee will consider the results of the vote when setting the compensation of the Corporation’s executive officers in the future.

What are your voting choices on the ratification of the appointment of PricewaterhouseCoopers LLP as the Corporation’s independent registered public accounting firm, and what vote is needed to ratify their appointment?

On the vote on the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year 2020,2021, stockholders may:

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Questions and Answers about the Meeting and Voting

HowWhat are brokernon-votes and how are they counted?

If aAlthough your broker or otheris the record holder of any shares returnsthat you hold in street name, it must vote those shares pursuant to your instructions. If you do not provide instructions, your broker may exercise discretionary voting power over your shares for “routine” items but not for “non-routine” items. All matters described in this Proxy Statement, except for the ratification of the appointment of our independent auditor, are considered to be non-routine matters. “Broker non-votes” occur with respect to a proxy card indicating that it doesnon-routine matter when shares held of record by a broker are not have discretionaryvoted on such matter because the beneficial owner has not provided voting instructions and the broker either lacks or declines to exercise the authority to vote as to a particular matter (“brokerthe shares in its discretion.

Broker non-votes”),non-votes those shares will be treatedcounted as not entitled to vote on that matter. Brokers do not have the discretionary authority to vote on Proposals 1 or 2.present for purposes of establishing a quorum. Brokernon-votes will not have any effect on Proposal 1, since broker non-votes are not votes cast, and will not have any effect on Proposal 2, since broker non-votes are not entitled to vote at the annual meeting. There will be no broker non-votes on Proposal 3, since Proposal 3 is a “routine” matter.

Can I change my mind and revoke or change my proxy?

Yes. A stockholder of record may revoke a proxy or change its vote by:

Note that attendance at the annual meeting, by itself, will not revoke your proxy.

A street name holder may revoke a proxy given pursuant to this solicitation by following the instructions of the bank, broker, trustee, or other nominee who holds his or her shares.

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Proposal 1 — Election of Directors

PROPOSAL 1 — ELECTION OF DIRECTORS

There are currently ten membersOn January 1, 2021 (the “Merger Effective Date”), the Corporation completed its previously announced all stock merger transaction with BMC Stock Holdings, Inc., a Delaware corporation (“BMC”). The merger between the Corporation and BMC is referred to as the “Merger” throughout this Proxy Statement. On the Merger Effective Date, the size of the Board of Directors. Directors was increased to twelve directors and reconstituted to consist of seven directors who were legacy directors of the Corporation and five directors who were legacy directors of BMC.

Pursuant to the Corporation’sBy-laws, the Board is “classified,” which means it is divided into three classes of directors based on the expiration of their terms. Under the classified Board arrangement, directors are elected to terms that expire on the annual meeting date three years following the annual meeting at which they were elected and the terms are “staggered” so that the terms of approximatelyone-third of the directors expire each year. Accordingly, Proposal 1 seeks the election of threefour directors to fill the continuing directorships whose terms expire in 2020.2021.

The terms of the threefour Class IIII directors, Paul S. Levy, Cleveland A. Christophe, David E. Flitman, W. Bradley Hayes, and Craig A. Steinke,Brett N. Milgrim, will expire at the annual meeting in 2020.2021. The Board of Directors has nominated Messrs. Levy, Christophe, Flitman, Hayes, and SteinkeMilgrim for election to a term that will expire at the annual meeting in 2023.2024.

Unless otherwise indicated, all proxies that authorize the proxy holders to vote for the election of directors will be voted “FOR” the election of the nominees listed below. If a nominee becomes unavailable for election as a result of unforeseen circumstances, it is the intention of the proxy holders to vote for the election of such substitute nominee, if any, as the Board of Directors may propose. As of the date of this Proxy Statement, each of the nominees has consented to serve and the Board is not aware of any circumstances that would cause a nominee to be unable to serve as a director.

EachThe background and business affiliations of the followingdirector nominees, furnishedas well as the qualifications that led the Board to conclude that each nominee should serve as a director of the Corporation, the following information with respect to his principal occupation or employment and recent public company directorships:are set forth below:

Class IIII — Directors with Terms Expiring in 20202021

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Proposal 1 — Election of Directors

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Proposal 1 — Election of Directors

Builders FirstSource, Inc.  |  2021 Proxy Statement    9

Continuing Directors

CONTINUING DIRECTORS

The background and business affiliations of the Corporation’s other directors, whose terms of service continue beyond 2021, as well as the qualifications that led the Board to conclude that such directors should serve as a director of the Corporation, are set forth below:

Class II — Directors with Terms Expiring in 2022

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Continuing Directors

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Continuing Directors

Class III — Directors with Terms Expiring in 2023

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Continuing Directors

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Continuing Directors

Class II — Directors with Terms Expiring in 2022

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Information Regarding the Board and its Committees

INFORMATION REGARDING THE BOARD AND ITS COMMITTEES

Board Purpose and Structure

The mission of the Board is to provide strategic guidance to the Corporation’s management, to monitor the performance and ethical behavior of the Corporation’s management, and to maximize the long-term financial return to the Corporation’s stockholders, while considering and appropriately balancing the interests of other stakeholders and constituencies. The Board currently consists of tentwelve directors.

