Douglas Palladini
CARTERSAbout Douglas Palladini
Douglas C. Palladini (age 58) became Chief Executive Officer & President of Carter’s, Inc. and joined its Board of Directors on April 3, 2025 . He previously served nearly 20 years at Vans (VF Corp.), including Global Brand President (2016–2022), where he more than doubled revenue to over $4.2 billion in under six years and led 20 consecutive quarters of double‑digit growth in the Americas prior role . Company context entering his tenure: FY2024 net income was $185.5 million and adjusted operating income was $286.6 million, with a 2024 TSR value of $57.59 per $100 initial investment (proxy PVP table) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Vans (VF Corporation) | Global Brand President | Jul 2016 – Mar 2022 | More than doubled global revenue to >$4.2B; expanded DTC/eCommerce; elevated apparel/accessories mix; built global brand loyalty . |
| Vans (VF Corporation) | GM, Americas Region | Jul 2013 – Jul 2016 | Led 20 consecutive quarters of double‑digit growth across the Americas . |
| Vans (VF Corporation) | Senior roles of increasing responsibility | Jun 2004 – Jul 2013 | Brand building and multi‑channel growth foundation . |
| Kickstand, LLC | Founder & Owner (brand/consumer strategy advisory) | Apr 2022 – Mar 2025 | Advised on brand strategy, executive coaching, organizational design . |
| Swell | Chief Operating Officer | Prior to 2004 (years not disclosed) | Drove revenue acceleration and profitability improvements . |
| Cynic (DGWB division) | Founder/Director | Prior to 2004 (years not disclosed) | Entrepreneurial, marketing-led growth initiatives . |
| EMAP Peterson | Group Publisher | Prior to 2004 (years not disclosed) | Marketing/publishing leadership; revenue growth . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Carter’s, Inc. | Director (management) | Apr 3, 2025 – present | Appointed upon CEO start . |
| Private company boards (unnamed) | Director | Prior to Apr 2025 | Agreed to retire from private company boards as a condition of employment . |
- Board governance and committee roles: As CEO, Palladini is a management director (not independent). Committee charters are filled by independent directors; committee assignment matrix lists independent directors (Palladini not listed) . The Board separates Chair and CEO roles; William J. Montgoris serves as Non‑Executive Chairman, mitigating CEO/Chair dual‑role concerns .
Fixed Compensation
| Component | Terms | Source |
|---|---|---|
| Base salary | $1,200,000 per year | |
| Target annual bonus | 150% of base salary; prorated for FY2025; based on Company financial and individual performance; must be employed at payout | |
| Annual equity (recurring) | Eligible beginning FY2026; target GDFV ≥ $5,500,000; types/metrics at Committee discretion under the Equity Plan | |
| Sign‑on equity (one‑time) | $7,000,000 GDFV granted Apr 3, 2025; 50% time‑based RS; 50% market‑based RS (price‑hurdle PSUs); time‑based vests 25% annually over 4 years; market‑based earned on 30%/60%/90% price hurdles over 3 years but vests only at 3‑year end | |
| Legal fee reimbursement | Up to $25,000 in reasonable legal/advisory fees related to the offer | |
| Relocation | Eligible per company relocation program; separate repayment agreement required |
Performance Compensation
- Company annual incentive design (context from FY2024 program used for NEOs; 2025 CEO weighting specifics not disclosed):
- Metrics/weights: Net Sales (50%), Adjusted Operating Income (30%), Strategic Objectives (20%) .
- FY2024 results: Net Sales $2,844m vs $3,000m target; Adj. Operating Income $287.0m vs $345m target; Strategic Objectives 25% achieved; overall payout 5% of target (payout examples shown for NEOs) .
- Long‑term incentives (company practice):
- FY2024 grants used 50% time‑based RS (4‑yr ratable) and 50% performance‑based RS with 3‑yr performance on Net Sales, Adjusted EPS, and Relative TSR (approx. 33/33/34% weights) .
- CEO sign‑on performance equity:
- Market‑based RS: earned upon achieving share price hurdles at +30%, +60%, +90% above $35.57 (grant‑date close) for 20 consecutive trading days within three years from 4/3/2025; all earned shares cliff‑vest at the end of the 3‑year period, subject to continued employment .
