DEF 14A of Ulta Beauty, Inc.
Filed Apr 24, 2024 · FY20230001558370-24-005588
MAJORITY VOTE STANDARD FOR ELECTION OF DIRECTORS AND DIRECTOR RESIGNATION POLICY
MAJORITY VOTE STANDARD FOR ELECTION OF DIRECTORS AND DIRECTOR RESIGNATION POLICY Our Bylaws require that, in an uncontested election, each director will be elected by a majority of the votes cast by the shares present virtually or represented by proxy and entitled to vote at the Annual Meeting, such that the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee. A plurality voting standard is applicable to any contested election of directors. A “contested election of directors” is one in which the number of nominees for director is greater than the number of directors to be elected. Our Corporate Governance Guidelines require that, following any election of directors other than a contested election of directors, any incumbent director who was a nominee and who did not receive a majority of the votes cast by the shares present virtually or represented by proxy and entitled to vote at the meeting must promptly tender his or her resignation to the Board for consideration by the Board. Our Corporate Governance Guidelines further provide that a recommendation on whether or not to accept such a resignation will then be made by the Nominating & Corporate Governance Committee or, if each member of the Nominating & Corporate Governance Committee did not receive the required majority vote or the Nominating & Corporate Governance Committee is otherwise unable to act, a majority of the Board will appoint a special committee of independent directors for the purpose of making a recommendation to the Board (the committee with authority to act is referred to as “Nominating Committee”). If no independent directors received the required majority vote, our Corporate Governance Guidelines require that the Board act on the resignations. Within 60 days following certification of the stockholder vote, the Nominating Committee will recommend to the Board the action to be taken. Any director who tenders his or her resignation will not participate in the Nominating Committee recommendation or Board action regarding whether to accept the resignation. The Board will determine whether or not to accept the resignation within 90 days following certification of the stockholder vote in accordance with the procedures and factors set forth in our Corporate Governance Guidelines.
PROPOSAL ONE ELECTION OF DIRECTORS
PROPOSAL ONE ELECTION OF DIRECTORS In 2023, our stockholders approved an amendment to our Certificate of Incorporation to declassify our Board and move to one-year terms, such that the Board will be fully declassified by the 2025 Annual Meeting of Stockholders. As a result, the current term of office for our Class II directors expires at this Annual Meeting and the term for our Class III directors expires at the 2025 Annual Meeting of Stockholders. The directors previously designated as Class I directors now have terms that expire annually. Vacancies on our Board of Directors may be filled by persons elected by a majority of the remaining directors. A director elected by our Board of Directors to fill a vacancy, including a vacancy created by an increase in size of our Board of Directors, will serve for the remainder of the term of the class of directors (if any) in which the vacancy occurred and until that director’s successor is elected. The Board of Directors is presently composed of eleven members, ten of whom are non-employee, independent directors. Each director was elected to the Board of Directors to serve until a successor is duly elected and qualified or until his or her resignation, removal, or death. The affirmative vote of the holders of a majority of the votes cast by the shares present virtually or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the nominees for election, assuming the election is uncontested (a plurality voting standard applies in contested elections). For this purpose, a majority of the votes cast means that the number of shares voted “for” a director’s election must exceed the number of shares voted “against” that director’s election. Abstentions and broker non-votes will be counted towards a quorum but will not be counted for any purpose in determining whether the nominees have been elected. For additional information on our majority voting in uncontested elections of directors policy and our policy on incumbent director resignation in an uncontested election, please see “Corporate Governance— Majority Vote Standard for Election of Directors and Director Resignation Policy” above.
Summary of Qualifications and Experience of Director Nominees and Directors Continuing in Office
Summary of Qualifications and Experience of Director Nominees and Directors Continuing in Office The following tables highlight the most relevant areas of specific experience, qualifications, attributes, skills, and background information, including average age, gender identity, race or ethnicity, and sexual orientation, where self-disclosed, that the Board considered for each director nominee and each director continuing in office. In addition to executive leadership, which all our directors possess, a particular director may possess additional experience, qualifications, attributes, or skills, even if not expressly indicated as one of the most relevant below.
Summary of Qualifications and Experience of Director Nominees and Directors Continuing in Office
| | Governance | Finance | Retail | E-commerce & Digital/Technology | Distribution | Marketing | Strategy | Operations | Cybersecurity/ Privacy | International | | Lorna E. Nagler | ✔ | | ✔ | | | | | ✔ | | | | Michelle L. Collins | ✔ | ✔ | | | ✔ | | | | | | | Kelly E. Garcia | | | | ✔ | | | | | ✔ | ✔ | | Catherine A. Halligan | | | ✔ | ✔ | | | ✔ | | | | | David C. Kimbell | | | | ✔ | | ✔ | ✔ | | | | | Patricia A. Little | | ✔ | | | | ✔ | | | | ✔ | | Michael R. MacDonald | | ✔ | ✔ | | | | | ✔ | | | | George R. Mrkonic | ✔ | ✔ | | | | | ✔ | | | | | Heidi G. Petz | | | ✔ | | | ✔ | ✔ | | | | | Gisel Ruiz | | | ✔ | | | | | ✔ | | ✔ | | Michael C. Smith | | | ✔ | ✔ | ✔ | | | | | |
Board Diversity Matrix (As of June 11, 2024*)
Board Diversity Matrix (As of June 11, 2024*)
Board Diversity Matrix (As of June 11, 2024*)
| Total Number of Directors | 11 | | | | | | | | | Did Not | | | Female | Male | Non-Binary | Disclose Gender | | | (#) | (#) | (#) | (#) | | Part I: Gender Identity | | | | | | Directors | 6 | 5 | — | — | | Part II: Demographic Background | | | | | | African American or Black | 1 | 1 | — | — | | Alaskan Native or Native American | — | — | — | — | | Asian | — | — | — | — | | Hispanic or Latinx | 1 | 1 | — | — | | Native Hawaiian or Pacific Islander | — | — | — | — | | White | 4 | 3 | — | — | | Two or More Races or Ethnicities | — | — | — | — | | LGBTQ+ | 1 | | | | | Did Not Disclose Demographic Background | — | | | | | Part III: Other | | | | | | Directors' Average Tenure (Years) | 6.2 | | | | | Directors' Average Age (Years) | 59.8 | | | | | Independent Directors | 10 | | | |
Board Diversity Matrix (As of June 11, 2024*)
*Assumes all directors standing for election are elected
INFORMATION ABOUT OUR DIRECTOR NOMINEES
INFORMATION ABOUT OUR DIRECTOR NOMINEES
INFORMATION ABOUT OUR DIRECTOR NOMINEES
| What are you voting on? You are being asked to elect Michelle L. Collins, Catherine A. Halligan, David C. Kimbell, Patricia A. Little, George R. Mrkonic, Lorna E. Nagler, Heidi G. Petz, and Michael C. Smith as directors for terms to expire at the 2025 Annual Meeting of Stockholders and until their successors are elected and qualified or until their resignation, removal, or death. | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE |
INFORMATION ABOUT OUR DIRECTOR NOMINEES
Nominees For Election:
INFORMATION ABOUT OUR DIRECTOR NOMINEES
| Michelle L. Collins | | Catherine A. Halligan | | | INDEPENDENT DIRECTOR COMMITTEES ñ Audit ñ Compensation Director Since: 2014 Age: 64 | | INDEPENDENT DIRECTOR COMMITTEES ñ Compensation (Chair) ñ Nominating & Corporate Governance Director Since: 2012 Age: 60 | | | DIRECTOR QUALIFICATIONS Ms. Collins contributes to the Board extensive experience in corporate finance and business consulting, including evaluating, investing in, monitoring and exiting private equity investments, as well as advising growth companies as an investment banker with deep corporate governance expertise. KEY SKILLS AND EXPERTISE ñ Finance: Gained deep expertise in corporate finance from her senior leadership and advisory roles at private equity and investment banking firms, including as the Co-Founder and Managing Director of Svoboda Capital Partners LLC, a private equity firm that manages over $400 million of capital. ñ Distribution: Acquired through her experience as a principal in the Corporate Finance Department at William Blair & Company, LLC, where she advised on public equity offerings, working closely with clients in the specialty retail, direct marketing, catalogue and distribution businesses. ñ Governance: Attained over 30 years of service on both public and private corporate boards across a wide range of industries as an independent board member. CAREER HIGHLIGHTS CAMBIUM LLC – a business and financial advisory firm ñ President (since 2007) SVOBODA CAPITAL PARTNERS, LLC – a leading private equity firm ñ Member, Advisory Board (since 2007) ñ Co-Founder and Managing Director (1998–2006) WILLIAM BLAIR & COMPANY, LLC – a multinational investment bank and financial services firm ñ Principal, Corporate Finance Department (1992–1997) OTHER BOARD DIRECTORSHIPS ñ Ryan Specialty Holdings, Inc. (NYSE: RYAN) (since 2021) ñ Canadian Imperial Bank of Commerce (TSX: CM) (NYSE: CM) (since 2017) ñ CIBC Bancorp USA/CIBC Bank USA (since 2017) ñ Health Care Service Corporation (2009–2021) ñ Arrowstream, Inc. (2009–2010) ñ Blue Cross, Blue Shield of Illinois (2006–2009) ñ CDW Corporation (NASDAQ: CDW) (1996–2007) EDUCATION ñ B.A., Yale University ñ M.B.A., Harvard Graduate School of Business | | DIRECTOR QUALIFICATIONS Ms. Halligan contributes to the Board over 20 years of experience in digital transformation, marketing, omnichannel business capabilities and e-commerce in the retail and SaaS industries. Ms. Halligan has a proven track record developing high growth online platforms and strategic brand and marketing strategies to drive exceptional customer experience and contributes to the board her extensive public corporate board expertise. KEY SKILLS AND EXPERTISE ñ E-commerce & Digital/Technology: Developed from her experiences leading e-commerce and digital sales growth and transformation strategies for prominent retailers, including Walmart.com, Williams-Sonoma, and Blue Nile, in addition to her leadership and strategic advisory experience with Software-as-a-Service (SaaS) companies. ñ Retail: Obtained through multiple executive leadership and public board roles across domestic and international retailers with store and digital operations. ñ Strategy: Gained from her extensive experience in marketing and e-commerce leadership roles and her tenure as an associate partner at a management consulting firm advising multinational corporations on growth, transformation, branding, and marketing. CAREER HIGHLIGHTS POWERREVIEWS INC. (acquired by 1WorldSync in 2023) – leading social commerce network ñ SVP, Sales and Marketing (2010–2012) WALMART (NYSE: WMT) – multinational retail corporation operating department and grocery stores ñVP, Product Management and MultiChannel integration, Market Development, Global eCommerce, Walmart.com (2009–2010) ñ Chief Marketing Officer, Walmart.com (2007–2009) ñ VP, Product Management and Multi-Channel Integration (2006–2007) PROPHET – integrated growth consulting firm ñ Associate Partner (2000–2006) BLUE NILE (acquired by Signet Jewelers in 2022) – leading online jewelry retailer ñ VP, Direct Marketing (1999–2000) WILLIAMS-SONOMA (NYSE: WSM) – US retailer for premium products for the home ñ VP, Internet (1996–1999) GYMBOREE (acquired by The Children’s Place in 2019) – children’s clothing retailer ñ VP, Direct Marketing (1995–1996) OTHER BOARD DIRECTORSHIPS ñ JELD-WEN, Inc. (NYSE: JELD) (since 2022) ñ Driven Brands, Inc. (NASDAQ: DRVN) (since 2020) ñ Ferguson Plc (NYSE: FERG) (since 2019) ñ FLIR Systems (acquired by Teledyne in 2021) (2014–2021) EDUCATION ñ B.S., Northern Illinois University | |