Director Independence

The Board of Directors is comprised of one management director, Mr. CrowFlitman (who is the Corporation’s current President and CEO), Mr. Sherman (who is the Corporation’s former CEO and was an employee of the Corporation until March 31, 2019), and eightten non-management directors. In 2019, our Board of Directors affirmatively determined that Messrs. Levy, Agroskin, Barr, Christophe, Hayes, Milgrim, and Steinke and Ms. Davis are “independent” under the director independence criteria adopted under the Nasdaq Marketplace Rules (the “Nasdaq Rules”). In addition, our Board of Directors affirmatively determined that Ms. Davis and Messrs. Hayes and Steinke are “independent” under the SEC’s standards for independent audit committee members and that Messrs. Christophe, Agroskin and Milgrim are “independent” under the SEC’s standards for independent compensation committee members. As a result, the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee are each comprised solely of independent directors.

As part of its annual evaluation of director independence, the Board examined, among other things, whether any transactions or relationships exist currently, or existed during the past three years, between each independent director and the Corporation or its subsidiaries or independent registered public accounting firm (the “auditors”). If such transactions or relationships exist, the Board reviews the nature of those transactions or relationships, including under the relevant Nasdaq Marketplace Rules (the “Nasdaq Rules”) and SEC standards, to determine whether those transactions or relationships would impair such director’s independence. The Board also examined whether there are, or have been within the past year, any transactions or relationships between each independent director and members of the senior management of Builders FirstSource or its affiliates. As a result of this evaluation, the Board affirmatively determined that each of Ms. Boydston and Messrs. Levy, Agroskin, Barr,Alexander, Bullock, Christophe, Hayes, Milgrim, O’Leary, and Steinke and Ms. Davis is independent under those criteria.

In addition, our Board of Directors affirmatively determined that all the members of the Audit and Compensation committees meet the additional independence requirements of the SEC and NASDAQ applicable to audit and compensation committee members. As a result, the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee are each comprised solely of independent directors.

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Information Regarding the Board and its Committees

Each year, the independent directors meet in regularly scheduled executive sessions outside the presence of management representatives. Interested parties, including stockholders, may communicate with the Chairman or the independent directors as a group through the process described in this Proxy Statement under the heading “Policy on Stockholder-Director Communications.”

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Information Regarding the Board and its Committees

raised by the Audit Committee. At least annually, the Audit Committee meets with the CIO and CISO in person to discuss cybersecurity in greater detail. The Audit Committee reports to the Board regarding cybersecurity matters, and the Board addresses cybersecurity issues either directly with management or through the Audit Committee.

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Information Regarding the Board and its Committees

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is composed of three independent directors, Messrs. Steinke, Barr,Bullock, and Christophe. Mr. Steinke serves as the Chair of the Committee. The Board adopted an amended charter forA copy of the Nominating and Corporate Governance Committee on February 20, 2019. A copy of this charter is available on the Governance section of our website at www.bldr.com.

The purpose of the Nominating and Corporate Governance Committee is to (i) identify and evaluate individuals qualified to become Board members, consistent with criteria approved by the Board, (ii) recommend to the Board the persons to be nominated for election as directors at any meeting of stockholders and the persons to be elected by the Board to fill any vacancies on the Board, (iii) recommend to the Board the directors to be appointed to each committee of the Board, (iv) evaluate and make recommendations to the Board regarding (a) the eligibility criteria for receipt of compensation as a director and (b) the appropriate compensation to be paid to eligible members of the Board and to members of Board committees, (v) assist the Board with general corporate governance issues, and (vi) assist the Board and its committees with their internal governance issues.

No Material Proceedings

As of April 15, 2020, there are no material proceedings to which any director, executive officer, or affiliate of the Corporation or any owner of more than five percent of the Common Stock, or any associate of any of the foregoing, (i) is a party adverse to the Corporation or any of its subsidiaries or (ii) has a material interest adverse to the Corporation or any of its subsidiaries.

Stock Ownership Guidelines for Executives and Directors

Under the Corporation’s Stock Ownership Guidelines for Executives and Directors, each executive officer of the Corporation (who has not reached the normal retirement age of 67) and director of the Corporation is expected to acquire (within the later of five years after the adoption of the policy or appointment to office) and continue to hold shares of the Corporation’s Common Stock having an aggregate market value that equals or exceeds the requirement set forth below. Unvested restricted stock units will count toward the ownership requirement. Until the required level is met, a director or executive officer is required to retain fifty percent of the net shares of common stock received from the Corporation as compensation. Once the requirements are met, future sales are only permitted to the extent that such director or executive officer shall continue to meet the requirements immediately following such sale. Once the target beneficial ownership level is achieved, that director or executive officer will not be required to acquire any additional shares in the event the stock price decreases, provided the underlying number of shares remain held by such director or executive officer.

* Excluding cash retainers for serving as the chairperson of the Board or any of its committees or for serving on any of the committees.

The Nominating and Corporate Governance Committee administers compliance with this policy and has the discretion to enforce these guidelines on acase-by-case basis. An annual evaluation will be performed on April 1 of each year. As of April 1, 2020,2021, all directors and executive officers were either in compliance with the policy or subject to the grace period for reaching the required totals.

