DEF 14A of Carters Inc
Filed Apr 4, 2024 · FY20230001193125-24-086507
2024 NOMINEES FOR DIRECTOR
2024 NOMINEES FOR DIRECTOR After considering the recommendations of the Nominating & Corporate Governance Committee, the Board has set the number of directors at 11 and nominated all current directors to stand for re-election. The Board believes that each of these nominees is qualified to serve as a director of Carter’s and, in addition to the skills listed in the table on page 3, certain key qualifications of each nominee that were considered by the Board follow each nominee’s biographical description. We believe that all nominees will be able and willing to serve if elected. However, if any nominee should become unable or unwilling to serve for any reason, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors.
2024 NOMINEES FOR DIRECTOR
| ROCHESTER ANDERSON, JR. Independent Director since 2022 Age: 62 Committee: • Compensation & Human Capital | Rochester Anderson, Jr. has over 30 years of human resources and operational experience at various public and private corporations, including more than 15 years of experience leading human resource organizations and more than 15 years of operational experience with public and private corporations and non-profit organizations. Mr. Anderson is currently Chief Human Resources Officer, Emory Healthcare, which he joined in September 2022. Previously, from February 2020 to September 2022, Mr. Anderson served as Chief Human Resources Officer of AutoNation, Inc., a publicly-traded company and the nation’s largest automobile dealer with over 21,000 associates, working in over 400 locations across 18 states. Mr. Anderson previously served as Senior Vice President, People Solutions for the Financial Industry Regulatory Authority, from May 2019 to February 2020, and served from 2006 to 2018 in various human resource focused and operational roles at Cox Automotive Inc., including serving as Chief Human Resources Officer and Executive Vice President from 2014 to 2018. Mr. Anderson’s experience focuses on human capital management, career development and training, operational management, and diversity and inclusion. Director Qualifications: ✓ Significant human capital management, organizational improvement, compensation and benefits, and executive management experience ✓ Valuable insights into workforce dynamics, diversity, equity and inclusion, and executive development ✓ Substantial operational experience in retail and consumer-focused businesses |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| JEFFREY H. BLACK Independent Director since 2022 Age: 69 Committee: • Audit Other Public Company Directorships: • Otis Worldwide Corp. since 2020 (Chair, Audit Committee; Member, Nominations and Governance Committee) | Jeffrey H. Black served as Senior Partner and Vice Chairman of Deloitte LLP from 2002 to 2016 and as Partner-in-Charge of Arthur Andersen LLP’s Metro New York audit practice from 1988 to 2002. Mr. Black has 40 years of experience leading teams serving those firms’ largest and most complex global clients. Director Qualifications: ✓ Significant accounting, financial reporting, and executive leadership experience, as well as valuable insights into risk and crisis management and oversight of publicly-traded, global businesses ✓ Valuable experience in cyber and information governance oversight and has earned a Computer Emergency Readiness Team (“CERT”) Certificate in Cybersecurity Oversight issued by the CERT Division of the Software Engineering Institute at Carnegie Mellon University, as well as completion of a National Association of Corporate Directors master course in Cybersecurity |
2024 NOMINEES FOR DIRECTOR
| HALI BORENSTEIN Independent Director since 2019 Age: 39 Committee: • Nominating & Corporate Governance | Hali Borenstein is the Chief Executive Officer of Reformation LLC, a women’s lifestyle brand focused on fashion and sustainability, a position she has held since June 2020. From December 2017 until June 2020, Ms. Borenstein was President of Reformation LLC, and from 2014 to 2017, Ms. Borenstein held various merchandising and design roles of increasing responsibility at Reformation LLC. Prior to joining Reformation LLC, Ms. Borenstein was a senior merchandiser at Gymboree Group, Inc., and began her career at Bain & Company. Director Qualifications: ✓ Deep strategic and leadership experience in a consumer-focused retail apparel business ✓ Valuable perspective and insight in eCommerce, brand marketing, sustainability, and retail businesses ✓ Expansive expertise in apparel marketing and merchandising |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| LUIS BORGEN Independent Director since 2021 Age: 54 Committees: • Audit • Compensation & Human Capital Other Public Company Directorships: • Eastern Bankshares, Inc., since 2016 • Synopsys, Inc., since 2022 | Luis Borgen has over 25 years of finance and operational experience at various public and private equity-backed companies. He was the Chief Financial Officer of athenahealth, Inc., a healthcare technology company from 2019 to 2022. Prior to that, he was Chief Financial Officer for Vistaprint, an e-commerce company that produces marketing products for small businesses, from 2017 to 2019. Prior to that, he served from 2012 to 2017 as Chief Financial Officer for DAVIDsTEA Inc., a specialty tea retailer in the United States and Canada, and from 2010 to 2012 he served as Chief Financial Officer of DaVita Inc. (“DaVita”), a healthcare services provider. Prior to DaVita, Mr. Borgen spent 13 years at Staples, Inc. culminating in his role as Senior Vice President Finance and Chief Financial Officer for the U.S. Retail division. Mr. Borgen began his career as an officer in the U.S. Air Force. Director Qualifications: ✓ Broad experience in finance, accounting, capital markets, investor relations, M&A and international expansion ✓ Meaningful experience in the oversight of executive compensation, risk management, and corporate governance ✓ Substantial operational experience in retail and consumer-focused businesses |
2024 NOMINEES FOR DIRECTOR
| MICHAEL D. CASEY Chairman, Chief Executive Officer & President Chairman of the Board since 2009, Director since 2008 Age: 63 | Michael D. Casey joined Carter’s in 1993 as Vice President of Finance. Mr. Casey was named Senior Vice President of Finance in 1997, Senior Vice President and Chief Financial Officer in 1998, Executive Vice President and Chief Financial Officer in 2003, and Chief Executive Officer in 2008. Prior to joining Carter’s, Mr. Casey worked for Price Waterhouse LLP, a predecessor firm to PricewaterhouseCoopers LLP (“PwC”), from 1982 to 1993. Director Qualifications: ✓ Valuable perspective and insight with respect to our business, industry, challenges, and opportunities as a result of his years serving in a variety of senior executive positions at Carter’s ✓ Represents management’s perspectives on important matters to the Board ✓ Experience as a former director of The Fresh Market, Inc. and National Vision Holdings, Inc., which provided him with additional insight into public company corporate governance matters |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| JEVIN S. EAGLE Independent Director since 2010 Age: 57 Committee: • Compensation & Human Capital (Chair) | Jevin S. Eagle has served as Professor of the Practice, Strategy and Innovation, and Executive Director of Social Impact Initiatives for Boston University’s Questrom School of Business since September 2022, and as Chief Executive Officer of Boston University Hillel since 2017. Mr. Eagle served as Chief Executive Officer and director of DAVIDsTEA Inc., a specialty tea retailer in the United States and Canada, from April 2012 to April 2014. Mr. Eagle previously held several senior leadership positions at Staples, Inc. from 2002 to 2012, including Executive Vice President, Merchandising and Marketing. Prior to joining Staples, Inc., Mr. Eagle worked for McKinsey & Company, Inc. from 1994 to 2001, ultimately serving as a partner in the firm’s retail practice. Director Qualifications: ✓ Broad experience in a number of areas as the former Chief Executive Officer and director of DAVIDsTEA Inc. and Executive Vice President, Merchandising and Marketing of Staples, Inc., including retail, management, merchandising, sourcing, strategic planning, and brand marketing ✓ Valuable experience with developing strategies and programs for teaching social impact business education, including matters relating to environmental, social, and governance (“ESG”) through his role as Professor and Executive Director of Social Impact Initiatives for Boston University’s Questrom School of Business ✓ Meaningful experience in business strategy and the retail industry provides our Board with critical insights |
2024 NOMINEES FOR DIRECTOR
