Michael Hiller
Builders FirstSourceAbout Michael Hiller
Michael Hiller, 51, is Chief Talent Officer at Builders FirstSource (appointed November 2024) and previously served as President – Central Division (January 2021–November 2024). He has 20+ years in building products and holds an MBA and graduate finance certificate from Westminster College . Under the company’s pay-for-performance framework, BLDR delivered Adjusted EBITDA of $2.33B, Working Capital as % of Sales of 9.0%, and ROIC of 20.7% in 2024; in 2022, BLDR achieved record Adjusted EBITDA of $4.4B and ROIC of 44.3% . BLDR’s 2022–2024 PSU program measured ROIC with a TSR modifier; the company’s TSR over that period was 66.8% (top quartile within the Dow Jones U.S. Construction & Materials Index methodology used for PSU modifiers) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Builders FirstSource | Chief Talent Officer | Nov 2024–present | Executive officer overseeing talent strategy and leadership development |
| Builders FirstSource | President – Central Division | Jan 2021–Nov 2024 | Operated one of three geographic divisions; in 2022, Central Division Adjusted EBITDA was 56% above target (supports execution track record) |
| BMC Stock Holdings | Division VP – Intermountain | 2017–2020 | Regional P&L leadership prior to BLDR/BMC combination |
| BMC Stock Holdings | Area Manager – Colorado | 2015–2016 | Market leadership |
| BMC Stock Holdings | Area Manager – Utah | 2011–2014 | Market leadership |
External Roles
No public company directorships or external board roles were disclosed for Hiller in the latest proxies .
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % of Salary | Target Bonus ($) | Actual Bonus Paid ($) |
|---|---|---|---|---|
| 2022 | 500,000 | 100% (for non-CEO NEOs in 2022) | 500,000 (derived from 100% x salary) | 917,597 (183.5% of target) |
Performance Compensation
2022 Corporate Annual Incentive Plan (Hiller as NEO; Central Division weighting applied where noted):
| Metric | Weighting | Threshold | Target | Maximum | 2022 Achievement | Payout (% of Total Target) |
|---|---|---|---|---|---|---|
| Corporate Adjusted EBITDA | 32.5% (of his 65% EBITDA component) | $2.21B | $2.77B | $3.32B+ | $4.4B | 130% of EBITDA component → contributes to total payout |
| Central Division Adjusted EBITDA | 32.5% (of his 65% EBITDA component) | Not disclosed | Not disclosed | Not disclosed | +56% vs target (divisional result) | 130% of EBITDA component → contributes to total payout |
| Working Capital as % of Sales | 20% | 12.0% | 10.0% | 8.0% or below | 10.2% | 18.6% |
| Safety (RIR) | 10% | 2.84 | 2.56 | 2.30 | 2.21 | 20% |
| DEI Training | 5% | — | 75% trained | 100% trained | 99.4% (Central) | 4.925% (out of 5%) |
| Sustainability Modifier | +5% potential | — | — | — | 2022 CSR issued, ESG included in proxy | +5% |
| Total Payout | — | — | — | — | — | 183.5% (Hiller) |
2024 LTIP design (company-wide): PSUs (50%) vest on 3rd anniversary based on annual and 3-year ROIC with a ±10% TSR modifier vs the Dow Jones U.S. Construction & Materials Index; RSUs (50%) vest ratably over 3 years .
Equity Ownership & Alignment
- Stock ownership guidelines: Executives must hold 3x salary; unvested RSUs count; retain 50% of net shares until compliant. As of October 2024, all directors and executive officers were compliant or within the grace period .
- Anti-hedging/pledging: Hedging and pledging of company stock are prohibited without prior written approval of the General Counsel .
- Clawback: Dodd-Frank-compliant recoupment policy (3-year lookback for restatements) .
Equity awards and vesting (Hiller-specific, 2022 grants):
- Time-vested RSUs (2/17/2022): 5,793 units; vest 1/3 each on Feb 17, 2023; Feb 17, 2024; Feb 17, 2025 .
- Retention RSUs (11/23/2022): 16,537 units; vest 25% on Nov 22, 2023; 25% on May 22, 2024; 50% on Nov 22, 2024 (one-time Executive Retention Award) .
- PSUs (2/17/2022): target 5,792; tranches for 2022, 2023, 2024 ROIC and 3-year average; TSR modifier applies; cliff vest on Feb 17, 2025 subject to performance .
