CSV DEF 14A Report ended Dec. 31, 2019

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•	Stockholder of Record . If your shares are registered directly in your name with American Stock Transfer & Trust Company, LLC, our transfer agent, you are considered to be the stockholder of record with respect to those shares, and you have the right to grant your voting proxy directly with the Company or to vote in person at our Annual Meeting.

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Street Name Stockholder . If your shares are held by a financial institution, broker or other nominee, you are considered the beneficial owner of shares held in “street name” and your financial institution, broker or other nominee is the stockholder of record. As the beneficial owner, you have the right to direct your financial institution, broker or other nominee how to vote your shares and are also invited to attend our Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at our Annual Meeting unless you obtain a legal proxy from the stockholder of record prior to attending our Annual Meeting giving you the right to vote the shares. In order to vote your shares, you will need to follow the directions your financial institution, broker or other nominee provides to you.

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•	submitting written notice of revocation no later than May 18, 2020 to our home office, which is located at 3040 Post Oak Boulevard, Suite 300, Houston, Texas 77056, Attn: Corporate Secretary;

•	timely submitting a proxy with new voting instructions using the Internet voting system;

•	submitting a later dated proxy with new voting instructions by mail that is received at our home office by May 18, 2020; or

•	attending our Annual Meeting and voting your shares in person.

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Proposal 1 (Election of the Class III Directors) : To be elected, each director nominee must receive the affirmative vote of a majority of the votes of the shares of Common Stock present in person or represented by proxy at our Annual Meeting and entitled to vote on the proposal. This means that the director nominees with more votes cast in favor of than votes withheld from the election will be elected. Broker non-votes will have no effect on the outcome of the vote for directors.

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Proposal 2 (Advisory Vote to Approve Named Executive Officer Compensation) : Approval of this proposal requires the affirmative vote of the holders of at least a majority of the outstanding shares of Common Stock present in person or represented by proxy at our Annual Meeting and entitled to vote on the proposal. Abstentions will be counted in determining the total number of shares “entitled to vote” on this proposal and will have the same effect as a vote “Against” this proposal. Broker non-votes will have no effect on the outcome of the vote on this proposal. While this vote is required by law, it will neither be binding on us, our Board or our Compensation Committee, nor will it create or imply any change in the fiduciary duties of, or impose any additional fiduciary duty on, us, our Board or our Compensation Committee. However, our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions.

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Proposal 3 (Ratification of the Appointment of Grant Thornton LLP) : Ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020 requires the affirmative vote of the holders of at least a majority of the outstanding shares of Common Stock present in person or represented by proxy at our Annual Meeting and entitled to vote on the proposal. Abstentions will be counted in determining the total number of shares “entitled to vote” on this proposal and will have the same effect as a vote “Against” this proposal.

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•	A deep, genuine belief, understanding and commitment to our Being The Best Mission Statement and Five Guiding Principles ;

•	Business and investment savvy, including an owner-oriented attitude and conviction that Carriage has evolved into a high value, superior investment platform; and

•	An ability to make a meaningful contribution and engagement to our Board’s oversight of all elements and linkages of our High Performance Culture Framework .

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•	Honesty, Integrity and Quality in All That We Do

•	Hard work, Pride of Accomplishment, and Shared Success Through Employee Ownership

•	Belief in the Power of People Through Individual Initiative and Teamwork

•	Outstanding Service and Profitability Go Hand-in-Hand

•	Growth of the Company Is Driven by Decentralization and Partnership

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•	A deep, genuine belief, understanding and commitment to our Being The Best Mission Statement and Five Guiding Principles ;

•	Business and investment savvy, including an owner-oriented attitude and conviction that we have evolved into a superior stockholder value creation investment platform and therefore represent a superior long-term investment opportunity; and

•	An ability to make a meaningful contribution and engagement to our Board’s oversight of all elements and linkages of our High Performance Culture Framework .

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•	review, evaluate and approve our executive officer compensation plans, policies and programs;

•	recommend to our Board non-employee director compensation plans, policies and programs;

•	produce the Compensation Committee Report on executive compensation for inclusion in our proxy statement for our Annual Meeting of Stockholders;

•	administer, review and approve grants under our stock incentive plans; and

•	perform such other functions as our Board may assign from time to time.

