Builders FirstSource Inc

Item 402(v) of the SEC’s Regulation S-K requires disclosure of information that demonstrates the relationship between “compensation actually paid” to NEOs, calculated pursuant to SEC rules (referred to herein as “CAP”) and our financial performance for 2023, 2022, 2021, and 2020.

Pay Versus Performance Table

Dave Rush was appointed as Interim Chief Executive Officer effective November 18, 2022. The amount for 2022 reflects Mr. Rush’s total compensation for 2022.

The dollar amounts represent the amount of “compensation actually paid,” or CAP, to the CEO and Other Non-CEO NEOs, respectively, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to the CEO or other NEOs, respectively, during the applicable year.

For purposes of calculating CAP:

a.

For 2023 and 2022, the Total Compensation of Dave Rush as reported in the Summary Compensation Table (“SCT”) was reduced by $4,102,537 and $499,990, respectively; for 2022 and 2021, the Total Compensation of Dave Flitman as reported in the SCT was reduced by $5,315,326 and $6,842,350, respectively; for 2021 and 2020, the Total Compensation of Chad Crow as reported in the SCT was not adjusted and reduced by $3,031,035, respectively; and the SCT Total Compensation of the other NEOs for 2023, 2022, 2021 and 2020 was reduced, on average, by $1,565,537, $2,099,424, $1,601,168 and $990,232, respectively, reflecting the grant date fair values of stock awards granted in the applicable year.

b.

For 2023 and 2022, the SCT Total Compensation of Dave Rush was increased by $8,477,476 and $488,352, respectively; for 2022 and 2021, the SCT Total Compensation for Dave Flitman was not adjusted and increased by $12,612,223, respectively; for 2021 and 2020, the SCT Total Compensation of Chad Crow was not adjusted and increased by $5,391,001, respectively; and the SCT Total Compensation of the other NEOs for 2023, 2022, 2021, and 2020 was increased, on average, by $3,125,543, $2,286,140, $3,009,696 and $1,763,298, respectively, reflecting the fair value as of December 31 of each applicable year of all stock awards granted during that year that are outstanding and unvested as of such date.

c.

For 2023 and 2022, the SCT Total Compensation of Dave Rush was not adjusted and decreased by $2,422,441, respectively; for 2022 and 2021, the SCT Total Compensation of Dave Flitman was not adjusted for either year; for 2021 and 2020, the SCT Total Compensation of Chad Crow was increased by $21,952,801 and $4,808,382, respectively; and the SCT Total Compensation of the other NEOs for 2023, 2022, 2021 and 2020 was, on average, increased by $5,317,269, decreased by $1,369,868, increased by $2,792,369 and increased by $850,585, respectively, reflecting the change in fair value from December 31 of the prior year to December 31 of the applicable year of any awards granted in a prior year that are outstanding and unvested as of December 31 of the applicable year.

d.

For 2023 and 2022, the SCT Total Compensation of Dave Rush was increased by $1,421,019 and decreased by $601,907, respectively; for 2022 and 2021, the SCT Total Compensation of Dave Flitman was decreased by $385,221 and not adjusted, respectively; for 2021 and 2020, the SCT Total Compensation of Chad Crow was increased by $684,032 and decreased by $317,401, respectively; and for 2023, 2022, 2021 and 2020, the SCT Total Compensation of the other NEOs was on average, increased by $1,102,300, decreased by $549,161, increased by $81,672 and decreased by $78,077, reflecting the change in fair value from December 31 of the prior year to the vesting date of any awards granted in any prior year as to which all vesting conditions were satisfied during the applicable year.

e.

For 2022, the SCT Total Compensation of Dave Flitman was reduced by $9,938,757, reflecting the fair value as of December 31 of the prior year of any awards granted in any prior year as to which vesting conditions failed to be met during the applicable year.

For purposes of the foregoing, the fair value of the stock awards at all applicable dates was calculated using the same methodology (including applicable assumptions) as used to account for share-based payments in the Company’s financial statements. The assumptions used in calculating the fair value of awards at the applicable dates did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table for the applicable year, except that (i) for 2023 CAP, the fair value calculations for PSUs granted in 2021 assumed a payout at 165% (based on actual payout amount as of the completion of all performance periods), the fair value calculations for the PSUs granted in 2022 and 2023 assumed a payout at 200%, which was the probable outcome of the applicable performance conditions as of December 31, 2023, compared to the grant date fair value calculations of such PSUs, which assumed a payout at target, (ii) for 2022 CAP, the fair value calculations for PSUs granted in 2020 assumed a payout at 220% (based on a maximum performance payout of 200% plus a 10% TSR modifier), the fair value calculations for the PSUs granted in 2021 assumed a payout at 150% for all NEOs except Mr. Rush, and the fair value calculations for the PSUs granted in 2021 to Mr. Rush assumed a payout at 120%, which was the probable outcome of the applicable performance conditions as of December 31, 2022, compared to the grant date fair value calculations of such PSUs, which assumed a payout at target, and (iii) for 2021 CAP, the fair value calculations for PSUs granted in 2020 assumed a payout at 200%, which was the probable outcome of the applicable performance conditions as of December 31, 2021, compared to the grant date fair value calculations of such PSUs, which assumed a payout at target. For a discussion of the assumptions used to estimate the fair value

50 Builders FirstSource, Inc.| 2024 Proxy Statement of stock awards, please refer to the “Stock-Based Compensation” in Notes 2 and 10 to the Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Dave Flitman was appointed as President effective January 1, 2021, and as Chief Executive Officer effective April 1, 2021. The amount for 2021 reflects Mr. Flitman’s total compensation in 2021.