| MARK P. HIPP Independent Director since 2018 Age: 62 Committees: • Audit • Compensation & Human Capital | Mark P. Hipp has been the Chief Executive Officer of H2IDD, an advisory firm focused on public and private mergers and acquisitions since January 2013. From November 2013 until April 2017, Mr. Hipp was the operating partner at Sterling Partners, a private equity firm. Prior to that, he spent over 28 years at Hewlett Packard Enterprise Company, most recently as Vice President & General Manager, HP Software and Global Networking Business Management. Director Qualifications: ✓ Valuable perspective and insight with respect to issues relating to information technology, including cybersecurity and eCommerce, as well as global supply chain and logistics ✓ Meaningful experience in strategic growth transactions including through investments, strategic relationships, and mergers and acquisitions |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| WILLIAM J. MONTGORIS Lead Independent Director Director Since 2007 Age: 77 Committee: • Nominating & Corporate Governance (Chair) Prior Public Company Directorships: • Stage Stores, Inc. (2004 to 2020, serving as Chair of Board from 2010 to 2020) | William J. Montgoris retired as Chief Operating Officer of The Bear Stearns Companies, Inc. (“Bear Stearns”) in 1999, a position he held since August 1993, after spending 20 years with the company. While at Bear Stearns, Mr. Montgoris also served as Chief Financial Officer from April 1987 until October 1996. Mr. Montgoris is a trustee of the Hackensack Meridian School of Medicine and a trustee emeritus of Colby College and St. John’s University. Director Qualifications: ✓ Valuable perspectives and insights with respect to finance and accounting after spending over 20 years in the investment banking industry. His financial expertise provides our Board a deep understanding of financial and audit-related matters ✓ Valuable insight with respect to the retail industry and the oversight of public companies |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| STACEY S. RAUCH Independent Director since 2022 Age: 66 Committees: • Audit • Nominating & Corporate Governance Other Public Company Directorships: • Heidrick & Struggles International, Inc. since 2019 Prior Public Company Directorships: • Ascena Retail Group (2017 to 2021) • Land Securities Group PLC (2012 to 2021) • Fiesta Restaurant Group, Inc. (2012 to 2023) (Chair from 2017 to 2023) | Stacey S. Rauch is a Senior Partner Emeritus of McKinsey & Company (“McKinsey”). Ms. Rauch was a leader in McKinsey’s Retail and Consumer Goods Practices, served as Head of the North American Retail and Apparel Practice, and as Global Retail Practice Convener. A 24-year veteran of McKinsey, Ms. Rauch led engagements for a wide range of retailers, apparel wholesalers, and consumer goods manufacturers in the U.S. and internationally. Ms. Rauch was a co-founder of McKinsey’s New Jersey office and was the first woman at McKinsey appointed as an industry practice leader. Since retiring from McKinsey, Ms Rauch has served as a member or chair of public, private and private trust company boards. Director Qualifications: ✓ Strategic leadership expertise and deep experience in international business with a significant focus on the retail, apparel, and consumer goods industries ✓ Meaningful experience in the oversight of executive compensation, corporate governance, and financial reporting |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| GRETCHEN W. SCHAR Independent Director since 2019 Age: 69 Committee: • Audit (Chair) Other Public Company Directorships: • Cincinnati Financial Corp. since 2002 | Gretchen W. Schar served as Executive Vice President and Chief Financial and Administrative Officer of Arbonne International LLC, a beauty and nutritional products company, from 2011 until 2018 and from 2008 until 2011 served as Executive Vice President and Chief Financial Officer of philosophy, inc., an international prestige beauty brand. Prior to that, Ms. Schar spent over 30 years at The Procter & Gamble Company in finance and general management and global operations roles of increasing responsibility. Director Qualifications: ✓ Broad experience in finance, accounting, auditing and financial reporting, capital management, investor relations, and global operations ✓ Meaningful experience with strategic growth, including mergers and acquisitions ✓ Significant public company board oversight experience, including in financial and accounting controls, public company reporting, engagement with independent public accounting firms, corporate governance, and executive compensation |
2024 NOMINEES FOR DIRECTOR
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2024 NOMINEES FOR DIRECTOR
| STEPHANIE P. STAHL Independent Director since 2022 Age: 57 Committees: • Compensation & Human Capital • Nominating & Corporate Governance Other Public Company Directorships: • Dollar Tree, Inc., since 2018 • Newell Brands, Inc., since 2022 Prior Public Company Directorships: • Knoll, Inc. (2013 to 2021) | Stephanie P. Stahl is a former Global Marketing & Strategy Officer of Coach, Inc., where she served from 2012-2015. She is the Founder of her investment and advisory company Studio Pegasus LLC, which she launched in 2015 to focus on supporting early-stage consumer ventures. Ms. Stahl previously held executive positions at several leading retail and consumer products companies and served as a Partner at The Boston Consulting Group until 2003. Director Qualifications: ✓ Significant experience in the retail/consumer sector including experience developing, executing, and optimizing major change initiatives including fundamental business transformations, mergers and acquisitions, and post-merger integrations ✓ Deep experience in marketing, data analytics, digital strategy, sustainability, brand building, and strategy ✓ Meaningful experience in the oversight of corporate governance, investor engagement, and ESG |
BOARD LEADERSHIP STRUCTURE
BOARD LEADERSHIP STRUCTURE Carter’s Corporate Governance Principles provide that the positions of Chairman and Chief Executive Officer may be combined if the non-management directors determine it is in the best interest of Carter’s. In August 2009, the independent directors appointed Mr. Casey as Chairman. The Board believes it is appropriate to continue to combine the positions of Chairman and Chief Executive Officer. Mr. Casey has over 30 years of management, finance, and administrative leadership experience at Carter’s. In addition, Mr. Casey has extensive knowledge of, and experience with, all other aspects of Carter’s business, including with its employees, customers, vendors, and shareholders. Having Mr. Casey serve as both Chairman and Chief Executive Officer helps promote unified leadership and direction for both the Board and management. In connection with Mr. Casey’s appointment as Chairman, the independent directors also created the position of Lead Independent Director (“Lead Director”). This position was created to, among other things, ensure that the independent directors maintain proper oversight of management and Board processes. The responsibilities of the Lead Director include:
BOARD LEADERSHIP STRUCTURE
| • | presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors; |
BOARD LEADERSHIP STRUCTURE
| • | calling additional meetings of the independent directors; |
BOARD LEADERSHIP STRUCTURE
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BOARD LEADERSHIP STRUCTURE
| • | facilitating discussion and open dialogue among the independent directors during Board meetings, executive sessions and outside of Board meetings; |
BOARD LEADERSHIP STRUCTURE
| • | serving as principal liaison between the independent directors and the Chairman, without inhibiting direct communication between them; |
BOARD LEADERSHIP STRUCTURE
| • | communicating to the Chairman and management, as appropriate, any decisions reached, and suggestions, views or concerns expressed, by independent directors in executive sessions or outside of Board meetings; |
BOARD LEADERSHIP STRUCTURE
| • | providing the Chairman with feedback and counsel concerning the Chairman’s interactions with the Board; |
BOARD LEADERSHIP STRUCTURE
| • | working with the Chairman to develop and approve Board meeting agendas and meeting schedules; |
BOARD LEADERSHIP STRUCTURE
| • | working with the Chairman on the appropriateness (including quality and quantity) and timeliness of information provided to the Board; |
BOARD LEADERSHIP STRUCTURE
| • | authorizing the retention of advisors and consultants who report directly to the Board when appropriate; |
BOARD LEADERSHIP STRUCTURE
| • | in consultation with the Nominating & Corporate Governance Committee, reviewing and reporting on the results of the Board performance self-evaluations; |
BOARD LEADERSHIP STRUCTURE
| • | at least annually, meeting individually with independent directors to discuss Board and committee performance, effectiveness and composition; and |
BOARD LEADERSHIP STRUCTURE
| • | if appropriate, and in coordination with management, being available for consultation and direct communication with major shareholders. |
BOARD LEADERSHIP STRUCTURE
Mr. Montgoris was appointed to serve as Lead Director in May 2022.
PROPOSAL NUMBER ONE — ELECTION OF DIRECTORS
PROPOSAL NUMBER ONE — ELECTION OF DIRECTORS The Board proposes that the following 11 director nominees be elected to the Board to serve until the next annual meeting in 2025, or until his or her earlier resignation, death, or removal. Each nominee is listed below, along with their age as of the date of the Annual Meeting. For more information about each of the director nominees, including individual biographies. Please see “Board of Directors and Corporate Governance Information—Board of Directors.”
PROPOSAL NUMBER ONE — ELECTION OF DIRECTORS
| Name | Age | | Rochester Anderson, Jr. | 62 | | Jeffrey H. Black | 69 | | Hali Borenstein | 39 | | Luis Borgen | 54 | | Michael D. Casey | 63 | | Jevin S. Eagle | 57 | | Mark P. Hipp | 62 | | William J. Montgoris | 77 | | Stacey S. Rauch | 66 | | Gretchen W. Schar | 69 | | Stephanie P. Stahl | 57 |
COMPENSATION OF DIRECTORS
COMPENSATION OF DIRECTORS When they are initially appointed to the Board, each of our independent directors receives a one-time restricted stock grant, equal to the value of the annual retainer, that cliff vests after three years. Thereafter, each of our non-management directors receives an annual cash retainer and an annual stock award, and each of our committee chairpersons and our Lead Director receives an additional annual retainer. Non-management directors also receive fees for each meeting they attend. For fiscal 2023, each director’s annual retainer was comprised of an $85,000 cash payment and an immediately vested grant of our common stock valued at approximately $155,000. In addition to the annual retainer:
COMPENSATION OF DIRECTORS
| • | our Lead Director received a $40,000 cash retainer; |
COMPENSATION OF DIRECTORS
| • | the chairperson of our Audit Committee received a $30,000 cash retainer and the chairpersons of our Compensation & Human Capital and Nominating & Corporate Governance Committees each received $25,000 cash retainers; and |
COMPENSATION OF DIRECTORS
| • | each director received meeting fees of $2,500 for each regularly scheduled Board meeting, and $1,000 for each special meeting of the Board and regularly scheduled or special meeting of the standing Board committees. |
COMPENSATION OF DIRECTORS
We also reimburse directors for travel expenses incurred in connection with attending Board and committee meetings and for other expenses incurred while conducting Company business. Mr. Casey receives no additional compensation for serving on the Board. The following table provides information concerning the compensation of our non-management directors serving during fiscal 2023.