Outstanding unvested equity at 12/31/2022:
| Award | Unvested/Unearned Units | Reference |
|---|---|---|
| 2021 RSUs (time-based) | 4,608 | |
| 2021 PSUs (performance-based) | 13,822 | |
| 2022 RSUs (time-based, Feb) | 5,793 | |
| 2022 PSUs (performance-based, Feb) | 5,792 | |
| 2022 RSUs (retention, Nov) | 16,537 |
Insider transactions and potential selling pressure:
| Trade Date | Form 4 Code | Shares | Price | Value | Post-Trade Holdings | Source |
|---|---|---|---|---|---|---|
| 2024-05-30 | S (open market sale) | 17,500 | $200.01 | $3,500,195 | 18,997 direct | |
| 2024-05-24 | F (tax withholding) | 1,630 | $165.97 | $270,033 | 34,980 before withholding | |
| 2024-02-21 | F (tax withholding) | 1,630 | $133.48 | $217,172 | 29,870 before withholding | |
| 2023-08-14 | S (open market sale) | 1,397 | $151.96 | $212,288 | — | |
| 2023-08-07 | S (open market sale) | 5,965 | $147.91 | $882,283 | — | |
| 2023-05-05 | S (open market sale) | 7,000 | $110.87 | $776,090 | — |
Notes:
- The 11/23/2022 retention RSUs vest on 11/22/2023, 05/22/2024, and 11/22/2024, dates that can coincide with tax withholdings or discretionary sales; Hiller reported a tax withholding in May 2024 and an open market sale on 05/30/2024 .
Employment Terms
- Severance plan: Hiller was designated a Tier II participant in BLDR’s Executive and Key Employee Severance Plan adopted in February 2023 .
- Regular termination without cause/for good reason (outside change in control window): 1.5x base salary + 1.5x target bonus, pro rata bonus (based on actual results), COBRA subsidy up to 18 months; pro rata time-based vesting to next tranche; pro rata performance award based on actual performance .
- Change-in-control severance (double-trigger within 3 months prior to or 24 months post-CIC): 2.0x base salary + 2.0x target bonus, pro rata target bonus, COBRA subsidy up to 24 months; performance awards measured at greater of target or actual (as specified) for periods begun or target for periods not begun .
- Restrictive covenants: Non-compete and non-solicit for 18 months post-termination for Tier II .
- Equity awards use double-trigger vesting on CIC under the plan design .
- No tax gross-ups; robust clawback policy applies .
Compensation Structure Analysis
- Mix of cash vs equity: 2022 compensation emphasized equity (stock awards $1.81M vs salary $0.5M), aligning pay with long-term performance .
- Shift to RSUs/PSUs: Equity grants are split 50% RSUs/50% PSUs, tying value to ROIC and TSR while retaining talent through time-based vesting .
- Performance rigor: 2022 bonus metrics drove an above-target 183.5% payout on exceptional results (corporate EBITDA + divisional outperformance), indicating formulaic pay-for-performance linkage .
- Governance guardrails: No tax gross-ups; anti-hedging/anti-pledging; ownership requirements; clawback policy—shareholder-friendly features that reduce governance risk .
Compensation Peer Group and Say-on-Pay
- Peer group (used for market benchmarking) includes 19 industrials/building products names such as Owens Corning, PPG, PulteGroup, Sherwin-Williams, Trane, WESCO and others (2024 cycle) .
- Say-on-pay: ~95% approval for 2024 compensation, suggesting investor support for design/outcomes .
Investment Implications
- Alignment: Hiller’s equity-heavy mix, ownership guidelines, and anti-pledging/hedging support alignment with shareholders; multi-year PSUs emphasize ROIC discipline with TSR oversight .
- Near-term selling pressure: The 2022 retention RSUs created vesting events in Nov 2023/May 2024/Nov 2024, with associated tax withholdings and a sizable open-market sale on May 30, 2024 (17,500 shares at ~$200), indicating episodic supply around vest dates rather than continuous selling .
- Retention risk: Participation in the executive severance plan (Tier II) with 18-month non-compete and double-trigger CIC protection mitigates flight risk while not overly insulating management; absence of gross-ups and presence of a clawback reduce governance risk .
- Execution track record: Central Division’s 2022 outperformance (+56% vs divisional EBITDA target) and corporate KPI delivery in 2024 support Hiller’s operating execution credentials as he leads talent strategy at scale .