Chad Crow served as President and Chief Executive Officer during the entirety of 2020, and as Chief Executive Officer from January 1, 2021 to March 31, 2021, and thereafter continued to serve as a consultant to the Company. The amount for 2021 reflects Mr. Crow’s total compensation for 2021.

The non-PEO NEOs in 2023 were Peter Jackson, Executive Vice President and Chief Financial Officer, Steve Herron, Chief Operating Officer, Scott Robins, President – West Division, and Tim Johnson, Executive Vice President, General Counsel and Corporate Secretary.

The non-PEO NEOs in 2022 were Peter Jackson, Executive Vice President and Chief Financial Officer, Scott Robins, President – West Division, Mike Hiller, President – Central Division, and Tim Johnson, Executive Vice President, General Counsel and Corporate Secretary.

The non-PEO NEOs in 2021 were Peter Jackson, Executive Vice President and Chief Financial Officer, Scott Robins, President – West Division, Mike Farmer, President – Commercial Operations, and Tim Johnson, Executive Vice President, General Counsel and Corporate Secretary.

The non-PEO NEOs in 2020 were Peter Jackson, Senior Vice President and Chief Financial Officer, Scott Robins, Senior Vice President and Chief Operating Officer – West, Dave Rush, Senior Vice President and Chief Operating Officer – East, and Don McAleenan, Senior Vice President and General Counsel.

Pro forma net income for the twelve months ended December 31, 2020 of Builders FirstSource, Inc. and BMC Stock Holdings, Inc.

Pro forma Adjusted EBITDA for the twelve months ended December 31, 2020 of Builders FirstSource, Inc. and BMC Stock Holdings, Inc.

We selected the S&P 600® Building Products Index (referred to herein as the “Index”) as our peer group for purposes of this disclosure. We also use the Index for purposes of the performance graph required by Item 201 of Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2023.

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Relationships Between Compensation Paid and Company Performance

Total Shareholder Return

The graph below presents, for the cumulative period from January 1, 2020 — December 31, 2023, the relationship between the CAP to our CEOs and the average CAP to our other NEOs and each of the Company’s TSR and the TSR of the Index.

As demonstrated by the graph above, CAP to our CEOs and the average CAP to our other NEOs is aligned with the Company’s TSR and the TSR of the Index. The Company’s TSR increased by 586.9% over the reporting period, outperforming the Index by 486.5% over the same period. Although no individual served as CEO during the entire reporting period, the correlation between TSR performance and CEO CAP is most effectively represented by Mr. Crow’s CAP in 2021. In 2021, the Company’s TSR outperformed the TSR of the Index from the prior year by 85.2% and Mr. Crow’s CAP increased 88.0% during that same period, primarily due to the high proportion of variable pay at risk for Mr. Crow that year and the relatively high year-end closing stock price in 2021. Additionally, while the Company’s TSR performance decreased 24.3% from 2021 to 2022 and the TSR performance of the Index decreased by 16.4% during that period, Mr. Flitman saw a negative CAP in 2022 as a result of the PSUs and RSUs he forfeited upon his departure from the Company in late 2021. Finally, because Mr. Rush was appointed interim CEO on November 18, 2022, his CAP does not follow any TSR trends of the Company or the Index. The increase in his CAP from 2022 and 2023 was primarily the result of his appointment as permanent President and CEO on January 10, 2023 and the compensation received in connection with his appointment.

During the reporting period, average CAP to the other NEOs increased 204.6% in the aggregate. CAP to the other NEOs was highest among the reporting periods when the Company achieved its highest year-end closing stock price in 2023, which correlates to the high proportion of variable pay at risk for the other NEOs. Conversely, CAP to the CEO and the other NEOs decreased in 2022 due to the slowing housing market and commodity deflation that resulted in the Company’s lower closing stock price in 2022. While CAP to the CEOs was subject to deviations primarily due to having three different CEOs over the reporting period, the average CAP to the other NEOs is generally aligned with the Company’s TSR and the TSR of the Index.

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Net Income and Adjusted EBITDA

The graph below presents, for each of the years ended December 31, 2023, 2022, 2021 and 2020, the relationship between the CAP to our CEOs and the average CAP to our other NEOs and each of the Company’s net income and Adjusted EBITDA.

Because we had multiple CEOs throughout the reporting period, trends between CEO CAP during the reporting period do not align with the Adjusted EBITDA trends throughout the reporting period. Annual Adjusted EBITDA trends also do not align with trends in other NEO CAP. Although Adjusted EBITDA is a performance metric in the 2023 Plan, variable pay comprises a high proportion of the compensation of our CEO and other NEOs, which correlates more closely to our year-end closing stock price as mentioned above. Nonetheless, while Adjusted EBITDA increased by 170.4% during the reporting period, average CAP to the other NEOs was closely correlated and increased 204.6% in the aggregate during that same period.

The Compensation Committee did not use net income as a metric for purposes of determining or paying compensation during the reporting period. While changes in CAP to our CEO may not align with trends in net income because we had multiple CEOs throughout the reporting period, CAP to our other NEOs is generally aligned with improvements in net income over the course of the reporting period. Net income increased by 217.7% over the reporting period and average CAP to the other NEOs increased 204.6% in the aggregate during that same period.

List of Most Important Financial Performance Measures

The following table lists the most important financial performance measures used in 2023 to link CAP to our CEO and our other NEOs to the Company’s performance. The financial performance measures are not ranked in order of importance. See “Compensation Discussion & Analysis — Elements of our Compensation Program” for applicable definitions of each metric and a discussion of the application of these measures in determining the compensation of our CEO and our other NEOs.

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Proposal 2 — Advisory Vote on Executive Compensation