INFORMATION ABOUT OUR DIRECTOR NOMINEES
| David C. Kimbell | | Patricia A. Little | | | COMMITTEES None Director Since: 2021 Age: 57 | | INDEPENDENT DIRECTOR COMMITTEES ñ Audit Director Since: 2019 Age: 63 | | | DIRECTOR QUALIFICATIONS As CEO of Ulta Beauty (NYSE: ULTA), Mr. Kimbell contributes to the Board critical insights into the Company’s operations, leadership, strategy and talent management. With over 25 years of operational and leadership experience in retail and consumer-driven businesses, he has developed a deep understanding of the beauty industry and the strategies needed to succeed in the evolving omnichannel and digital environment, with a proven record of leading and transforming numerous top brands and retailers to create positive impact across multiple stakeholder communities. KEY SKILLS AND EXPERTISE ñ Marketing: Developed from decades in brand management and marketing and merchandise leadership roles for large public companies, including five years overseeing marketing at Ulta Beauty. ñ Strategy: Obtained through extensive experience developing branding and marketing strategies to drive growth for consumer-centric companies, as well as through direct responsibility for corporate strategy as Ulta Beauty’s President and CEO. ñ E-commerce & Digital/Technology: Acquired through his executive roles at leading retail companies with significant E-commerce operations and omnichannel strategies, innovating to bring traditional, customer-centric brands into the digital age. CAREER HIGHLIGHTS ULTA BEAUTY (NASDAQ: ULTA) ñ Chief Executive Officer (since 2021) ñ President (2019–2021) ñ Chief Marketing and Merchandising Officer (2014–2019) U.S. CELLULAR (NYSE: USM) – U.S. mobile network operator ñ EVP, Chief Marketing Officer (2011–2012) SEVENTH GENERATION (acquired by Unilever in 2016) – national leader in sustainable household products ñ SVP, Chief Marketing Officer (2011–2012) PEPSICO (NASDAQ: PEP) – leading multinational food and beverage company ñ VP, Marketing (2001–2008) PROCTOR & GAMBLE (NYSE: PG) – leading multinational consumer goods company ñ Brand Manager (1996–2001) OTHER BOARD DIRECTORSHIPS ñ Best Buy (NYSE: BBY) (Since 2023) EDUCATION ñ B.S., DePauw University ñ M.B.A., Purdue University | | DIRECTOR QUALIFICATIONS Ms. Little contributes deep financial and leadership expertise to our Board developed over a career of more than 30 years in finance, accounting, and treasury roles with multinational companies, along with a strong track record of supporting the development of profitable, sustainable international business models through strategic capital allocation and disciplined enterprise cost management. KEY SKILLS AND EXPERTISE ñ Finance: Developed throughout her extensive executive leadership career in corporate finance, including serving as CFO of The Hershey Company and Kelly Services Inc. and head of global accounting at Ford Motor Company. In these positions Ms. Little oversaw enterprise financial systems, strategic capital allocation strategies, enterprise risk management function and financial reporting. ñ International: Obtained through leadership roles at multinational organizations, including at Ford Motor Company, Kelly Services Inc. and The Hershey Company where she managed an internationally based finance organization. ñ Marketing: Gained through her leadership experiences at consumer-oriented and brand-driven companies, developed through cross-functional corporate partnerships to develop effective marketing capital allocation strategies that supported top-line growth. CAREER HIGHLIGHTS THE HERSHEY COMPANY (NYSE: HSY) – US multinational confectionary company ñ Chief Financial Officer (2015–2019) KELLY SERVICES, INC. (NYSE: MKC) – a leading provider of staffing and workforce solutions ñ Chief Financial Officer (2008–2015) FORD MOTOR COMPANY (NYSE: F) – US multinational automobile manufacturer ñ General Auditor (2006–2008) ñ Senior leadership roles in accounting and corporate finance (1984–2006) OTHER BOARD DIRECTORSHIPS ñ McCormick & Company Inc. (NYSE: MKC) (since 2010) EDUCATION ñ B.A., Drake University ñ M.B.A., Carnegie Mellon University | |
INFORMATION ABOUT OUR DIRECTOR NOMINEES
| George R. Mrkonic | | Lorna E. Nagler | | | INDEPENDENT DIRECTOR COMMITTEES ñ Nominating & Corporate Governance (Chair) ñ Compensation Director Since: 2015 Age: 71 | | INDEPENDENT CHAIR OF THE BOARD COMMITTEES None Director Since: 2009 Age: 67 | | | DIRECTOR QUALIFICATIONS Mr. Mrkonic contributes to the Board his deep expertise in corporate strategy, finance, governance and industry leadership, stemming from his more than 40 years of experience in the retail and manufacturing industries as a senior executive and director of large public retail companies, providing him with a broad understanding of complex strategic issues facing retail companies. KEY SKILLS AND EXPERTISE ñ Governance: Attained from service on multiple public company boards, including North American and UK retail companies. ñ Strategy: Developed through his leadership roles with national retailers, overseeing strategy development and implementation across large retail operations. ñ Finance: Gained from his experience serving in senior leadership roles, including as Chief Financial Officer at Herman’s World of Sporting Goods, where he was responsible for financial reporting, development and implementation of capital allocation strategies and internal audit. CAREER HIGHLIGHTS BORDERS GROUP, INC. – former book and music retail chain ñ Director (1994–2004) ñ Vice Chairperson (1994–2002) ñ President (1994–1997) KMART SPECIATLY RETAILING GROUP – group under the nationwide retail chain, Kmart Corporation ñ President (1990–1994) HERMAN’S WORLD OF SPORTING GOODS – former sporting goods retailer ñ President and CEO (1981–1987) ñ Chief Financial Officer (1981–1986) OTHER BOARD DIRECTORSHIPS ñ AutoZone, Inc. (NYSE: AZO) (since 2006) ñ Follett Corporation (2016–2022) ñ Maru Group (2016–2022) ñ Paperchase Products Limited (2005–2017) ñ Brinker International (NYSE: EAT) (2003–2021) ñ Syntel, Inc. (acquired by Atos in 2018) (1997–2007; 2009–2016) EDUCATION ñ B.A., Stanford University ñ M.A., Stanford University ñ M.B.A., Harvard University | | DIRECTOR QUALIFICATIONS Ms. Nagler contributes to the Board nearly 40 years of retail expertise, including first-hand experience leading a wide variety of retail companies. She brings an extensive understanding of merchandising and operations strategies, as well as in-depth knowledge and capabilities in customer loyalty programs with multi-faceted customer bases. KEY SKILLS AND EXPERTISE ñ Retail: Developed through extensive senior leadership experience serving at a variety of national retail companies with a strong track-record of successfully introducing new national brands and transforming customer relations management capabilities. ñ Operations: Attained expertise through overseeing all aspects of retail operations, including global supply chain management, merchandizing, marketing, risk and reputation management, and talent engagement. ñ Governance: Acquired through service on other public company boards, which enhanced her governance expertise and strengthens our Board’s oversight capabilities. CAREER HIGHLIGHTS BEALLS DEPARTMENT STORES, INC. – a department store specializing in home goods, apparel and accessories ñ President (2011–2016) CHRISTOPHER & BANKS CORPORATION (acquired by iMedia Brands, Inc. in 2021) –specialty retailer of women’s clothing ñ President, Chief Executive Officer and Director (2007–2010) CHARMING SHOPPES, INC. (acquired by Ascena Retail Group in 2012) – women’s apparel company ñ President of Lane Bryant division (2004–2007) ñ President of Catherine Stores division (2002–2004) KMART CORPORATION (acquired by Transformco in 2019) – national retail chain ñ SVP, General Merchandise Manager of Apparel and Jewelry (1999–2002) ñ Divisional VP and General Merchandise Manager of Kids and Menswear (1996–1999) KIDS “R” US – children’s clothing brand of Toys “R” Us ñ VP, Divisional Merchandise Manager (1994–1996) Previous retail experience with MONTGOMERY WARD and MAIN STREET DEPARTMENT STORES OTHER BOARD DIRECTORSHIPS ñ Hibbett, Inc. (NASDAQ: HIBB) (since 2019) EDUCATION ñ B.S., University of Wisconsin | |
INFORMATION ABOUT OUR DIRECTOR NOMINEES
