UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

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☐	Preliminary Proxy Statement
☐	Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒	Definitive Proxy Statement
☐	Definitive Additional Materials
☐	Soliciting Material Under §240.14a-12


ULTA BEAUTY, INC.
(Name of Registrant as Specified In Its Charter)

	Not applicable
	(Name of Person(s) Filing Proxy Statement, if other than the Registrant)



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☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

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Notice of Annual Meeting of Stockholders

When?	Where?	Who?

	10:00 am CDT on Thursday, June 1, 2023	Virtual meeting at www.virtualshareholdermeeting.com /ULTA2023	Stockholders of Record as of April 4, 2023

Meeting Agenda


Proposals	Board Recommendation	For more information
1. To elect Michelle L. Collins, Patricia A. Little, Heidi G. Petz, and Michael C. Smith as Class I Directors	FOR (all nominees)	Page 10
2. To approve an amendment to our Certificate of Incorporation to declassify our Board of Directors and provide for the annual election of directors	FOR	Page 19
3. To approve amendments to our Bylaws to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors and, if Proposal 2 is approved, with or without cause	FOR	Page 21
4. To approve an amendment to our Certificate of Incorporation to replace all supermajority voting standards for amendments to the Certificate of Incorporation with a majority standard	FOR	Page 22
5. To approve an amendment to our Bylaws to replace all supermajority voting standards for amendments to the Bylaws with a majority standard	FOR	Page 23
6. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year 2023, ending February 3, 2024	FOR	Page 24
7. To vote on an advisory resolution to approve the Company’s executive compensation	FOR	Page 54
8. To vote on the frequency of future advisory votes on the Company’s executive compensation	1 YEAR	Page 56

We will also consider any other matters that may properly be brought before the meeting or any adjournment or postponement thereof.

Virtual Meeting

We are holding the 2023 annual meeting online, in a virtual meeting (via live webcast) format. You will not be able to attend the annual meeting physically. You or your proxyholder can participate, vote, and examine our stockholder list at the annual meeting by visiting www.virtualshareholdermeeting.com/ULTA2023 and using your control number found on your proxy card. We believe that a virtual format provides improved communication and the opportunity for participation by a broader group of our stockholders, while reducing costs associated with planning, holding, and arranging logistics for an in-person meeting. In addition, hosting a virtual annual meeting reduces the environmental impact of our annual meeting.

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Voting

Stockholders of Ulta Beauty as of the record date are entitled to vote, as follows:



Internet	Telephone	Mail
www.proxyvote.com for beneficial ownership	1-800-690-6903 for beneficial ownership	Mark, sign and date your proxy card and return it in the pre-addressed postage paid envelope we have provided or return it to:
www.proxyvote.com for registered ownership up until 11:59 pm CDT, on May 31, 2023	or 1-800-690-6903 for registered ownership up until 11:59 pm CDT, on May 31, 2023	For beneficial ownership: Vote Processing c/o Broadridge 51 Mercedes Way Edgewood, NY 11717	For registered ownership: Proxy Services C/O American Stock Transfer & Trust Company PO BOX 505008 Louisville, KY 40233 9814

Your vote is important. Whether or not you plan to attend the meeting, we encourage you to read this proxy statement and submit your proxy or voting instructions as soon as possible. For specific instructions on how to vote your shares, please refer to the instructions on the notice of internet availability of proxy materials you received in the mail. If you received paper copies of the proxy materials, kindly vote by internet or telephone by following the instructions set forth on the enclosed proxy card or mark, sign, and date the enclosed proxy card and return it promptly in the enclosed envelope (which is postage prepaid, if mailed in the United States). Even if you have given your proxy, you may still revoke your proxy and vote by attending the virtual meeting online. Please note, however, that if your shares are held by a broker, bank, or other nominee and you wish to vote at the meeting, you must obtain, from your broker, bank, or other nominee, the record holder, and submit a legal proxy issued in your name. For specific instructions on voting, please refer to the section, Questions and Answers — Voting Information/page 66.

If you have any questions or need assistance voting, please contact our proxy solicitor:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Stockholders may call toll free: (877) 800-5190
Banks and Brokers may call collect: (212) 750-5833

Proxy Materials

This Notice of Annual Meeting, proxy statement, and form of proxy are being distributed and made available around April 20, 2023.

By order of the Board of Directors.

Jodi J. Caro
General Counsel, Chief Risk & Compliance Officer and Corporate Secretary

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TABLE OF CONTENTS
TABLE OF CONTENTS


CORPORATE GOVERNANCE	1

Proposal One — Election of Directors	8

Information About Our Director Nominees	10

Information About Our Directors Continuing in Office	12

Non-Employee Director Compensation for Fiscal 2022	16

Proposal Two — Amendment to our Certificate of Incorporation to declassify our Board of Directors and provide for the annual election of directors	19

Proposal Three — Amendments to our Bylaws to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors and, if Proposal 2 is approved, with or without cause	21

Proposal Four — Amendment to our Certificate of Incorporation to replace all supermajority voting standards for amendments to the Certificate of Incorporation with a majority standard	22

Proposal Five — Amendment to our Bylaws to replace all supermajority voting standards for amendments to the Bylaws with a majority standard	23

Proposal Six — Ratification of Appointment of Independent Registered Public Accounting Firm	24

Fees to Independent Registered Public Accounting Firm	25

Audit Committee	26

Report of the Audit Committee of the Board Of Directors	27

Compensation Committee	28

Report of the Compensation Committee of the Board Of Directors	30

COMPENSATION DISCUSSION AND ANALYSIS	31

Proposal Seven — Advisory Resolution on Executive Compensation	54

Proposal Eight — Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation	56

CEO Pay Ratio	57

Pay Versus Performance	57

STOCK OWNERSHIP	62

CERTAIN RELATIONSHIPS AND TRANSACTIONS	65

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING	66

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MISCELLANEOUS	72

APPENDIX A: Proposed Amendment to our Certificate of Incorporation to Declassify our Board of Directors	73

APPENDIX B: Proposed Amendments to our Bylaws Regarding the Removal of Directors	74

APPENDIX C: Proposed Amendment to our Certificate of Incorporation to Replace the Supermajority Voting Standards	75

APPENDIX D: Proposed Amendment to our Bylaws to Replace the Supermajority Voting Standards	76

Important notice regarding the availability of proxy materials for the annual meeting of stockholders to be held on June 1, 2023. The proxy statement and Annual Report to Stockholders for the year ended January 28, 2023 are available at https://ulta.com/investor. Brokers cannot vote for Proposals 1, 2, 3, 4, 5, 7 or 8 without your instructions.

We are furnishing proxy materials to our stockholders primarily via the internet. Internet distribution of our proxy materials is designed to expedite receipt by stockholders, lower the cost of the 2023 Annual Meeting of Stockholders (sometimes referred to as the “Annual Meeting”), and conserve natural resources. However, if you would prefer to receive paper copies of proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials.

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C		orporate Governance

The Board of Directors (sometimes referred to as the “Board”) of Ulta Beauty, Inc. (“Ulta Beauty,” the “Company,” “we,” “us” or “our”) is committed to excellence in governance. As part of this commitment and in the spirit of improving always (which is one of Ulta Beauty’s Values), the Board continues to take additional steps to enhance our corporate governance practices, policies, structures, and functioning, taking into account ongoing corporate governance trends, peer practices, and views and perspectives of our stakeholders. As a result, the Board has considered certain provisions in the Company’s Certificate of Incorporation and Bylaws and determined that it would serve the best interests of our stockholders to:

●

Amend our Certificate of Incorporation to declassify the Board and provide for the annual election of the entire Board of Directors for one-year terms, such that the Board will be fully declassified by the 2025 Annual Meeting of Stockholders;

●

Amend our Bylaws to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors and, if the Board declassification proposal is also approved, with or without cause;

●

Amend our Certificate of Incorporation to replace all supermajority voting standards for amendments to the Certificate of Incorporation with a majority standard; and

●

Amend our Bylaws to replace all supermajority voting standards for amendments to the Bylaws with a majority standard, at the Annual Meeting.