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| Name | Fees Earned or Paid in Cash ($) (b) | Stock Awards ($) (c) | Total ($) | | Rochester Anderson, Jr. | $107,000 | $155,049 | $262,049 | | Jeffrey H. Black | $106,000 | $155,049 | $261,049 | | Hali Borenstein | $103,000 | $155,049 | $258,049 | | Luis Borgen | $115,000 | $155,049 | $270,049 | | A. Bruce Cleverly (d) | $6,500 | $— | $6,500 | | Jevin S. Eagle | $132,000 | $155,049 | $287,049 | | Mark P. Hipp | $114,000 | $155,049 | $269,049 | | William J. Montgoris | $168,000 | $155,049 | $323,049 | | Stacey S. Rauch | $111,000 | $155,049 | $266,049 | | Gretchen W. Schar | $136,000 | $155,049 | $291,049 | | Stephanie P. Stahl | $112,000 | $155,049 | $267,049 |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| (a) As a NEO and management director, Mr. Casey’s compensation information is omitted from this table and presented in the Summary Compensation Table on page 41. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| (b) This column reports the amount of cash compensation earned in fiscal 2023 through annual cash retainers and meeting fees. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| (c) On May 18, 2023, we issued 2,385 fully vested shares of common stock to each non-management director who was a member of the Board on that date with a grant date fair value of $65.01 per share, computed in accordance with FASB ASC Topic 718. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| (d) Mr. Cleverly retired from the Board and did not stand for election at the 2023 annual meeting. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
For complete beneficial ownership information of our common stock for each director, see the information presented below the heading “Securities Ownership of Beneficial Owners, Directors, and Executive Officers” on page 55.
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| 2024 Proxy Statement | 23 |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
COMPENSATION OF DIRECTORS Directors may opt to defer cash retainer payments and stock grants in the form of deferred stock units until the fifth anniversary of the grant date or until the director leaves the Board. No directors deferred their cash retainer and/or stock grants for fiscal 2023. Under Carter’s minimum ownership guidelines, no director may sell Carter’s stock unless he or she owns shares of Carter’s stock with a total market value in excess of five times his or her annual cash retainer, or $425,000, by the end of his or her sixth year of service on the Board. Each of our directors complied with these ownership guidelines in fiscal 2023. There are no family relationships among any of the directors or our executive officers and none of our non-management directors performed any services for Carter’s other than services as directors.
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
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FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| MICHAEL D. CASEY Chairman, Chief Executive Officer & President Age: 63 | Michael D. Casey joined Carter’s in 1993 as Vice President of Finance. Mr. Casey was named Senior Vice President of Finance in 1997, Senior Vice President and Chief Financial Officer in 1998, Executive Vice President and Chief Financial Officer in 2003, Chief Executive Officer in 2008, and re-assumed the President position in March 2024. Mr. Casey became a director in 2008 and was named Chairman of the Board of Directors in 2009. Prior to joining Carter’s, Mr. Casey worked for Price Waterhouse LLP, a predecessor firm to PricewaterhouseCoopers LLP, from 1982 to 1993. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| KENDRA D. KRUGMAN Senior Executive Vice President, Chief Creative & Growth Officer Age: 46 | Kendra D. Krugman joined Carter’s in 2007 as Manager, Merchandising. Ms. Krugman was named Director, Merchandising in 2008, Vice President Sales and Merchandising, Mass Channel in 2012, Senior Vice President Carter’s Brands and Licensing in 2016, Executive Vice President, Merchandising & Design in July 2018, Executive Vice President, Retail and Chief Merchandising Officer in March 2023, and Senior Executive Vice President, Chief Creative & Growth Officer in March 2024. Prior to joining Carter’s, Ms. Krugman held positions at The Gap, Inc. and French Connection Group. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| RICHARD F. WESTENBERGER Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer Age: 55 | Richard F. Westenberger joined Carter’s in 2009 as Executive Vice President & Chief Financial Officer, and was appointed Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer in March 2024. Mr. Westenberger’s responsibilities include management of Carter’s finance, enterprise risk management, supply chain, real estate, and information technology functions. Prior to joining Carter’s, Mr. Westenberger served as Vice President of Corporate Finance and Treasurer of Hewitt Associates, Inc. from 2006 to 2008. From 1996 to 2006, Mr. Westenberger held various senior financial management positions at Sears Holdings Corporation and its predecessor organization, Sears, Roebuck and Co., including Senior Vice President & Chief Financial Officer of Lands’ End, Inc., Vice President of Corporate Planning & Analysis, and Vice President of Investor Relations. Prior to Sears, Mr. Westenberger was with Kraft Foods, Inc. He began his career at Price Waterhouse LLP, a predecessor firm to PricewaterhouseCoopers LLP, and is a certified public accountant. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
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FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| JULIE A. D’EMILIO Executive Vice President, Global Sales Age: 57 | Julie A. D’Emilio joined Carter’s in 2006 as Vice President of Sales. Ms. D’Emilio was named Senior Vice President of Sales in 2013, and then Executive Vice President, Sales in 2016. In 2020, Ms. D’Emilio was appointed Executive Vice President, Global Sales. Prior to joining Carter’s, Ms. D’Emilio was with Calvin Klein Jeans, a division of The Warnaco Group, Inc., in various management positions, including Executive Vice President of Juniors’ and Girls, and Vice President of the Women’s Division. Ms. D’Emilio began her career with Liz Claiborne Inc. and also worked for London Fog Industries, Inc. and Jones Apparel Group, a predecessor of The Jones Group, Inc. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| JEFFREY M. JENKINS Executive Vice President, Global Marketing Age: 46 | Jeffrey M. Jenkins joined Carter’s in 2019 as Executive Vice President, Global Marketing. From July 2017 to July 2019, Mr. Jenkins was with CKE Restaurants Holdings, Inc., the parent company of the Carl’s Jr. and Hardee’s fast food restaurant brands, serving most recently as Global Chief Digital Officer and previously as Chief Marketing Officer. From June 2015 to July 2017, Mr. Jenkins was with Whole Foods Market, Inc. as Vice President, Digital Marketing & Channel Activation and Vice President, Digital Strategy & Marketing. From 2008 to June 2015, Mr. Jenkins was with Yum! Brands, Inc. in marketing roles of increasing responsibility. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| BENJAMIN L. PIVAR Senior Vice President & Chief Information Officer Age: 57 | Benjamin L. Pivar joined Carter’s in 2015 as Vice President Information Technology (IT) Supply Chain. Mr. Pivar was named Vice President Retail IT in 2017, Vice President & Chief Information Officer in 2018, and Senior Vice President & Chief Information Officer in 2019. Prior to joining Carter’s, Mr. Pivar spent 12 years at Capgemini, most recently as Senior Vice President, North America Retail Lead. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
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FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| ANTONIO D. ROBINSON Senior Vice President, General Counsel, Secretary, Corporate Social Responsibility & Chief Compliance Officer Age: 52 | Antonio D. Robinson joined Carter’s in 2010 as Vice President, Associate General Counsel. Mr. Robinson was named Vice President, Deputy General Counsel & Chief Compliance Officer in 2019; Senior Vice President, Corporate Social Responsibility in 2020; and Senior Vice President, General Counsel, Secretary, Corporate Social Responsibility & Chief Compliance Officer in 2023. Prior to joining Carter’s, Mr. Robinson was a shareholder and attorney in private practice in the Atlanta office of Littler Mendelson P.C. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| KAREN G. SMITH Executive Vice President, Supply Chain Age: 57 | Karen G. Smith joined Carter’s in 2022 as Executive Vice President, Supply Chain. From 2019 to 2022, Ms. Smith was with Kontoor Brands, inc. (“Kontoor”), serving most recently as Executive Vice President of Supply Chain and previously as Vice President of Global Supply Chain Operations, a role she assumed after Kontoor’s 2019 spinoff from V.F. Corporation. From 2014 to 2019, she was with V.F. Corporation in various management positions, including Vice President, Supply Chain Operations, Americas East. Prior to V.F. Corporation, Ms. Smith worked for Jockey International in supply chain leadership roles of increasing responsibility. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
| JILL A. WILSON Senior Vice President, Human Resources & Talent Development Age: 57 | Jill A. Wilson joined Carter’s in 2009 as Vice President of Human Resources. In 2010, Ms. Wilson was promoted to Senior Vice President, Human Resources & Talent Development. Ms. Wilson joined Carter’s after more than 20 years with The May Company and Macy’s, Inc. While at Macy’s, Ms. Wilson held various human resource positions of increasing responsibility, including Group Vice President of Human Resources. Ms. Wilson has extensive experience in a broad range of human resource disciplines including global talent management, organizational development, learning and development, compensation, benefits, talent acquisition, and merger integration. |
FISCAL 2023 DIRECTOR COMPENSATION TABLE(a)
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OVERVIEW OF EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2023
OVERVIEW OF EXECUTIVE COMPENSATION DECISIONS FOR FISCAL 2023 This CD&A presents information regarding the Committee’s consideration of Carter’s performance in 2023 and related compensation decisions. On an annual basis, the Committee approves Carter’s compensation programs in February and final target metrics in March, based on forecasted financial results for the fiscal year. The Committee made its decisions in light of then current, and expected, industry, macroeconomic, and geopolitical trends, including high levels of inflation, consumer uncertainty about the overall economy, and elevated interest rates. The Committee considered various factors in determining the structure of Carter’s compensation programs for 2023, including the effects of high levels of inflation and elevated interest rates on our target consumers, and various initiatives planned by Carter’s to meaningfully reduce inventory levels and improve product sell-throughs, price realization, and gross profit margin. During the course of 2023, Carter’s also benefited from improved on-time shipping performance and negotiating lower ocean freight rates and product costs. In light of continued consumer trends and shifting customer demographics, management recommended, and the Committee approved, a 2023 annual cash incentive compensation structure that included a strategic objectives component (weighted at 25%) that includes CSR-related objectives. More information on Carter’s 2023 annual cash incentive compensation structure can be found in this CD&A, under the heading “2023 Annual Cash Incentive Compensation”.