| Heidi G. Petz | | Michael C. Smith | | | INDEPENDENT DIRECTOR COMMITTEES ñ Audit Director Since: 2022 Age: 49 | | INDEPENDENT DIRECTOR COMMITTEES ñ Nominating & Corporate Governance Director Since: 2019 Age: 54 | | | DIRECTOR QUALIFICATIONS Ms. Petz brings over 25 years of professional experience in a variety of commercial and consumer facing industries, including executive leadership and operational expertise within consumer brands and supply chain, and her deep industry knowledge and understanding of the growth drivers behind consumer mindset. KEY SKILLS AND EXPERTISE ñ Retail: Obtained through numerous executive roles with leading consumer brand companies, with responsibilities for the oversight of multiple operating segments, including the entire Global Supply Chain organization of Sherwin-Williams (NYSE: SHW), development of shareholder and customer value maximizing operational efficiencies, and navigating rapidly evolving supply chain challenges. ñ Marketing: Developed throughout multiple brand and product marketing leadership positions, including at Target, Newell Rubbermaid and most recently, Sherwin-Williams. ñ Strategy: Acquired from her current role as Chief Executive Officer and prior leadership roles at Sherwin-Williams, a $23 billion dollar business, overseeing successful execution of a highly differentiated growth strategy predicated on accelerating growth and adaptation to the shifting industry and macroeconomic environment during some of the most challenging periods in the company’s history. CAREER HIGHLIGHTS SHERWIN-WILLIAMS (NYSE: SHW) – global leader in paint and coatings manufacturing, development and distribution ñ Chief Executive Officer (since 2024) ñ President and Chief Operating Officer (2022–2024) ñ President, The Americas Group (2021–2022) and Consumer Brands Group (2019–2021) ñ SVP, Marketing (2017–2021) VALSPAR (acquired by Sherwin Williams in 2017) – American manufacturer of paint and coatings ñ VP, Marketing (2013–2022) NEWELL RUBBERMAID (NASDAQ: NWL) – American manufacturer, marketer and distributor of consumer and commercial products ñ Various leadership positions (2003–2013), including Director of Marketing TARGET CORPORATION (NYSE: TGT) – Retail operator of department store chain ñ Marketing Manager (2000–2003) EDUCATION ñ B.A., University of Richmond ñ M.B.A., Loyola University Maryland | | DIRECTOR QUALIFICATIONS Mr. Smith contributes over 27 years of professional retail experience and a strong understanding of data analytics and logistics through a customer-centric lens. He additionally brings differentiated operational leadership expertise in the financial services, technology and retail markets. KEY SKILLS AND EXPERTISE ñ E-commerce & Digital/Technology: Acquired from his leadership roles at Walmart.com, a $5 billion division, and Walmart (NYSE: WMT) stores, where he led one of the most successful omnichannel offerings in retail through the site to store launch of over 3,500 stores. ñ Distribution: As an expert in operations, logistics and driving growth in retail, Mr. Smith’s decade plus of retail leadership, including as Chief Operations Officer at Walmart.com has included responsibilities over inbound and outbound transportation, reverse logistics, customer service, customer experience and order management, as well as managing retailer relationships with national logistics and shipping companies. ñ Retail: Developed during his tenure as an innovative consumer sector leader, including as President & Chief Operating Officer at Stitch Fix (NASDAQ: SFIX), where he was instrumental in scaling the business to a public company and oversaw client experience and merchandising. CAREER HIGHLIGHTS FOOTWORK – early-staged focused venture capital firm ñ Co-Founder and General Partner (since 2021) STITCH FIX (NASDAQ: SFIX) – online personal styling service and retailer ñ President and Chief Operating Officer (2018–2021, COO from 2012–2016 and 2017–2021) ñ Interim Chief Financial Officer (2019–2021) ñ General Manager, Stitch Fix Men (2016–2017) WALMART (NYSE: WMT) – multinational retail corporation operating department and grocery stores ñ VP and Chief Operations Officer, Walmart.com (2008–2012) ñ Sr. Manager and Director (2003–2008) OTHER BOARD DIRECTORSHIPS ñ Stitch Fix (NASDAQ: SFIX) (2020–2022) ñ Miller Knoll (formerly Herman Miller) (NASDAQ: MLKN) (since 2019) ñ Food52 (2021–2023) ñ Mayvenn (2017–2022) ñ Imperfect Foods (2017–2021) ñ Own The Room (2016–2019) EDUCATION ñ B.A., University of Virginia ñ M.B.A., University of California, Berkeley, Haas School of Business | |
INFORMATION ABOUT OUR DIRECTORS CONTINUING IN OFFICE
INFORMATION ABOUT OUR DIRECTORS CONTINUING IN OFFICE Directors Continuing in Office Until the 2025 Annual Meeting:
INFORMATION ABOUT OUR DIRECTORS CONTINUING IN OFFICE
| Kelly E. Garcia | | Michael R. MacDonald | | | INDEPENDENT DIRECTOR COMMITTEES ñ Audit Director Since: 2022 Age: 49 | | INDEPENDENT DIRECTOR COMMITTEES ñ Audit (Chair) ñ Nominating & Corporate Governance Director Since: 2012 Age: 72 | | | DIRECTOR QUALIFICATIONS Mr. Garcia contributes to the Board his deep industry-leading expertise developing and implementing strategic technology initiatives to support and improve business operations with a proven track record of revolutionizing online consumer experience with global reach. His experience includes over 25 years of professional technology and leadership experience, including roles with responsibility for digital innovation, development of global commercial software products, e-commerce analytics and customer loyalty, cybersecurity and data privacy. KEY SKILLS AND EXPERTISE ñ Cybersecurity/Privacy: Developed through his experience leading multifunctional teams responsible for building out Domino’s suite of global software platforms and integrations with other service and hardware providers, with special focus on the adoption of cybersecurity and data privacy protocols to ensure the protection of enterprise platforms and consumer information. ñ E-commerce & Digital/Technology: Acquired while serving in a number of senior leadership roles, including as Chief Technology Officer at Domino’s where he transformed the online customer experience and continues to earn industry recognition for adopting leading technological innovation tools that elevate the customer experience, including the development of multiple global software platforms integral to Domino’s e-commerce strategy with the integration of mobile ordering and GPS capabilities. ñ International: Obtained through executive leadership roles where he was responsible for scaling technology platforms to support Domino’s international operations and various leadership roles overseeing global business and strategic marketing intelligence for international stakeholders while at R. L. Polk. CAREER HIGHLIGHTS DOMINO’S PIZZA (NYSE: DPZ) – multinational pizza restaurant chain ñ Chief Technology Officer (since 2020) ñ SVP, eCommerce Development and Emerging Technologies (2016–2020) ñ VP, eCommerce Development (2012–2016) R. L. POLK & COMPANY (acquired by IHS Inc. in 2013) – leader in global automotive information and analytics solutions ñ VP, Business Intelligence and North American Operations (2011–2012) ñ VP, Global Application Development (2008–2011) ñ Managerial roles in Application Development and Support (2006–2010) EDUCATION ñ B.S., The Ohio State University | | DIRECTOR QUALIFICATIONS Mr. MacDonald contributes to the Board over 30 years of experience in retail knowledge and industry leadership, including first-hand business expertise and overseeing multiple aspects of retail operations, such as managing merchandising, marketing, stores, operations and finance functions. He brings an extensive understanding of evolving customer preferences and consumer engagement strategies obtained through his executive leadership roles developing and executing highly complex retail strategies with several leading North American retailers. KEY SKILLS AND EXPERTISE ñ Finance: Gained from his many executive leadership positions, where he was responsible for overseeing capital raising and allocation strategies and corporate finance and reporting functions, in addition to his current role as member of the Frontier Group Holdings Audit Committee. He also brings over a decade of experience as the former CFO of Carson Pirie Scott. ñ Retail: Obtained through multiple executive leadership and public board roles across large retailers with store and digital operations. ñ Operations: Stemming from his experience transforming large-scale retail operations over the last three decades, in response to changing industry trends, challenging operating environments and evolving consumer preferences, including his experience overseeing DSW’s transformation to a leading omni-channel retailer. CAREER HIGHLIGHTS DSW INC. (NYSE: DBI) – leading American footwear and accessories company ñ Chairperson, President and CEO (2009–2015) SHOPKO STORES – multi-department retail, pharmacies and optical center stores ñ Chairperson and CEO (2006–2009) SAKS INC. – luxury department store chain ñ CEO and Chairperson (2000–2006) ñ Various executive positions (1998–2006) CARSON PIRIE SCOTT (acquired by Northern Department Stores Group in 1998) – department and furniture store retail chain ñ President of Northern Department Stores Group (2000–2006) ñ Chairperson and CEO (1999–2000) ñ President and CEO (1998–1999) ñ President and Chief Operating Officer (1996–1998) ñ Executive Vice President and Chief Administrative Officer (1994–1996) ñ Executive Vice President and Chief Financial Officer (1990–1994) OTHER BOARD DIRECTORSHIPS ñ Frontier Group Holdings, Inc. (NASDAQ: ULCC) (since 2016) EDUCATION ñ B.B.A., University of Notre Dame ñ M.B.A., University of Detroit | |
INFORMATION ABOUT OUR DIRECTORS CONTINUING IN OFFICE
| Gisel Ruiz | | | INDEPENDENT DIRECTOR COMMITTEES ñ Compensation Director Since: 2022 Age: 53 | | | DIRECTOR QUALIFICATIONS Ms. Ruiz contributes to the Board over 26 years of professional retail and leadership experience, including executive and senior management positions with oversight responsibilities spanning across cost optimization, real estate operations, in-store innovation, sustainability and talent management. Her successful track record of leading teams through digital and multi-channel transformation, large scale growth and innovative tech-enabled consumer experience further enhance the Board’s oversight capabilities. KEY SKILLS AND EXPERTISE ñ Retail: Acquired from her deep retail executive leadership experience at Walmart (NYSE: WMT) where she was responsible for the oversight of over 4,100 U.S. Walmart stores, 1.3 million employees and P&L responsibility for the organization's $279 billion in revenue. ñ Operations: Gained from Ms. Ruiz’s experience leading complex operations and human resources functions in senior and executive level leadership positions for Walmart U.S. and Sam’s Club, a division of Walmart, where she served as COO overseeing operations, real estate, territory sales, food service operation and in-store innovation for the $65 billion warehouse club. ñ International: Obtained from her unique directorships on several private and public, multinational company boards, including her former position on Yihaodian’s Board, China's then fourth largest business to consumer E-commerce website, her service on the board of Walmart de Mexico and leadership role responsible for Walmart International Human Resources, across 27 countries. CAREER HIGHLIGHTS SAM’S CLUB – leading membership warehouse retail division of Walmart ñ EVP, Chief Operations Officer (2017–2019) WALMART (NYSE: WMT) – multinational retail corporation operating department and grocery stores ñ EVP, International Human Resources (2014–2017) ñ EVP, Chief People Officer 2010–2012) ñ EVP, Chief Operating Officer (2012–2014) ñ Various other leadership roles (1992–2012) OTHER BOARD DIRECTORSHIPS ñ Cracker Barrel (NASDAQ: CBRL) (since 2020) ñ Vital Farms (NASDAQ: VITL) (since 2020) ñ TelevisaUnivision (since 2020) ñ Walmart de Mexico S.A. de C.V (2016–2019) ñ Yihaodian (2012–2015) EDUCATION ñ B.S., Santa Clara University | |
