🧾 What This Document Is

This is a Definitive Proxy Statement (DEF 14A) for Carter's, Inc. Think of it as the official "meeting agenda" and information packet sent to shareholders before their annual meeting. Its purpose is to provide all the details shareholders need to make informed votes on key company decisions.

Why it matters: This document isn't just paperwork—it’s your chance as a shareholder to have a say in how the company is run, who leads it, and how executives are paid.

🏢 What The Company Does

In simple terms, Carter's is the leading brand for babies and young children in the U.S. They design, market, and sell children's apparel, accessories, and footwear. You’ll find their products under well-known labels like Carter's, OshKosh B'gosh, Skip Hop, and Child of Mine. They sell through major retailers, their own stores, and online.

👉 Their business model relies on strong brand recognition, a multi-channel sales strategy, and deep relationships with major retailers like Walmart and Target.

📅 The Annual Meeting & Key Votes

Shareholders will vote on four main proposals at the virtual meeting on Wednesday, May 13, 2026.

Proposal	What It Is	Board's Recommendation
1. Election of Directors	Choose 9 board members to lead the company.	Vote FOR all nominees
2. Executive Compensation	Advisory vote to approve how top executives are paid.	Vote FOR
3. Equity Incentive Plan	Approve an updated plan for granting employee stock awards.	Vote FOR
4. Auditor Ratification	Approve PricewaterhouseCoopers LLP as the company's auditor for fiscal 2026.	Vote FOR

👉 The "Say-on-Pay" vote is advisory, meaning it’s non-binding but serves as a crucial signal to the board on shareholder sentiment about executive pay.

👥 Meet the Board Nominees

The board proposes nine director nominees, each bringing specific expertise. Here are a few highlights:

• Douglas C. Palladini (Age 59): The new CEO & President (since April 2025). Former Global Brand President of Vans.
• Gretchen W. Schar (Age 71): Non-Executive Chair of the Board. Former CFO with deep finance and governance experience.
• Stacey S. Rauch (Age 68): Chair of the Compensation & Human Capital Committee. Former senior partner at McKinsey & Company with deep retail expertise.
• Mark P. Hipp (Age 64): Brings tech and M&A experience from his time at Hewlett Packard Enterprise.

👉 Why it matters: This board oversees the company's strategy and holds management accountable. Their diverse backgrounds in retail, finance, and operations are critical for navigating a challenging market.

💼 Executive Changes & Leadership

Fiscal 2025 was a year of significant leadership transition:

• New CEO: Douglas C. Palladini joined on April 3, 2025, succeeding Michael D. Casey, who retired.
• CFO/COO: Richard F. Westenberger served as Interim CEO before Palladini's arrival and remains CFO & COO.
• Other Key Hires: New Chief Strategy Officer (Emily Evert), Chief Marketing Officer (Sarah Crockett), and Chief Brand Officer (David Tichiaz).

👉 This signals a strategic reset. The new leadership team, with strong branding and consumer strategy backgrounds, is tasked with executing a business transformation and returning the company to growth.

💰 How Executives Are Paid (CD&A)

The Compensation & Human Capital Committee designs pay to attract talent and drive performance.

• Philosophy: Pay for performance. A significant portion of compensation is "at risk," tied to hitting company goals.
• Structure:
  • Base Salary: Fixed pay.
  • Annual Cash Bonus: Based on hitting targets for Net Sales (30%), Operating Income (35%), and Strategic Objectives (35%) like executing a "concept-to-consumer" transformation.
  • Long-Term Equity: Historically a mix of performance-based and time-based restricted stock. For 2025, they granted only time-based stock due to the CEO transition and need to attract talent. They plan to return to a 60/40 performance/time-based mix in 2026.

⚠️ Performance vs. Pay: A Tough Year

Fiscal 2025 was financially challenging, which impacted executive payouts:

• Net Sales: Up 1.9% to $2.90 billion.
• Adjusted Operating Income: Down 38.6% to $176.0 million.
• Adjusted EPS: Down 40.3% to $3.47.
• Inventory: Increased 8.4% to $544.6 million due to tariff costs.

👉 The compensation committee did not approve any base salary increases for executives in 2025, reflecting the tough results. Bonuses were paid but were lower than target due to missing financial goals.

🔍 Key Governance & Policies

• Majority Voting: Directors must get more "For" votes than "Against" to be elected.
• Stock Ownership Guidelines: Executives and directors must hold significant company stock.
• Clawback Policy: The company can recover incentive pay if financial results are later restated.
• No Hedging/Pledging: Executives are prohibited from hedging or pledging company stock.

🧠 The Analogy

Running Carter's right now is like captaining a ship through a storm. The board (the navigators) has just brought in a new captain (CEO Palladini) with fresh charts to steady the course. They're asking the crew (shareholders) to trust their plan and approve the updated navigation tools (the Equity Plan) and compensation (to motivate the officers) to get everyone safely to port—profitable growth.

📇 Key Contacts & People

• Investor Relations: For questions about the proxy or meeting.
• Antonio D. Robinson: Chief Administrative & Compliance Officer, Corporate Secretary (proxy contact).
• Board Chair: Gretchen W. Schar (Non-Executive Chair)
• CEO: Douglas C. Palladini
• CFO/COO: Richard F. Westenberger

🧩 Final Takeaway

This proxy reveals a company in a major leadership and strategic transition during a difficult operating environment. Shareholders are being asked to approve the new board and leadership's direction, including a refreshed equity plan, while the "say-on-pay" vote will be a key test of confidence in the new team's compensation structure after a year of significant earnings decline. The focus is squarely on execution of the turnaround plan under the new CEO.