Each of these proposals (Proposals 2, 3, 4 and 5) are more fully described below. These changes are in addition to the following improvements made:

●

Updating our Governance Guidelines to better express our commitment to diversity;

●

Implementing an age limit for our directors to encourage board refreshment;

●

Refreshing our Board by adding six new directors in the last five years, expanding our expertise, and enhancing our diversity in multiple dimensions. Our Board is comprised of 55% women, including our Board Chair, and is 36% diverse;

●

Updating the charters of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee to enhance risk oversight, better express our commitment to diversity, and address oversight of environmental, social, and governance (“ESG”) risks;

●

Enhancing the Company’s policy prohibiting use of corporate funds to support political campaigns and publishing the updated policy on our website for more convenient access to stockholders and others;

●

Publishing our first annual ESG report in 2020 and providing stockholders with expanded disclosures across our four key pillars: People, Product, Environment, and Community in successive reports; and

●

Proactively engaging with our stockholders to seek feedback on our ESG reporting and related disclosures, including our governance practices.

Our Board and the Company will continue to strive for excellence in governance and appreciates your support of these and the other proposals in this proxy statement.

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Corporate Governance
Corporate Governance

Board Leadership Structure

The Corporate Governance Guidelines of Ulta Beauty provide that the offices of the Chief Executive Officer (“CEO”) and the Chair of the Board of Directors may be either combined or separated at the discretion of the Board. We currently separate the roles of CEO and Chair of the Board, and our Board is led by an independent, non-executive Chair. We believe separating the roles of CEO and Chair enhances the accountability of the CEO to the Board, strengthens the Board’s independence from management, and ensures a greater role for the independent directors in the oversight of the Company. In addition, it allows our CEO to focus his efforts on running our business and managing our Company in the best interests of our stockholders, while the Chair provides guidance to the CEO and, in consultation with management, helps to set the agenda for Board meetings and establishes priorities and procedures for the work of the full Board. The Chair presides over meetings of the full Board as well as executive sessions (without management), which the Board generally holds several times a year.

Our Corporate Governance Guidelines also provide that a majority of the independent directors will select a lead independent director when the Chair does not qualify as an independent director. In the event that a lead independent director is designated, his or her duties would include: assisting the Chair of the Board and Board of Directors in assuring compliance with and implementation of the Company’s Corporate Governance Guidelines; coordinating the agenda for and moderating sessions of the Board’s non-management directors; and facilitating communications between the non-management directors and the other members of the Board and the management of the Company.

The Board believes that the current Board leadership structure with separate CEO and Chair roles is in the best interests of the Company and its stockholders at this time. The Board recognizes that no single leadership model is right for all companies and at all times and that, depending on the circumstances, other leadership models, such as combining the Chair and CEO roles, might be appropriate. Accordingly, the Board periodically reviews its leadership structure. Our Corporate Governance Guidelines provide the flexibility for the Board to modify or continue its leadership structure in the future, as it deems appropriate.

Independence

Board member independence is an essential element of Ulta Beauty corporate governance. The Board of Directors determined each current non-employee director is free of any relationship that would interfere with the ability to exercise independent judgment with regard to Ulta Beauty. Each member of, and nominee for, the Board of Directors is independent other than David C. Kimbell, our CEO. Each member of the Nominating and Corporate Governance Committee, Compensation Committee, and Audit Committee satisfies the independence requirements of the NASDAQ Stock Market (“NASDAQ”) and the Securities and Exchange Commission (the “SEC”).

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	Corporate Governance
	Corporate Governance

Board of Directors Meetings and Committees

During the fiscal year ended January 28, 2023 (“fiscal 2022”), the Board of Directors held seven meetings. The Board of Directors has an Audit Committee, a Nominating and Corporate Governance Committee, and a Compensation Committee. During fiscal 2022, no incumbent director attended less than 75% of the aggregate meetings of the Board of Directors and of the committees on which they served that were held during the period for which they were a director or committee member, respectively. Directors are invited and expected to attend the Annual Meeting of Stockholders, and all our directors then in office attended our 2022 Annual Meeting of Stockholders.

The following table provides the composition of each of our committees as of April 4, 2023:


Director	Nominating and Corporate Governance Committee (1)	Audit Committee (2)	Compensation Committee (3)
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


Committee Chair	Member	* Non-Executive Chair of the Board

** As a new director, Ms. Petz will observe all committees until June 2023 when she will be appointed to serve on a specific committee(s).

Additional information regarding the Nominating and Corporate Governance Committee can be found starting on page 4.

Additional information regarding the Audit Committee can be found starting on page 26.

Additional information regarding the Compensation Committee can be found starting on page 28.

Board Role in Risk Oversight

Our Board of Directors oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. Management is responsible for the Company’s day-to-day risk management activities and processes, and our Board’s role is to engage in informed oversight of, and provide guidance with respect to, such risk management activities and processes. The Board recognizes that a fundamental part of risk management is not only understanding the risks our Company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for our Company. As such, the Board focuses on understanding the nature of our enterprise risks, including operational, financial, legal and regulatory, cybersecurity, strategic, and competitive, as well as climate related and environmental risks, and reputational risks. The Board also focuses on understanding the adequacy of our risk assessment and risk management processes. To facilitate such an understanding, the Board and its committees receive regular management updates on our business operations, financial results, and strategy, and the Board discusses and provides guidance with respect to risks related to those topics.

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Corporate Governance
Corporate Governance

While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management, including the Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee.

The Audit Committee oversees risks associated with financial accounting and audits, internal control over financial reporting, as well as data privacy, cybersecurity, and other technology risks. The Audit Committee assists the Board in its oversight by discussing with management the Company’s risk assessment and management policies, the Company’s major and emerging risk exposures, including significant financial risk exposures, and the actions taken by management to limit, monitor or control such exposures.

The Compensation Committee oversees risks relating to the Company’s compensation policies and practices. In setting compensation, the Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with the Company’s business strategy. The Compensation Committee oversees risks relating to the Company’s development and implementation of human capital development plans, as well as succession planning practices to foster sufficient management depth at the Company to support its continued growth and talent needed to execute long-term strategies. In addition, the Compensation Committee is also responsible for reviewing with management the Company’s policies, practices, and strategies relating to human capital management as they relate to the Company’s workforce generally, including policies and strategies regarding recruiting, selection, talent development, progression and retention, succession planning, workplace health and safety, culture and engagement, as well as diversity, equity, and inclusion.

The Nominating and Corporate Governance Committee oversees the implementation of the Company’s Code of Business Conduct and monitors compliance therewith. This oversight includes monitoring compliance with the Company’s recently enhanced policy prohibiting use of corporate funds to support political campaigns. The Nominating and Corporate Governance Committee also periodically reviews the ESG strategies, policies, risks, practices, goals, and programs, including through the Company’s annual ESG Report, except where delegated to other Board committees. In addition, the Nominating and Corporate Governance Committee oversees implementation of the Company’s Corporate Governance Guidelines, board evaluation process, and the process for recommending candidates to the Board of Directors for nomination as directors and membership on committees of the Board.

Director Age Limit

Our Corporate Governance Guidelines currently provide that any director who reaches the age of 75 years in the first year of his or her three-year term will not be eligible to stand for election unless the Nominating and Corporate Governance Committee, after evaluation of the continued appropriateness of Board membership in light of all of the circumstances, decides to recommend to the Board that an exception be made. In addition, any director who reaches the age of 75 years in the second or third year of his or her three-year term will, promptly following such director’s 75th birthday, submit to the Board his or her resignation from the Board. In this situation, the Nominating and Corporate Governance Committee will consider the resignation submitted, evaluate the continued appropriateness of Board membership in light of all of the circumstances and recommend to the Board whether to accept such director’s resignation or request that the director continue to serve. If such resignation is accepted by the Board, it will be effective at the next annual meeting of stockholders following the resignation.

If the stockholders approve Proposals 2 and 3 (which are discussed below) at the Annual Meeting, the Board will revise this provision of our Corporate Governance Guidelines to reflect the declassification of the Board.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee acts under a written charter approved by the Board of Directors that is reviewed regularly and has been published under “Governance” in the Investor Relations section of the Ulta Beauty website at https://ulta.com/investor. The primary responsibility of the Nominating and Corporate Governance Committee is to recommend to the Board of Directors candidates for nomination as directors and membership on committees of the Board. The Committee reviews the performance and independence of each director, and in appropriate circumstances, may recommend the removal of a director. The Committee oversees the evaluation of the Board of Directors and the committees of the Board and makes recommendations to improve performance. The Committee also recommends policies with respect to corporate governance to the Board of Directors.