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•	developing, summarizing and presenting compensation information and analysis to enable our Compensation Committee to execute its responsibilities, as well as addressing specific requests for information from our Compensation Committee;

•	developing recommendations for individual executive officer and senior leadership bonus plans for consideration by our Compensation Committee and reporting to our Compensation Committee regarding achievement against the bonus plans;

•	preparing long-term incentive award recommendations for our Compensation Committee’s approval; and

•	attending our Compensation Committee’s meetings as requested in order to provide additional information, respond to questions and otherwise assist our Compensation Committee.

•	assist our Board in fulfilling its oversight responsibilities regarding the:

◦	integrity of our financial statements and financial reporting process, and our systems of internal accounting and financial controls;

◦	qualifications and independence of the independent registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other review or attestation services for Carriage;

◦	performance of our internal audit function and independent auditors;

◦	whistleblower hotline and associated reporting procedures; and

◦	compliance by Carriage with legal and regulatory requirements.

•	perform such other functions as our Board may assign to our Audit Committee from time to time.

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•	assist our Board by identifying individuals qualified to become Board members, and to recommend to our Board the director nominees for the next Annual Meeting of Stockholders;

•	assist our Board with succession planning for our CEO and other members of the senior leadership team;

•	lead our Board in its annual review of the performance of our Board and its committees;

•	review the Company's compliance programs, including, but not limited to, the Code of Business Conduct and Ethics and the Insider Trading and Anti-Hedging Policy; and

•	perform such other functions as our Board may assign to our Corporate Governance Committee from time to time.

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(1)	Paid on a quarterly basis in either cash or Common Stock. Retainers are not paid to employee directors.

(2)	The Lead Director receives this annual retainer in addition to the retainer paid to other Independent Directors.

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(2)	Pursuant to our Director Compensation Policy, Mr. Goetz is not compensated for his service as an employee director. He is included in the Director Compensation Table solely to satisfy Item 402(k)(2)(i) of Regulation S-K.

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(1)	The ownership of stock options shown in the table includes shares of Common Stock which may be acquired within 60 days upon the exercise of outstanding stock options granted under our stock option plans. For unexercisable stock options, see “Executive Compensation – Outstanding Equity Awards at Fiscal Year-End” in this Proxy Statement.

(2)	Mr. Payne’s holdings include 11,446 shares of Common Stock held in an Annuity Trust for Mr. Payne’s benefit, 11,446 shares of Common Stock held in an Annuity Trust for Mr. Payne’s spouse’s benefit and 17,072 shares of Common Stock held by Mr. Payne’s spouse.

(3)	Mr. Payne has pledged 1.2 million shares of his Common Stock pursuant to a margin account which was opened in October 2012.

(4)	Mr. Phillips has pledged 61,842 shares of his Common Stock pursuant to a margin account which was opened in November 2015.

(5)	Mr. Elliot's holdings include 6,029 shares held jointly by himself and his spouse.

(6)	Mr. Elliot has pledged 2,000 shares of his Common Stock pursuant to a margin account which was opened in November 2019.

(7)	Mr. Brink's holdings include 4,426 shares held jointly by himself and his spouse.

(8)	Mr. Leibman’s holdings include 2,576 shares of Common Stock held by Mr. Leibman’s minor children.

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(1)	Based solely on Schedule 13G/A filed with the SEC on February 12, 2020. Dimensional Fund Advisors LP has sole voting power as to 1,470,530 shares and sole dispositive power as to 1,516,687 shares.

(2)	Based solely on Schedule 13G/A filed with the SEC on February 5, 2020. BlackRock Inc. has sole voting power as to 1,254,226 shares and sole dispositive power as to 1,300,799 shares.

(3)	Based solely on Schedule 13G filed with the SEC on February 13, 2020. Renaissance Technologies has sole voting power as to 1,237,500 shares, sole dispositive power as to 1,283,001 shares and shared dispositive power as to 99 shares.