EXECUTIVE COMPENSATION HIGHLIGHTS FOR FISCAL 2023
| • | reviewed the peer group to be used by the Committee as a source of comparative compensation data for fiscal 2023, and determined that the existing group remained appropriate with no necessary adjustments; |
EXECUTIVE COMPENSATION HIGHLIGHTS FOR FISCAL 2023
| • | benchmarked compensation for all executive officers, including the NEOs, using a combination of proxy disclosures by Carter’s peer group and retail industry survey data; |
EXECUTIVE COMPENSATION HIGHLIGHTS FOR FISCAL 2023
| • | structured annual incentive compensation for 2023 to consist of four performance metrics, weighted equally at 25%: (1) net sales; (2) operating income (with attainment to be measured based on adjusted results reported to financial markets); (3) operating cash flow; and (4) strategic objectives (consisting of the following: (a) accelerate growth of Little Planet sales; (b) advance marketing personalization capabilities; (c) test new store experiences; and (d) demonstrate progress with multi-cultural customer acquisition); |
EXECUTIVE COMPENSATION HIGHLIGHTS FOR FISCAL 2023
| • | approved new equity awards consisting of 50% time-based restricted stock vesting annually over four years and 50% performance-based restricted stock. The 2023 performance-based restricted stock has the following features: |
EXECUTIVE COMPENSATION HIGHLIGHTS FOR FISCAL 2023
| • | two performance metrics, net sales and adjusted earnings per share, as reported to financial markets; and |
COMPENSATION STRUCTURE AND DETERMINATION
| • | annual cash incentive compensation; and |
COMPENSATION STRUCTURE AND DETERMINATION
| • | long-term equity incentive compensation. |
COMPENSATION STRUCTURE AND DETERMINATION
| • | comparative compensation data for executive officers in similar positions at companies in our peer group and, as needed, a broader retail survey; |
COMPENSATION STRUCTURE AND DETERMINATION
| • | prior equity awards and potential future earnings from equity awards; |
ANNUAL CASH INCENTIVE COMPENSATION
ANNUAL CASH INCENTIVE COMPENSATION Carter’s makes annual cash incentive compensation (through our Incentive Compensation Plan) a significant component of our NEOs’ targeted total direct compensation in order to motivate our executive officers to achieve Carter’s annual operating plans. For each NEO, the Committee approves target annual cash incentive compensation as a percentage of such NEO’s base salary. In establishing these annual cash incentive compensation targets, the Committee considers our NEOs’ potential total direct compensation in light of Carter’s compensation philosophy and comparative compensation data. The Committee has the discretion to reduce or not to award annual cash incentive compensation, even if Carter’s achieves its financial performance targets, and to take into account personal performance in determining the percentage of each NEO’s annual cash incentive compensation to be paid, if any. Furthermore, the Board has adopted a clawback policy, consistent with the requirements of Rule 10D-1 under the Exchange Act and the related NYSE listing standards (referred to in this proxy statement as the “clawback policy”) that requires an executive officer (as defined in the clawback policy) to repay or return erroneously awarded compensation in the event of an accounting restatement of previously-reported financial results.
LONG-TERM EQUITY INCENTIVE COMPENSATION
LONG-TERM EQUITY INCENTIVE COMPENSATION Our Equity Incentive Plan allows for various types of equity awards, including stock options, restricted stock (both time and performance-based), restricted stock units, stock appreciation rights, and deferred stock. Awards under
LONG-TERM EQUITY INCENTIVE COMPENSATION
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LONG-TERM EQUITY INCENTIVE COMPENSATION
our Equity Incentive Plan are granted to recruit, motivate, and retain employees and in connection with promotions or increased responsibility. Historically, the Committee has awarded a combination of time and performance-based restricted stock and time-based restricted stock units, although it may choose to use other forms of equity awards in the future. All awards under our Equity Incentive Plan must be approved by the Committee. The Committee determines the type, timing, and amount of equity awards granted to each of our NEOs after considering their previous equity awards, base salary, and target annual cash incentive compensation in light of Carter’s compensation philosophy. The Committee also considers the comparative compensation data in our peer group and, as needed, a broader retail survey, and our desire to retain and motivate our NEOs and align their goals with the long-term goals of our shareholders. The Committee’s practice is to approve equity grants at regularly scheduled meetings, but may also make equity grants at special meetings or by unanimous written consent, and could select a date subsequent to a regularly scheduled meeting on which to grant equity awards. In considering the value of equity awards, we calculate the value of time-based and performance-based restricted stock awards using the closing price of our common stock on the date of grant. Effective February 15, 2024, Carter’s amended its Equity Incentive Plan to include double-trigger change of control provisions to more closely-align Carter’s pay practices with market practice. For equity awards in fiscal 2024 and beyond, the vesting of the awards will be accelerated if either (1) the surviving entity does not provide replacement awards that meet criteria as set forth in the amended Equity Plan or, if applicable, the award agreement (referred to as “qualifying replacement awards”), or (2) the surviving entity provides qualifying replacement awards, but there is a termination of employment for cause or resignation for good reason (as defined in the amended Equity Incentive Plan) within two years after the change in control. In addition, the Equity Incentive Plan was amended to include mandatory clawback provisions consistent with the requirements of Rule 10D-1 under the Exchange Act, related NYSE listing standards, and Carter’s clawback policy. Under the amended Equity Incentive Plan, and consistent with Carter’s clawback policy, the executive is required to repay or return erroneously awarded compensation in the event of an accounting restatement of previously-reported financial results. No other changes were made to the Equity Incentive Plan.
ROLE OF THE COMPENSATION & HUMAN CAPITAL COMMITTEE, INDEPENDENT CONSULTANT AND MANAGEMENT
| • | reviews market data and advises the Committee regarding the compensation of Carter’s executive officers; and |
ROLE OF THE COMPENSATION & HUMAN CAPITAL COMMITTEE, INDEPENDENT CONSULTANT AND MANAGEMENT
| • | reviews and advises the Committee regarding director compensation. |
PEER GROUP ANALYSIS AND RETAIL SURVEY
PEER GROUP ANALYSIS AND RETAIL SURVEY To assess the market competitiveness of our NEOs’ compensation, the Committee and management review data provided by Meridian from two sources: our peer group and, as needed, a broader retail survey. The Committee has established a peer group, which is generally comprised of companies in the retail or wholesale industries which primarily conduct business in apparel or related accessories, sell products under multiple brands through retail stores, and have net sales generally between one-half and two times Carter’s net sales. In setting fiscal 2023 compensation, our peer group was comprised of the following fifteen companies:
PEER GROUP ANALYSIS AND RETAIL SURVEY
| Abercrombie & Fitch Co. | Kontoor Brands, Inc. | | American Eagle Outfitters, Inc. | Levi Strauss & Co. | | The Children’s Place, Inc. | Skechers USA, Inc. | | Columbia Sportswear Company | Tapestry, Inc. | | G-III Apparel Group, Ltd. | Under Armour, Inc. | | Gildan Activewear, Inc. | Urban Outfitters, Inc. | | Guess?, Inc. | Williams-Sonoma, Inc. | | HanesBrands Inc. | |
PEER GROUP ANALYSIS AND RETAIL SURVEY
The Committee, with the advice of Meridian, also uses select information from a broader retail survey (that includes apparel and related products retailers or department stores which primarily sell apparel and related products) for executive compensation market assessment in order to supplement compensation data provided by the peer group analysis that may not be adequately represented in the data that is available from our peer group. In November 2023, the Committee conducted its annual review of our peer group, with the assistance of Meridian, and removed Skechers USA, Inc. and Williams-Sonoma, Inc., and added Victoria’s Secret & Co. and Oxford Industries, Inc.