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023 We strive to promote an ownership mentality among our key leadership and board of directors. The Company utilizes equity compensation to encourage our directors to maintain meaningful stock ownership in the Company, aligning directors’ interests with stockholders. As a result, each non-employee director is granted an annual equity retainer totaling $160,000 in the form of restricted stock units (rounded up to the nearest whole share), valued using the share price of our common stock on the date of grant. During fiscal 2023, on the date of our annual meeting, each non-employee director received a grant of 397 restricted stock units that will vest on June 1, 2024. Each non-employee director is paid an annual cash retainer. In addition, the Non-Executive Chair and each Committee Chair receives an additional cash retainer for serving in those roles. Cash payments are paid pro-rata in quarterly installments at the end of each fiscal quarter. The Compensation Committee reviews, on a regular basis, market data for the same peer group used to evaluate executive officer compensation gathered by the Compensation Committee’s independent advisor for determining compensation. The following table sets forth the cash retainer amounts, by role:
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
| Role | Cash Retainer ($) | | Non-Employee Director | 110,000 | | Non-Executive Chair | 180,000 | | Audit Committee Chair | 30,000 | | Compensation Committee Chair | 30,000 | | Nominating & Corporate Governance Committee Chair | 20,000 |
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
The following table provides information related to non-employee director compensation earned for fiscal 2023:
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
| | Fees Earned or | Stock | | | | Paid in Cash | Awards (1) | Total | | Name | ($) | ($) | ($) | | Lorna E. Nagler | 290,000 | 160,321 | 450,321 | | Michelle L. Collins | 110,000 | 160,321 | 270,321 | | Kelly E. Garcia | 110,000 | 160,321 | 270,321 | | Catherine A. Halligan | 140,000 | 160,321 | 300,321 | | Patricia A. Little | 110,000 | 160,321 | 270,321 | | Michael R. MacDonald | 140,000 | 160,321 | 300,321 | | George R. Mrkonic | 130,000 | 160,321 | 290,321 | | Heidi G. Petz | 110,000 | 160,321 | 270,321 | | Gisel Ruiz | 110,000 | 160,321 | 270,321 | | Michael C. Smith | 110,000 | 160,321 | 270,321 |
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
| 1. | Amounts shown represent the grant date fair value as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC 718”). For a discussion of the assumptions made in the valuation reflected in this column, see Note 15 to the consolidated financial statements for fiscal 2023 contained in our Annual Report on Form 10-K filed on March 26, 2024. |
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
The following table sets forth the outstanding restricted stock units held by our non-employee directors as of February 3, 2024:
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
| | Restricted Stock | | Name | Units (#) | | Lorna E. Nagler | 397 | | Michelle L. Collins (1) | 397 | | Kelly E. Garcia | 397 | | Catherine A. Halligan | 397 | | Patricia A. Little (1) | 397 | | Michael R. MacDonald | 397 | | George R. Mrkonic | 397 | | Heidi G. Petz | 397 | | Gisel Ruiz | 397 | | Michael C. Smith | 397 |
NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023
| 1. | Ms. Collins and Ms. Little elected to defer the restricted stock units received in fiscal 2023 until their retirement or termination from the Board of Directors. |
Compensation Overview
| ● | Salaries are established early in each fiscal year and reflect competitive market data, company and individual performance, succession planning, and internal equity among other factors. Salary represents the smallest and only fixed portion of NEO pay. |
Compensation Overview
| ● | The annual incentive plan is tied solely to full-year EBT attainment. |
Compensation Overview
| ● | For the annual award of equity granted in March, the Compensation Committee awarded NEOs 50% of the target value in the form of PBSs, 30% in the form of stock options, and 20% in the form of time-based RSUs. The Compensation Committee believes that utilizing three different equity incentive vehicles provides a balanced approach and is in line with the compensation philosophy to attract, retain and motivate executives in alignment with stockholders. PBSs align executives and stockholders by incentivizing management to implement the company’s long-term strategies and achieve multiyear EBT and revenue goals; stock options incent executives to increase the stock price over time, aligning them with the interests of stockholders; and RSUs align the executive and stockholders for the same reason and reward the executive only after the three-year cliff vesting period has lapsed. |
Compensation Overview
The alignment of performance and pay in fiscal 2023 reflects our compensation philosophy. Executive pay is delivered through a performance-based compensation program that provides the opportunity to earn meaningful compensation upon achievement of superior performance and limits earnings opportunity when results are not satisfactory. Annual incentive opportunity is directly tied to one quantifiable objective performance target: EBT. No awards are paid under this program if a threshold level of EBT is not achieved. In addition, PBSs are earned based on the attainment of two-year EBT growth and two-year revenue growth goals, subject to a three-year TSR modifier as described below. Our long-term incentive plan (“LTIP”) is designed to focus on our plan to drive long-term profitable growth. The LTIP uses PBSs that are earned based on attainment of two-year EBT growth and two-year revenue growth goals and require a third year of vesting to deliver 50% of the target LTI value for our NEOs. The Compensation Committee chose to use revenue as a metric as it is a measurement of growth. EBT was chosen as a metric because of its focus on profitable growth, which is a key indicator of our operating performance and therefore closely tied to stockholder value. EBT and revenue are weighted equally at 50%. Each performance metric and its resulting payout operate independently of each other. The resulting PBS award payout is then subject to modification such that payout will be capped at target if the Company’s TSR for its 2023-2025 fiscal years decreases by 10% or more even if revenue and/or EBT performance exceeds target, or if TSR is 10% or more and the revenue and/or EBT performance targets are not met. The LTIP also includes non-qualified stock options with four-year vesting and time-based RSUs with three-year cliff vesting. Stock options only deliver executive compensation if the share price rises above the fair market value grant price, also aligning executive’s interests in share value growth, and time-based RSUs serve as a retention vehicle and further align associates’ interests with stockholder value. We value stockholder engagement and consider the results of our say-on-pay votes. At our 2023 Annual Meeting of Stockholders, approximately 89% of stockholders indicated their approval of the compensation paid to our NEOs through the advisory vote to approve executive compensation (“say-on-pay”). The Compensation Committee believes that this vote affirms stockholder support of the Company’s approach to executive compensation. Our stockholders have consistently supported our say-on-pay proposals. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for our NEOs. We regularly review and assess our compensation programs to ensure that they are aligned with our business strategies and that the type and mix of short-term and long-term incentive vehicles used continue to align management with stockholders’ interests and reward for high performance. Feedback from stockholders is an important consideration that the Compensation Committee uses when formulating future compensation programs. The Company actively solicits feedback on a wide range of topics, including executive compensation, corporate governance, and environmental and social responsibility issues.
Components of Compensation
| | Reward Element | Purpose | Form | Type | Duration | | Fixed | Base Salary | Compensation for duties and responsibilities | Cash | Fixed | One-year | | At Risk | Annual Incentive Plan | Rewards NEOs for achievement of company-wide EBT goal | Cash | Performance Based | One-year | | | Long-Term Incentive Plan | Rewards creation of long-term stockholder value | Performance-Based Units (50% of award value) Stock Options (30% of award value) Restricted Stock Units (20% of award value) | Performance Based | Three-year to Four-year |
2023 Executive Compensation Process
| What We Do: | Objectives and Considerations: | | Compensation Committee Reviews Comparative Pay Levels We review competitive pay levels among a peer group of retailers with revenues similar to Ulta Beauty, compensation survey data for similarly sized retail companies from the Willis Towers Watson Retail Executive Survey Report, and compensation survey data for similarly sized general industry companies from the Willis Towers Watson CDB General Industry Survey report. Our CEO Provides Input for Other Executives The CEO, with input from our human resources department on competitive market positions, recommends to the Compensation Committee the compensation of other executives based on the executive’s performance and internal pay equity among the executives team, as well as talent and succession planning considerations. The CEO does not participate in the discussion or setting of his own compensation. Compensation Committee Makes Final Determination The Compensation Committee approves executive compensation after deliberation, taking into account such factors as talent planning, succession, and Company performance. In addition, the Committee considers such factors as total compensation philosophy, individual performance, and the positioning of Ulta Beauty’s executive total compensation levels relative to market. | | | | We consider the nature and job scope of each NEO. | | | We consider internal pay positioning, taking into account each NEO’s pay components and levels relative to other executives with respect to role, length of time the NEO has served in the NEO’s current position, seniority, and level of responsibility. | | | We consider the accounting and tax impact of each element of compensation. | | | We consider competitive pay levels and practices for similar positions among identified data sets. |
2023 Executive Compensation Process
| ULTA BEAUTY 2023 COMPENSATION PEER GROUP | | | | Bath & Body Works, Inc. | Foot Locker, Inc. | Tractor Supply Company | | Burlington Stores, Inc. | Lululemon Athletica Inc. | Under Armour, Inc. | | Capri Holdings Limited | PVH Corp. | V.F. Corporation | | Dick’s Sporting Goods, Inc. | Ross Stores, Inc. | Williams-Sonoma, Inc. |
2023 Executive Compensation Process
The Compensation Committee selected a peer group of companies that are generally within 0.5x to 3.0x of Ulta’s revenues and/or 0.2x to 4.0x Ulta’s market capitalization and with whom we may compete for talent. The Compensation Committee assesses the peer group annually to ensure the peer group remains relevant from industry, size, and performance perspectives for use in benchmarking pay to inform its decisions.
