Carla Vernón
About Carla Vernón
Carla Vernón is Chief Executive Officer of The Honest Company (HNST) and a Director. She joined as CEO on January 9, 2023 and has served on the Board since January 25, 2023. She is 54 years old, holds a B.A. in Ecology & Evolutionary Biology from Princeton and an MBA from Texas McCombs, with prior P&L leadership at Amazon and General Mills . Under her leadership, FY2024 revenue grew 10% to $378 million, gross margin expanded 900 bps to 38.2%, and the company achieved its first full year of positive adjusted EBITDA ($26 million), with 2025 guidance targeting 4–6% revenue growth and adjusted EBITDA of $27–30 million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Amazon.com, Inc. | Vice President, Consumables Categories | Jan 2021–Dec 2022 | P&L responsibility for Household Essentials, Wellness, Beauty, Baby, Food & Beverage; technology development oversight |
| General Mills, Inc. | Corporate Officer; Operating Unit President, Natural & Organic Division | Jul 2017–Apr 2020 | Managed ~$900M ESG brand portfolio (Annie’s, Cascadian Farm, Epic Provisions, Muir Glen); led regenerative agriculture efforts |
External Roles
| Organization | Role | Years |
|---|---|---|
| Smithsonian National Museum of the American Latino | Board of Trustees | Current |
| Princeton University | Board of Trustees | 2020–2024 |
Board Governance
- Board service: Director since January 25, 2023; company’s board met 4 times in FY2024 and each member attended at least 75% of meetings; Board committees: Audit, Compensation, and Nominating & Corporate Governance, all composed of independent directors .
- Committee roles: Vernón is not listed as a member of Audit, Compensation, or Nominating committees; committee chairs in FY2024 were Susan Gentile (Audit), Katherine Bayne (Compensation; transitioning to Jack Hartung post-Annual Meeting), and James D. White (Nominating & Corporate Governance; transitioning to Katherine Bayne post-Annual Meeting) .
- Director compensation and independence: Employee-directors do not receive board compensation; Ms. Vernón received no additional compensation for director service in 2024 . Non-employee directors receive cash retainers and annual RSU grants per policy; RSUs fully vest immediately prior to a change-in-control .
Fixed Compensation
| Metric | FY2023 | FY2024 |
|---|---|---|
| Base Salary ($) | 711,058 | 725,000 |
| Target Bonus (% of Salary) | 100% of base | 100% of base |
| Actual Bonus Paid (Non-Equity Incentive) ($) | 717,025 | 884,000 |
| Stock Awards (Grant-Date Fair Value, $) | 3,247,619 | 3,683,758 |
| Option Awards ($) | — | — |
| All Other Compensation ($) | 263,535 | 9,760 (tax prep $2,900; 401k match $6,692; life insurance $167) |
| Total ($) | 5,772,569 | 5,302,518 |
Performance Compensation
| Component | Metric | Weighting | Target | Actual | Payout | Vesting/Payment Timing |
|---|---|---|---|---|---|---|
| Annual STIP (Financial) | Net Revenue | 25% of total (50% combined for financial metrics) | Pre-set corporate goal | Maximum achieved | Contributed to 121.9% total payout | Cash bonus paid for FY2024 |
| Annual STIP (Financial) | Adjusted EBITDA | 25% of total | Pre-set corporate goal | Maximum achieved | Contributed to 121.9% total payout | Cash bonus paid for FY2024 |
| Annual STIP (Operating Priorities) | Expand Retail Distribution | 12.5% of total (50% combined for operating priorities, equally weighted) | Pre-set operating priority | Partially achieved | Part of 121.9% total payout | Cash bonus paid for FY2024 |
| Annual STIP (Operating Priorities) | Increase Operational Efficiency | 12.5% | Pre-set operating priority | Achieved | Part of 121.9% total payout | Cash bonus paid for FY2024 |
| Annual STIP (Operating Priorities) | Build Innovation Pipeline | 12.5% | Pre-set operating priority | Achieved | Part of 121.9% total payout | Cash bonus paid for FY2024 |
| Annual STIP (Operating Priorities) | Develop Organizational Effectiveness | 12.5% | Pre-set operating priority | Achieved | Part of 121.9% total payout | Cash bonus paid for FY2024 |
Notes:
- Total FY2024 STIP payout for all NEOs, including the CEO, was 121.9% of target .