2023 ANNUAL CASH INCENTIVE COMPENSATION
2023 ANNUAL CASH INCENTIVE COMPENSATION In February 2023, the Committee set the following fiscal 2023 annual cash incentive compensation targets for our NEOs:
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | 150% of base salary for Mr. Casey; |
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | 100% of base salary for Mr. Lynch; and |
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | 75% of base salary for Mr. Westenberger, Ms. Krugman, and Ms. D’Emilio |
2023 ANNUAL CASH INCENTIVE COMPENSATION
based on each NEO’s responsibilities, expected contribution and market data. In accordance with our Incentive Compensation Plan, for fiscal 2023, the Committee established three financial performance metrics and one “Strategic Objectives” component, to determine the amount, if any, of annual cash incentive compensation to be paid under our Incentive Compensation Plan:
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | net sales (weighted at 25%); |
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | operating income (weighted at 25%) (with attainment to be based on adjusted results as reported to shareholders); |
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | operating cash flow (weighted at 25%); and |
2023 ANNUAL CASH INCENTIVE COMPENSATION
| • | strategic objectives (weighted at 25%), which consisted of the following four objectives (1) accelerate the growth of Little Planet sales, (2) advance marketing personalization capabilities, (3) test new store experiences, and (4) demonstrate progress with multi-cultural customer acquisition. |
2023 ANNUAL CASH INCENTIVE COMPENSATION
The Committee selected net sales, operating income (as it may be adjusted and reported to financial markets), operating cash flow, and strategic objectives as performance metrics because it believes these metrics are key measures that align with the interests of our shareholders, namely growth, profitability, and cash flow generation.
2023 ANNUAL CASH INCENTIVE COMPENSATION
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2023 ANNUAL CASH INCENTIVE COMPENSATION
As described below, our NEOs could have earned from 0% to 150% of their target annual cash incentive compensation in fiscal 2023 based upon Carter’s achievement of net sales, operating income (as it may be adjusted), and operating cash flow financial performance metrics and the strategic objectives metric. In prior years, the Committee had approved payouts of up to 200% of the executive officer’s target annual cash incentive compensation (based on achievement of financial performance metrics). In light of planned sales and profitability in 2023, which was expected to be below that achieved in 2022, the Committee lowered the maximum potential payout to 150% and also set the milestones between Target and Maximum to be more challenging to attain. The payment grid for the 2023 annual incentive compensation program is set forth below. Please see additional information in our Annual Report on Form 10-K for fiscal 2023 for how adjusted operating income is calculated from Carter’s audited financial statements.
2023 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS
2023 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS
2023 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS
| | Net Sales (25%) (in millions) | Adj. Operating Income (25%) (in millions)(1) | Operating Cash Flow (25%) (in millions) | Strategic Objectives (25%) | | 25% of Target (Threshold Performance) | $2,840 | $325 | $275 | N/A | | 100% of Target (Target Performance) | $3,021 | $363 | $325 | N/A | | 150% of Target (Maximum Performance) | $3,213 | $400 | $375 | N/A | | Actual Fiscal 2023 Performance | $2,946 | $328 | $529 | N/A |
2023 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS
| (1) See the Appendix to this Proxy Statement for a reconciliation of Adjusted Operating Income to its most directly comparable GAAP measure, Operating Income. |
2023 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS
In February 2024, the Committee determined that based on Carter’s performance noted above, as well as the achievement of 100% of the strategic objectives, Carter’s achieved an overall performance at 88% of Target and, as a result, our NEOs were awarded 88% of their annual cash incentive compensation targets for fiscal 2023 as summarized below.
2023 ANNUAL CASH INCENTIVE COMPENSATION — PERFORMANCE METRICS
| | Annual Cash Incentive Compensation Targets ($) | Annual Cash Incentive Compensation Actually Paid at 88% of Target ($) | | Michael D. Casey | $1,950,000 | $1,716,000 | | Richard F. Westenberger | $536,250 | $471,900 | | Brian J. Lynch | $880,000 | $774,400 | | Kendra B. Krugman | $525,000 | $462,000 | | Julie A. D’Emilio | $442,500 | $389,400 |
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION The discussion below includes information regarding long-term equity incentive compensation awarded in fiscal 2023. Long-Term Equity Incentive Compensation Awarded in 2023. In February 2023, the Committee approved a 50%/50% mix of annual time-based restricted stock grants and three year performance-based restricted stock grants for each NEO. These grants reflect our historical practice of awarding a combination of time-based and performance-based restricted stock to Carter’s NEOs.
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
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2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
All of the time-based restricted stock awards granted to our NEOs in fiscal 2023:
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
| • | are subject to the equity retention policy described below; |
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
| • | are contingent on the NEO’s continued employment with Carter’s through each vesting date; and |
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
| • | vest in four equal annual installments on the first through fourth anniversaries of each grant date. |
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
Each NEO’s performance-based restricted stock granted in February 2023 is eligible to vest following completion of a three-year performance period through fiscal 2025, with the target performance set for the first-year of the performance period and the target performance for each of the following years based on a set rate of growth included in the award agreement. The amount vested varies based on Carter’s achievement of certain growth targets set for each of fiscal 2023, fiscal 2024, and fiscal 2025 net sales and earnings per share (as adjusted and reported to financial markets) and may range between 0% (assuming failure to achieve threshold performance) and 200%. In addition, in connection with Ms. Krugman’s promotion to Executive Vice President, Retail and Chief Merchandising Officer in March 2023, the Committee approved an award of 14,022 shares of time-based restricted stock that cliff-vests on March 21, 2026, the third anniversary of the grant date. When valuing equity awards, the Company uses the closing price of our common stock on the date of grant. The following table details the number of time-based restricted shares and performance-based restricted shares underlying the grants to each of our NEOs for fiscal 2023. A more detailed description of such grants can be seen below in the table “Fiscal 2023 Grants of Plan-Based Awards” and its footnotes.
2023 LONG-TERM EQUITY INCENTIVE COMPENSATION
| | Michael D. Casey | Richard F. Westenberger | Brian J. Lynch | Kendra D. Krugman | Julie A. D’Emilio | | Time-Based Restricted Stock | 43,884 | 10,468 | 16,880 | 5,404 | 5,404 | | Performance-Based Restricted Stock | 43,884 | 10,468 | 16,880 | 5,404 | 5,404 | | Time-Based Restricted Stock (Cliff-Vesting) | — | — | — | 14,022 | — |
ACCOUNTING AND TAX CONSIDERATIONS
ACCOUNTING AND TAX CONSIDERATIONS Accounting, tax, and related financial implications to Carter’s and our NEOs are considered during the analysis of our compensation and benefits program and individual elements of each. Overall, the Committee seeks to balance attainment of our compensation objectives with the need to maximize current tax deductibility of compensation that may impact earnings and other measures of importance to shareholders. In general, base salary, annual cash incentive bonus payments, and the costs related to benefits and perquisites are recognized as compensation expense at the time they are earned or provided. Share-based compensation expense is recognized over the vesting period in our consolidated statements of operations for stock options and restricted stock (both time and performance-based).
RETIREMENT OF NEO AND CONSULTING AGREEMENT
RETIREMENT OF NEO AND CONSULTING AGREEMENT In connection with Mr. Lynch’s retirement on March 1, 2024, the Company entered into a consulting agreement with Mr. Lynch pursuant to which Mr. Lynch will serve as a consultant to the Company following his retirement to assist with an orderly transition. The consulting agreement provides for, among other things: (i) a term of twelve months concluding on February 28, 2025; and (ii) a consulting fee of $125,000 per month payable by the Company to Mr. Lynch for the consulting services provided to the Company during the period of the consulting agreement, which consulting services include consultations with executive officers and other management personnel of the Company related to the business of the Company and assistance with leadership transitions at the Company. In addition, pursuant to the terms of the outstanding award agreements governing Mr. Lynch’s unvested performance-based restricted stock, Mr. Lynch is entitled to, and will receive, “retirement” treatment for those outstanding awards. This treatment will result in pro-rated vesting (if any) of his performance-based restricted stock (calculated based on the number of days he worked at the Company from the grant date through the retirement date) subject to the ultimate achievement, by the Company, of the performance metrics under the applicable award agreements.