2023 Compensation Components
| COMPENSATION COMPONENTS | | | | Base Salary | Annual Incentives | Long-Term Incentive Plan |
Annual Incentives
Annual Incentives The NEO target annual incentives, shown as a percentage of base salaries, for fiscal 2023 remained appropriately competitive and were unchanged from 2022 as follows:
Annual Incentives
| | 2023 | | | Annual Incentive | | Named Executive Officer | Target | | David C. Kimbell | 180% | | Scott M. Settersten | 100% | | Jodi J. Caro | 65% | | Anita J. Ryan | 65% | | Kecia L. Steelman | 115% |
Annual Incentives
In fiscal 2023, target EBT under the annual incentive program was $1.703 billion. This target reflected a rigorous goal-setting process in which management and the Compensation Committee worked collaboratively to set targets reflective of our growth expectations. When approving the fiscal 2023 EBT goal, the Committee determined the goal was appropriate given the prior year’s extraordinary performance over plan, concerns over the economy in an inflationary and rising interest rate environment and substantial capital investments in enterprise systems. The fiscal 2023 annual incentive performance/payout range was as follows:
Annual Incentives
| | 2023 | | | | Annual Incentive Performance | Payout as a % of | | | Percent to Target | Target | | Threshold | 87% | 40% | | Target | 100% | 100% | | Maximum | 110% | 200% |
Annual Incentives
Based on our EBT performance of $1.696 billion, the annual incentive payout was 97.84% of target based on EBT performance of less than 100% of target. The Compensation Committee can use negative discretion to reduce calculated annual incentive payouts but did not apply any downward discretion in fiscal 2023.
Long-Term Incentive Plan
Long-Term Incentive Plan During fiscal 2023, we provided long-term incentive awards through grants of PBSs, stock options, and RSUs to our NEOs and certain other associates. Under the LTIP, each eligible associate may receive an award with a value that is targeted to a percentage of base salary, with the ultimate value dependent upon Company performance. The LTIP awards, shown as a percentage of base salaries, for fiscal 2023 compared to fiscal 2022 were as follows:
Long-Term Incentive Plan
| | 2023 | 2022 | | | LTIP Target | LTIP Target | | Named Executive Officer | Percentage | Percentage | | David C. Kimbell | 655% | 524% | | Scott M. Settersten | 230% | 230% | | Jodi J. Caro | 150% | 150% | | Anita J. Ryan | 125% | 125% | | Kecia L. Steelman | 350% | 350% |
Long-Term Incentive Plan
The Compensation Committee increased the LTIP target percentage for Mr. Kimbell to further align his compensation with stockholders for long-term value creation and provide market competitive long-term compensation opportunities. Consistent with our pay-for-performance orientation, the Compensation Committee granted the annual LTIP award with the following mix:
Long-Term Incentive Plan
| PBS | Stock Options | RSUs | | PBSs granted under the LTIP have the following characteristics: | Stock options granted under the LTIP generally have the following characteristics: | RSUs granted under the LTIP generally have the following characteristics: | | ✔ tied to achievement of two-year revenue and EBT targets; ✔ 50% of PBS grant value tied to attainment of revenue target and 50% of PBS grant value tied to attainment of EBT target; ✔ the number of shares earned can be less or greater than target, including zero, based on Company performance; ✔ following the end of the two-year performance period, a third year of time vesting is required before the number of earned shares is delivered to the recipient; and ✔ the PBS awards are capped at target payout if three-year TSR decreases by 10% or more even if revenue and/or EBT performance exceeds target, or if TSR is 10% or more and the revenue and/or EBT performance targets are not met. | ✔ exercise price equal to the fair market value of our common stock on the date of grant; ✔ ratable vesting, on an annual basis over a four-year period; and ✔ ten-year term from the date of grant. | ✔ entitle the holder to receive an equal number of shares of common stock at settlement; and ✔ cliff vest three years from grant date. |
Long-Term Incentive Plan
As described in our proxy statement filed in 2023, the PBSs granted in 2021 were eligible to be earned based on two one-year cumulative revenue and EBITDA targets for fiscal 2021 and 2022, and subject to a three-year TSR modifier. Achievement in each of fiscal 2021 and 2022 resulted in a payout of 170% of target for the revenue component and 200% of target for the EBT component, which were subject to a performance cap if three-year TSR for fiscal years 2021-2023 was not positive. Based on the average closing stock price for the 20 trading days ending February 3, 2024 of $486.45, the three-year TSR was positive and performance cap was not applied. Therefore, the PBSs vested at 170% of target for the revenue component and 200% of target for the EBT component on March 15, 2024. PBS awards previously granted in fiscal 2022 were eligible to be earned based on two-year cumulative revenue and EBT targets follows:
Long-Term Incentive Plan
| | Revenue – 50% of PBS Value | | EBT – 50% of PBS Value | | | | Percent to Target | Payout | Percent to Target | Payout | | Threshold | 95% | 50% | 85% | 50% | | Target | 100% | 100% | 100% | 100% | | Maximum | 105% | 200% | 110% | 200% |
Long-Term Incentive Plan
The two-year cumulative revenue and EBT targets were $19.0 billion and $2.7 billion, respectively and we achieved $21.4 billion and $3.3 billion, respectively, resulting in a maximum 200% earning of the PBS award. The award is subject to a target level payout cap if the Company’s three-year TSR decreases by 10% or more and is not eligible to vest until March 2025.
Executive Compensation Policies and Practices
| What We Do | | What We Don’t Do | | | ✔ | Pay-for-Performance: Vast majority of compensation is performance-based and not guaranteed | ✘ | No Excise Tax Gross-Ups: The Company does not provide any excise tax gross-up payments in connection with a change in control | | ✔ | Multiple Performance Metrics and Time Horizons: Use multiple performance metrics focusing on top-line and bottom-line growth and multi-year vesting and measurement periods for long-term incentives | ✘ | No Repricing or Buyouts of Stock Options: The Company’s equity plan prohibits repricing or buyouts of underwater stock options | | ✔ | Annual Compensation Risk Review: Annually assess risk in compensation programs | ✘ | No Tax Gross-ups for Perquisites: The Company does not provide tax gross-ups to NEOs for the limited perquisites we provide | | ✔ | Double-Trigger Change in Control: Include “double-trigger” change in control provisions for the vesting of equity awards and the receipt of severance | ✘ | No Hedging, Derivatives, Pledging or Margin Accounts: NEOs are prohibited from engaging in derivatives and hedging transactions and from holding Company stock in a margin account or pledging Company stock as collateral | | ✔ | Share Ownership Guidelines: NEOs must comply with share ownership requirements | ✘ | No Dividends on Unearned PBSs and RSUs: No dividends or dividend equivalents are paid on PBSs or RSUs until such PBSs and RSUs become vested and earned | | ✔ | Clawback Policy: We have adopted a clawback policy in compliance with the new SEC rules corresponding Nasdaq listing standards, which provides for the mandatory recovery of incentive compensation in the event of a financial restatement. In addition, our clawback policy permits the recovery of incentive compensation in the event of other misconduct not involving financial restatements, and for breaches of non-compete and other restrictive covenants | ✘ | No Employment Agreements: No contracts with multi-year guaranteed compensation arrangements | | ✔ | Challenging Performance Objectives: Set challenging performance objectives for Annual Incentive and LTIP | | | | ✔ | Use of Independent Consultant: The Compensation Committee has retained an independent compensation consultant that performs no other consulting services for the Company and has no conflicts of interest | | | | ✔ | Limited Perquisites: Provide limited perquisites | | | | ✔ | Peer Groups: Use appropriate peer groups when establishing compensation | | |
Clawback Provisions
Clawback Provisions We maintain a robust compensation recovery policy applicable to all Section 16 officers as well as other associates who receive equity grants or are otherwise selected for coverage. Effective as of October 2, 2023, our Senior Leadership Clawback Policy (the “Clawback Policy”) is intended to comply with the Nasdaq listing standards adopted pursuant to Rule 10D-1 under the Exchange Act. Under the Clawback Policy, if Ulta Beauty is required to prepare an accounting restatement due to its material noncompliance with financial reporting requirements under the securities laws, we will be required to recover from current and former executive officers any excess of (1) the amount of any incentive compensation received during the three years preceding the date that Ulta Beauty is required to prepare such restatement over (2) the amount of any such incentive compensation that would have been received had it been determined based on the restated amounts, computed without regard to any taxes paid, unless the Compensation Committee determines that such recovery would be impracticable. In addition, under the Clawback Policy, the Compensation Committee may recover incentive compensation in the event of: (a) fraud or misconduct (regardless of whether the fraud or misconduct is related to a restatement), (b) a violation of Ulta Beauty’s Code of Business Conduct, or (c) a violation of any applicable non-compete, non-solicitation or confidentiality covenants. For purposes of the Clawback Policy, incentive compensation includes annual and long-term incentives that were paid or vested under any plan or agreement, whether paid or payable in cash and/or shares including any annual bonus, options, SARs, restricted stock, restricted stock units or performance shares (including recovery of gains realized upon the exercise or sale thereof); outstanding incentive awards that have not been earned or vested; and any other compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure.
Long-Term Incentive Granting Policy
Long-Term Incentive Granting Policy We have a general policy of making equity grants (stock options and RSUs) for new executive officers and NEOs once our trading window opens on the third business day following the date our earnings announcements is made for each fiscal quarter. The annual LTIP grant (stock options, PBSs and RSUs) is generally made in the open trading window and at least two days after filing of our Annual Report on Form 10-K. The trading window generally remains open for 30 days (except it only remains open for 10 days following the date our earnings announcement is made for our third fiscal quarter). This timing is therefore generally consistent with when our executives and directors would be allowed to trade in our common stock under our insider trading policy. The Compensation Committee determined that granting stock compensation at this time was prudent in that it allowed for the market to process all reported public information prior to establishing the price as of the grant date. Such a practice thereby eliminates any potential manipulation regarding the timing of stock option grants. All equity grants for executives and NEOs are approved in advance by the Compensation Committee.