(4)	Based solely on Schedule 13G/A filed with the SEC on February 7, 2020. FMR LLC does not have sole voting power on any shares and sole dispositive power as to 930,000 shares, of which, 683,786 shares are issuable upon the conversion of Carriage 2.75% Convertible Notes due March 15, 2021.

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•	Honesty, Integrity and Quality in All That We Do

•	Hard work, Pride of Accomplishment, and Shared Success Through Employee Ownership

•	Belief in the Power of People Through Individual Initiative and Teamwork

•	Outstanding Service and Profitability Go Hand-in-Hand

•	Growth of the Company Is Driven by Decentralization and Partnership

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to attract, motivate, and retain exceptional 4E Leadership talent that are leaders within our High Performance Culture senior leadership team (“First Who”). These leaders are expected to improve on the already industry leading operating performance through attracting and motivating individual business Managing Partners with 4E Leadership characteristics, enhance our best-in-class corporate support functions, and make sound decisions regarding long-term stockholder value creation, particularly involving capital allocation (“Then What”);

•	to provide transparency between pay, commensurate with individual and team contribution, and our annual and long-term Company performance;

•	to motivate, reward, retain and reinvest in 4E Leadership that has established a proven record of success over time; and

•	to align senior leadership interests with what is best for the Company and thus, what is best for our stockholders.

•	A significant portion of 2019 executive compensation is performance-based and is tied to our financial performance over the intermediate to long-term period (see the “Annual Cash Incentive Bonuses” and “Long-Term Equity-Based Incentives” sections on pages 29 and 30, respectively, for additional details).

•	Our CEO’s 2019 annual cash incentive was made at the discretion of the Compensation Committee because the CEO sets the long-term vision and intermediate-term strategy for Carriage and should be judged on the annual progress towards those goals versus short-term performance metrics.

•	Our 2019 long-term incentive program is discretionary but takes into consideration long-term operating and financial metrics that we believe will lead to significant stockholder value creation, if achieved.

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The Company's Insider Trading and Anti-Hedging Policy includes provisions that specifically prohibits all employees, including our NEOs and Directors, from entering into any financial instrument or otherwise engage in any transactions that hedge or offset any decrease in the market value or limit the ability to profit from an increase in the market value of the Company’s stock. The Company’s policy also prohibits all employees, including our NEOs and Directors, from buying or selling warrants, puts or calls, options, forward transactions or other derivative securities or instruments involving the Company's stock. Our Corporate Governance Committee is responsible for reviewing the Company's compliance programs, including our Insider Trading and Anti-Hedging Policy.

•	Carriage is principle-based in its unwavering beliefs and every day practices as reflected in our Five Guiding Principles . Our first Guiding Principle of “Honesty, Integrity and Quality in all that we do” requires that we hire and hold all employees, at all levels, accountable to this first Guiding Principle (as well as the other four Guiding Principles) at all times.

•	We have share ownership and trading guidelines for officers.

•	We have clawback provisions that permit the Board to pursue recovery of incentive payments if the payment would have been lower based on restated financial results.

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•	We regularly evaluate share utilization levels within our long-term incentive plans and we manage the dilutive impact of stock-based compensation to appropriate levels.

•	During 2019, we repurchased 400,000 shares of our Common Stock with an aggregate cost of $7.8 million.

•	No supplemental retirement plans.

•	No repricing of underwater stock options.

•	No option exercise prices below 100% of fair market value on the date of grant.

•	No inclusion of long-term incentive awards in cash severance calculations.

•	No excise tax gross-ups upon change in control.

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•	developing, summarizing and presenting compensation information and analysis (generally for one to five years) to enable our Compensation Committee to execute its responsibilities, as well as addressing specific requests for information from our Compensation Committee;

•	developing recommendations for executive officer’s bonus plans for consideration by our Compensation Committee and reporting to our Compensation Committee regarding achievement against the bonus plans;

•	preparing long-term incentive award recommendations for our Compensation Committee’s approval; and

•	attending our Compensation Committee’s meetings as requested in order to provide additional information, respond to questions and otherwise assist our Compensation Committee.