SEVERANCE AGREEMENTS WITH NEOS
SEVERANCE AGREEMENTS WITH NEOS Each of our NEOs has a severance agreement with Carter’s. In the event that an NEO is terminated by Carter’s for “cause,” retires, becomes disabled, or dies, the executive or his or her estate will be provided the executive’s base salary and medical and other benefits through the termination of his or her employment. If an NEO is terminated without “cause,” or an NEO terminates their employment for “good reason” (with “cause” and “good reason” defined in each executive’s respective severance agreement and summarized below) the Company will be obligated to pay such executive’s base salary for 24 months in the case of Mr. Casey, and for 12 months in the cases of Mr. Westenberger, Ms. Krugman, and Ms. D’Emilio. In each case, base salary will be paid in bi-weekly installments. The Company is also obligated to pay each NEO a pro-rated annual cash incentive compensation amount that would have been earned by each such executive if he or she had been employed at the end of the year in which his or her employment was terminated. The determination of whether annual cash incentive compensation is payable to the NEO will not take into account any individual performance goals and shall be based solely on the extent to which Company performance goals have been met. Additionally, the Company is obligated to pay the Company’s contribution to the medical, dental, and life insurance benefits for 24 months in the case of Mr. Casey, and for 12 months in the case of Mr. Westenberger, Ms. Krugman, and Ms. D’Emilio. The payment of severance is contingent on the NEO (a) executing an effective release of claims, and (b) complying with post-termination obligations including confidentiality, noncompetition, and non-solicitation covenants. In the event that, within two years following a “change of control” (with “change of control” defined in each executive’s severance agreement) the Company terminates the NEO’s employment, other than for “cause” or such executive terminates his or her employment for “good reason,” the Company shall pay such NEO’s base salary, and the Company’s contribution to the medical, dental, and life insurance benefits, for 36 months in the case of Mr. Casey, and 24 months in the case of Mr. Westenberger, Ms. Krugman, and Ms. D’Emilio. In the event of a “change of control” of the Company: (1) for all unvested stock options and all unvested shares of restricted stock held by the NEO that were awarded prior to February 15, 2024, such awards will fully vest; and (2) for all unvested equity awards made on or after February 15, 2024, such awards will fully vest if there is a qualifying termination of employment within two years after the change in control or if the surviving entity does not provide qualifying replacement awards. Under the severance agreements with each of our NEOs, “cause” is generally deemed to exist when such NEO has: (a) been convicted of a felony or entered a plea of guilty or no contest to a felony; (b) committed fraud or other act involving dishonesty for personal gain which is materially injurious to the Company; (c) materially breached his obligations of confidentiality, intellectual property assignment, non-competition, non-solicitation, or non-disparagement against the Company after a cure period, provided such breach by its nature was curable; (d) willfully engaged in gross misconduct which is injurious to the Company; or (e) after a cure period, willfully refused to substantially perform his or her duties or is grossly negligent in performance of such duties. Under the agreements with our NEOs, “good reason” is generally deemed to exist when there is: (a) a material reduction in the executive’s title, duties, or responsibilities; (b) a material change in the geographic location at which the executive must perform services; or (c) a material breach of the executive’s agreement by the Company. See “Potential Payments Upon Termination or Change of Control” below for a discussion and presentation of amounts our NEOs may be entitled to in the event of their termination, including following a change in control.
SEVERANCE AGREEMENTS WITH NEOS
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FISCAL 2023 SUMMARY COMPENSATION TABLE*
FISCAL 2023 SUMMARY COMPENSATION TABLE* The table below provides information concerning the compensation of our NEOs.
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| Name and Principal Position | Fiscal Year | Salary ($) (a) | Bonus ($) (b) | Stock Awards ($) (c) | Non-Equity Incentive Plan Compensation ($) (d) | All Other Compensation ($) (e) | Total ($) | | Michael D. Casey Chairman of the Board of Directors, Chief Executive Officer & President | 2023 | $1,282,692 | $— | $6,500,098 | $1,716,000 | $589,342 | $10,088,133 | | | 2022 | $1,192,885 | $468,800 | $6,500,136 | $— | $444,933 | $8,606,754 | | | 2021 | $1,072,885 | $— | $6,500,323 | $3,255,000 | $228,177 | $11,056,385 | | Richard F. Westenberger Senior Executive Vice President, Chief Financial Officer & Chief Operating Officer | 2023 | $704,615 | $— | $1,550,520 | $471,900 | $169,734 | $2,896,769 | | | 2022 | $674,615 | $128,500 | $1,250,166 | $— | $125,585 | $2,178,867 | | | 2021 | $648,077 | $— | $2,200,242 | $982,500 | $82,885 | $3,913,703 | | Brian J. Lynch Former President & Chief Operating Officer | 2023 | $867,885 | $— | $2,500,266 | $774,400 | $241,106 | $4,383,656 | | | 2022 | $831,154 | $211,300 | $2,000,266 | $— | $165,949 | $3,208,669 | | | 2021 | $796,346 | $— | $2,600,286 | $1,610,000 | $93,356 | $5,099,989 | | Kendra B. Krugman Senior Executive Vice President, Chief Creative & Growth Officer | 2023 | $683,846 | $— | $1,800,489 | $462,000 | $149,459 | $3,095,794 | | | 2022 | $609,231 | $118,200 | $1,000,862 | $— | $97,229 | $1,825,522 | | | 2021 | $563,077 | $— | $1,575,467 | $855,000 | $58,381 | $3,051,926 | | Julie A. D’Emilio Executive Vice President, Global Sales | 2023 | $581,346 | $— | $800,440 | $389,400 | $96,911 | $1,868,097 | | | 2022 | $556,346 | $106,000 | $650,232 | $— | $74,896 | $1,387,475 | | | 2021 | $534,808 | $— | $1,150,715 | $810,000 | $62,937 | $2,558,460 |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| * Amounts in rows may not foot across due to rounding. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| (a) Base salary for each NEO was based on a 364-day fiscal year for fiscal years 2023, 2022 and 2021. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| (b) Reflects the discretionary bonus that was awarded in 2023 based on fiscal 2022 performance, in light of the challenges faced by the Company due to the COVID-19 pandemic, inflationary impact on consumers, and responses to other challenges in the Company’s business including supply chain disruptions. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| (c) The amounts disclosed in this column represent the total grant date fair value for the following grants computed in accordance with FASB ASC Topic 718: |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| • | As set forth in the table below, a portion of the time-based restricted stock awards made in 2021 vest in four equal, annual installments beginning one year from the date of the grant and a portion cliff vest on the third anniversary of the date of grant. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| • | The time-based restricted stock granted in 2023 and 2022 vest in four equal, annual installments beginning one year from the date of the grant, except for a special restricted stock award granted to Ms. Krugman (in connection with her promotion) that includes a portion that cliff vests on the third anniversary of the date of grant. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| • | Vesting of the performance-based restricted stock granted in fiscal 2023 is contingent upon meeting specific performance targets for each of the three fiscal years 2023, 2024, and 2025, individually, and vest, as and to the extent performance criteria are met, in 2026 following completion of fiscal 2025. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| Name | Grant Date | Time-Based Restricted Shares – 4 Year Vest | Time-Based Restricted Shares – 3 Year Cliff Vest | Performance- Based Restricted Shares | Grant Date Fair Value per Share | | Michael D. Casey | 2/27/2023 | 43,884 | — | 43,884 | $74.06 | | | 2/16/2022 | 35,668 | — | 35,668 | $91.12 | | | 2/10/2021 | 66,296 | — | — | $98.05 | | Richard F. Westenberger | 2/27/2023 | 10,468 | — | 10,468 | $74.06 | | | 2/16/2022 | 6,860 | — | 6,860 | $91.12 | | | 2/10/2021 | 11,220 | 11,220 | — | $98.05 | | Brian J. Lynch | 2/27/2023 | 16,880 | — | 16,880 | $74.06 | | | 2/16/2022 | 10,976 | — | 10,976 | $91.12 | | | 2/10/2021 | 13,260 | 13,260 | — | $98.05 | | Kendra B. Krugman | 3/21/2023 | — | 14,022 | — | $71.32 | | | 2/27/2023 | 5,404 | — | 5,404 | $74.06 | | | 2/16/2022 | 5,492 | — | 5,492 | $91.12 | | | 2/10/2021 | 5,868 | 10,200 | — | $98.05 | | Julie A. D’Emilio | 2/27/2023 | 5,404 | — | 5,404 | $74.06 | | | 2/16/2022 | 3,568 | — | 3,568 | $91.12 | | | 2/10/2021 | 5,868 | 5,868 | — | $98.05 |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
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FISCAL 2023 SUMMARY COMPENSATION TABLE*
FISCAL 2023 SUMMARY COMPENSATION TABLE
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| (d) Reflects dollar value of all compensation earned in fiscal 2023, 2022, and 2021 pursuant to the Company’s Amended and Restated Incentive Compensation Plan, including all annual cash incentive compensation. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| (e) The amounts shown as “All Other Compensation” for fiscal 2023 consist of the following: |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| Name | 401 (k) Company Match | Dividends Paid on Unvested Restricted Stock | Other (i) | Total | | Michael D. Casey | $13,200 | $570,396 | $5,746 | $589,342 | | Richard F. Westenberger | $13,200 | $153,054 | $3,480 | $169,734 | | Brian J. Lynch | $13,200 | $222,993 | $4,913 | $241,106 | | Kendra B. Krugman | $13,200 | $134,165 | $2,094 | $149,459 | | Julie A. D’Emilio | $13,200 | $79,518 | $4,193 | $96,911 |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| (i) These amounts include imputed income from health and life insurance contributions, imputed income from bring-your-own technology to work programs, and benefits from healthcare programs, each of which are available to all employees. |
FISCAL 2023 SUMMARY COMPENSATION TABLE*
| 42 | |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS The following table provides information concerning each grant of plan-based awards made to an NEO in fiscal 2023. This includes incentive compensation awards granted under our Incentive Compensation Plan and restricted stock awards granted under our Equity Incentive Plan. The threshold, target, and maximum columns reflect the range of estimated payouts under these plans for fiscal 2023. The last column reports the aggregate grant date fair value of all awards made in fiscal 2023 as if they were fully vested on the grant date, computed in accordance with FASB ASC Topic 718.