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Report of the Audit Committee

REPORT OF THE AUDIT COMMITTEE

The primary responsibility of the Audit Committee is to assist the Board of Directors of the Corporation (the “Board”) in fulfilling its oversight responsibilities relating to (i) the quality and integrity of the financial reporting process, (ii) compliance with legal and regulatory requirements, (iii) the performance of the Corporation’s internal audit function, and (iv) the appointment of the independent registered public accounting firm. Management is responsible for the financial statements and the financial reporting process, including the implementation and maintenance of effective internal controls. The independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), is responsible for expressing an opinion on the Corporation’s financial statements and its internal control over financial reporting. The Board has concluded that all Audit Committee members are independent under Nasdaq and SEC rules, and are financially literate and possess “financial sophistication” as defined by the Nasdaq Rules. The Board has also designated the Chair of the Audit Committee, W. Bradley Hayes,Rules, and committee member Craig A. Steinkequalify as Audit Committee “financial experts” under the SEC’s guidelines. The Audit Committee has reviewed and discussed with management and PwC ourthe Corporation’s audited financial statements as of and for the year ended December 31, 2019.2020.

During 2019,2020, the Audit Committee conducted seveneight meetings. The Audit Committee chair and other members of the Audit Committee each quarter reviewed and commented on the Corporation’s earnings news release and interim financial statements contained in the Corporation’s quarterly report on SEC Form10-Qs,10-Q during each quarter, and met and discussed ourthe Corporation’s draft Annual Report on SEC Form10-K with the chief financial officer, general counsel, and PwC prior to the report’s filing and public release. The Audit Committee considers various relevant factors including qualifications, performance, and independence when appointing the audit firm and evaluating the audit firm annually. The Audit Committee is also is involved in the selection process of selection of the lead engagement partner when rotation is required after five years under the SEC’s audit partner rotation rules or is required for other reasons. Due to rotational requirements, a new lead engagement partner was selected effective for the 2017 fiscal 2017.year. In addition, the Audit Committee reviewed and ratified its Charter, which is available within the Governance section of the Corporation’s website.

The Audit Committee discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. Both the vice president of internal audit and PwC have complete and direct access to the Audit Committee, and the Audit Committee has the same access to the vice president of internal audit and PwC. The Audit Committee met with the vice president of internal audit and PwC, with and without management present, to discuss the results of their examinations, their evaluations of ourthe Corporation’s internal controls, and the overall quality of ourthe Corporation’s financial reporting process. The Audit Committee met separately with the Corporation’s chief financial officer and general counsel. The Audit Committee discussed with management the status of pending litigation, taxation, and other areas of oversight relating to financial reporting and audit processes as the Committee determined to be appropriate. The Audit Committee also reviewed the Corporation’sCompany’s Enterprise Risk Management (ERM) program, including, among other topics, specific risk topics that theinformation security risks. The Audit Committee directedrecommended that many of these topics be addressed in presentations to the Board, including information security risks.Board. The Audit Committee has discussed the overall scope of the Corporation’s internal audits and approved the annual internal audit plan. The Audit Committee reports the results of these discussions to the Board on a quarterly basis.

The Audit Committee received and reviewed the written communications from PwC as required by applicable requirements of the Public Company Accounting Oversight Board for independent auditor communications with audit committees concerning independence and has discussed with PwC theirits independence. The Audit Committee has adopted procedures forpre-approving all audit, audit-related, andnon-audit services provided by PwC, which included reviewing and approving estimated fees for audit, audit-related, and permittednon-audit services. The Audit Committee considers the compatibility of all services provided by PwC with theirits independence and has concluded the provision of thenon-audit services is compatible with maintaining PwC’s independence. During the fiscal year ended December 31, 2019,2020, PwC was employed principally to perform the annual audit and to render tax services. The Audit Committee reviewed the audit engagement letter and approved all fees paid to PwC for audit, audit-related, andnon-audit services.

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Report of the Audit Committee

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in ourthe Corporation’s Annual Report on SEC Form10-K for the year ended December 31, 2019,2020, as filed with the SEC. The Audit Committee appointed PwC as ourthe Corporation’s independent registered public accounting firm for fiscal 2020,2021, subject to stockholder ratification.

Submitted by the Audit Committee:

W. Bradley Hayes (Chair)

Janice L. DavisMark A. Alexander

Cory J. Boydston

Craig A. Steinke

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Corporate Governance

CORPORATE GOVERNANCE

Builders FirstSource is committed to conducting its business in a way that reflects best practices, as well as the highest standards of legal and ethical conduct. To that end, the Board of Directors has approved a comprehensive system of corporate governance documents. These documents are reviewed periodically and updated as necessary to reflect changes in regulatory requirements and evolving oversight practices. These policies embody the principles, policies, processes, and practices followed by the Board, executive officers, and employees in governing the Corporation and serve as a flexible framework for sound corporate governance.

