Kendra Krugman
CARTERSAbout Kendra Krugman
Kendra D. Krugman served as Senior Executive Vice President, Chief Creative & Growth Officer at Carter’s, Inc. (CRI) in 2024 and was later referenced as Chief Product Officer in 2025; she joined Carter’s in 2007 and is 47 years old . In 2024, CRI’s annual incentive plan paid out at 5% of target (net sales and adjusted operating income below thresholds; strategic objectives 25%), and the 2022–2024 performance share cycle paid 0%, evidencing a tight pay-for-performance linkage . Shareholders supported executive pay with ~98% say‑on‑pay approval in 2024 . Ms. Krugman’s separation was announced August 18, 2025, effective October 21, 2025, treated as an involuntary termination without cause consistent with her severance agreement .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Carter’s, Inc. | Manager, Merchandising | 2007 | Early merchandising leadership contributor |
| Carter’s, Inc. | Director, Merchandising | 2008 | Advanced assortment and category leadership |
| Carter’s, Inc. | VP, Sales & Merchandising, Mass Channel | 2012 | Mass-channel growth and merchandising execution |
| Carter’s, Inc. | SVP, Carter’s Brands & Licensing | 2016 | Brand stewardship and licensing expansion |
| Carter’s, Inc. | EVP, Merchandising & Design | Jul 2018 | End-to-end product creation leadership |
| Carter’s, Inc. | EVP, Retail & Chief Merchandising Officer | Mar 2023 | Retail merchandising, traffic and marketing alignment |
| Carter’s, Inc. | Sr EVP, Chief Creative & Growth Officer | Mar 2024 | Creative direction, growth initiatives |
| Carter’s, Inc. | Chief Product Officer | 2025 | Led product; quoted at Otter Avenue brand launch |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Gap Inc.; French Connection Group | Positions prior to Carter’s | Not disclosed | Apparel/retail experience prior to Carter’s |
Fixed Compensation
| Metric | FY2023 | FY2024 |
|---|---|---|
| Base Salary ($) | $700,000 | $775,000 |
| Target Annual Bonus (% of Salary) | 85% (set for 2024 for Krugman) | 85% |
| Actual Annual Bonus Paid ($) | $462,000 (for FY2023) | $33,000 (5% of target) |
Performance Compensation
Annual Incentive – FY2024 Design and Outcome
| Metric | Weight | Threshold | Target | Maximum | FY2024 Actual | Payout Contribution |
|---|---|---|---|---|---|---|
| Net Sales ($MM) | 50% | $2,890 | $3,000 | $3,093 | $2,844 | Below threshold |
| Adjusted Operating Income ($MM) | 30% | $310 | $345 | $377 | $287.0 | Below threshold |
| Strategic Objectives | 20% | N/A | N/A | N/A | 25% achieved | Low contribution |
| Overall Payout | — | — | — | — | — | 5% of target |
- FY2024 Cash Bonus Paid to Krugman: $33,000 .
Long‑Term Equity – FY2024 Grants (Award Mix 50% time‑based / 50% performance/market‑based)
| Award Type | Grant Date | Shares/Target | Vesting / Performance | Grant Date FV/Share |
|---|---|---|---|---|
| Time‑based RS | 2/28/2024 | 9,152 | 25% annually over 4 years | $81.95 |
| Performance‑based RS (Company PSAs) | 2/28/2024 | 6,040 target | 3‑yr period (FY24–FY26); Net Sales (33%), Adjusted EPS (33%), Relative TSR (34%) | $81.95 (base award accounting) |
| Market‑based RS (Relative TSR PSAs) | 2/28/2024 | 3,112 target | 3‑yr relative TSR; 25%–200% payout curve | $117.28 |
| Total FY2024 LTIP Grant Value | FY2024 | $1,609,960 | Per CD&A; mix 50/50 | — |
- Completed PSA Cycle (FY2022–FY2024): 0% payout on Net Sales and Adjusted EPS metrics (below threshold) .
Equity Ownership & Alignment
| Ownership Metric | Amount |
|---|---|
| Beneficial Ownership (shares) | 100,861 |
| Shares Outstanding (as of record date 3/20/2025) | 36,237,114 |
| Ownership as % of SO | ~0.28% (100,861 / 36,237,114) |
| Breakdown (as of 3/20/2025): Owned & Vested | 24,684 shares |
| Breakdown: Exercisable Options | 13,028 shares |
| Breakdown: Restricted Common (Unvested) | 48,593 shares |
| Breakdown: Unvested Performance‑Based RS | 14,556 shares |
| Stock Ownership Guidelines | 3x base salary for Sr EVP/EVP; all NEOs in compliance |
| Hedging/Pledging | Prohibited |
- Options context: Listed strikes ($82–$120) vs $54.43 YE2024 price indicate options were out‑of‑the‑money at FY2024 year‑end .
Employment Terms
Standard NEO Severance and Change‑of‑Control (per Proxy)
- Without cause / Good reason: cash severance of 12 months base salary; pro‑rated annual bonus based solely on company results; up to 12 months company contributions for medical/dental; 12 months life insurance contributions; COBRA coordination; subject to release and restrictive covenants .