Change in Control and Severance Plan
Change in Control and Severance Plan The Company has an Executive Change in Control and Severance Plan (the “CIC Plan”), which provides severance and other benefits should an executive be involuntarily terminated in connection with a change in control. We adopted the CIC Plan as a market-based plan that is intended to minimize distraction to our executives by providing financial security in the event of a loss of employment following a change in control. See “Potential Payments upon Termination or Change in Control” below for additional details.
Summary Compensation Table
Summary Compensation Table The following table sets forth the compensation of our NEOs for fiscal 2023, 2022, and 2021:
Summary Compensation Table
| | | | | | Non-Equity | | | | | | | | Stock | Incentive | | | | | | | Stock | Option | Plan | All Other | | | | | Salary | Awards | Awards | Compensation | Compensation | Total | | Name and Principal Position | Year | ($) | ($) (1) | ($) (2) | ($) | ($) (3) | ($) | | David C. Kimbell | 2023 | 1,350,003 | 6,190,080 | 2,652,857 | 2,377,517 | 93,423 | 12,663,880 | | Chief Executive Officer and | 2022 | 1,225,016 | 5,897,497 | 1,925,796 | 4,410,058 | 54,017 | 13,512,384 | | Director (Principal Executive | 2021 | 1,037,756 | 2,349,012 | 1,353,033 | 3,735,922 | 64,044 | 8,539,767 | | Officer) | | | | | | | | | Scott M. Settersten | 2023 | 805,480 | 1,297,604 | 555,856 | 788,082 | 70,914 | 3,517,936 | | Chief Financial Officer | 2022 | 767,125 | 1,753,629 | 529,419 | 1,534,250 | 63,594 | 4,648,017 | | (Principal Financial Officer) | 2021 | 723,694 | 1,008,718 | 499,434 | 1,230,280 | 50,963 | 3,513,089 | | Jodi J. Caro | 2023 | 658,050 | 691,364 | 296,189 | 418,494 | 55,369 | 2,119,466 | | General Counsel, | 2022 | 620,797 | 1,139,705 | 279,395 | 807,036 | 48,162 | 2,895,095 | | Chief Risk & Compliance Officer | 2021 | 585,645 | 495,999 | 263,572 | 761,338 | 41,701 | 2,148,255 | | and Corporate Secretary | | | | | | | | | Anita J. Ryan | 2023 | 562,016 | 492,194 | 210,904 | 357,419 | 46,964 | 1,669,497 | | Chief Human Resources Officer | 2022 | 501,878 | 593,823 | 127,621 | 663,832 | 38,380 | 1,925,534 | | Kecia L. Steelman | 2023 | 1,065,022 | 2,609,940 | 1,118,334 | 1,198,320 | 64,187 | 6,055,803 | | President and Chief Operating Officer | 2022 | 1,000,022 | 4,147,721 | 1,050,041 | 2,300,052 | 61,317 | 8,559,153 | | | 2021 | 783,246 | 1,170,468 | 672,093 | 1,566,492 | 44,687 | 4,236,986 |
Summary Compensation Table
| 1. | Fiscal 2023 represents the sum of: |
Summary Compensation Table
| (i) the grant date fair value of RSUs of $1,768,516 for Mr. Kimbell, $371,056 for Mr. Settersten, $197,533 for Ms. Caro, $140,783 for Ms. Ryan, and $745,931 for Ms. Steelman was based on the closing share price of our common stock on the date of grant; and |
Summary Compensation Table
| (ii) the grant date fair value at target of the 2023 LTIP PBSs (see footnote 3 to the Grants of Plan Based Awards Table for more information) of $4,421,564 for Mr. Kimbell, $926,548 for Mr. Settersten, $493,831 for Ms. Caro, $351,411 for Ms. Ryan and $1,864,009 for Ms. Steelman was determined using a Monte Carlo simulation using the average closing share price over 20 trading days of $522.74, a valuation day stock price of $545.67, an expected volatility of 35.29% over a 2.84 year period, a risk-free interest rate of 3.81% and TSR of 4.39%. If the maximum level of performance is achieved for the 2023 LTIP PBS grants, the amounts shown above would increase by $4,421,564, $926,548, $493,831, $351,411, and $1,864,009 for Mr. Kimbell, Mr. Settersten, Ms. Caro, Ms. Ryan, and Ms. Steelman, respectively. |
Summary Compensation Table
| 2. | Amounts shown represent the grant date fair value of stock options granted in the year indicated as computed in accordance with ASC 718. For a discussion of the assumptions made in the valuation reflected in these columns, see Note 15 to the consolidated financial statements for fiscal 2023 contained in the Form 10-K filed on March 26, 2024. |
Summary Compensation Table
| 3. | All other compensation includes 401(k) match, deferred compensation match, long-term disability premiums, and other perquisites, including health screenings and life insurance premiums as indicated in the table below for fiscal 2023: |
Summary Compensation Table
| | | Deferred | Executive LT | | | | 401(k) | Compensation | Disability | Other | | | Match | Match | Premium | Perquisites | | Name | ($) | ($) | ($) | ($) | | David C. Kimbell | 13,200 | 39,635 | 39,988 | 600 | | Scott M. Settersten | 13,200 | 23,899 | 33,215 | 600 | | Jodi J. Caro | 13,200 | 19,484 | 22,092 | 593 | | Anita J. Ryan | 13,200 | 16,505 | 16,752 | 506 |
Summary Compensation Table
| Kecia L. Steelman | 10,564 | 31,501 | 21,522 | 600 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth certain information with respect to grants of plan-based awards to the NEOs for fiscal 2023:
Grants of Plan-Based Awards
| | | | | | | | | | | All Other | | | | | | | | | | | | | All Other | Option Awards: | | | | | | | | | | | | | Stock Awards: | Number | Exercise or | Grant Date | | | | | Estimated Future Payouts | | | Estimated Future Payouts | | | Number | of | Base | Fair Value of | | | | | Under Non‑Equity Incentive | | | Under Equity Incentive | | | of | Securities | Price of | Stock and | | | | | Plan Awards | | | Plan Awards (3) | | | Shares | Underlying | Option | Option | | | Grant | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | of Stock | Options | Awards | Awards | | Name | Type | Date | ($) (1) | ($) | ($) (2) | (#) (4) | (#) | (#) (5) | (#) | (#) (6) | ($) | ($) (7) | | David C. Kimbell | | | | | | | | | | | | | | | Annual Incentive | | 972,002 | 2,430,005 | 4,860,010 | — | — | — | — | — | — | — | | | LTIP - PBS | 3/31/2023 | — | — | — | 4,052 | 8,103 | 16,206 | — | — | — | 4,421,564 | | | LTIP - NQ | 3/31/2023 | — | — | — | — | — | — | — | 13,220 | 545.67 | 2,652,857 | | | LTIP - RSU | 3/31/2023 | — | — | — | — | — | — | 3,241 | — | — | 1,768,516 | | Scott M. Settersten | | | | | | | | | | | | | | | Annual Incentive | | 322,192 | 805,480 | 1,610,960 | — | — | — | — | — | — | — | | | LTIP - PBS | 3/31/2023 | — | — | — | 849 | 1,698 | 3,396 | — | — | — | 926,548 | | | LTIP - NQ | 3/31/2023 | — | — | — | — | — | — | — | 2,770 | 545.67 | 555,856 | | | LTIP - RSU | 3/31/2023 | — | — | — | — | — | — | 680 | — | — | 371,056 | | Jodi J. Caro | | | | | | | | | | | | | | | Annual Incentive | | 171,093 | 427,733 | 855,466 | — | — | — | — | — | — | — | | | LTIP - PBS | 3/31/2023 | — | — | — | 453 | 905 | 1,810 | — | — | — | 493,831 | | | LTIP - NQ | 3/31/2023 | — | — | — | — | — | — | — | 1,476 | 545.67 | 296,189 | | | LTIP - RSU | 3/31/2023 | — | — | — | — | — | — | 362 | — | — | 197,533 | | Anita J. Ryan | | | | | | | | | | | | | | | Annual Incentive | | 146,124 | 365,310 | 730,620 | — | — | — | — | — | — | — | | | LTIP - PBS | 3/31/2023 | — | — | — | 322 | 644 | 1,288 | — | — | — | 351,411 | | | LTIP - NQ | 3/31/2023 | — | — | — | — | — | — | — | 1,051 | 545.67 | 210,904 | | | LTIP - RSU | 3/31/2023 | — | — | — | — | — | — | 258 | — | — | 140,783 | | Kecia L. Steelman | | | | | | | | | | | | | | | Annual Incentive | | 489,910 | 1,224,775 | 2,449,550 | — | — | — | — | — | — | — | | | LTIP - PBS | 3/31/2023 | — | — | — | 1,708 | 3,416 | 6,832 | — | — | — | 1,864,009 | | | LTIP - NQ | 3/31/2023 | — | — | — | — | — | — | — | 5,573 | 545.67 | 1,118,334 | | | LTIP - RSU | 3/31/2023 | — | — | — | — | — | — | 1,367 | — | — | 745,931 |
Grants of Plan-Based Awards
| 1. | Threshold assumes performance equals 87% of the EBT performance target, resulting in a payout of 40% of the EBT target bonus. |
Grants of Plan-Based Awards
| 2. | Maximum assumes performance equals or exceeds 110% of the EBT performance target, resulting in a payout of 200% of the EBT target bonus. |
Grants of Plan-Based Awards
| 3. | Amounts represent the 2023 LTIP PBSs granted in which 50% of the grant value is tied to attainment of a revenue target and 50% of the grant value is tied to attainment of an EBT target, in each case subject to a TSR modifier. The 2023 PBSs vest on March 15, 2026, subject to continued service through the vesting date except in the case of certain earlier terminations or in connection with a change in control as further explained in “Potential Payments Upon a Termination or Change in Control.” |
Grants of Plan-Based Awards
| 4. | Threshold assumes performance meets or exceeds 95% of the revenue performance target and 85% of the EBT performance target, resulting in a payout of 50% and 50% of the target performance-based units, respectively. |
Grants of Plan-Based Awards
| 5. | Maximum assumes performance meets or exceeds 105% of the revenue performance target and 110% of the EBT performance target, resulting in a payout of 200% and 200% of the target performance-based units, respectively. |
Grants of Plan-Based Awards
| 6. | Stock options vest in 25% annual increments beginning March 15, 2024, and each anniversary thereafter through March 15, 2027, subject to continued service through the vesting date except in the case of certain earlier terminations or in connection with a change in control. |
Grants of Plan-Based Awards
| 7. | Represents the grant date fair value of RSUs, PBSs and stock options granted as computed in accordance with ASC 718. For a discussion of the assumptions made in the valuation reflected in these columns, see Note 15 to the consolidated financial statements for fiscal 2023 contained in the Form 10-K filed on March 26, 2024 and with respect to the PBSs, footnote 1 in the Summary Compensation Table. RSUs cliff vest on March 15, 2026, subject to continued service through the vesting date except in the case of certain earlier terminations or in connection with a change in control. |