Code of Business Conduct and Ethics

Builders FirstSource and its subsidiaries endeavor to do business according to the highest ethical and legal standards, complying with both the letter and spirit of the law. Our Board of Directors approved a Code of Business Conduct and Ethics that applies to the Corporation’s directors, officers (including our principal executive officer, principal financial officer, principal accounting officer, and controller), and employees. Our Code of Business Conduct and Ethics is administered by the Compliance Committee, which is made up of representatives from our Finance, Legal, Human Resources, and Internal Audit Departments. Our employees are encouraged to report any suspected violations of laws, regulations, or the Code of Business Conduct and Ethics and all unethical business practices. We provide a continuously monitored hotline for anonymous reporting by employees. Our Board of Directors also approved a Supplemental Code of Ethics for Chief Executive Officer, President, and Senior Financial Officers of Builders FirstSource, Inc., which is administered by our General Counsel. Both policies can be found on the Governance section of our corporate website at www.bldr.com. Stockholders may request a free copy of these policies by contacting the Corporate Secretary, Builders FirstSource, Inc., 2001 Bryan Street, Suite 1600, Dallas, Texas 75201.

In addition, within four business days of:

that relates to one or more of the items set forth in Item 406(b) ofRegulation S-K, we will provide information regarding any such amendment or waiver (including the nature of any waiver, the name of the person to whom the waiver was granted, and the date of the waiver) on our website at the internet address above. Such information will be available on our website for at least a12-month period. In addition, we will disclose any amendments and waivers to our Code of Business Conduct and Ethics and our Supplemental Code of Ethics as required by the Nasdaq Rules.

Additionally, the Corporation has adopted a Related Party Transaction Policy that works in conjunction with the Code of Business Conduct and Ethics and sets forth the process by which the Audit Committee will review certain related party transactions between the Corporation and its executive officers, directors, and greater than five percent beneficial owners, and their immediate family members, and the Corporation.

By-law Provisions on Stockholder Nominations of Director Candidates

Builders FirstSource’sBy-laws provide that no director candidate may be nominated by a stockholder for election at a meeting unless the stockholder (i) has delivered to the Corporate Secretary, within the time limits described in theBy-laws, a written notice containing the information specified in theBy-laws and (ii) was a stockholder of record (a) at the time such notice was delivered to the Corporate Secretary and (b) on the record date for the determination of stockholders entitled to notice and to vote at the meeting at which such director is standing for election. Accordingly, in order for a stockholder’s nomination of a person for election to the Board of Directors to be considered by the stockholders at the 20212022 annual meeting in accordance with the Corporation’sBy-laws, the required written notice must be received by our Corporate Secretary on or after February 17, 2021,15, 2022, but no later

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Corporate Governance

than March 19, 2021.17, 2022. Only individuals nominated in accordance with the procedures set forth in theBy-laws

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Corporate Governance

and have a record and reputation for honest and ethical conduct in both his or her professional and personal activities. Nominees for director shall be those people who, after taking into account their skills, expertise,

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Corporate Governance

Policy on Stockholder-Director Communications

The Policy on Stockholder-Director Communications describes the process for stockholders to send communications to the Board. Stockholders and other interested parties may contact any member (or all members) of the Board (including without limitation thenon-management or independent directors as a group, any Board committee, or any chair of any such committee) in writing by mail or overnight service or electronically. To communicate with the Board of Directors, any individual directors, or any group or committee of directors, correspondence should be addressed to the Board of Directors or any such individual directors or group or committee of directors by either name or title. All such correspondence should be sent to the Corporation in care of the Corporate Secretary at 2001 Bryan Street, Suite 1600, Dallas, Texas 75201. A current copy of the Policy on Stockholder-Director Communications is available on the Governance section of our website at www.bldr.com.

All communications received will be opened by the office of our General Counsel for the sole purpose of determining whether the contents represent a message to our directors. Any contents that legitimately relate to the business and operation of the Corporation and that are not in the nature of advertising, promotions of a product or service, patently offensive material, charitable requests, repetitive materials, or promotions of a political or similar agenda will be forwarded promptly to the addressee. In the case of communications to the Board or any group or committee of directors, the General Counsel’s office will make sufficient copies of the contents to send to each director who is a member of the group or committee to which the envelope ore-mail is addressed.

Auditor ServicesPre-Approval Policy

Our Audit andNon-Audit ServicesPre-Approval Policy, available on the Governance section of our website at www.bldr.com,defines the principles and procedures followed by the Audit Committee inpre-approving audit andnon-audit services performed by the Corporation’s independent registered public accounting firm.

Policy Regarding Hedging and Pledging

The Corporation’s Insider Trading Policy, which is applicable to all directors, executive officers, and other employees, provides that such persons may not trade in options, warrants, puts and calls, or similar instruments on Corporation securities, hold Corporation securities in margin accounts, or sell Corporation securities “short” without the prior written approval of the Corporation’s General Counsel. Such persons may not enter into any other hedging transaction involving Corporation securities or pledge Corporation securities as collateral for a loan or other obligation without the prior written approval of the Corporation’s General Counsel.

Environmental, Social, and Governance Matters2020 Sustainability Highlights

As the largest U.S. supplier of building products, prefabricated components, and value-added services to the professional market segment for new residential construction and repair and remodeling, we continue to make significant advancements in our commitment to environmental sustainability. We continuously strive to ensure that steps are taken to minimize our carbon footprint and seek new opportunities and resources that will reduce and limit adverse impacts on the environment globally and in our communities. Our senior leadership prioritizes the development of organization-wide efforts to embed sustainability across the Company’s operations.