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	Corporate Governance
	Corporate Governance

During fiscal 2022, the Nominating and Corporate Governance Committee was composed of the following independent directors: Ms. Collins (until June 1, 2022), Ms. Halligan, Mr. MacDonald (effective June 1, 2022), Mr. Mrkonic (effective June 1, 2022), and Mr. Smith (effective June 1, 2022), and former independent directors Ms. Blount and Mr. Heilbronn (both until June 1, 2022). Mr. Mrkonic serves as the current Chair of the Committee. The Nominating and Corporate Governance Committee met six times during fiscal 2022.

Nominating and Corporate Governance Committee Charter

The Nominating and Corporate Governance Committee charter identifies the roles and responsibilities that govern the Committee, such as:

●

identifying and evaluating qualified candidates to become Board members;

●

selecting nominees for election as directors at the next annual meeting of stockholders (or special meeting of stockholders at which directors are to be elected);

●

selecting candidates to fill any vacancies on the Board;

●

reviewing the composition of the Committees of the Board and making recommendations to the Board regarding the selection of the members of the Committees;

●

overseeing the implementation of and monitoring compliance with Ulta Beauty’s Code of Business Conduct (other than with respect to accounting or auditing issues that the Audit Committee oversees);

●

reviewing the Company’s ESG strategies, policies, practices, goals, and programs, including through the Company’s annual ESG Report, except where delegated to other Board Committees. Such review includes a review of the Company’s risks related to ESG;

●

overseeing the evaluation of the Board and the Committees of the Board; and

●

periodically reviewing the Company’s Corporate Governance Guidelines and other governance policies.

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Corporate Governance
Corporate Governance

Nomination Process — Qualifications

Pursuant to its charter, the Nominating and Corporate Governance Committee annually assesses the experience, expertise, capabilities, skills, and diversity of the members of the Board, including diversity of age, gender, nationality, race, ethnicity, and sexual orientation, individually and collectively, and considers these factors when evaluating director candidates.

What We Do:

We review the skills and characteristics of the board directors

The Nominating and Corporate Governance Committee is responsible for reviewing the appropriate skills and characteristics in the context of prevailing business conditions and, in its nominating committee capacity, for making recommendations regarding the size, composition, and desired complementary skill sets of the Board of Directors, including diversity of age, gender, nationality, race, ethnicity, and sexual orientation.

We search for appropriate candidates based on recommendations

We consider potential director candidates recommended by current directors, officers, associates (i.e., employees), and others. We also consider all stockholder recommendations for candidates for the Board of Directors. Stockholders who want to suggest a candidate for consideration should send a written notice, addressed to the Corporate Secretary. We have periodically engaged the services of search firms to provide us with candidates, especially when we are looking for a candidate with a particular expertise, quality, skill, or background.

We interview candidates and deliberate

The Nominating and Corporate Governance Committee screens all potential candidates in the same manner, regardless of the source of the recommendation. Our review is typically based on any written materials provided with respect to potential candidates, as well as appropriate due diligence, and we review such materials to determine the qualifications, experience, and background of the candidates. Final candidates are typically interviewed by members of the Committee and other members of the Board, as appropriate. After review and deliberation of all feedback and data, the Committee makes a recommendation to the full Board of Directors regarding who should be nominated by the Board of Directors.

Key Objectives and Considerations:

The objective of the Nominating and Corporate Governance Committee is to create and sustain a Board of Directors that brings to Ulta Beauty a variety of perspectives and skills derived from high-quality business and professional experience and that has the appropriate skills and experience to oversee execution of UIta Beauty’s strategic plan. Both the Board and the Nominating and Corporate Governance Committee believe that it is essential for Board members to represent diverse viewpoints, backgrounds, experiences, expertise, and skill sets, including diversity of age, gender, nationality, race, ethnicity, and sexual orientation, differences in professional experience, education, skill, and other individual qualities and attributes that contribute to an active, effective Board.

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	Corporate Governance
	Corporate Governance

We value our stockholders’ input and encourage them to nominate candidates. To submit a candidate, please follow the process outlined under the Nomination of Directors header in the Questions and Answers section of this proxy statement.

The Committee evaluates each individual in the context of our Board of Directors as a whole with the objective of assembling a group that can best perpetuate the success of our Company and represent stockholder interests through the exercise of sound judgment. The Nominating and Corporate Governance Committee recommends those candidates who possess the highest personal and professional integrity, have prior experience in corporate management and the industry, maintain academic or operational expertise in an area of our business, and demonstrate practical and mature business judgment.

Our Board of Directors has also adopted proxy access for director nominees. Proxy access means that any stockholder or group of up to 20 stockholders owning 3% or more of our common stock continuously for at least three years may nominate and include in our proxy materials director nominees totaling up to the greater of two directors or 20% of the Board. For more information about proxy access, see the Nomination of Directors header in the Questions and Answers section of this proxy statement.

Code of Business Conduct

All Ulta Beauty associates, officers, and members of the Board of Directors must always act ethically and in accordance with the Ulta Beauty Code of Business Conduct. All corporate associates, officers, and members of the Board of Directors have signed a certificate acknowledging that they have read, understand, and will continue to comply with the policy, and all corporate associates and officers are required to read and acknowledge this policy on an annual basis. Ulta Beauty includes the Code of Business Conduct in new hire materials for all corporate associates. The policy is published under “Governance” in the Investor Relations section of the Ulta Beauty website located at https://ulta.com/investor.

Corporate Governance Guidelines

Our Board of Directors adopted the Corporate Governance Guidelines to assist the Board in the exercise of its responsibilities. The Corporate Governance Guidelines have been published under “Governance” in the Investor Relations section of the Ulta Beauty website located at https://ulta.com/investor.

Director Ownership Guidelines

Our Board of Directors has adopted share ownership guidelines that each non-employee director should hold shares of our common stock or restricted stock units with a value equal to five times the annual cash retainer paid to non-employee directors by the fifth anniversary of the date the guidelines became effective for each director. As of January 28, 2023, each non-employee director serving for at least five years met or exceeded the ownership guideline.

Stockholder Communication

We welcome communication from stockholders. Any stockholder can communicate in writing with the Board of Directors on matters pertaining to Ulta Beauty by addressing their comments to the Board of Directors, c/o General Counsel, Ulta Beauty, Inc., 1000 Remington Blvd., Suite 120, Bolingbrook, IL 60440, or by e-mail at InvestorRelations@ulta.com. Our General Counsel will review all correspondence addressed to our Board of Directors, or any individual director, and will forward appropriate stockholder communications to our Board of Directors prior to the next regularly scheduled meeting of our Board of Directors following the receipt of such communication. Our General Counsel will also forward any stockholder correspondence which is more suitably directed to management to the appropriate member(s) of the management team. In addition, upon request of the Board, our General Counsel will summarize all correspondence not forwarded to the Board and make the correspondence available to the Board for its review.

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Corporate Governance
Corporate Governance

PROPOSAL ONE
ELECTION OF DIRECTORS

Our Certificate of Incorporation currently provides that our Board of Directors is divided into three classes, designated Class I, Class II, and Class III, with each class consisting, as nearly as possible, of one-third of the total number of directors. Each class serves a three-year term with one class being elected at each year’s annual meeting of stockholders. 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 full term of the class of directors in which the vacancy occurred and until that director’s successor is elected and qualified.

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 Board is seeking stockholder approval at the Annual Meeting to declassify the Board and provide for the annual election of directors (see Proposals 2 and 3 below). If the stockholders elect the four nominees proposed by the Board and also approve Proposals 2 and 3, each such director will hold office for a one-year term expiring at the 2024 Annual Meeting of Stockholders. However, if the stockholders elect the four nominees proposed by the Board, but do not approve Proposals 2 and 3, each such director will hold office for a three-year term expiring at the 2026 Annual Meeting of Stockholders.

The affirmative vote of the holders of a majority of 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. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. 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.

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.

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

✔

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	Corporate Governance
	Corporate Governance

Board Diversity Matrix (As of June 1, 2023*)


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)	5.2
Directors' Average Age (Years)	58.9
Independent Directors	10

*Assumes all directors standing for election are elected

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Corporate Governance
Corporate Governance

INFORMATION ABOUT OUR DIRECTOR NOMINEES

What are you voting on?

