A generalization of the Householder transformation, renamed as elementary matrix by A.S. Householder: Unitary transformation of a nonsymmetric matrix, J. ACM, 5(4), 339–342, 1958, was introduced by LaBudde (Math Comput 17(84):433–437, 1963) as a tool to obtain a tridiagonal matrix similar to a given square matrix. Some of the free parameters of the transformation can be chosen to attain better numerical properties. In this work, we study the spectral properties of the transformation. We also propose a special choice for free coefficients of that transformation to minimize its condition number. The transformation with such suitable choice of parameters is called optimal.