| Incentive type | Metric | Weighting | Target/Structure | Vesting |
|---|---|---|---|---|
| Annual bonus (CEO, FY2025 terms) | Company financial + individual performance | Not disclosed | Target 150% of base; prorated for FY2025 | Typically paid after FY end; must be employed at payout |
| Sign‑on Time‑based RS | Service | 100% of this tranche | 98,400 shares granted; GDFV per share $35.57 | 25% per year over 4 years |
| Sign‑on Market‑based RS | Stock price hurdles | 100% of this tranche | 98,400 shares target; GDFV per share $10.67; 30%/60%/90% price hurdles vs $35.57, 20 consecutive days within 3 years | Earned on hurdle achievement; no vesting until 3‑year end; continued employment required |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership at proxy record date (3/20/2025) | Not listed with share count as of record date; footnote notes post‑record sign‑on grant on 4/3/2025 . |
| CEO sign‑on awards (4/3/2025) | 98,400 time‑based RS; 98,400 market‑based RS (price‑hurdle) . |
| Ownership guidelines | CEO required minimum ownership of 7x base salary; executives cannot sell until exceeding guideline; unvested performance‑based shares excluded from compliance calculation . |
| Equity retention policy | Time‑based restricted stock must be held 4 years from grant before sale (tax withholdings excepted) . |
| Hedging/pledging | Prohibited for all directors and employees . |
| Options exposure | Company has not granted stock options since fiscal 2018; reduces repricing risk . |
Implications: Four‑year service vesting and 3‑year cliff vesting on market‑based awards, combined with 7x ownership and no hedging/pledging, meaningfully limit near‑term insider selling pressure and align incentives with multi‑year TSR performance .
Employment Terms
| Term | Detail |
|---|---|
| Employment | At‑will; reports to Board; indemnified; covered by D&O insurance; subject to company clawback policy (Rule 10D‑1 compliant) . |
| Severance (without Cause / for Good Reason) | 24 months of base salary continuation; pro‑rata annual bonus based solely on Company goal attainment; employer COBRA contribution up to 18 months; release required . |
| Change‑of‑Control (within 2 years; double‑trigger) | Additional 12 months salary (total 36 months base); continued benefits per agreement; equity acceleration subject to Equity Plan’s double‑trigger rules (qualifying replacement awards or qualifying termination) . |
| Restrictive covenants | Non‑compete 24 months (U.S. nationwide) and non‑solicit; confidentiality and non‑disparagement provisions . |
| Legal/relocation | Up to $25,000 legal fee reimbursement; relocation benefits per policy . |
Board Governance (service history, committees, independence)
- Service history: Appointed to Board effective April 3, 2025; standing for election at the 2025 Annual Meeting .
- Independence: Management director (CEO); NYSE independence applies to non‑management directors; Board affirms all current independent directors meet independence standards .
- Committees: Committee assignments shown for independent directors; CEO is not listed on Audit, Compensation & Human Capital, Nominating & Corporate Governance, or Business Transformation committees .
- Dual‑role implications: Roles are separated—Non‑Executive Chairman (Montgoris) and CEO (Palladini)—which reduces concentration of authority; executive sessions of non‑management directors held at least quarterly .
Additional Context: Company Compensation Governance and Shareholder Feedback
- Equity Plan changes (effective Feb 15, 2024): Double‑trigger change‑of‑control and mandatory clawback provisions aligned with SEC/NYSE requirements .
- Say‑on‑Pay support: Approximately 98% approval in 2024, indicating strong investor support for pay practices heading into 2025 leadership transition .
- Compensation peer group (used for 2024 benchmarking): Abercrombie & Fitch; American Eagle; The Children’s Place; Columbia Sportswear; G‑III; Gildan; Guess?; HanesBrands; Kontoor; Levi Strauss; Oxford Industries; Tapestry; Under Armour; Urban Outfitters; Victoria’s Secret .
Performance & Track Record (highlights relevant to incentives)
- Vans leadership results: More than doubled revenue to >$4.2B in <6 years; expanded global DTC/eCommerce; elevated apparel/accessories mix .
- CRI 2025 operating agenda under Palladini: Announced accelerated productivity actions (closing low‑margin stores, right‑sizing org, honing product choices) and stated decision with the Board to reduce 2026 compensation in light of difficult decisions, signaling alignment with performance and shareholder expectations .
- FY2024 baseline for incentive context: Net income $185.5m; adjusted operating income $286.6m; 2024 annual incentive paid at 5% of target for NEOs given underperformance vs targets .
Risk Indicators & Red Flags
- Positive mitigants: Mandatory clawback; no hedging/pledging; option grants discontinued since 2018; double‑trigger CoC equity vesting; independent Chair structure .
- Potential concerns: Generous severance duration (24 months base; 36 months with CoC) could raise termination cost; market‑based grant uses absolute price hurdles (less diversified than relative TSR) but combined with 3‑year cliff vesting creates strong retention/TSR alignment .
Investment Implications
- Alignment and upside focus: Market‑based sign‑on equity earned only upon substantial absolute share price appreciation (+30/+60/+90%) with 3‑year cliff vesting directly ties CEO wealth to TSR and reduces near‑term selling pressure; 7x ownership/retention policy further aligns with long‑term holders .
- Retention risk appears low near term: Large unvested awards (time‑based and market‑based), 4‑year/3‑year vesting structure, and non‑compete reduce likelihood of voluntary exit; severance terms provide downside protection that can stabilize leadership through the turnaround .
- Pay‑for‑performance posture: Company track record includes very low 2024 bonus payout (5% of target) and enhanced clawback/double‑trigger features; 2026 compensation reduction commitment signals responsiveness to operating realities and shareholder optics .
- Governance quality: Separation of Chair/CEO and independent committees mitigate dual‑role risks; no hedging/pledging; strong director ownership guidelines .