We are also committed to delivering long-term value to our employees, customers, communities, and stockholders. Guided by initiatives such as the Sustainability Accounting Standards Board (SASB) and informed by our stakeholders, we focus on issues, like our strong safety record, that contribute to the success of our business. The Company has implemented many processes aimed at protecting our associates during the COVID-19 pandemic, including providing personal protective equipment and encouraging remote work where appropriate. The Company also reduced recordable injury rates for the pro-forma combined company (Builders FirstSource and BMC) by 12% to 3.45% in 2020. While we take pride in our noteworthy safety accomplishments to date, we are focused on continuously improving our safety performance by targeting a further 10% improvement for 2021.

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Corporate Governance

In sourcing our materials, Builders FirstSource is committed to partnering with those companies that share our values on environmental sustainability and responsibility towards our planet. Our top suppliers represent industry leaders in actively promoting, supplying, or collaborating with environmentally conscious organizations including the Sustainable Forestry Initiative (“SFI”), the Forest Sustainability Counsel (“FSC”), ISO 14001, and the Programme for the Endorsement of Forest Certification (“PEFC”). The certification of SFI is accepted by the U.S. Green Building Council in its Leadership in Energy and Environmental Design (“LEED”) rating system. The Company has enacted a Responsible Supply Chain Policy outlining that it expects all of its suppliers to buy materials from socially responsible sources in compliance with Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Included in our sustainability efforts is our goal to help our customers cost-effectively improve their safety and efficiency. Our READY-FRAME^® products, which are computerized, precisely pre-cut, and labeled framing bundles, enable crews to build faster and safer and with less waste. READY-FRAME^® houses took 20% less time to complete and were framed with 39% less labor. The jobsites where READY-FRAME^® products are utilized require 60% less saw time and 27% less ladder time, making them much safer and cleaner than jobsites that use conventional framing products and methods. Additionally, each of these homes only requires a single dumpster haul, compared with three dumpster hauls for each conventionally framed home. The reduction in wasted lumber means that nearly 2,000 fewer board feet of lumber is needed to build a home with our READY-FRAME^® products.

Representatives at Levy Partnership, a New York City consulting firm that specializes in sustainable building, analyzed all of the data collected from construction using our READY-FRAME^® products and figured savings of approximately 2,500 pounds of carbon per completed house frame and 7.8 fewer trees harvested per home. These savings also translated to less mill time, resulting in another 1,500 fewer pounds of carbon emissions per home.

As a key tenet of our business, we are proud of our success to date in contributing to the sustainability of our planet and are committed to making informed choices that improve our corporate governance, financial strength, operational efficiency, environmental stewardship, community engagement, and resource management. Consistent with our core values, our goal iscontinuing to be recognized by our customers asexpand on these efforts in meaningful ways for the preferred supplier, bywellbeing of our employees, as a safe, diverse,customers, communities, and inclusive workforce, by the industry as being at the forefront of innovation, and by our stakeholders as an ethical company. We continue our efforts to identify, measure, and map the environmental, social, and governance impacts of our business in an effort to be a good corporate citizen and proactively manage the impacts on the communities in which we serve. Helping homebuilders become more productive and efficient is fundamental to what we do, and we are passionate about building this future together.stockholders.

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Executive Officers of the Registrant

EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of Builders FirstSource and their ages (as of April 28, 2020)2021) are as follows:

M. Chad Crowjoined the Corporation in September 1999 and has held several roles of increasing responsibility. Mr. Crow became a director in 2017 and President and CEO on December 29, 2017. In 2009, Mr. Crow was named Senior Vice President and Chief Financial Officer and in 2014 was promoted to President and Chief Operating Officer. Prior to joining Builders FirstSource, he served in a variety of positions at Pier One Imports and Price Waterhouse LLP. Mr. Crow received his B.B.A. degree from Texas Tech University.⁽¹⁾

(1)

As Mr, Flitman is also a director of the Corporation, Mr. Flitman’s biography is set forth under “Proposal 1 – Election of Directors” beginning on page 7 of this Proxy Statement.

Peter M. Jackson joined the Corporationwas appointed as Executive Vice President and Chief Financial Officer in November 2016 asJanuary 2021. He had been Senior Vice President and Chief Financial Officer.Officer of the Corporation since November 2016. Prior to joining the Corporation, Mr. Jackson was employed by Lennox International, Inc. (“Lennox”). Since July 2014, Mr. Jacksonhe had served as Vice President and CFO of Lennox’s Refrigeration Segment. His previous positions at Lennox also included Vice President, Finance – Financial Planning and Analysis and Mergers and Acquisitions as well as Vice President and Chief Financial Officer of Lennox’s Residential Heating and Cooling Segment. Before joining Lennox, Mr. Jackson served in multiple financial leadership positions at SPX Corporation, General Electric, and Gerber Scientific. Mr. JacksonHe is a certified public accountant and a graduate of General Electric’s Experienced Financial Leadership program. He holds an M.B.A. degree from Rensselaer Polytechnic Institute and a B.S. from Bryant University.