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Award (a) | | | Estimated Future Payouts Under Non-Equity Incentive Plan Award | | | Grant Date Fair Value of Stock and Option Name Awards | | Name | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | Michael D. Casey | Cash Incentive Compensation | — | $487,500 | $1,950,000 | $2,925,000 | — | — | — | $— | | | Shares (b) | 2/27/2023 | — | — | — | — | 43,884 | 43,884 | $3,250,049 | | | Shares (c) | 2/27/2023 | — | — | — | 10,971 | 43,884 | 87,768 | $3,250,049 | | Richard F. Westenberger | Cash Incentive Compensation | — | $134,063 | $536,250 | $804,375 | — | — | — | $— | | | Shares (b) | 2/27/2023 | — | — | — | — | 10,468 | 10,468 | $775,260 | | | Shares (c) | 2/27/2023 | — | — | — | 2,617 | 10,468 | 20,936 | $775,260 | | Brian J. Lynch | Cash Incentive Compensation | — | $220,000 | $880,000 | $1,320,000 | — | — | — | $— | | | Shares (b) | 2/27/2023 | — | — | — | — | 16,880 | 16,880 | $1,250,133 | | | Shares (c) | 2/27/2023 | — | — | — | 4,220 | 16,880 | 33,760 | $1,250,133 | | Kendra B. Krugman | Cash Incentive Compensation | — | $131,250 | $525,000 | $787,500 | — | — | — | $— | | | Shares (b) | 2/27/2023 | — | — | — | — | 5,404 | 5,404 | $400,220 | | | Shares (c) | 2/27/2023 | — | — | — | 1,351 | 5,404 | 10,808 | $400,220 | | | Shares (d) | 3/21/2023 | — | — | — | — | 14,022 | 14,022 | $1,000,049 | | Julie A. D’Emilio | Cash Incentive Compensation | — | $110,625 | $442,500 | $663,750 | — | — | — | $— | | | Shares (b) | 2/27/2023 | — | — | — | 1,351 | 5,404 | 5,404 | $400,220 | | | Shares (c) | 2/27/2023 | — | — | — | — | 5,404 | 10,808 | $400,220 |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
| (a) The amounts shown under the “Threshold” column represent 25% of the target cash incentive compensation, assuming threshold-level performance is achieved under the financial performance measures and strategic objectives component. The amounts shown under the “Target” column represent 100% of the target cash incentive compensation, assuming target-level performance is achieved under the financial performance measures and strategic objectives component. The amounts shown under the “Maximum” column represent 150% of the target cash incentive compensation, assuming maximum-level performance is achieved under the financial performance measures and the strategic objectives component. The Company achieved 88% of “Target” for 2023. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
| (b) Shares of time-based restricted stock were granted pursuant to the Company’s Equity Incentive Plan. These restricted shares vest ratably in four equal, annual installments beginning one year from the date of the grant. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
| (c) Shares of performance-based restricted stock were granted pursuant to the Company’s Equity Incentive Plan. The amounts shown under the “Threshold” column represent 25% of the target grant award, assuming threshold-level performance is achieved under the performance vesting criteria in each of the fiscal years 2023, 2024, and 2025. The amounts shown under the “Target” column represent 100% of the target grant award, assuming target-level performance is achieved under the performance vesting criteria in each of the fiscal years 2023, 2024, and 2025. The amounts shown under the “Maximum” column represent 200% of the target grant award, assuming maximum-level performance is achieved under the performance vesting criteria under the performance vesting criteria in each of the fiscal years 2023, 2024, and 2025. Additional shares above Target performance, if any, will be issued following completion of the performance period and determination by the Compensation and Human Capital Committee that the additional shares above Target were earned. Shares above Target have not been issued and do not carry voting rights or rights to receive dividends. The dollar amounts under the “Grant Date Fair Value of Stock and Option Awards” are calculated based on the number of awards reported under the “Target” column. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
| (d) Shares of time-based restricted stock were granted pursuant to the Company’s Equity Incentive Plan. These restricted shares cliff vest on the third anniversary of the date of the grant. |
FISCAL 2023 GRANTS OF PLAN-BASED AWARDS
| 2024 Proxy Statement | 43 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END The following table provides information regarding unexercised stock options, stock that has not yet vested, and equity incentive plan awards for each NEO outstanding as of the end of fiscal 2023. Each outstanding award is represented by a separate row that indicates the number of securities underlying the award.
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| | Options Awards | | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) (Exercisable) | Number of Securities Underlying Unexercised Options (#) (Unexercisable) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (a) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (b) | | Michael D. Casey | 49,268 | — | — | $120.25 | 2/21/2028 | | | | | 69,000 | — | — | $83.84 | 2/14/2027 | | | | | 44,500 | — | — | $90.66 | 2/16/2026 | | | | | 28,000 | — | — | $82.40 | 2/18/2025 | | | | | | | | | | 190,132 | $14,238,985 | | Richard F. Westenberger | 5,048 | — | — | $120.25 | 2/21/2028 | | | | | 7,000 | — | — | $83.84 | 2/14/2027 | | | | | 5,220 | — | — | $90.66 | 2/16/2026 | | | | | 3,400 | — | — | $82.40 | 2/18/2025 | | | | | | | | | | 51,018 | $3,820,738 | | Brian J. Lynch | 9,844 | — | — | $120.25 | 2/21/2028 | | | | | 13,920 | — | — | $83.84 | 2/14/2027 | | | | | 10,400 | — | — | $90.66 | 2/16/2026 | | | | | 7,000 | — | — | $82.40 | 2/18/2025 | | | | | | | | | | 74,331 | $5,566,649 | | Kendra B. Krugman | 1,508 | — | — | $120.25 | 2/21/2028 | | | | | 1,508 | — | — | $120.25 | 2/21/2028 | | | | | 2,068 | — | — | $83.84 | 2/14/2027 | | | | | 1,404 | — | — | $83.84 | 2/14/2027 | | | | | 2,260 | — | — | $98.98 | 8/17/2026 | | | | | 960 | — | — | $90.66 | 2/16/2026 | | | | | 960 | — | — | $90.66 | 2/16/2026 | | | | | 2,360 | — | — | $86.88 | 11/11/2025 | | | | | 1,200 | — | — | $82.40 | 2/18/2025 | | | | | 400 | — | — | $82.40 | 2/18/2025 | | | | | | | | | | 48,227 | $3,611,720 | | Julie A. D’Emilio | 5,048 | — | — | $120.25 | 2/21/2028 | | | | | 7,000 | — | — | $83.84 | 2/14/2027 | | | | | 2,600 | — | — | $90.66 | 2/16/2026 | | | | | 1,760 | — | — | $82.40 | 2/18/2025 | | | | | | | | | | 26,506 | $1,985,034 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
[See next page for footnotes to table]
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
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OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (a) Equity Incentive Plan awards relate to the following grants: |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| • | As set forth in the table below, a portion of the time-based restricted stock awards made in 2023 and 2021 vest in four equal, annual installments beginning one year from the date of the grant and a portion cliff vest on the third anniversary of the date of grant. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| • | The time-based restricted stock awards made in 2022 and 2020 vest in four equal, annual installments beginning one year from the date of the grant. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| Name | Grant Date | Time-Based Restricted Shares – 4 Year Vest# | Time-Based Restricted Shares – 3 Year Cliff Vest # | Performance- Based Restricted Shares | Grant Date Fair Value per Share | | Michael D. Casey | 2/27/2023 | 43,884 | — | 43,884 | $74.06 | | | 2/16/2022 | 35,668 | — | 35,668 | $91.12 | | | 2/10/2021 | 66,296 | — | — | $98.05 | | | 2/12/2020 | 27,188 | — | — | $110.35 | | Richard F. Westenberger | 2/27/2023 | 10,468 | — | 10,468 | $74.06 | | | 2/16/2022 | 6,860 | — | 6,860 | $91.12 | | | 2/10/2021 | 11,220 | 11,220 | — | $98.05 | | | 2/12/2020 | 4,988 | — | — | $110.35 | | Brian J. Lynch | 2/27/2023 | 16,880 | — | 16,880 | $74.06 | | | 2/16/2022 | 10,976 | — | 10,976 | $91.12 | | | 2/10/2021 | 13,260 | 13,260 | — | $98.05 | | | 2/12/2020 | 5,892 | — | — | $110.35 | | Kendra B. Krugman | 3/21/2023 | — | 14,022 | — | $71.32 | | | 2/27/2023 | 5,404 | — | 5,404 | $74.06 | | | 2/16/2022 | 5,492 | — | 5,492 | $91.12 | | | 2/10/2021 | 5,868 | 10,200 | — | $98.05 | | | 2/12/2020 | 2,608 | — | — | $110.35 | | Julie A. D’Emilio | 2/27/2023 | 5,404 | — | 5,404 | $74.06 | | | 2/16/2022 | 3,568 | — | 3,568 | $91.12 | | | 2/10/2021 | 5,868 | 5,868 | — | $98.05 | | | 2/12/2020 | 2,608 | — | — | $110.35 |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| (b) Amount based on the closing market price per share of the Company’s common stock as traded on the NYSE on December 29, 2023, the last trading day of fiscal 2023, of $74.89. |
OUTSTANDING EQUITY AWARDS AT FISCAL 2023 YEAR-END
| 2024 Proxy Statement | 45 |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023 The following table provides information concerning our NEOs’ exercises of stock options and vesting of restricted stock during fiscal 2023. The table reports, on an aggregate basis, the number of securities acquired upon exercise of stock options, the dollar value realized upon exercise of stock options, the number of shares of restricted stock that have vested, and the dollar value realized upon the vesting of restricted stock.
