Shyam K. Reddy
BlueLinx HoldingsAbout Shyam K. Reddy
Shyam K. Reddy, age 50, is President & Chief Executive Officer and a director of BlueLinx Holdings Inc. since March 2023. He holds a BA in Political Science and an MPH from Emory University, and a JD from the University of Georgia. Under his tenure in 2024, BlueLinx generated net sales of $2,952.5M and Adjusted EBITDA of $131.4M; a $100 investment in BlueLinx in 2019 was worth $409.80 by year-end 2024, illustrating strong cumulative TSR through the period.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| BlueLinx Holdings Inc. | President & CEO and Director | Mar 2023–present | Leads strategy; previously Chief Legal & Sustainability Officer; Chief Administrative Officer; Chief Transformation Officer; General Counsel & Corporate Secretary, building multi-year transformation and governance continuity |
| Euramax International, Inc. (predecessor of OmniMax) | SVP, Chief Administrative Officer, General Counsel & Corporate Secretary | Mar 2013–Mar 2015 | Oversight of corporate administration and legal at building products manufacturer |
| U.S. General Services Administration (Southeast Sunbelt Region) | Regional Administrator | Mar 2010–Mar 2013 | Federal regional leadership, operations oversight |
| Kilpatrick, Townsend & Stockton LLP (Atlanta) | Partner (Corporate Law) | Jan 2009–Mar 2010 | Corporate law practice (M&A, governance) |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No current public company board roles disclosed for Mr. Reddy in proxy |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 501,985 | 725,760 | 797,654 |
Additional items:
- Perquisites and other compensation in 2024 included company-paid life insurance, 401(k) match $8,625, and auto allowance $12,308.
Performance Compensation
Annual STIP (Short-Term Incentive Plan) – FY 2024 Design and Outcome
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout vs Target |
|---|---|---|---|---|---|---|
| Adjusted EBITDA (USD mm) | 60% | 113.5 | 133.6 | 200.3+ | 131.355 | Contributed to 99.74% overall payout |
| ROWC (%) | 40% | 23.0% | 27.1% | 40.7% | 28.3% | Contributed to 99.74% overall payout |
| CEO Target Bonus Opportunity | — | — | 110% of base salary | 220% of base salary | — | — |
| CEO Actual STIP Payment ($) | — | — | — | — | — | 884,295 |
Design notes:
- Committee-selected metrics focus on profitability and capital efficiency (Adjusted EBITDA 60%, ROWC 40%). Payouts can range 0–200% of target; 2024 paid 99.74% of target, with no discretionary adjustments.
LTIP (Long-Term Equity Incentive Plan) – FY 2024 Grants and Terms
| Grant Type | Grant Date | Shares Granted | Grant-Date Fair Value ($) | Vesting Schedule | Performance Conditions |
|---|---|---|---|---|---|
| Time-based RSUs | 6/7/2024 | 15,361 | 1,500,002 | 3 equal annual installments on each anniversary of grant date, subject to continued service | N/A |
| Performance-based RSUs (PRSUs) | 6/7/2024 | 15,361 (Target) | 1,500,002 | Vests after 3-year performance period upon Committee certification | Cumulative Adjusted EBITDA (60%) and average ROWC (40%); 30% vests at threshold, 100% at target, 200% at max |
Program features:
- No stock options granted in 2024; company generally does not grant options.
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 37,877 shares; <1% of outstanding |
| Unvested RSUs (time-based) | 26,183 units as of 12/28/2024 (10,822 remaining from 2023 grant; 15,361 from 2024 grant) |
| Unvested PRSUs (performance-based) | 35,475 units (3,880 granted 2022; 16,234 in 2023; 15,361 in 2024) |
| Options | None outstanding disclosed |
| CEO Stock Ownership Guidelines | Required ownership equal to ≥5x base salary; must hold vested shares until guideline met; monitoring by Nominating & Governance Committee |
| Hedging/Pledging | Prohibited for all directors/officers/employees (no hedging/monetization; no margin or pledging), with pre-clearance and blackout procedures |
Insider sale pressure considerations:
- Annual time-based RSU vesting on each anniversary of June 7 for recent grants may create predictable vest-related supply; however, hedging/pledging prohibitions and pre-clearance reduce misalignment risk.