You are being asked to elect Michelle L. Collins, Patricia A. Little, Heidi G. Petz, and Michael C. Smith as Class I Directors for terms to expire either at the 2024 Annual Meeting of Stockholders if Proposals 2 and 3 are approved by the stockholders, or at the 2026 Annual Meeting of Stockholders if Proposals 2 and 3 are not approved by the 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

Class I Nominees For Election:


Michelle L. Collins	Patricia A. Little
Age: 63 Director Since: 2014		Age: 62 Director Since: 2019

EXPERIENCE Ms. Collins is a member of the boards of Ulta Beauty, Inc., Canadian Imperial Bank of Commerce and CIBC Bancorp USA/CIBC Bank USA, and Ryan Specialty, LLC. She previously served on several other public and private company boards. Ms. Collins is a member of the Board and Executive Committee of the Economic Club of Chicago. Professional affiliations include the Global Risk Institute, Executive Women on Boards, and The Chicago Network. She also serves on several non-profit boards, including Chair of the National Louis University, the Museum of Science and Industry, and Navy Pier, Inc. Ms. Collins is President of Cambium LLC. In 1997, she co-founded Svoboda, Collins LLC, a private equity firm, where she served as Managing Director from 1998 to 2006 and is now a member of the firm’s Advisory Board. From 1992 to 1997, she was a principal in the Corporate Finance Department at William Blair & Company, LLC, where she focused on specialty retail, direct-to-consumer and distribution businesses. QUALIFICATIONS The Board benefits from Ms. Collins’ extensive experience serving on both private and public company boards. That and her prior committee experience makes her a valued member of the Board and member of our Audit and Compensation Committees. Ms. Collins’ experience evaluating, investing in, monitoring, and exiting private equity investments as well as advising growth companies as an investment banker also enhances her value to our Board.	EXPERIENCE Ms. Little served as the Senior Vice President and Chief Financial Officer of The Hershey Company from 2015 until her retirement in May 2019. Prior to joining Hershey, she was the Executive Vice President and Chief Financial Officer at Kelly Services, Inc. from 2008 to 2015 and before that she spent 24 years with Ford Motor Company holding a variety of leadership roles. Ms. Little currently serves as a member of the Board of Directors of McCormick and Company Inc. and is a member of its Nominating/Corporate Governance Committee. QUALIFICATIONS The Board benefits from Ms. Little’s deep financial and leadership expertise and insights gained from her more than 30 years of experience with consumer-oriented and brand-driven companies. This experience and her other board service experience makes her a valued member of our Audit Committee.

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Heidi G. Petz	Michael C. Smith
Age: 47 Director Since: 2022		Age: 53 Director Since: 2019

EXPERIENCE Ms. Petz is the President and Chief Operating Officer of The Sherwin-Williams Company, where she is responsible for all Sherwin-Williams operating segments, which include The Americas Group, the Performance Coatings Group, the Consumer Brands Group, as well as the Global Supply Chain organization. She joined Sherwin-Williams when the company acquired The Valspar Corporation in 2017. Prior to joining Sherwin-Williams and Valspar, Ms. Petz held various leadership roles with Newell Rubbermaid, Target Corporation, and PricewaterhouseCoopers. Ms. Petz holds a bachelor’s degree in Business and Leadership from the University of Richmond and an MBA from Loyola University Maryland. QUALIFICATIONS The Board benefits from Ms. Petz’s more than 25 years of professional experience in a variety of industries including both commercial and consumer facing businesses. In addition, Ms. Petz brings strong leadership and operational experience including expertise with consumer brands and supply chain.	EXPERIENCE Mr. Smith is the General Partner and co-founder of Footwork Capital, an early stage venture capital firm. Mr. Smith was the President, Chief Operating Officer and interim Chief Financial Officer of Stitch Fix, Inc., an online personal styling platform with millions of clients, overseeing operations, styling, client experience, and finance, until January 2021. He previously served in various executive positions at Stitch Fix, including as Chief Operating Officer from June 2012 to March 2016 and from September 2017 to October 2018. From 2003 to 2012, Mr. Smith served in a variety of capacities at Walmart.com, including Vice Presidents from 2008 to 2010 and Chief Operating Officer from 2010 to 2012. Mr. Smith currently serves as a member of the Board of Directors of MillerKnoll, Inc., and is a member of its Audit Committee. QUALIFICATIONS The Board benefits from Mr. Smith’s more than 27 years of professional experience, with deep retail experience and a strong understanding of data analytics and logistics through a customer-centric lens. In addition, his operational leadership experience makes him a valued member of our Nominating and Corporate Governance Committee.

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INFORMATION ABOUT OUR DIRECTORS CONTINUING IN OFFICE

Class II Directors Continuing in Office Until the 2024 Annual Meeting:

Catherine A. Halligan	David C. Kimbell
Age: 59 Director Since: 2012		Age: 56 Director Since: 2021

EXPERIENCE Ms. Halligan has served as an Advisor/Consultant to Chanel Inc. since January 2014 and Narvar Inc. since February 2013. Since January 2019, she has served as a non-executive director of Ferguson plc, a foreign private issuer listed on both the NYSE and the London Stock Exchange and is in the FTSE 100 index of listed companies, including as a member of the Audit, Nominating and Governance, Remuneration, and Technology Committees. Ms. Halligan also serves as a non-executive director of Driven Brands Holdings, Inc., a controlled company listed on the NASDAQ, and serves as Chair of its Compensation Committee. Ms. Halligan previously served as a member of the Board of Directors of FLIR Systems, Inc. between March 2014 and its merger with Teledyne in May 2021, including as Chair of the Compensation Committee and a member of its Audit Committee. Ms. Halligan held Senior Executive level positions with a SaaS software company and prominent retailers. She served as an Advisor from January to April 2012 and Senior Vice President, Sales & Marketing from July 2010 to December 2011 of PowerReviews Inc., a leading SaaS software for customer reviews and social commerce. Prior to joining PowerReviews Inc., from 2005 to 2010, she was an Officer, and served in various executive positions with Walmart, including Chief Marketing Officer of Walmart from 2007 to 2009 and Vice President Market Development, Global eCommerce of Walmart.com from 2009 to 2010. From 2000 to 2005, Ms. Halligan served as an Associate Partner at Prophet, a global strategy consultancy. From 1996 to 1999, Ms. Halligan held Executive retail management positions with Williams Sonoma Inc., including Vice President and General Manager, Internet and Vice President, Marketing. Ms. Halligan also has previous retail experience with Blue Nile, Inc. and the Gymboree Corporation. Ms. Halligan began her career as a Marketing and Planning analyst for Lands’ End from 1987 to 1991. QUALIFICATIONS With over 20 years of experience in marketing, digital, and e-commerce in the retail and SaaS software industries, Ms. Halligan provides valuable insight and expertise on strategic marketing issues, digital technology, and omnichannel business capabilities. In addition, Ms. Halligan’s business experience with large retail companies and software companies makes her a valued member of our Nominating and Corporate Governance Committee and Chair of our Compensation Committee.	EXPERIENCE Mr. Kimbell has been our Chief Executive Officer since June 2021. Previously, he served as our President from December 2019 until June 2021, our Chief Merchandising and Marketing Officer from March 2015 until December 2019 and Chief Marketing Officer from February 2014 until March 2015. Prior to joining Ulta Beauty, he was Chief Marketing Officer and Executive Vice President at U.S. Cellular since February 2011. From 2008 to 2010, Mr. Kimbell served as Chief Marketing Officer and Senior Vice President of Seventh Generation, a producer of environmentally friendly household products. From 2001 to 2008, Mr. Kimbell held various positions at PepsiCo, Quaker Food Division, including Vice President of Marketing. Mr. Kimbell held a number of brand management roles in the Beauty Division of The Procter and Gamble Company from 1995 to 2001. QUALIFICATIONS As the Chief Executive Officer of the Company, Mr. Kimbell is able to provide the Board with valuable insight regarding the Company’s operations, its management team, and associates as a result of his day-to-day involvement in the operations of the business. Additionally, Mr. Kimbell brings over 25 years of operational and leadership experience in retail and consumer-driven businesses to the Board, so the Board benefits from his extensive merchandising and marketing expertise as well as his deep understanding of the beauty industry and the strategies needed to operate successfully in our evolving omnichannel and digital environment. In addition, Mr. Kimbell’s demonstrated leadership skills combined with his focus on inclusivity and sustainability provides valuable perspectives and insights to the Board.