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•	The CEO sets the long-term 10 year Vision and 5 year Strategy for Carriage and should be judged on the annual progress towards those goals versus short-term performance metrics that act as a budget;

•	2019 Performance including, but not limited to Revenue growth, Adjusted Consolidated EBITDA Margin expansion and increasing adjusted Consolidated EBITDA;

•	2019 Performance compared to 2018 Performance and 5 Year Trend;

•	Strategic goals and execution thereof that could change the course and composition of the Company;

•	Acquisition activity;

•	Equity valuation; and

•	4E Leadership Development.

(1)	Target is based on a percentage of base salary in effect in 2019.

(2)	Actual cash incentive bonus paid in 2020 for performance in 2019.

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(1)

Reflects the grant date fair value of performance-based stock awards, at the minimum target payout, calculated in accordance with ASC Topic 718. The value of the performance-based stock awards granted during 2019 was $4.57 per share on February 20, 2019, which was determined using the Monte-Carlo simulation pricing model. The performance-based stock award will vest (if at all) during December 2023, provided that certain criteria surrounding our Common Stock is achieved and the Reporting Person has remained continuously employed by Carriage through such date. The assumptions made in the valuation of these awards are set forth in Note 20, Stockholder's Equity, to the Consolidated Financial Statements in our 2019 Annual Report on Form 10-K. Refer to “Long-Term Equity-Based Incentives” on page 30 for a further description of these performance awards.

(2)	On November 29, 2018, we cancelled all Performance Award Agreements previously awarded to all individuals in 2017 and 2018. Prior to such cancellation, each of the Performance Award Agreements provided for contingent compensation, which was payable to such individuals in shares of Common Stock, based on the Company’s performance over a five-year period from the grant date.

(3)	The total amount of all other compensation for Ms. Blinderman was less than $10,000 and not reflected in the Summary Compensation Table.

(1)	The amounts represent reimbursements to Mr. Payne for his club membership dues.

(2)	The amounts represent matching contributions by the Company to the accounts of NEOs in our 401(k) Plan.

(3)	The amounts represent dividends paid on unvested restricted stock.

(4)

The amounts represent the incremental cost to the Company to provide perquisites and other personal benefits, including certain benefits received primarily related to spousal travel for award trips hosted by the Company. Additionally, with respect to Messrs. Payne and Phillips, this includes $8,639 and $806, respectively, reflecting the amount of benefits received for spousal travel outside of award trips hosted by the Company.

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(1)	Reflects the anticipated award at the 25% CAGR target, which represents both the threshold and minimum target payout. Refer to “Long-Term Equity-Based Incentives” on page 30 for a further description of these performance awards.

(2)	Reflects the anticipated award at the 35% CAGR target, which represents the maximum target payout. Refer to “Long-Term Equity-Based Incentives” on page 30 for a further description of these performance awards.

(3)

Reflects the grant date fair value of the performance-based stock awards, at the threshold and minimum target payout, calculated in accordance with ASC Topic 718. The value of the performance-based stock awards granted during 2019 was $4.57 per share on February 20, 2019, which was determined using the Monte-Carlo simulation pricing model. The performance-based stock award will vest (if at all) during December 2023, provided that certain criteria surrounding our Common Stock is achieved and the Reporting Person has remained continuously employed by Carriage through such date. The assumptions made in the valuation of these awards are set forth in Note 20, Stockholder's Equity, to the Consolidated Financial Statements in our 2019 Annual Report on Form 10-K. Also, refer to “Long-Term Equity-Based Incentives” on page 30 for a further description of these performance awards.

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(1)

The unexercisable stock options expiring February 23, 2026 vest one half each on February 23, 2020 and February 23, 2021, the unexercisable stock options expiring March 21, 2027 vest one third each on March 21, 2020, March 21, 2021 and March 21, 2022 and the unexercisable stock options expiring February 14, 2028 vest one fourth each on February 14, 2020, February 14, 2021, February 14, 2022 and February 14, 2023.

(2)	Calculated using the closing price of our Common Stock on December 31, 2019, which was $25.60 per share.

