In the heatproof bowl of a mixer, whisk together sugar and egg whites. Set over (not in) a pot of simmering water and whisk until sugar is dissolved and a thermometer registers 140 degrees.
Beat in mixer fitted with the whisk attachment until mixture until stiff, glossy peaks form. Reduce speed to medium-low and add butter, a few tablespoons at a time; continue beating until smooth. Stir in vanilla and caramel. Buttercream may be used immediately or refrigerated up to 3 days. If longer storage is required, place buttercream in a plastic container covered with plastic wrap directly on top of buttercream, cover with a tight fitting lid, and freeze up to 1 month.