David E. RushTimothy D. Johnson joined the Corporation as Executive Vice President, General Counsel, and Corporate Secretary in January 2021. Previously, he served as Executive Vice President, General Counsel, and Corporate Secretary of BMC Stock Holdings, Inc. since January 2019. Prior to BMC, Mr. Johnson was Senior Vice President and General Counsel at Ply Gem Holdings, Inc. from June 2008 until January 2019 and Senior Vice President and Regional Counsel for Arysta LifeScience North America from March 2006 to June 2008. Mr. Johnson practiced law at the international law firms of Hunton Andrews Kurth (previously Hunton & Williams) and Wilson, Sonsini, Goodrich & Rosati. He holds a B.A. in Biology from Taylor University and a J.D. from Duke University School of Law.

Michael A. Farmer was appointed as President – Commercial Operations in January 2021. Prior to joining the Corporation, Mr. Farmer served in various roles at BMC Stock Holdings, Inc., including Executive Vice President – Operational Excellence, People and Growth from February 2019 to December 2020 and as Senior Vice President of Human Resources from December 2015 to January 2019. Prior to that, he had been a member of the human resources department at Stock Building Supply since 2006. Mr. Farmer holds a bachelor’s degree from Hope College and Chief Operating Officera master’s degree from Michigan State University. Mr. Farmer has also completed executive development programs at the Wharton School of the University of Pennsylvania and Harvard University.

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Executive Officers of the Registrant

Stephen J. Herron was appointed as President – East Division of the Corporation in November 2018.January 2021. Mr. Rush hadHerron previously served as Senior Vice President – Strategy and Business Development of(Region 5) for the Corporation sincefrom August 2017. Prior2015 to that, he had been Senior Vice President – Integration sinceDecember 2020. Before the Corporation’s acquisition of ProBuild Holdings LLC by the Corporation in July 2015. From 2003 to 2015, Mr. Rush was an Area Vice President, with responsibility for more than 18 locations in three states. He joined the Corporationhe served as Senior Vice President of Financethe Southeastern US Operations for Pro Build. Prior to that, Mr. Herron served as Senior Vice President for HD Supply Holdings and oversaw the lumber and building materials (LBM) division. He has over 39 years of experience in the Southeast Groupbuilding products industry and has held senior management roles at Home Depot, HD Supply Holdings, and Williams Brothers Lumber.

Michael Hiller was appointed as President – Central Division in 1999. BeforeJanuary 2021. Prior to joining Builders FirstSource,the Corporation, Mr. Rush workedHiller served in various accountingroles at BMC Stock Holdings, Inc., including Division Vice President – Intermountain from January 2017 to December 2020, Area Manager – Colorado from January 2015 to December 2016, and finance positions, primarily with multi-location distribution companies, including as Chief Financial Officer of the Bojangles Restaurant chain.Area Manager – Utah from October 2011 to December 2014. He holds a B.A.Master’s in accountingBusiness Administration and graduate certificate in finance from the University of North Carolina at Chapel Hill.Westminster College.

Scott L. Robinswas appointed as President – West Division in January 2021. Mr. Robins had previously served as Senior Vice President and Chief Operating Officer – West inof the Corporation since February 2018. He had beenwas a Senior Vice President – Operations of the Corporation since the acquisition of ProBuild Holdings LLC by the Corporation in July 2015 and with ProBuild prior to that since 2007. At the time of his promotion, heProBuild, Mr. Robins had supervisory responsibility for 93 locations in eight states. Mr. Robins joined Hope Lumber Company in 2004 as a Vice President of Operations, overseeing numerous operations in a three-state area, and continued in that role when Hope was acquired by ProBuild Holdings LLC in 2007. Before then, he had worked in various operational, sales, and supply chain management positions with Anderson Lumber and Stock Building Supply since 1988. Mr. Robins has 30 plus years of experience in the building products business. He holds a B.A. in Finance from Weber State University.

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Executive Compensation and Other Information

EXECUTIVE COMPENSATION AND OTHER INFORMATION

Compensation Discussion and Analysis

Overview

In the discussion that follows, we will give an overview and analysis of our compensation program and policies, the material compensation decisions we have made under those programs and policies with respect to our top executive officers, and the material factors that we considered in making those decisions. The executive officers of our Company during 20192020 (whom we refer to herein as our “named executive officers,” or “NEOs”) were as follows:

In 2020, Dave Rush and Scott Robins areserved as operational leaders with separate geographic responsibilities (who we refer to herein as our “Regional NEOs”). Mr. Rush servesserved as the Senior Vice President and COO of our operations located in the eastern half of the U.S. (“East Region”). Mr. Robins servesserved as the Senior Vice President and COO of our operations located in the western half of the U.S. (“West Region”). As such, their compensation iswas aligned to reflect the performance of their respective regions where appropriate.

The remaining three NEOs, Chad Crow, Peter Jackson, and Don McAleenan, arewere corporate leaders (who we refer to herein as our “Corporate NEOs”). in 2020. As such, their compensation iswas aligned to reflect overall company performance, which includesincluded regional and corporate-managed performance metrics.

As previously announced, Chad Crow stepped down as President as of the Merger Effective Date, but continued to serve as CEO until April 1, 2021, at which time he retired. Dave Flitman has served as President of the Company since the Merger Effective Date and became our CEO effective April 1, 2021. In addition, as a result of the Merger, the roles of several of our NEOs changed. On the Merger Effective Date, Dave Rush became Executive Vice President – Integration and Scott Robins became President – West Division. Additionally, Don McAleenan retired as Senior Vice President and General Counsel on December 31, 2020.