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George R. Mrkonic	Lorna E. Nagler
Age: 70 Director Since: 2015		Age: 66 Director Since: 2009

EXPERIENCE Mr. Mrkonic is the retired Non-Executive Chairman of Paperchase Products Limited, London, UK, a retailer of cards, stationery, wraps, and gifts. He is also the retired President and Vice Chairman of Borders Group, Inc. having served as Director from 1994 to 2004, Vice Chairman from 1994 to 2002, and President from 1994 to 1997. He began his retail career in 1978 and has led several retail companies including Herman’s Sporting Goods, Eyelab, Kmart’s Specialty Retailing Group, and Borders. Mr. Mrkonic currently serves as a Director and member of the Audit and Compensation Committees of AutoZone, Inc. In the last five years he has also served on the board of directors of Brinker International. QUALIFICATIONS Mr. Mrkonic’s more than 30 years of experience in the retail industry as well as his knowledge and skills as a senior executive and director of large public companies brings a broad understanding of the complex strategic, governance, and financial issues facing large public companies in the current economic environment to our Board and to his role as Chair of our Nominating and Corporate Governance Committee.	EXPERIENCE Ms. Nagler has served as a member of the Board of Directors of Hibbett Sports since June 2019 and is the chair of its Compensation Committee. In July 2020, she was appointed to the Wisconsin Foundation and Alumni Association Board as a member of their Audit Committee. Ms. Nagler was President of Bealls Department Stores, Inc. from January 2011 to January 2016. She served as President, Chief Executive Officer and director of Christopher & Banks Corporation, a specialty retailer of women’s clothing, from August 2007 to October 2010. From 2004 to 2007, Ms. Nagler was President of Lane Bryant, a division of Charming Shoppes, Inc., a women’s apparel company. From 2002 to 2004, she was President of Catherines Stores, also a division of Charming Shoppes, Inc. From 1996 to 2002, Ms. Nagler held various retail management positions with Kmart Corporation, including Senior Vice President, General Merchandise Manager of Apparel and Jewelry, Divisional Vice President and General Merchandise Manager of Kids and Menswear. From 1994 to 1996, Ms. Nagler was a Vice President, Divisional Merchandise Manager for Kids “R” Us. Ms. Nagler also has previous retail experience with Montgomery Ward and Main Street Department Stores. QUALIFICATIONS With years of experience as a senior level executive in a wide variety of retail companies, including as the President and Chief Executive Officer of a public retail company, Ms. Nagler provides considerable expertise on strategic, management, and operational issues facing a multi-state retailer. Running a public company gave Ms. Nagler front line exposure to many of the issues facing public retail companies, particularly on the operational, financial, and corporate governance fronts. The Board also benefits from Ms. Nagler’s extensive experience in the retail industry and the informed perspectives such experience facilitates. Additionally, her past role as President and Chief Executive Officer positions her well to serve as our Board Chair.

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Class III Directors Continuing in Office Until the 2025 Annual Meeting:


Kelly E. Garcia	Michael R. MacDonald
Age: 48 Director Since: 2022		Age: 71 Director Since: 2012

EXPERIENCE Mr. Garcia is the Executive Vice President and Chief Technology Officer of Domino’s Pizza, where he is responsible for providing the company’s technology vision and leadership as well as developing and implementing strategic technology initiatives to support and improve the business globally, since July 2012. His broad technology experience includes global e-commerce, loyalty, innovation, and global software product development. Prior to joining Domino’s, Mr. Garcia was Vice President of Business Intelligence and North American Operations for R. L. Polk & Company. QUALIFICATIONS The Board benefits from Mr. Garcia’s broad technology, digital and e-commerce experience. With over 24 years of technology and business experience in a variety of technology-related roles, including global commercial software products and P&L responsibilities, Mr. Garcia brings deep digital, ecommerce data analytics and cybersecurity/privacy expertise to our Board. Mr. Garcia also brings leadership, international and strategic abilities which makes him a valued member of our Audit Committee.	EXPERIENCE Mr. MacDonald served as the President and Chief Executive Officer and member of the Board of Directors of DSW Inc. from April 2009 through December 2015. Prior to joining DSW Inc., Mr. MacDonald served as Chairperson and Chief Executive Officer of Shopko Stores, a retail company, from May 2006 to March 2009. Prior to that time, Mr. MacDonald held executive positions at Saks Incorporated from 1998 to 2006, including as Chairperson and Chief Executive Officer of the Northern Department Stores Group for six years. Prior to serving in that capacity, Mr. MacDonald held executive positions at Carson Pirie Scott, including the position of Chairperson and Chief Executive Officer. Mr. MacDonald currently serves on the Board of Directors of Frontier Group Holdings, Inc. (NASDAQ: ULCC) since 2016 and is a member of their Audit Committee. QUALIFICATIONS The Board benefits from Mr. MacDonald’s experience serving as a director for a public company board and his prior experience makes him a valued member of the Board, Chair of the Audit Committee, and member of our Nominating and Corporate Governance Committee. With more than 30 years of business experience in all phases of retail, including managing merchandising, marketing, stores, operations, and finance functions, Mr. MacDonald brings strong leadership abilities and in-depth retail knowledge to our Board.

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Gisel Ruiz
Age: 52 Director Since: 2022

EXPERIENCE Ms. Ruiz held a number of senior positions within the Walmart organization during a career that spanned over 26 years. Most recently, she served as Executive Vice President and Chief Operating Officer of the Sam’s Club division of Walmart. Prior to that role, she served as Executive Vice President of International People for Walmart International, Executive Vice President and Chief Operating Officer of Walmart US, and Executive Vice President and Chief People Officer of Walmart US. Ms. Ruiz previously served on the Board of Directors of Walmart de Mexico S.A. de C.V., the largest publicly traded retailer in Mexico, and Yihaodian, China’s then fourth largest business to consumer eCommerce website. She currently serves as a director of Cracker Barrel Old Country Store, Inc. (NASDAQ: CRBL) and Vital Farms (NASDAQ: VITL). QUALIFICATIONS The Board benefits from Ms. Ruiz’s experience serving as a director for public company boards as well as her extensive professional retail and executive leadership experience. With more than 26 years of retail experience, including leadership roles in operations and human resources, with wide ranging responsibilities including cost optimization, real estate operations, in-store innovation, and sustainability, Ms. Ruiz brings deep retail knowledge and broad leadership capabilities to our Board and to our Compensation Committee.

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NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2022

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 2022, on the date of our annual meeting, each non-employee director received a grant of 393 restricted stock units that will vest on June 1, 2023.

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, for service before and after June 1, 2022:


	Cash Retainer Before	Cash Retainer After
Role	June 1, 2022 ($)	June 1, 2022 ($)
Non-Employee Director	110,000	110,000
Executive Chair (1)	800,000	—
Non-Executive Chair (2)	—	180,000
Lead Independent Director (2)	40,000	—
Audit Committee Chair	30,000	30,000
Compensation Committee Chair	30,000	30,000
Nominating and Corporate Governance Committee Chair	20,000	20,000

As part of our CEO succession plan in 2021, our former CEO served as Executive Chair of the Board for one year, retiring on June 1, 2022.

As part of our CEO succession plan in 2021, Ms. Nagler became the lead independent director for one year, before then becoming Non-Executive Chair of the Board on June 1, 2022.

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The following table provides information related to non-employee director compensation earned for fiscal 2022:


	Fees Earned or	Stock
	Paid in Cash	Awards (1)	Total
Name	($)	($)	($)
Mary N. Dillon (2)	272,527	—	272,527
Lorna E. Nagler (3)	242,692	160,077	402,769
Sally E. Blount (4)	37,170	160,077	197,247
Michelle L. Collins	116,758	160,077	276,835
Kelly E. Garcia (5)	104,560	206,251	310,811
Catherine A. Halligan	140,000	160,077	300,077
Charles Heilbronn (6)	37,170	160,077	197,247
Patricia A. Little	110,000	160,077	270,077
Michael R. MacDonald	140,000	160,077	300,077
George R. Mrkonic	123,242	160,077	283,319
Heidi G. Petz (7)	12,995	73,533	86,528
Gisel Ruiz (5)	104,560	206,251	310,811
Michael C. Smith	110,000	160,077	270,077

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 16 to the consolidated financial statements for fiscal 2022 contained in our Annual Report on Form 10-K filed on March 24, 2023.

Ms. Dillon retired from the Board of Directors on June 1, 2022, and her cash compensation as Executive Chair in fiscal 2022 was pro-rated in accordance with her service period.

Ms. Nagler was appointed as the Non-Executive Chair on June 1, 2022 and her cash compensation was pro-rated in accordance with her service period as lead independent director and Non-Executive Chair in fiscal 2022.

Ms. Blount retired from the Board of Directors on June 1, 2022 and her cash compensation for service as a non-employee director in fiscal 2022 was pro-rated in accordance with her service period.

