DEF: Carriage Services Sets 2026 Annual Meeting Agenda

Carriage Services, Inc. announces its 2026 Annual Meeting of Shareholders, detailing proposals for director elections, board declassification, executive compensation, and incentive plan amendments.

Summary

• The 2026 Annual Meeting of Shareholders will be held on Tuesday, May 12, 2026, at 9:00 a.m. Central Time in Houston, Texas.
• Shareholders will vote on five proposals, including the election of two Class III directors, an amendment to declassify the Board of Directors, an advisory vote on 2025 Named Executive Officers (NEO) compensation, an amendment to extend the 2017 Omnibus Incentive Plan, and the ratification of Grant Thornton LLP as the independent auditor.
• Over the last three years, the company focused on disciplined execution, improving financial flexibility, strengthening execution, and embedding a culture for long-term performance.
• In 2025, the company completed approximately $60 million in strategic acquisitions and enhanced operational execution through improved systems and processes.
• Executive incentive compensation has been 100% contingent on key performance metrics since 2024, with no discretionary components.
• Adjusted Consolidated EBITDA grew by over 15% and revenue grew over 9% over the past three years.
• The 2025 cash incentive bonus payout for NEOs (excluding the CEO) was 101% of target, reflecting achievement slightly above the 4% Adjusted Consolidated EBITDA growth target, assuming certain unplanned divestitures had not occurred.
• Long-term incentive grants for the Executive Leadership team in 2025 consisted of 50% restricted stock units (3-year vest) and 50% performance share units (vesting based on Adjusted Consolidated EBITDA growth rates over a 3-year period).
• An interim cash-based Long-Term Incentive (LTI) Bridge Award was implemented for 2025 and 2026 to address a two-year compensation program gap, based on Annual Revenue target achievement.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive update, highlighting strong financial performance in 2025, significant governance enhancements, and a clear strategic focus on growth and sustainability, despite some minor compliance oversights and recent relative TSR underperformance.

Positives

• Disciplined execution of strategic objectives over the last three years led to improved financial flexibility, strengthened execution, and a culture for long-term performance.
• Achieved measurable outcomes, improved quality of earnings, and renewed confidence in long-term value creation potential.
• Completed approximately $60 million in strategic acquisitions in 2025, demonstrating purposeful growth while maintaining portfolio optimization and balance sheet discipline.
• Enhanced operational execution through improved systems and processes, aiming for a competitive advantage as a consolidator in a highly fragmented industry.
• Committed to continuous improvement in governance practices, highlighted by the proposal to declassify the Board of Directors.
• Executive Leadership team incentive compensation is now 100% contingent on key performance metrics, eliminating discretionary components since 2024, aligning pay with performance.
• Adjusted Consolidated EBITDA grew by over 15% and revenue grew over 9% over the past three years.
• Received strong shareholder support (approximately 95%) for the Named Executive Officer compensation program at the 2025 Annual Meeting, an increase from 84% in 2024.
• Implemented Share Ownership Guidelines for the Board and Executive Leadership team, further aligning financial interests with shareholders.
• Invested holistically in employees through education, development, financial wellness (e.g., employee stock purchase plan, 401k match, HSA match), and physical/mental well-being programs.
• Carriage Cares, the company's 501(c)(3) non-profit, raised over $150,000 in 2025 through its second annual charitable golf tournament, benefiting the Boys & Girls Clubs of Greater Houston and its mission.
• Increased the number of KySaan Piatti Scholarships awarded in 2025, totaling $12,000 to five deserving future community leaders.
• Observed a 72% increase in female Managing Partners since 2019, with women leading over 34% of businesses by the end of 2025.
• Achieved significant diversity within the Support Center team, with 52% women and 64% racial or ethnic minorities as of December 31, 2025.
• Empowered Managing Partners to implement energy-efficient lighting, heating, and cooling, and other sustainable practices at businesses.
• Facilitated the planting of over 16,500 memorial trees in 2025 through the Plant a Tree program, offering eco-friendly commemoration options.
• Utilized on-site wells or reclaimed water sources for cemetery maintenance at approximately 62% of cemeteries to lessen impact on municipal water sources.
• Established a new supply chain management department in 2024, leading to commitments from strategic contractors and suppliers to adhere to a Supplier Code of Conduct.
• Fully implemented a new urn core line offering sustainable and eco-friendly urns made from materials like biodegradable sand and salt.
• Net Income increased to $51,507 thousand in 2025 from $32,953 thousand in 2024 and $33,413 thousand in 2023.
• Adjusted Diluted EPS increased to $3.20 in 2025 from $2.65 in 2024 and $2.19 in 2023.

Negatives

• Several late Form 4 filings were made on April 25, 2025, for executive officers Carlos R. Quezada, Steven D. Metzger, John Enwright, Kathryn Shanley, Rob P. Franch, and Shane Pudenz, related to performance awards.
• A late Form 4 was filed on August 12, 2025, for Mr. Carlos Quezada related to a sale of 4,250 shares of Common Stock.
• The company has not repurchased shares under its authorized share repurchase program since June 30, 2022, despite approximately $48.9 million in remaining authorization.