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Executive Compensation and Other Information

Executive Summary

In early 2019,2020, our Board of Directors tasked our executive team with several priority objectives for the year. The Compensation Committee believes that the executive team substantially accomplished these objectives, which are summarized as follows:

With our financial and operational objectives in mind, our Compensation Committee designed the 20192020 executive compensation program, which included the following components:

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Executive Compensation and Other Information

Compensation Principles

Our 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 executive compensation program has historically been guided by several key principles:

Key Executive Compensation Practices

The following is a summary of our executive compensation practices that we believe drive performance and align our executives’ interests with the interests of our stockholders:

Consideration of Most Recent Advisory Stockholder Vote on Executive Compensation

At the annual meeting of stockholders on May 22, 2019,June 17, 2020, over 98%96% of the shares represented and entitled to vote on the proposal at the annual meeting were voted to approve the compensation of the Company’s named executive officers, as discussed and disclosed in the 20192020 Proxy Statement. The Board and the Compensation Committee appreciate and value the views of our stockholders. In considering the results of this advisory vote on executive compensation, the Compensation Committee concluded that the compensation paid to our named executive officers and the Company’s overall pay practices enjoy strong stockholder support.

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Executive Compensation and Other Information

20192020 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 Company’s 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 Company’s compensation–related risk.Ascompensation-related 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 20182019 and February 2019,2020, the Compensation Committee approved, and recommended to our Board of Directors for its ratification, the 20192020 executive compensation program, which included setting 20192020 base salaries, approving the 20192020 Corporate Incentive Plan, and approving equity incentive awards to be granted in 2019.2020.

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 20192020 executive compensation program. The Compensation Committee and the Board also considered our CEO’s recommendations for our executive officers (other than himself) with respect to the 20192020 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,March 2020, after considering the decisions and recommendations of the Compensation Committee, the Board ratified the 20192020 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, theThe Compensation Committee has 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 20192020 executive compensation program. The Compensation Committee determined that Meridian is independent under applicable SEC rules. While the Compensation Committee takes Meridian’s 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, theThe Compensation Committee has 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. AsThe Peer Group approved by the Compensation Committee for 2020 market comparisons was almost identical to the Peer Group approved for 2019 market comparisons, with only USG Corporation being removed in 2020 as a result of Meridian’s 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.a merger.

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Executive Compensation and Other Information

For purposes of the Compensation Committee review of market compensation comparisons for 2019,2020, the primary peer group (“Peer Group”) included:

Our market comparison analysis consisted of all components of total direct compensation, including base salary, annual bonus, and long-term incentives. These components were measured against data gathered from the proxy statements of the Peer Group.

Elements of our Compensation Program

Components of Compensation. There are three main components of our executive compensation program:

The Compensation Committee generally seeks to provide total direct compensation opportunities to our executive officers, consisting of base salary, target annual bonus,cash incentive, and long-term equity award value (“TDC”), at approximately the median of the market or below, but individual market positioning may be more or less than median for a variety of reasons such as Company and individual performance, experience, tenure, retention concerns, internal alignment, unique aspects of their role relative to external benchmarks, or other relevant factors. Based on the market comparison surveys conducted by Meridian, the 20192020 TDC target opportunities established for our executive officers were consistent with this compensation philosophy and were within the following percentile ranges relative to our Peer Group:

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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 executive’s career. In determining base salaries, we generally consider each executive’s role and responsibilities, unique skills, the salary levels for similar positions in our Peer Group companies, and internal pay equity.

For 2019, in expectationIn January 2020, Mr. Crow notified the Board of a flattening housing marketDirectors of his intention to retire as President and as part of our ongoing cost control program,Chief Executive Officer during the Compensation Committee and our executive team decided to freeze the salaries of most managers making over $100,000, including our executive officers.year. Accordingly, none of our NEOs receivedMr. Crow did not receive a salary increase in 2019.2020. Additionally, in response to the global COVID-19 pandemic, our NEOs voluntary elected to temporarily reduce their base salaries beginning in March 2020. Mr. Crow’s base salary was reduced by 25%, and our other NEOs’ base salaries were reduced by 20%. The salary reductions were reversed in June 2020 based on the Company’s continued strong financial performance during 2020.

In 2019, theThe salaries ofapproved for our executive officers were asare listed below (these amounts do not reflect the temporary salary reductions related to COVID-19 referenced above) and were within the following percentage ranges of our Peer Group:

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 Company’s near-term success.

20192020 Corporate Annual Incentive Plan. For 2019,2020, the Compensation Committee decided to implement an annual cash incentive program for our corporate office managers, including our NEOs, that was similarlargely identical to the 20182019 program. Under the 20192020 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 2019,2020, the Compensation Committee set the target bonus opportunity for each NEO at 100% of hissuch NEO’s base salary, as provided in each NEO’s employment agreement. Under the 20192020 Plan, 80% of an NEO’s bonus potential was based solely on the Company’s achievement of financial goals in 2019,2020, while the remaining 20% was based on achievement of certain key short-term operational objectives, as described below.