Mr. Garcia and Ms. Ruiz joined the Board of Directors on February 16, 2022 and, at that time, each received a pro-rated award of restricted stock units for the service period to June 1, 2023.

Mr. Heilbronn retired from the Board of Directors on June 1, 2022 and his cash compensation for services as a non-employee director in fiscal 2022 was pro-rated in accordance with his service period.

Ms. Petz joined the Board of Directors on December 16, 2022 and, at that time, received a pro-rated award of restricted stock units for the service period to June 1, 2023.

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The following table sets forth the outstanding restricted stock units held by our non-employee directors as of January 28, 2023:


			Restricted Stock
Name			Units (#)
Lorna E. Nagler			393
Michelle L. Collins			393
Kelly E. Garcia			514
Catherine A. Halligan			393
Patricia A. Little (1)			393
Michael R. MacDonald			393
George R. Mrkonic			393
Heidi G. Petz			163
Gisel Ruiz			514
Michael C. Smith			393

Ms. Little elected to defer the restricted stock units received in fiscal 2022 until her retirement or termination from the Board of Directors.

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PROPOSAL TWO
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO DECLASSIFY OUR BOARD OF DIRECTORS AND PROVIDE FOR THE ANNUAL ELECTION OF DIRECTORS

What are you voting on?

You are being asked to approve an amendment to our Certificate of Incorporation to declassify our Board and provide for the annual election of directors.

Ulta Beauty is asking stockholders to approve an amendment to our Certificate of Incorporation to declassify the Board and provide for the annual election of the entire Board of Directors for one-year terms, such that the Board will be fully declassified by the 2025 Annual Meeting of Stockholders. This proposal, as well as the other corporate governance matters in Proposals 3, 4 and 5 discussed below, is a result of the Board's continuous effort to improve and enhance our corporate governance practices, policies, structures and functioning, taking into account ongoing corporate governance trends, peer practices, and views and perspectives of our stakeholders. The Board has determined that it is in the best interests of the Company and its stockholders to amend our Certificate of Incorporation to eliminate the classified board structure and provide for the annual election of each member of the Board. Accordingly, our Board has approved, and recommends that all stockholders approve, the proposed amendment to our Certificate of Incorporation as provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL TWO

Proposed Amendment

If approved, this proposal would amend our Certificate of Incorporation to provide for the annual election of directors to one-year terms, beginning with this year’s Annual Meeting (the "Declassification Amendment"). Our Certificate of Incorporation currently divides the Board into three classes that are elected for staggered, three-year terms. If the proposed Declassification Amendment is adopted, directors will begin to be elected on an annual basis as follows, such that each member of the Board (or their successors) will stand for election for a one-year term by the 2025 Annual Meeting of Stockholders:

directors who are elected at this Annual Meeting will serve a one-year term and they, or their successors, will stand for election for a one-year term at the 2024 Annual Meeting of Stockholders;

directors whose terms expire at the 2024 Annual Meeting of Stockholders (including those directors who are elected at this Annual Meeting), or their successors, will stand for election for a one-year term at the 2024 Annual Meeting of Stockholders; and

directors whose current terms expire at the 2025 Annual Meeting of Stockholders (including those directors who are elected at this Annual Meeting and the 2024 Annual Meeting of Stockholders), or their successors, will stand for election for a one-year term at the 2025 Annual Meeting of Stockholders.

The text of the proposed Declassification Amendment, which would modify Article Six of our Certificate of Incorporation, is attached as Appendix A to this proxy statement. If approved by our stockholders, the Declassification Amendment would become effective upon its filing with the Secretary of State of the State of Delaware, which we would file promptly following the Annual Meeting.

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As discussed in more detail in Proposal 3 below, our Bylaws currently provide that our directors may only be removed for cause and only by the affirmative vote of the holders of at least 66 2/3% of the voting power of the shares of our stock then entitled to vote at an election of directors. Delaware corporate law, however, does not permit directors of a corporation with an unclassified board to be removed only for cause or by a vote of more than the holders of a majority of the shares then entitled to vote at an election of directors. Therefore, in order to align with Delaware corporate law governing companies with unclassified boards, the proposed amendments to our Bylaws set forth in Proposal 3 below must also be approved by our stockholders at the Annual Meeting or the proposed Declassification Amendment will not be effective.

Required Vote

For the Declassification Amendment to become effective, this proposal must receive the affirmative vote of the holders of not less than 66 2/3% of the outstanding shares of our common stock. If the Declassification Amendment does not receive this level of stockholder approval and/or the amendment to our Bylaws set forth in Proposal 3 below is not approved by the stockholders at the Annual Meeting, the Declassification Amendment cannot be implemented, the Company’s current classified board structure will remain in place, and the nominees to be elected as Class I directors pursuant to Proposal 1, if so elected, will each serve for a three-year term that expires at the 2026 Annual Meeting of Stockholders. Abstentions and broker non-votes will be counted toward a quorum and the tabulation of votes cast on proposals presented to the stockholders, but will have the same effect as a vote against this proposal.

Related Governance Changes

If the stockholders approve the Declassification Amendment and Proposal 3 at the Annual Meeting, the Board intends to revise the provisions in our other governance documents to reflect the declassification of the Board.

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PROPOSAL THREE
AMENDMENTS TO OUR BYLAWS TO PROVIDE THAT DIRECTORS MAY BE REMOVED BY THE HOLDERS OF A MAJORITY OF THE SHARES THEN ENTITLED TO VOTE AT AN ELECTION OF DIRECTORS AND, IF PROPOSAL 2 IS APPROVED, WITH OR WITHOUT CAUSE

What are you voting on?

You are being asked to approve amendments to our Bylaws to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors and, if Proposal 2 is approved, with or without cause.

Ulta Beauty is asking stockholders to approve amendments to our Bylaws to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors and, if Proposal 2 is also approved, with or without cause. This proposal, as well as the other corporate governance matters in Proposal 2 discussed above and Proposals 4 and 5 discussed below, is a result of the Board's continuous effort to improve and enhance our corporate governance practices, policies, structures and functioning, taking into account ongoing corporate governance trends, peer practices, and views and perspectives of our stakeholders. The Board has determined that it is in the best interests of the Company and its stockholders to amend our Bylaws to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors and, if Proposal 2 is also approved, with or without cause. Accordingly, our Board has approved, and recommends that all stockholders approve, the proposed amendments to our Bylaws as provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL THREE

Proposed Amendments

Our Bylaws currently provide that our directors may be removed only by the affirmative vote of the holders of at least 66 2/3% of the voting power of the shares of our stock then entitled to vote at an election of directors and any amendments or changes to this requirement must be approved by our stockholders. Recent decisions by the Delaware courts have held that any supermajority vote requirement for the removal of directors is not valid. Therefore, to comply with Delaware corporate law, Section 3 of Article III of our Bylaws is proposed to be amended to provide that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors. If approved, this portion of the proposed amendment to our Bylaws will be implemented even if the proposal to declassify our Board (Proposal 2) is not approved by our stockholders at the Annual Meeting.

Our Bylaws also currently provide that our directors may only be removed for cause. Delaware corporate law, however, does not permit directors of a corporation with an unclassified board to be removed only for cause. Therefore, in order to align with Delaware corporate law governing companies with unclassified boards, if the proposal to declassify our Board (Proposal 2) is approved by our stockholders at the Annual Meeting, then Section 3 of Article III of our Bylaws would also be amended to provide that directors may be removed with or without cause.

The text of these proposed amendments to our Bylaws is attached as Appendix B to this proxy statement.

Required Vote

For these amendments to our Bylaws to become effective, this proposal must receive the affirmative vote of the holders of not less than 66 2/3% of the outstanding shares of our common stock. Abstentions and broker non-votes will be counted toward a quorum and the tabulation of votes cast on proposals presented to the stockholders, but will have the same effect as a vote against this proposal.

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PROPOSAL FOUR
AMENDMENT TO OUR CERTIFICATE OF INCORPORATION TO REPLACE ALL SUPERMAJORITY VOTING STANDARDS FOR AMENDMENTS TO THE CERTIFICATE OF INCORPORATION WITH A MAJORITY STANDARD

What are you voting on?

You are being asked to approve an amendment to our Certificate of Incorporation to replace all supermajority voting standards for amendments to the Certificate of Incorporation with a majority standard.