Employment Terms
| Provision | Base Case (Non-CIC) | Change-in-Control (CIC) Scenario |
|---|---|---|
| Base Salary & Target STIP in Agreement | Base salary $775,000; STIP target 100% of base (2023: prorated transition then CEO) | Same base and target basis for severance calculations |
| Severance Multiples | 2× base salary; 12 months medical/dental at active rates (or reimbursement); time-based RSUs vest; PRSUs remain outstanding and vest per actual performance | 2× (base + target STIP); 18 months medical/dental; PRSUs vest at greater of target or actual performance (subject to ≥1-year performance period elapsed) |
| Term/Auto-Renewal | Initial term expired Mar 21, 2025; auto-extends in 1-year increments absent 90-day notice | |
| Restrictive Covenants | Non-compete typically 1 year; non-solicit 2 years; confidentiality and non-interference obligations | |
| Clawback Policy | Recovery of erroneously awarded incentive-based comp upon accounting restatement; multiple recovery mechanisms; no indemnification |
Estimated payouts if separation occurred on FY2024 year-end (illustrative disclosure):
| Scenario (as of 12/28/2024) | Salary & Incentive ($) | Medical ($) | Time-based RSUs ($) | Performance RSUs ($) | Total ($) |
|---|---|---|---|---|---|
| Termination w/o cause or for good reason (Non-CIC) | 1,595,307 | — | 2,715,701 | 1,673,730 | 5,984,738 |
| CIC + qualifying termination | 2,479,602 | 0 | 2,715,701 | 3,679,467 | 8,874,770 |
Performance & Track Record
- FY2024 results: Net sales $2,952.5M; gross margin 16.6%; operating income $87.6M; net income $53.1M; structural margins compressed while specialty margins benefited from $12.7M net import duty items; Adjusted EBITDA $131.4M.
- Cumulative TSR: BlueLinx $100 investment grew to $409.80 over 2019–2024; Russell 2000 to $167.77; S&P 600 Building Products Index to $323.45.
- CFO transition: CFO resigned effective Jan 24, 2025; interim Principal Financial Officer in place.
Board Governance (Director Service, Committees, Independence)
- Director Service: Reddy has served as President & CEO and Director since March 2023.
- Board Structure: Separate Non-Executive Chair (Kim S. Fennebresque) and CEO; Chair leads executive sessions; Board majority independent (Reddy not independent as CEO).
- Committees: Audit (Chair: Yancey); Human Capital & Compensation (Chair: Smith); Nominating & Governance (Chair: DiNapoli). Reddy not listed as a committee member.
- Meetings & Attendance: Board met nine times in FY2024; each director attended ≥75% of meetings; directors expected to attend the Annual Meeting.
- Director Compensation: Non-employee directors receive cash retainers and time-based RSUs; CEO Reddy does not receive director fees (comp reported separately).
Director Compensation (For non-employee directors; FY2024 reference)
- Cash retainers: $90,000 for directors; $140,000 for Chair; committee chair fees (Audit $30,000; Comp $15,000; N&G $15,000).
- Equity: Time-based RSUs of ~$135,000 for directors; ~$225,000 for Chair, vesting in 1 year.
Compensation Peer Group & Say-on-Pay
- Peer Group utilized in benchmarking: Applied Industrial Technologies, Beacon Roofing Supply, Boise Cascade, GMS, Louisiana-Pacific, DNOW, MRC Global, Patrick Industries, Pool Corp, SiteOne Landscape Supply, TopBuild, UFP Industries, Watsco.
- Say-on-Pay support: >95% approval at 2024 Annual Meeting for executive compensation.
Risk Indicators & Red Flags
- Industry cyclicality and price volatility (commodities); disintermediation risk; supplier/customer consolidation; inventory management and working capital sensitivity; IT/cybersecurity risks; climate/weather impacts; leverage and finance lease exposure.
- Insider alignment protections: strict hedging/pledging prohibitions; clawback policy compliant with SEC/NYSE.
Equity Ownership & Vesting Detail (as of FY2024 year-end)
| Category | Quantity / Value |
|---|---|
| RSUs (time-based) unvested | 26,183 units; market value $2,715,701 (at $103.72) |
| PRSUs (performance) unvested | 35,475 units; market value $3,679,467 (at $103.72), CIC table reference |
| Shares beneficially owned | 37,877 shares; <1% |
| No option awards outstanding | — |
Employment Contracts: Change-of-Control Economics & Triggers
- Double-trigger CIC: 2× (base + target STIP), 18 months health benefits; PRSUs vest at greater of target or actual performance (with ≥1-year period elapsed).
- Single-trigger vesting: Time-based RSUs automatically vest upon qualifying non-CIC termination; PRSUs continue and vest based on actual performance.
Investment Implications
- Alignment and retention: High equity mix with multi-year PRSU performance metrics (Adjusted EBITDA and ROWC) plus strict anti-hedging/pledging promotes long-term alignment; vesting cadence may create periodic supply around anniversaries but pre-clearance and policy controls mitigate misalignment risk.
- Downside protection and CIC value: Clear severance framework and PRSU vesting protections under CIC provide management continuity incentives, but create meaningful payout obligations in sale scenarios ($8.9M illustrative total), relevant for M&A modeling.
- Performance linkage: 2024 STIP near-target payout aligns with achieved Adjusted EBITDA and ROWC; specialty margin stability and capital discipline remain key as structural margins compressed; ongoing focus on specialty mix and working capital efficiency remains central to value creation.
- Governance quality: Separate Chair/CEO, majority independent board, active committee oversight, high say-on-pay support (>95%) indicate strong governance posture, reducing independence concerns from CEO-director dual role.