Risks

• The Annual Meeting format may change from in-person to virtual-only if circumstances prevent or limit an in-person meeting.
• Federal tax laws are complex and subject to change, potentially impacting the tax consequences for participants in the 2017 Omnibus Incentive Plan.
• Awards under the 2017 Incentive Plan may be subject to Code Section 409A, which could result in immediate taxation and excise tax if specific requirements are not met.
• Accelerated vesting of equity awards upon a Change in Control could result in certain amounts constituting excess parachute payments under Code Section 280G, depending on individual circumstances.
• There is no guarantee that awards intended to qualify as performance-based compensation under Code Section 162(m) will always qualify, potentially limiting the company's tax deduction for executive compensation.
• Failure to approve the Second Amendment to the 2017 Omnibus Incentive Plan would result in its termination on May 18, 2027, potentially hindering the company's ability to attract, motivate, and retain qualified employees in a highly competitive market.

Future Outlook

The company expects its foundational efforts to result in continuing to generate long-term value for shareholders, guided by a clear framework and focused on three strategic objectives. If the declassification proposal is approved, all directors will be subject to annual elections starting in 2027. The Compensation Committee will continue to refine long-term incentive compensation plans to further incentivize executives through value creation and ownership, and the company anticipates reporting continued improvements in governance and social/environmental responsibilities in the coming years. The proposed extension of the 2017 Omnibus Incentive Plan aims to ensure the company's ability to offer competitive equity awards for talent retention.

Management Comments

• "Over the last three years, we have focused on the disciplined execution of our strategic objectives that started with improving our financial flexibility, strengthening our execution discipline, and embedding a culture at Carriage that can sustain long-term performance."
• "We are excited that these foundational investments have begun to translate into measurable outcomes, improved quality of earnings, and renewed confidence in our long-term value creation potential."
• "We believe these enhancements will create a competitive advantage for us as a disciplined consolidator of high-quality assets in a highly fragmented industry."
• "As we begin 2026, we believe Carriage has successfully navigated our focus on rebuilding a strong foundation, and is now operating with clarity, alignment, and momentum."
• "We expect these efforts will result in continuing to generate long-term value for our shareholders as we remain guided by a clear, consistent framework in our purpose statement, and focused on our three strategic objectives, which serve as the foundation for how we operate and allocate resources."

Industry Context

StockSavvy.ai notes that Carriage Services operates in a highly fragmented funeral and cemetery services industry, where it aims to be a disciplined consolidator of high-quality assets. The company faces a competitive market for employee talent, necessitating robust incentive programs. Its compensation peer group includes industry players like Service Corporation International (SCI) and Matthews, providing a benchmark for performance and compensation strategies.

Comparison to Industry Standards

• Carriage Services' Total Shareholder Return (TSR) of $144 in 2025 lagged its peer group (SCI and Matthews) TSR of $167, assuming an initial $100 investment in December 2020.
• In 2024, Carriage Services' TSR of $134 also lagged the peer group's TSR of $169.
• However, in 2021, Carriage Services' TSR of $208 significantly outperformed the peer group's TSR of $145, indicating a period of strong outperformance followed by relative underperformance in recent years.

Management Changes

Corporate Governance

Related Party Transactions

• No reportable transactions between Carriage and related persons occurred since January 1, 2025, and none are currently proposed or anticipated.

Stakeholder Impact

• Shareholders: Directly impacted by voting on governance proposals and executive compensation, with potential for long-term value creation through strategic objectives and performance-linked compensation.
• Employees: Benefit from incentive plans designed for talent attraction, motivation, and retention, along with comprehensive investment in education, development, financial wellness, and well-being programs.
• Customers/Client Families: Experience enhanced services through a focus on 'premier experiences' and the offering of sustainable and eco-friendly merchandise options.
• Communities: Benefit from local business involvement and the Carriage Cares non-profit's support for charitable causes and environmental initiatives, such as water conservation at cemeteries.
• Suppliers/Vendors: Engaged through a new supply chain management department and a Supplier Code of Conduct, fostering partnerships based on business integrity and sustainability.

Next Steps

• Shareholders are encouraged to vote on the five proposals at the Annual Meeting on May 12, 2026.
• The company will report the voting results in a Current Report on Form 8-K with the SEC within four business days of the Annual Meeting.
• If approved, the Board of Directors will be declassified, with all directors subject to annual election starting in 2027.
• The Compensation Committee will continue to focus on designing long-term incentive compensation plans to incentivize executives through value creation and ownership.
• The company looks forward to reporting continued improvement in governance and social and environmental responsibilities in the years ahead.

Key Dates

Recommendation

StockSavvy.ai recommends a 'hold' for Carriage Services. The company demonstrated strong financial performance in 2025 with increased Net Income and Adjusted Diluted EPS, alongside a commitment to enhanced corporate governance through board declassification. Executive compensation is now fully performance-based, aligning management incentives with shareholder value creation. While recent TSR has lagged peers, the foundational improvements and strategic acquisitions position the company for potential long-term value, warranting continued observation rather than immediate aggressive action.

Keywords

Carriage Services, CSV, Proxy Statement, Annual Meeting, Corporate Governance, Executive Compensation, Board Declassification, Incentive Plan, Shareholder Vote, Funeral Services, Cemetery Services, Financial Performance, Adjusted EBITDA, ESG, Sustainability