- Change‑of‑Control (within 2 years, double‑trigger for 2024+ awards): additional 12 months base salary; extended benefits contributions; equity acceleration rules: pre‑2/15/2024 awards single‑trigger vest; on/after 2/15/2024 awards vest on qualifying termination or if no qualifying replacement awards are provided .
Separation Agreement Specifics for Kendra Krugman (Filed with Q3’25 10‑Q)
- Effective separation date: October 21, 2025 .
- Severance: $775,000 (12 months of base salary) paid in biweekly installments; first lump sum of $149,038.50 reflecting initial five installments .
- Retention bonus: $250,000 under Retention Agreement dated April 1, 2025, payable Oct 31, 2025 .
- Pro‑rated FY2025 bonus: paid on regular bonus cycle; fraction 294/365 of actual bonus for 2025 (days worked); subject to committee approval .
- Benefits: Company pays employer portion of COBRA premiums up to 12 months (earlier if covered elsewhere or COBRA ends) .
- Equity: vesting continued through separation date; all unvested RS/option awards canceled at separation; vested options exercisable for 60 days post‑separation .
- Non‑compete: 1‑year restricted period post‑separation; children’s specialty retail brands named (e.g., Justice, Children’s Place, Gap Kids, Old Navy, Hanna Andersson) .
- Release of claims and 409A compliance provisions included .
- 8‑K confirmation: departure as part of restructuring; severance consistent with existing agreement; FY2025 AIP payout pro‑rated through Aug 22, 2025 .
- Trading plans: No 10b5‑1 plan adoption/termination reported by directors/officers in the quarter ended Sep 27, 2025 .
Performance & Track Record
- 2024 Pay and Outcomes: Annual incentive paid at 5% of target (net sales $2,844MM; adjusted operating income $287.0MM; strategic objectives 25% achieved); 2022–2024 PSAs paid 0% .
- Brand/Innovation: Quoted as Chief Product Officer at July 22, 2025 launch of “Otter Avenue,” a toddler‑first brand with design features to facilitate self‑dressing, highlighting product leadership and innovation agenda .
Compensation Governance, Peer Group, and Controls
- Governance safeguards: clawback policy under Rule 10D‑1; no hedging/pledging; equity retention and ownership guidelines; independent consultant (Meridian) supports committee .
- 2024 Peer group for benchmarking included: Abercrombie & Fitch; American Eagle; The Children’s Place; Columbia Sportswear; G‑III; Gildan; Guess?; Hanesbrands; Kontoor; Levi Strauss; Oxford; Tapestry; Under Armour; Urban Outfitters; Victoria’s Secret .
- Say‑on‑pay: ~98% approval at 2024 annual meeting .
Compensation Structure Analysis
- Mix shifts and risk: 2024 LTIP maintained 50/50 time‑ vs performance/market‑based mix; options not used since 2018; equity plan amended in 2024 to add double‑trigger CoC and mandatory clawback, reducing windfall risk and aligning with best practices .
- Pay‑for‑performance alignment: Minimal 2024 cash payout (5% of target) and 0% 2022–24 PSA payout corroborate downside sensitivity to under‑target results .
- Perquisites: No special perquisites beyond broad‑based programs; 401(k) match approved for FY2024 contributions (100% up to 4%) .
Equity Ownership & Alignment Details (as of 3/20/2025)
| Component | Shares | Notes |
|---|---|---|
| Owned & Vested Common Stock | 24,684 | Direct/vested holdings |
| Exercisable Stock Options | 13,028 | Multiple strikes ($82–$120), YE2024 stock $54.43 |
| Restricted Common Stock (Unvested) | 48,593 | Subject to time‑based vesting and retention policy |
| Unvested Performance‑Based RS | 14,556 | Performance‑contingent; excluded from ownership guideline calc |
| Total Beneficial Ownership | 100,861 | |
| Ownership % of SO | ~0.28% (100,861 / 36,237,114) | Inputs cited |
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited by policy (alignment positive) .
- Equity award practices: No option repricing; no special perquisites; mandatory clawback; double‑trigger CoC features (governance positive) .
- Related party transactions: None in FY2024 per proxy disclosure .
Investment Implications
- Compensation alignment: 2024 incentive outcomes (5% of target) and 0% PSA payout underscore tight linkage to net sales, adjusted EPS/operating income, and relative TSR—reducing risk of overpayment in downcycles .
- Selling pressure/overhang: Krugman’s unvested equity canceled at separation and options were largely out‑of‑the‑money at YE2024, limiting near‑term insider selling pressure tied to her awards; no 10b5‑1 trading plan reported in Q3’25 .
- Retention/transition: Non‑compete for 12 months with named children’s specialty peers mitigates near‑term competitive spillover; CEO oversight of product on interim basis disclosed .
- Governance: Double‑trigger CoC and clawback adoption in 2024, plus ownership guidelines and no hedging/pledging, indicate strong alignment practices (supportive for say‑on‑pay and broader governance assessments) .