(3)	These awards will vest (if at all) during December 2023, provided that certain criteria surrounding our Common Stock is achieved and the Reporting Person has remained continuously employed by Carriage through such date.

(4)	Calculated using the value of the performance-based stock awards of $4.57 per share, in accordance with ASC Topic 718, multiplied by the number of shares awarded, at the threshold and minimum target payout.

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(1)	Includes vested shares withheld to pay taxes as follows:

a.	Mr. Payne paid the taxes in cash associated with the shares that vested on February 14, 2019.

(2)	Value realized on vesting is calculated using the closing price of our Common Stock on the date that the shares vested.

(1)	Reflects payment of annual bonus pursuant to the terms of their employment agreements in effect on December 31, 2019. These amounts represent 100% of their target bonus payout due to the assumption that such NEOs’ employment terminated on the last day of the year.

(2)	Amounts reflect estimated cost of benefit continuation for 18 months pursuant to the terms of employment agreements in effect on December 31, 2019.

(3)	Reflects accelerated vesting of shares of restricted stock and options pursuant to the terms of employment agreements in effect on December 31, 2019 and related award agreements upon death and disability. At December 31, 2019, certain outstanding options had an exercise price below the closing price of our Common Stock and as such were excluded from the table above. Performance awards

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(4)	Amounts reflect cash severance payable under the terms of employment agreements in effect on December 31, 2019, which represents two years base salary continuation and a pro-rated target annual bonus for the year in which the termination occurs.

(5)

Amounts with respect to Ms. Blinderman, Messrs. Brink, Elliot and Phillips reflect cash severance payable under the terms of employment agreements in effect on December 31, 2019, which represents a lump sum equal to two times the sum of NEOs’ base salary in effect on the Termination Date (or as of the date of the Corporate Change, if higher), plus target annual bonus. Mr. Payne’s cash severance represents a lump sum equal to three times the sum of his base salary plus target annual bonus.

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We determined that as of December 31, 2019, our employee population consisted of approximately 2,797 individuals with all of these individuals located in the United States. This population consisted of 1,137 full-time and 1,660 part- time employees. Our part-time employees are an integral part of our business and due to our industry, are dedicated members of our community, but may only work on a very limited, as requested basis. We selected December 31, 2019, which is in the last three months of our most recent fiscal year, as the date upon which we would identify the “median employee” because it enabled us to make such identification in a reasonably efficient and economical manner.

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To determine the “median employee” from our employee population, we examined the amount of salary, bonus, wages and other taxable income items of our employees as reported by us to the Internal Revenue Service on Form W-2 for 2019. The “median employee’s” annual total compensation included the Company matching amount provided in our Section 401(k) employee savings plan. In making the determination, we annualized the compensation of approximately 452 employees who were hired in 2019, but did not work for us the entire fiscal year. This population consisted of 167 full-time and 285 part-time employees.

•	We determined our median employee using this compensation measure, which was consistently applied to all of our employees included in the calculation. Since all of our employees are located in the United States, as is our CEO, we did not make any cost of living adjustments when identifying the “median employee.”

•	Once we determined our median employee, we combined all of the elements of such employee’s compensation for 2019 in accordance with Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of approximately $11,532.

•	With respect to the annual compensation of our CEO, we used the amount reported in the “Total $” column of our Summary Compensation Table included in this Proxy Statement.

•	There has been no major change in our employee population or our employee compensation arrangements since that median employee was identified that we believe would significantly impact our pay ratio disclosure.

•	The median employee is an Ambassador in the community, working on an as needed or by request basis, proactively participating in civic and community events that create a lasting heritage;

•	The median annual total compensation of all employees of our Company (other than our CEO) was approximately $11,532; and

•	The annual total compensation of our CEO, as reported in the Summary Compensation Table included elsewhere in this Proxy Statement was $2,042,675.

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–	the integrity of our financial statements, including the adequacy and effectiveness of the Company’s financial reporting and disclosure controls and procedures;

–	the engagement of the Company’s independent registered public auditor, including its qualifications, independence and performance;

–	the performance, function and design of the Company’s internal audit function; and

–	the compliance by the Company with legal and regulatory requirements.

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