Specifically, the 20192020 Corporate Incentive Plan provided for bonuses for our NEOs based on the following metrics:

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Executive Compensation and Other Information

The Compensation Committee chose Adjusted EBITDA (as defined below) and Working Capital as a Percentage of Sales as the financial performance goals under the 20192020 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.

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Executive Compensation and Other Information

included in the 2019 AOP. If the region’s actual Working Capital Days for the year was lower than the target, the bonus payment would increase. If the actual Working Capital Days was higher than the target, the bonus payment would decrease. Under the 2019 Plan, each Region had to achieve a maximum Working Capital Days target (58.6 days for the East Region and 62.7 days for the West Region) to trigger any payment.

The following grid outlines the scaled bonus payment for this component of the 20192020 Plan depending on (i) for the Corporate NEOs, the actual Working Capital percentage achieved by the Company for the year and (ii) foryear. Any performance between levels was calculated based on the Regional NEOs, the actual Working Capital Days achieved by their respective regions for the year:linear interpolation between such levels.

The Company achieved an 8.7%8.1% Working Capital as a Percentage of Sales result for 2019,2020, which was below its budget target. Our East Region and West Region achieved Working Capital DaysFor purposes of 45.3 and 52.7, respectively.this component of the 2020 Plan, the performance of all NEOs was determined based on results of the entire Company. The following chart shows the 20192020 performance of each NEO under the Working Capital as a Percentage of Sales component of the 20192020 Plan.

The working capital-related bonus amounts paid to our NEOs for 20192020 are included in the“Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” in this Proxy Statement.

Operational Objectives Component.The Compensation Committee believes that the ability to incentivize the achievement of key short-term operational objectives by our executives is important to the Company’s success. Therefore, in addition to the Adjusted EBITDA and Working Capital metrics described above, the Compensation Committee decided that the 20192020 Plan should include the achievement of specific operational objectives as a component of our NEO bonus program. For 2019,2020, the Compensation Committee determined that our NEOs would be eligible for a maximum payment of up to 20% of their target bonus amounts based on achievement of the designated objectives. The operational objectives selected by the Compensation Committee in consultation with our CEO arewere as follows:follows:

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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 2019.2020. The performance of Mr.Messrs. Rush and Mr. Robins against these objectives for 20192020 was based on the performance of the regions for which they are responsible. The following charts show the 20192020 performance of each NEO against the various operational objectives set by the Compensation Committee.

Overall Payout. As a result of the Company’s 20192020 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:

The bonus amounts paid to our NEOs for 20192020 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 2019,2020, the Compensation Committee decided to grant PRSUsperformance-based RSUs (PRSUs) and TRSUs,time-vesting RSUs (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, 2019,2020, the Compensation Committee and the Board approved RSUequity awards to key managers, including our NEOs, in order to promote retention and provide incentive to management to maximize the Company’s financial performance over an extended period. 50% of the RSU grants are time-vestingawards were TRSUs and the other 50% vest contingent on the achievement of performance metrics,were PRSUs, as described below:

The Compensation Committee chose the aboveforegoing performance metrics for 50% of the RSUPRSU grants to each NEO in order to (i) incentivize our executive team to grow the Company’s ROIC in conjunction with the Adjusted EBITDA and Working Capital financial metrics applicable toutilized in our 20192020 Corporate Incentive Plan and (ii) ensure that our

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Executive Compensation and Other Information

NEOs’ financial interests are aligned with those of our stockholders over an extended period. The Compensation Committee determined that the balance50% of the RSU award to each NEO should be time-vestingTRSUs that vest based on continued employment with the Company, because it views retention of key management talent as a critical function of our long-term equity incentive program.

Following Mr. Crow’s announcement of his intention to retire as CEO, the Compensation Committee determined that it was critical both to retain other key executives and to compensate them for managing the potential disruptions to morale and ongoing operations that may have been caused by Mr. Crow’s announcement. The Compensation Committee therefore granted to Messrs. Jackson and McAleenan a special, one-time TRSU award with a target value of $225,000 that fully vests on March 1, 2022 (the “Special TRSU Awards”).

The target value of the performance-basedTRSU and time-vesting RSUPRSU awards made to each executive officer for 20192020 was as follows:

TheExcluding the Special TRSU Awards, the RSU awards to each of our executive officers were set between the 25^thpercentile and the median of the market. The RSU awards granted to our NEOs in 20192020 are reflected in the “2019“2020 Grants of Plan-Based Awards” table later in this Proxy Statement.

Performance Measurement – ROIC Component. The Compensation Committee believes that ROIC is an effective metric to measure the Company’s efficiency at allocating capital and generating returns for stockholders.

In establishing a long-term performance goal, the Compensation Committee and management believe it is appropriate to incentivize immediate and continued performance againstpre-established goals. Additionally, as we operate in a cyclical industry, it is important to mitigate large swings in performance (either up or down). As such, the ROIC incentive plan was designed to reward for 3 individual performance years based on continual improvement from prior year results as well as the achievement against apre-set3-yearpre-set 3-year objective. This provides the appropriate balance between year-over-year improvement and long-term sustained performance.

ROIC is defined as:

*  Calculated based on trailing four quarter average for each of the annual tranches

ROIC performance is measured over four separate measurement tranches: an annual ROIC measurement for each of 2019-20212020-2022 and a cumulative ROIC measurement for performance over the three-year period.

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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.