- As an Emerging Growth Company, HNST does not provide a CD&A and is not required to submit say-on-pay/say-on-frequency votes .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership (shares; % outstanding) | 945,811 shares; less than 1% of 110,229,634 shares outstanding as of Mar 31, 2025 |
| Composition of Beneficial Ownership | 756,215 shares plus 189,596 RSUs vesting within 60 days of Mar 31, 2025 |
| Unvested RSUs at 12/31/2024 | 1,037,946 from 3/21/2023 grant; market value $7,192,966 |
| Unvested RSUs at 12/31/2024 | 1,188,309 from 2/29/2024 grant; market value $8,234,981 |
| Options | None reported for Ms. Vernón; no options outstanding |
| Hedging/Pledging | Company policy prohibits short sales, margin accounts, pledging, and hedging (puts/calls) by employees and directors |
| Executive Ownership Guidelines | Not disclosed in reviewed sections; non-employee director RSUs accelerate on change-in-control |
| Section 16 Compliance | All Section 16(a) filings were timely for officers and directors since Jan 1, 2024 |
Employment Terms
| Term | CEO Agreement Details |
|---|---|
| Effective Date | Employment agreement signed Dec 12, 2022; effective Jan 9, 2023; at-will, no fixed term |
| Base Salary | $725,000 (effective date) |
| Target Bonus | 100% of base salary |
| Initial RSU Grant | $5,166,667 value; 1,845,238 shares |
| RSU Vesting (2023 grant) | 25% on the first quarterly vesting date following first anniversary; then 6.25% quarterly; for award footnote: 25% vested Mar 4, 2024; remainder vests 1/12th quarterly thereafter |
| RSU Vesting (2024 grant) | 25% on Mar 4, 2025; remainder vests 1/12th quarterly thereafter |
| Severance (Without Cause / Good Reason) | 12 months base salary plus pro rata portion of target bonus based on corporate goals; paid in equal installments over 12 months; contingent on release and resignation from all roles |
| COBRA | Company pays COBRA premiums for executive and dependents as additional severance benefit |
| Definitions | “Cause” includes willful material policy breach, injurious conduct, certain convictions, refusal to follow lawful instructions, and for the CEO, change in reporting from Board to an officer; “Good Reason” includes material adverse assignment change, title change, base salary reduction (≤25% broadly applicable), relocation >25 miles, uncured company breach (notice/cure required) |
| Clawback | Dodd‑Frank compliant clawback policy adopted Oct 2, 2023 |
Director Compensation (context for dual role)
| Component | Amount |
|---|---|
| Non-Employee Director Annual Cash Retainer | $50,000 |
| Audit Committee Member / Chair | $15,000 / $20,000 |
| Compensation Committee Member / Chair | $7,500 / $15,000 |
| Nominating & Corporate Governance Member / Chair | $5,000 / $10,000 |
| Annual Director RSU Grant | RSUs valued at $185,000; fully vest on earlier of 1-year anniversary or immediately prior to next annual meeting; accelerates on change-in-control |
| CEO as Director | Vernón received no additional board compensation (employee-director) |
Performance & Track Record (Company outcomes during tenure)
| Metric | FY2023 | FY2024 |
|---|---|---|
| Revenue ($MM) | 344.4 | 378.3 (+10%) |
| Gross Margin (%) | 29.2% | 38.2% (+900 bps) |
| Net Income (Loss, $MM) | (39.2) | (6.1) |
| Adjusted EBITDA ($MM) | (11.2) | 25.9 |
| Cash & Equivalents ($MM, YE) | 32.8 | 75.4 |
| Debt | None outstanding at YE2024 | |
| FY2025 Outlook | Revenue +4–6%; Adjusted EBITDA $27–30MM |
Related Party Transactions and Governance Policies
- Related person transactions discussed include legacy agreements with founder Jessica Alba (Name & Likeness agreement terminated April 2024); no related party transactions involving Ms. Vernón are identified in the reviewed section .
- Insider Trading Policy and Corporate Governance Guidelines are posted; company prohibits hedging/pledging as described above .
Investment Implications
- Pay-for-performance alignment: CEO’s cash bonus tied to objective financial metrics (net revenue and adjusted EBITDA) and operating priorities; achieving maximum on financial metrics and strong execution on operating priorities yielded a 121.9% payout, consistent with improved FY2024 revenue and profitability metrics .
- Retention and selling pressure: Large unvested RSU balances with quarterly vesting create steady vesting events; while hedging/pledging is prohibited, executives may have sell-to-cover activity at vest dates; net, RSU-heavy design aligns long-term value creation and retention .
- Change-in-control economics: Director RSUs accelerate on change-in-control; executive CIC equity acceleration not specified in reviewed materials; severance for CEO is 12 months salary plus pro-rata target bonus, which is moderate and reduces transition risk without excessive guarantees .
- Governance and independence: CEO holds a dual role as Director but is not on independent committees and receives no director compensation; independent committee chairs and defined clawback/insider trading policies mitigate independence concerns and compliance risk .
- Execution track record: FY2024 outcomes—gross margin expansion, first full-year positive adjusted EBITDA, and improved net loss—signal operational discipline and margin enhancement; 2025 outlook remains conservative with 4–6% revenue growth and EBITDA expansion guidance .