Outstanding Equity Awards as of FEBRUARY 3, 2024
Outstanding Equity Awards as of FEBRUARY 3, 2024 The following table presents information concerning stock options, PBSs, and RSUs held by the NEOs as of February 3, 2024:
Outstanding Equity Awards as of FEBRUARY 3, 2024
| | Stock Option Awards | | | | Stock Awards | | | | | | | | | | | | | Equity | | | | | | | | | Equity | Incentive | | | | | | | | | Incentive | Plan Awards: | | | Number of | Number of | | | Number of | Market | Plan Awards: | Market or | | | Securities | Securities | | | Shares of | Value of | Number of | Payout Value of | | | Underlying | Underlying | | | Stock | Shares of | Unearned | Unearned | | | Unexercised | Unexercised | Option | | that | Stock that | Shares | Shares | | | Options | Options | Exercise | Option | have not | have not | that have not | that have not | | | Exercisable | Unexercisable | Price | Expiration | Vested | Vested | Vested | Vested | | Name | (#) | (#) | ($) | Date | (#) | ($) | (#) (1) | ($) | | David C. Kimbell (2) | | | | | 23,037 | 11,641,287 | 24,321 | 12,290,131 | | | 8,771 | — | 281.53 | 3/24/2027 | | | | | | | 16,880 | — | 204.27 | 3/29/2028 | | | | | | | 10,971 | — | 348.73 | 3/29/2029 | | | | | | | 29,196 | 17,707 | 174.45 | 3/27/2030 | | | | | | | 6,347 | 6,348 | 306.59 | 3/25/2031 | | | | | | | 3,229 | 9,688 | 395.84 | 3/24/2032 | | | | | | | — | 13,220 | 545.67 | 3/31/2033 | | | | | | Scott M. Settersten (3) | | | | | 7,683 | 3,882,450 | 6,156 | 3,110,811 | | | 2,231 | — | 348.73 | 3/29/2029 | | | | | | | 3,797 | 3,797 | 174.45 | 3/27/2030 | | | | | | | 1,172 | 2,343 | 306.59 | 3/25/2031 | | | | | | | 887 | 2,664 | 395.84 | 3/24/2032 | | | | | | | — | 2,770 | 545.67 | 3/31/2033 | | | | | | Jodi J. Caro (4) | | | | | 5,071 | 2,562,527 | 3,259 | 1,646,870 | | | — | 1,804 | 174.45 | 3/27/2030 | | | | | | | 1,236 | 1,237 | 306.59 | 3/25/2031 | | | | | | | 468 | 1,406 | 395.84 | 3/24/2032 | | | | | | | — | 1,476 | 545.67 | 3/31/2033 | | | | | | Anita J. Ryan (5) | | | | | 1,975 | 998,027 | 2,256 | 1,140,024 | | | 1,068 | — | 348.73 | 3/29/2029 | | | | | | | 1,189 | 595 | 174.45 | 3/27/2030 | | | | | | | 250 | 251 | 306.59 | 3/25/2031 | | | | | | | 214 | 642 | 395.84 | 3/24/2032 | | | | | | | — | 1,051 | 545.67 | 3/31/2033 | | | | | | Kecia L. Steelman (6) | | | | | 13,885 | 7,016,507 | 12,258 | 6,194,335 | | | 1,395 | — | 348.73 | 3/29/2029 | | | | | | | 2,759 | 2,759 | 174.45 | 3/27/2030 | | | | | | | 1,577 | 3,153 | 306.59 | 3/25/2031 | | | | | | | 1,760 | 5,283 | 395.84 | 3/24/2032 | | | | | | | — | 5,573 | 545.67 | 3/31/2033 | | | | |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| 1. | Amounts represent the maximum payout of LTIP PBSs granted in fiscal 2022 and target payout of the LTIP PBSs granted in fiscal 2023. With respect to the 2022 PBSs, there are 16,218 for Mr. Kimbell, 4,458 for Mr. Settersten, 2,354 for Ms. Caro, 1,612 for Ms. Ryan and 8,842 for Ms. Steelman for which the performance period has not ended. The award will not be certified until February 2025 and will vest in March 2025. With respect to the 2023 PBSs, there are 8,103 for Mr. Kimbell, 1,698 for Mr. Settersten, 905 for Ms. Caro, 644 for Ms. Ryan and 3,416 for Ms. Steelman for which the performance period has not ended. The award will not be certified until February 2026 and will vest in March 2026. |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| 2. | The vesting schedule for Mr. Kimbell’s outstanding stock options, PBSs, and RSUs as of February 3, 2024 is as follows: |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| | Type of | Expiration | | | | | | Name | Award | date | 3/15/24 | 3/15/25 | 3/15/26 | 3/15/27 | | David C. Kimbell | NQ | 3/27/2030 | 17,707 | — | — | — | | | NQ | 3/25/2031 | 3,174 | 3,174 | — | — | | | NQ | 3/24/2032 | 3,229 | 3,229 | 3,230 | — | | | NQ | 3/31/2033 | 3,305 | 3,305 | 3,305 | 3,305 | | | PBS | | — | 16,218 | 8,103 | — | | | RSU | | 16,552 | 3,244 | 3,241 | — |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| 3. | The vesting schedule for Mr. Settersten’s outstanding stock options, PBSs, and RSUs as of February 3, 2024 is as follows: |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| | Type of | Expiration | | | | | | Name | Award | date | 3/15/24 | 3/15/25 | 3/15/26 | 3/15/27 | | Scott M. Settersten | NQ | 3/27/2030 | 3,797 | — | — | — | | | NQ | 3/25/2031 | 1,171 | 1,172 | — | — | | | NQ | 3/24/2032 | 888 | 888 | 888 | — | | | NQ | 3/31/2033 | 692 | 693 | 692 | 693 | | | PBS | | — | 4,458 | 1,698 | — | | | RSU | | 6,111 | 892 | 680 | — |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| 4. | The vesting schedule for Ms. Caro’s outstanding stock options, PBSs, and RSUs as of February 3, 2024 is as follows: |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| | Type of | Expiration | | | | | | Name | Award | date | 3/15/24 | 3/15/25 | 3/15/26 | 3/15/27 | | Jodi J. Caro | NQ | 3/27/2030 | 1,804 | — | — | — | | | NQ | 3/25/2031 | 618 | 619 | — | — | | | NQ | 3/24/2032 | 469 | 468 | 469 | — | | | NQ | 3/31/2033 | 369 | 369 | 369 | 369 | | | PBS | | — | 2,354 | 905 | — | | | RSU | | 3,227 | 1,482 | 362 | — |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| 5. | The vesting schedule for Ms. Ryan’s outstanding stock options, PBSs, and RSUs as of February 3, 2024 is as follows: |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| | Type of | Expiration | | | | | | Name | Award | date | 3/15/24 | 3/15/25 | 3/15/26 | 3/15/27 | | Anita J. Ryan | NQ | 3/27/2030 | 595 | — | — | — | | | NQ | 3/25/2031 | 125 | 126 | — | — | | | NQ | 3/24/2032 | 214 | 214 | 214 | — | | | NQ | 3/31/2033 | 262 | 263 | 263 | 263 | | | PBS | | — | 1,612 | 644 | | | | RSU | | 1,151 | 566 | 258 | — |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| 6. | The vesting schedule for Ms. Steelman’s outstanding stock options, PBSs, and RSUs as of February 3, 2024 is as follows: |
Outstanding Equity Awards as of FEBRUARY 3, 2024
| | Type of | Expiration | | | | | | Name | Award | date | 3/15/24 | 3/15/25 | 3/15/26 | 3/15/27 | | Kecia L. Steelman | NQ | 3/27/2030 | 2,759 | — | — | — | | | NQ | 3/25/2031 | 1,576 | 1,577 | — | — | | | NQ | 3/24/2032 | 1,761 | 1,761 | 1,761 | — | | | NQ | 3/31/2033 | 1,393 | 1,393 | 1,393 | 1,394 | | | PBS | | — | 8,842 | 3,416 | — | | | RSU | | 8,222 | 4,296 | 1,367 | — |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table presents information concerning exercises of stock options and vesting of RSUs during fiscal 2023:
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of | | Number of | | | | Shares | Value | Shares | Value | | | Acquired on | Realized on | Acquired on | Realized on | | | Exercise | Exercise | Vesting | Vesting | | Name | (#) | ($) (1) | (#) | ($) (2) | | David C. Kimbell | — | — | 22,087 | 11,577,564 | | Scott M. Settersten | — | — | 4,737 | 2,483,041 | | Jodi J. Caro | 5,241 | 1,110,836 | 2,250 | 1,179,405 | | Anita J. Ryan | 1,255 | 380,868 | 824 | 431,924 | | Kecia L. Steelman | — | — | 7,874 | 3,837,858 |
Option Exercises and Stock Vested
| 1. | The value realized on exercise of stock options is based on the difference between the weighted average sales price of our common stock on the transaction date as reported on the Form 4 and the exercise price of the options. The value realized was determined without considering any taxes that may have been owed or withheld. |
Option Exercises and Stock Vested
| 2. | The value realized on vesting of stock awards is based on the closing share price of our common stock on the vesting date as reported on the NASDAQ Global Select Market. The value realized was determined without considering any taxes that may have been owed or withheld. |
2023 Non-Qualified Deferred Compensation
2023 Non-Qualified Deferred Compensation The Ulta Beauty Non-qualified Deferred Compensation Plan allows participants to defer up to 75% of their base salary and 100% of their annual cash bonus. We match 100% of the contributions up to 3% of salary deferred. We do not match or make any other contributions to the plan with regards to bonus or long-term compensation. Participants may direct the investment of their contributions to the plan among several mutual funds, similar to those available under our 401(k) plan. The table below sets forth certain information with respect to the non-qualified deferred compensation plans in which our NEOs may participate as of February 3, 2024:
2023 Non-Qualified Deferred Compensation
| | | | | | Aggregate | | | Executive | Registrant | Aggregate | Aggregate | Balance at | | | Contributions in | Contributions in | Earnings in | Withdrawals/ | Last Fiscal | | | Last Fiscal Year | Last Fiscal Year | Last Fiscal Year | Distributions | Year End | | Name | ($) (1)(2) | ($) | ($) | ($) | ($) | | David C. Kimbell | 241,616 | 39,635 | 393,943 | — | 4,226,762(3) | | Scott M. Settersten | 110,643 | 23,899 | 21,498 | — | 976,775(4) | | Jodi J. Caro | 32,125 | 19,484 | 34,633 | — | 519,311(5) | | Anita J. Ryan | 110,822 | 16,505 | 44,548 | — | 702,933(6) | | Kecia L. Steelman | 31,651 | 31,501 | 94,526 | — | 1,060,178(7) |
2023 Non-Qualified Deferred Compensation
| 1. | Included in the amount listed under the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table above. |
2023 Non-Qualified Deferred Compensation
| 2. | Contributions include salary and annual cash incentive deferrals, including annual cash incentive awards earned in fiscal 2023 but paid in fiscal 2024. |
2023 Non-Qualified Deferred Compensation
| 3. | $3,551,568 was previously reported as compensation to Mr. Kimbell in the Summary Compensation Table for prior years. |