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) (a) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (b) | | Michael D. Casey | 30,000 | $195,300 | 40,025 | $3,112,084 | | Richard F. Westenberger | 3,800 | $2,863 | 6,893 | $535,711 | | Brian J. Lynch | 7,500 | $3,931 | 9,080 | $705,930 | | Kendra B. Krugman | 2,000 | $2,940 | 4,301 | $334,518 | | Julie A. D’Emilio | 3,400 | $13,634 | 3,820 | $297,135 |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
| (a) Aggregate dollar amount was calculated by multiplying the number of shares acquired by the difference between the market price of the underlying securities at the time of exercise and the exercise price of the stock options. |
OPTION EXERCISES AND STOCK VESTED IN FISCAL 2023
| (b) Aggregate dollar amount was calculated by multiplying the number of shares acquired on vesting by the closing market price of the Company’s common stock as traded on the NYSE on the date of vesting. |
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION Eligible employees, including our NEOs, may elect annually to defer a portion of their base salary and annual cash incentive compensation under The William Carter Company Deferred Compensation Plan (the “Deferred Compensation Plan”). Under this plan, participants can defer up to 75% of their salary and/or 90% of their cash bonus. At the option of the participant, these amounts may be deferred to a specific date at least two years from the last day of the year in which deferrals are credited into the participant’s account. Interest on deferred amounts is credited to the participant’s account based upon the earnings and losses of one or more of the investments selected by the participant from the various investment alternatives available under the Deferred Compensation Plan. At the time of deferral, a participant must indicate whether he or she wishes to receive the amount deferred in either a lump sum or in substantially equal annual installments over a period of up to five years for “Specified Date” accounts or up to ten years for “Retirement” accounts. If a participant who is an employee of the Company separates from service prior to the elected commencement date for distributions and has not attained age 62, or age 55 and completed ten years of service, then the deferred amounts will be distributed as a lump sum, regardless of the method of distribution originally elected by the participant. If the participant in question has attained age 62, or age 55 with ten years of service, and has previously elected to do so on a timely basis, then the participant may receive the amounts in substantially equal annual installments over a period of up to ten years. There is a six-month delay in the commencement of distributions for all participants, if triggered by the participant’s termination or retirement. Changes to deferral elections with respect to previously deferred amounts are permitted only under the limited terms and conditions specified in the Code and early withdrawals from deferred accounts are permitted only in extreme cases, such as unforeseen financial hardship resulting from an illness or accident of the participant that is demonstrated to the Company’s Retirement Committee.
NONQUALIFIED DEFERRED COMPENSATION
| 46 | |
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
NONQUALIFIED DEFERRED COMPENSATION
| Name | Employee Contributions in 2023 (a) | Company Contributions in 2023 | Aggregate Earnings in 2023 (b) | Aggregate Withdrawals or Distributions | Aggregate Balance at End of 2023 (c) | | Michael D. Casey | $— | $— | $— | $— | $— | | Richard F. Westenberger | $— | $— | $36,987 | $— | $293,676 | | Brian J. Lynch | $110,740 | $— | $349,331 | $— | $2,653,555 | | Kendra B. Krugman | $— | $— | $— | $— | $— | | Julie A. D’Emilio | $— | $— | $— | $— | $— |
NONQUALIFIED DEFERRED COMPENSATION
| (a) All of the amounts reported in this column for Mr. Lynch are also included within the amount reported for that officer in the Summary Compensation Table. |
NONQUALIFIED DEFERRED COMPENSATION
| (b) None of the amounts reported in this column are reported in the All Other Compensation column of the Summary Compensation Table because the Company does not pay guaranteed or preferential earnings on deferred compensation. |
NONQUALIFIED DEFERRED COMPENSATION
| (c) Amounts reported in this column for each NEO include amounts previously reported in the Company’s Summary Compensation Table in previous years when earned if that NEO’s compensation was required to be disclosed in a previous year. |
NONQUALIFIED DEFERRED COMPENSATION
| 2024 Proxy Statement | 47 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
PAY RATIO DISCLOSURE
PAY RATIO DISCLOSURE In August 2015, pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the SEC adopted a rule requiring annual disclosure of the ratio of our median employee’s (the “Median Employee”) annual total compensation to the total annual compensation of the principal executive officer (“PEO”). The Company’s PEO is Mr. Casey. We selected a new Median Employee in fiscal 2023 due to last year’s median employee’s departure from the Company. Our Median Employee is a part-time employee at one of our U.S. retail store locations whose annual total compensation for fiscal 2023 (as calculated pursuant to Item 402(c)(2)(x) of Regulation S-K) was $12,540. The annual total compensation for fiscal 2023 for our PEO was $10,088,133. The resulting ratio of our PEO’s pay to the pay of our Median Employee for fiscal 2023 was 804:1.
METHODOLOGY TO IDENTIFY OUR MEDIAN EMPLOYEE
| Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs (2) | Value of Initial Fixed $100 investment based on: | | Net Income ( dollars in thousands) (5) | Adjusted Operating Income ( dollars in thousands) (6) | | | | | | | Total Shareholder Return (3) | Peer Group Total Shareholder Return (4) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $10,088,133 | $7,858,875 | $3,061,079 | $2,624,467 | $75.89 | $73.34 | $232,500 | $327,816 | | 2022 | 8,606,754 | 4,760,564 | 2,264,230 | 1,619,056 | 72.36 | 67.87 | 250,038 | 388,171 | | 2021 | 11,056,385 | 13,931,119 | 3,801,288 | 4,249,437 | 94.49 | 103.90 | 339,748 | 500,764 | | 2020 | 7,297,118 | (185,504) | 1,648,590 | 579,698 | 86.62 | 92.36 | 109,717 | 279,764 |
METHODOLOGY TO IDENTIFY OUR MEDIAN EMPLOYEE
| (1) The dollar amounts reported in the column “Compensation Actually Paid to PEO” (column (c)) represent the amount of Compensation Actually Paid (“CAP”) to Michael Casey, our Chief Executive Officer (“CEO”), 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 during the applicable year. To calculate CAP to the CEO, for each of the years shown, the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation: |
METHODOLOGY TO IDENTIFY OUR MEDIAN EMPLOYEE
| (2) The dollar amounts reported in the column “Average Compensation Actually Paid to Non-PEO NEOs” (column (e)) represent the average amount of CAP to the non-CEO named executive officers (“Non-CEO NEOs”) as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the Non-CEO NEOs during the applicable year. The Non-CEO NEOs reflected in columns (d) and (e) consist of the following individuals for each of the years shown: 2023—Richard Westenberger, Brian Lynch, Kendra Krugman, and Julie D’Emilio; 2022—Richard Westenberger, Brian Lynch, Patrick Moore, and Kendra Krugman; 2021—Richard Westenberger, Brian Lynch, Patrick Moore, and Peter Smith; 2020—Richard Westenberger, Brian Lynch, Patrick Moore, and Peter Smith. To calculate CAP to our Non-CEO NEOs for each of the years shown, the following amounts were deducted from and added to SCT total compensation. |