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  "docSlug": "75aa3b2bd0fb",
  "documentTitle": "Floor & Decor Holdings, Inc. (FND)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-07-01 00:00:00",
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  "pageNumber": 114,
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  "notes": "The slide uses a contrast-based argument to suggest management incentives are misaligned with operational health.",
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      "text": "Therefore, we find it curious and interesting that FND management is rewarded heavily on operating income and not evaluated on inventory turnover. Operating income is more heavily influenced by inventory and lease accounting and management than sales.",
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      "text": "Operating Income: 80%",
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      "kind": "paragraph",
      "text": "Our report shows many areas where FND's inventory and leasing management and accounting have become more concerning. The Company's two most visible peers, Home Depot and Lowe's, have very similar short-term performance incentive metrics. Therefore, we find it curious and interesting that FND management is rewarded heavily on operating income and not evaluated on inventory turnover. Operating income is more heavily influenced by inventory and lease accounting and management than sales.",
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      "kind": "source-note",
      "text": "Source: Company 10-K's and Proxy Statements",
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      "text": "Stores Owned vs. Leased table comparing Lowe's, Home Depot, Tile Shop, and Floor & Decor across Owned and Leased percentages.",
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      "text": "Short-Term Cash Incentive Metrics table comparing Lowe's, Home Depot, Tile Shop, and Floor & Decor across Sales, Operating Income, Inventory Turnover, Pro Sales Growth, and EBITDA.",
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      "kind": "title",
      "text": "Short-Term Incentives Skew To Operating Income",
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