2023 Non-Qualified Deferred Compensation
| 4. | $820,735 was previously reported as compensation to Mr. Settersten in the Summary Compensation Table for prior years. |
2023 Non-Qualified Deferred Compensation
| 5. | $433,069 was previously reported as compensation to Ms. Caro in the Summary Compensation Table for prior years. |
2023 Non-Qualified Deferred Compensation
| 6. | $531,058 was previously reported as compensation to Ms. Ryan in the Summary Compensation Table for prior years. |
2023 Non-Qualified Deferred Compensation
| 7. | $902,500 was previously reported as compensation to Ms. Steelman in the Summary Compensation Table for prior years. |
Potential Payments Upon a Termination or Change in Control
Potential Payments Upon a Termination or Change in Control
Executive Change in Control and Severance Plan
| ● | accelerated vesting of all outstanding equity awards held by the executive that vest solely based on the passage of time; and |
CEO PAY RATIO
CEO PAY RATIO The SEC requires companies to disclose the ratio of the total annual compensation of the CEO to the median of the total annual compensation of all our associates, other than the CEO. We explain below how we made reasonable efforts to identify our median associate and calculate both the median associate’s total annual compensation and the total annual compensation of our CEO. As permitted by the SEC, we have used reasonable estimates, assumptions, and methodologies to prepare this disclosure. The SEC provided companies with flexibility to calculate their CEO pay ratio in a manner that best suits their facts and circumstances. Our CEO pay ratio is specific to Ulta Beauty, Inc. and should not be used as a basis for comparison with the CEO pay ratios disclosed by other companies. We identified our median associate by (1) identifying all associates on November 6, 2023, (2) calculating each associate’s cash compensation (salary, wages, bonuses, and commissions) earned through that date and (3) then ranking all 58,834 associates by compensation from high to low and selecting the associate who had the median cash compensation. We calculated the median associate’s total annual compensation for fiscal 2023 according to the same methodology we used for calculating Mr. Kimbell’s total annual compensation as reported in the Summary Compensation Table on page 40, to determine both our median associate’s total annual compensation and Mr. Kimbell’s for purposes of the ratio. Using this methodology for fiscal 2023, our median associate’s total annual compensation was $13,193 and our CEO’s total annual compensation was $12,663,880. The resulting ratio of our CEO’s total annual compensation to the total annual compensation of our median associate was approximately 960:1.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE In accordance with rules adopted by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officers (“PEOs”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years shown.
PAY VERSUS PERFORMANCE
| | | | | | | | Value of Initial Fixed $100 | | | | | | | | | | | | Investment based on:4 | | | | | Year | Summary Compensation Table Total for Mary N. Dillon ($) (1) | Compensation Actually Paid to Mary N. Dillon ($) (1), (2), (3) | Summary Compensation Table Total for David C. Kimbell ($) (1) | Compensation Actually Paid to David C. Kimbell ($) (1), (2), (3) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (1) | Average Compensation Actually Paid to Non-PEO NEOs ($) (1), (2), (3) | TSR ($) | Peer Group TSR ($) | Net Income ($ Millions) | Earnings Before Taxes (EBT) ($ Millions) (5) | | 2023 | — | — | 12,663,880 | 12,283,344 | 3,340,676 | 3,164,007 | 188.62 | 174.14 | 1,291 | 1,696 | | 2022 | — | — | 13,512,384 | 31,234,457 | 4,506,950 | 8,156,948 | 188.75 | 123.99 | 1,242 | 1,644 | | 2021 | 6,968,391 | 22,560,792 | 8,539,767 | 19,890,765 | 2,961,167 | 5,266,028 | 133.94 | 149.72 | 986 | 1,296 | | 2020 | 8,100,164 | 12,265,040 | — | — | 3,939,707 | 6,641,083 | 104.42 | 141.39 | 176 | 231 |
PAY VERSUS PERFORMANCE
| 1. | David C. Kimbell has served as our PEO from June 2021 to present. Mary N. Dillon was our PEO from July 2013 to June 2021. The individuals comprising the Non-PEO NEOs for each year presented are listed below. |
PAY VERSUS PERFORMANCE
| 2023 | 2022 | 2021 | 2020 | | Scott M. Settersten | Scott M. Settersten | Scott M. Settersten | David C. Kimbell | | Jodi J. Caro | Jodi J. Caro | Jodi J. Caro | Scott M. Settersten | | Anita J. Ryan | Anita J. Ryan | Jeffrey J. Childs | Jodi J. Caro | | Kecia L. Steelman | Kecia L. Steelman | Kecia L. Steelman | Jeffrey J. Childs |
PAY VERSUS PERFORMANCE
| 2. | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
PAY VERSUS PERFORMANCE
| 3. | Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEOs and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. |
PAY VERSUS PERFORMANCE
| | Summary Compensation Table | Exclusion of Stock Awards and | Inclusion of Equity Values for | Compensation Actually Paid to | | | Total for David C. Kimbell | Option Awards for David C. Kimbell | David C. Kimbell | David C. Kimbell | | Year | ($) | ($) | ($) | ($) | | 2023 | 12,663,880 | (8,842,937) | 8,462,401 | 12,283,344 | | | Average Summary Compensation Table Total for Non-PEO NEOs | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs | Average Inclusion of Equity Values for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | | Year | ($) | ($) | ($) | ($) | | 2023 | 3,340,676 | (1,818,096) | 1,641,427 | 3,164,007 |
PAY VERSUS PERFORMANCE
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
PAY VERSUS PERFORMANCE
| | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for David C. Kimbell | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for David C. Kimbell | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for David C. Kimbell | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for David C. Kimbell | Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for David C. Kimbell | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for David C. Kimbell | Total - Inclusion of Equity Values for David C. Kimbell | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 8,785,257 | (487,966) | — | 165,110 | — | — | 8,462,401 | | | Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs | Average Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non- PEO NEOs | Average Fair Value at Last Day of Prior Year of Equity Awards Forfeited During Year for Non- PEO NEOs | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs | Total - Average Inclusion of Equity Values for Non-PEO NEOs | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | 2023 | 1,590,014 | 49,800 | — | 1,613 | — | — | 1,641,427 |
PAY VERSUS PERFORMANCE
The fair values of RSUs, PBSs, and stock options included in the Compensation Actually Paid to our PEOs and the Average Compensation Actually Paid to our non-PEO NEOs are calculated at the required measurement dates, consistent with the approach used to value the awards at the grant date as described in this proxy statement and our Annual Report on Form 10-K for the year ended February 3, 2024. Any changes to the RSU fair values from the grant date (for current year grants) and from prior year-end (for prior year grants) are based on our updated stock price at the respective measurement dates. Changes to the PBS fair values are based on the updated stock price at the respective measurement dates, in addition to expected volatility, risk-free interest rate assumptions, and TSR. Changes to the stock option fair values are based on the updated stock price at the respective measurement dates, in addition to updated expected life, expected volatility, and risk-free interest rate assumptions. For all years presented, the meaningful increases or decreases in the year-end PBS fair value and stock option fair value from the fair value on the grant date were primarily driven by changes in the stock price.
PAY VERSUS PERFORMANCE
| 4. | The Peer Group TSR set forth in this table utilizes the S&P 500 Retailing (Industry Group, SP500-2550) (“S&P 500 Retailing”), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended February 3, 2024. The comparison assumes $100 was invested for the period starting January 28, 2020, through the end of the listed year in the Company and in the S&P 500 Retailing, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
PAY VERSUS PERFORMANCE
| 5. | We determined Earnings Before Taxes (EBT) to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEOs and Non-PEO NEOs in fiscal 2023. This performance measure may not have been the most important financial performance measure for years 2022, 2021, and 2020 and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company TSR and Peer Group TSR
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company TSR and Peer Group TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our other NEOs, the Company’s cumulative TSR, and the TSR of the S&P 500 Retailing (Industry Group, SP500-2550) over the four most recently completed fiscal years.
Description of Relationship BETWEEN PEO and Other NEO Compensation Actually Paid and Net Income
Description of Relationship BETWEEN PEO and Other NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEOs, the average of Compensation Actually Paid to our other NEOs, and our net income during the four most recently completed fiscal years.
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company-Selected Measure
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Company-Selected Measure The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our Earnings Before Taxes (EBT) during the four most recently completed fiscal years.