Ulta Beauty is asking stockholders to approve an amendment to our Certificate of Incorporation to replace all supermajority voting standards for amendments to the Certificate of Incorporation with a majority standard. This proposal, as well as the other corporate governance matters in Proposals 2 and 3 discussed above and Proposal 5 discussed below, is a result of the Board's continuous effort to improve and enhance our corporate governance practices, policies, structures and functioning, taking into account ongoing corporate governance trends, peer practices, and views and perspectives of our stakeholders. The Board has determined that it is in the best interests of the Company and its stockholders to amend our Certificate of Incorporation to replace all supermajority voting standards for amendments to the Certificate of Incorporation with a majority standard. Accordingly, our Board has approved, and recommends that all stockholders approve, the proposed amendment to our Certificate of Incorporation as provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL FOUR

Proposed Amendment

Article Fourteen of our Certificate of Incorporation currently requires the affirmative vote of the holders of not less than 66 2/3% of the votes entitled to be cast by the holders of all the then outstanding shares of stock then entitled to vote generally in the election of directors, voting together as a single class (the “Certificate Supermajority Voting Standard”), to approve any proposal to amend or repeal, or to adopt any provision of the Certificate of Incorporation inconsistent with the following provisions of the Certificate of Incorporation: Article Six with respect to the current classified Board of Directors; Article Nine regarding stockholder actions by written consent; Article Ten with respect to who can call a special meeting of the stockholders; Article Eleven regarding the applicability of Section 203 of the Delaware General Corporation Law (the Delaware “business combination” statute); and Article Fourteen itself.

If approved, this proposal would amend Article Fourteen of our Certificate of Incorporation to replace the Certificate Supermajority Voting Standard with a majority of the outstanding stock entitled to vote standard, as well as a majority of the outstanding stock of each class entitled to vote as a class standard (if applicable), as provided in the Delaware corporate law.

The text of this proposed amendment to our Certificate of Incorporation is attached as Appendix C to this proxy statement. If approved by our stockholders, this amendment to our Certificate of Incorporation would become effective upon its filing with the Secretary of State of the State of Delaware, which we would file promptly following the Annual Meeting.

Required Vote

For this amendment to our Certificate of Incorporation to become effective, this proposal must receive the affirmative vote of the holders of not less than 66 2/3% of the outstanding shares of our common stock. Abstentions and broker non-votes will be counted toward a quorum and the tabulation of votes cast on proposals presented to the stockholders, but will have the same effect as a vote against this proposal.

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PROPOSAL FIVE
AMENDMENT TO OUR BYLAWS TO REPLACE ALL SUPERMAJORITY VOTING STANDARDS FOR AMENDMENTS TO THE BYLAWS WITH A MAJORITY STANDARD

What are you voting on?

You are being asked to approve an amendment to our Bylaws to replace all supermajority voting standards for amendments to the Bylaws with a majority standard.

Ulta Beauty is asking stockholders to approve an amendment to our Bylaws to replace all supermajority voting standards for amendments to the Bylaws with a majority standard. This proposal, as well as the other corporate governance matters in Proposals 2, 3 and 4 discussed above, is a result of the Board's continuous effort to improve and enhance our corporate governance practices, policies, structures and functioning, taking into account ongoing corporate governance trends, peer practices, and views and perspectives of our stakeholders. The Board has determined that it is in the best interests of the Company and its stockholders to amend our Bylaws to replace all supermajority voting standards for amendments to the Bylaws with a majority standard. Accordingly, our Board has approved, and recommends that all stockholders approve, the proposed amendment to our Bylaws as provided below.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL FIVE

Proposed Amendment

Article VIII of our Bylaws currently requires the affirmative vote of the holders of not less than 66 2/3% of the votes entitled to be cast by the holders of all the then outstanding shares of stock then entitled to vote generally in the election of directors, voting together as a single class (the “Bylaws Supermajority Voting Standard”), to approve any proposal to amend or repeal, or to adopt any provision of the Bylaws inconsistent with the following provisions of the Bylaws: Section 2 of Article II with respect to who can call a special meeting of the stockholders; Section 11 of Article II regarding the advance notice provisions to bring business before an annual meeting of the stockholders; Section 2 of Article III with respect to stockholder procedures to nominate directors; Section 3 of Article III regarding the number, election, tenure and removal of directors; and Article VIII itself.

If approved, this proposal would amend Article VIII of our Bylaws to delete the Bylaws Supermajority Voting Standard and provide that the Bylaws could be amended, altered or repealed, or new bylaws could be adopted, by the vote of the holders of a majority of the stock which are present in person or by proxy and entitled to vote at the meeting of stockholders (and where a separate vote by class is required, the affirmative vote of the majority of shares of such class present in person or represented by proxy at the meeting of stockholders) or, as currently provided in our Bylaws, by the Board by majority vote.

The text of this proposed amendment to our Bylaws is attached as Appendix D to this proxy statement.

Required Vote

For this amendment to our Bylaws to become effective, this proposal must receive the affirmative vote of the holders of not less than 66 2/3% of the outstanding shares of our common stock. Abstentions and broker non-votes will be counted toward a quorum and the tabulation of votes cast on proposals presented to the stockholders, but will have the same effect as a vote against this proposal.

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Corporate Governance
Corporate Governance

PROPOSAL SIX
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

What are you voting on?

You are being asked to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year 2023, ending February 3, 2024.

The Audit Committee of the Board of Directors has appointed Ernst & Young LLP as our independent registered public accounting firm for fiscal 2023, ending February 3, 2024. Services provided to Ulta Beauty by Ernst & Young LLP in fiscal 2022 are described under “Fees to Independent Registered Public Accounting Firm” below. Additional information regarding the Audit Committee is provided on page 26. Ernst & Young LLP has audited the financial statements of Ulta Beauty since 1997. The Audit Committee believes that the tenure of Ernst & Young LLP is a benefit to the Company because of their institutional knowledge of our business, as well as the avoidance of costs and time that would be associated with a new auditor. Representatives of Ernst & Young LLP will be available at the Annual Meeting to respond to appropriate questions and to make such statements as they may desire.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL SIX

Stockholder ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise. However, the Board of Directors is submitting the selection of Ernst & Young LLP to the stockholders for ratification as a matter of good corporate governance practice. If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Ulta Beauty and our stockholders.

The affirmative vote of the holders of a majority of the shares present virtually online or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the appointment of Ernst & Young LLP. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes, if any, will be counted towards a quorum but will not be counted for any purpose in determining whether this proposal has been ratified.

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	Corporate Governance
	Corporate Governance

FEES TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The following table sets forth the aggregate fees billed by Ernst & Young LLP for professional services rendered for fiscal 2022 and 2021:


	2022		2021
Audit Fees (1)	$	2,351,000	$	1,868,000
Audit-Related Fees		—		—
Tax Fees (2)		1,200,000		1,137,000
All Other Fees (3)		410,000		117,000
Total	$	3,961,000	$	3,122,000

Audit fees consist of fees and expenses for the annual audit of our consolidated financial statements included in the Annual Report on Form 10-K, the annual audit of our internal control over financial reporting, the quarterly reviews of our consolidated financial statements included in Quarterly Reports on Form 10-Q, accounting consultations, and services related to other regulatory filings made with the SEC.

Tax fees and expenses in fiscal 2022 consist of $592,000 for tax planning, advisory, and consulting services and $608,000 for tax compliance and preparation services. Tax fees and expenses in fiscal 2021 consist of $417,000 for tax planning, advisory, and consulting services and $720,000 for tax compliance and preparation services.

All other fees consist of fees for access to online research software as well as advisory services associated with information technology systems.

The Audit Committee has approved all professional fees paid to Ernst & Young LLP.

The Audit Committee has established procedures for the pre-approval of all audit and non-audit-related services provided by our independent registered public accounting firm. The procedures include, in part, that: (i) the Audit Committee, on an annual basis, shall pre-approve the independent registered public accounting firm’s engagement letter/annual service plan; (ii) the Audit Committee must pre-approve any permitted service not included in the annual service plan; (iii) the Audit Committee Chair has the ability to pre-approve any permitted service up to a pre-determined amount between regularly scheduled meetings, as applicable, and a report of such services and related fees are to be disclosed to the full Audit Committee at the next scheduled meeting; and (iv) the Audit Committee will review a summary of the services provided and the fees paid on an annual basis.

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Corporate Governance

AUDIT COMMITTEE

The Audit Committee provides assistance to the Board of Directors in fulfilling its responsibility to our stockholders, potential stockholders, the investment community, and other stakeholders relating to the Company’s accounting and financial reporting process and the audits of the Company’s financial statements. During fiscal 2022, the Audit Committee held ten meetings.

Specifically, the Audit Committee assists the Board of Directors in monitoring the integrity of our financial statements, our independent registered public accounting firm’s qualifications and independence, the performance of our internal audit function and independent registered public accounting firm, our compliance with legal and regulatory requirements, and our policies with respect to risk assessment and risk management, including cybersecurity and technology risks. The Audit Committee annually evaluates its own performance and reports its findings and action plans to the Board. The Audit Committee has direct responsibility for the appointment, compensation, retention (including termination), and oversight of our independent registered public accounting firm. Our independent registered public accounting firm reports directly to the Audit Committee.

During fiscal 2022, the Audit Committee was composed of the following independent directors: Ms. Collins, Ms. Little, Messrs. MacDonald, Garcia (effective June 1, 2022), Mrkonic (until June 1, 2022) and Smith (until June 1, 2022). Mr. MacDonald serves as the current Chair of the Audit Committee. Each of the following current members of the Committee were designated by the Board of Directors as an “Audit Committee financial expert” as defined in applicable SEC rules: Ms. Collins, Ms. Little, and Mr. MacDonald. The Board of Directors made a qualitative assessment of each member’s level of knowledge and experience based on a number of factors, including education and work, management, and director experience. The Board of Directors has determined that all members of our Audit Committee are financially literate and are independent, as independence is defined in Rule 5605(a)(2) of the NASDAQ listing standards and Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee acts under a written charter that was adopted by the Board of Directors and has been published under “Governance” in the Investor Relations section of the Ulta Beauty website located at https://ulta.com/investor.

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	Corporate Governance
	Corporate Governance

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS¹

The Audit Committee assists the Board of Directors in fulfilling its responsibility for oversight of the quality and integrity of the accounting, auditing, and financial reporting processes, and practices of Ulta Beauty. In addition, the Audit Committee oversees mitigation efforts related to data privacy, cybersecurity, and other technology risks.

The Audit Committee oversees Ulta Beauty’s financial process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. Ulta Beauty has an Internal Audit Department that is actively involved in examining and evaluating Ulta Beauty’s financial, operational, and information systems activities and reports functionally to the Audit Committee and administratively to management. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the periodic reports, including the audited financial statements in our Annual Report on Form 10-K. This included a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Audit Committee reviewed with the independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, its judgments as to the quality, not just the acceptability, of Ulta Beauty’s accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including the Public Company Accounting Oversight Board Standard No. 1301, Communications with Audit Committees (AS 1301). In addition, the Audit Committee has discussed with the independent registered public accounting firm the firm’s independence from management and Ulta Beauty, including the matters in the written disclosures and the Letter from the Independent Registered Public Accounting Firm required by applicable requirements of the Public Company Accounting Oversight Board regarding the firm’s communications with the Audit Committee concerning independence.

The Audit Committee discussed with Ulta Beauty’s independent registered public accounting firm the overall scope and plans for their audit and developed a pre-approval process for all independent registered public accounting firm services. The Audit Committee meets with the independent registered public accounting firm, with and without management present, to discuss the results of their examination, their evaluation of Ulta Beauty’s internal and disclosure controls, and the overall quality of Ulta Beauty’s financial reporting. As noted, the Audit Committee held ten meetings during fiscal 2022.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors approved, that the audited financial statements be included in Ulta Beauty’s Annual Report on Form 10-K for fiscal 2022, ended January 28, 2023, for filing with the SEC. The Audit Committee has appointed Ernst & Young LLP to be Ulta Beauty’s independent registered public accounting firm for fiscal 2023, ending February 3, 2024.


	Audit Committee of the Board of Directors

	Michael R. MacDonald (Chair) Michelle L. Collins Kelly E. Garcia Patricia A. Little

This report is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any Ulta Beauty filing under the Securities Act of 1933 (as amended, the “Securities Act”) or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.

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COMPENSATION COMMITTEE

During fiscal 2022, the Compensation Committee was composed of the following directors, all of whom satisfy the independence requirements of NASDAQ: Ms. Collins (effective June 1, 2022), Ms. Halligan, Messrs. MacDonald (until June 1, 2022), and Mrkonic, and Ms. Ruiz (effective June 1, 2022), and former independent director Mr. Heilbronn (until June 1, 2022). Ms. Halligan serves as the current Chair of the Compensation Committee. During fiscal 2022, the Compensation Committee held seven meetings.

The Compensation Committee acts under a written charter that was adopted by the Board of Directors and has been published under “Governance” in the Investor Relations section of the Ulta Beauty website located at https://ulta.com/investor. Under this charter, the Compensation Committee is responsible for:

●

setting our compensation philosophy;

●

reviewing and approving the compensation for the CEO and the CEO’s direct reports (“C-Level Officers”);

●

reviewing and recommending to the Board the compensation for non-employee directors;

●

supervising compensation policies for all associates, including reviewing the compensation structure and procedures;

●

recommending to the Board the employment, appointment, and removal of C-Level Officers in accordance with the Bylaws;

●

establishing, amending, and terminating compensation and benefits plans and administering such plans;

●

annually evaluating its own performance and reporting findings and action plans to the Board; and

●

periodically reviewing with management, the Company’s policies, practices, and strategies relating to human capital management as they relate to the Company’s workforce generally, including policies and strategies regarding recruiting, selection, talent development, progression and retention, succession planning, workplace health and safety, culture and engagement, as well as diversity, equity, and inclusion.

The Compensation Committee may under its charter delegate any of its responsibilities to a subcommittee, but only to the extent consistent with our Bylaws, Certificate of Incorporation, and NASDAQ rules.

Compensation Consultant

During fiscal 2022 the Compensation Committee engaged Pay Governance as its outside consultant to assist the Compensation Committee with executive and non-employee director compensation program design, to advise and consult with the Committee on general compensation issues, and to keep the Committee apprised of regulatory, legislative, and accounting developments and competitive practices related to executive and director compensation. In those capacities, Pay Governance was engaged directly by the Compensation Committee. During fiscal 2022, Pay Governance provided no services to the Company other than the consulting services provided to the Compensation Committee. Pay Governance is an independent executive compensation consulting firm and does not determine or recommend the exact amount or form of executive compensation for any executive officers. Pay Governance reports directly to the Compensation Committee, and a representative of Pay Governance, when requested, attends meetings of the Committee, is available to participate in executive sessions, and communicates directly with the Chair of the Compensation Committee or its members outside of meetings. The Compensation Committee has reviewed the nature of and extent of the relationship between the Compensation Committee, the Company, and Pay Governance with respect to any potential conflicts of interest or similar concerns. Based on that review, the Compensation Committee believes that there are no conflicts of interest or potential conflicts of interest that would unduly influence Pay Governance’s provision of advice that is independent of management to the Compensation Committee.

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	Corporate Governance

Compensation Risk

The Company reviewed its compensation plans, practices, and policies and determined that it does not have any such plans, practices, and policies that create risks that are reasonably likely to have a material adverse effect on the Company based on, but not limited to the following:

●

the Company’s variable compensation programs are linked to specific performance goals set and approved by the Compensation Committee for executive officers and for other associates by supervisors consistent with the Company’s compensation philosophy and business goals;

●

the performance periods for the pay programs are designed to match the period for which the associate has influence on the results and incorporate incentives of a longer-term nature to tie the associate to the actual results;

●

payments under the incentives are capped;

●

earned award levels are reviewed and certified by the Compensation Committee, management, payroll, and human resources;

●

the mix between fixed and variable pay is balanced so as to neither discourage proper risk taking, nor encourage excessive risk taking;

●

participants cannot approve their own performance goals, nor their own payouts; and

●

the Compensation Committee actively oversees the executive compensation program and has flexibility to use its judgment in assessing performance and pay.

Compensation Committee Interlocks and Insider Participation

During fiscal 2022, none of the members of our Compensation Committee had at any time been one of our officers or associates. None of our executive officers currently serves, or in the past year has served, as a member of the Compensation Committee, or other Committee serving an equivalent function. Other than our CEO, none of our executive officers currently serves, or in the past year has served, as a member of the Board of Directors. See also “Certain Relationships and Transactions” below.

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Corporate Governance

REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS²

The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis (“CD&A”) with management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors, and the Board of Directors approved, that the CD&A be included in Ulta Beauty’s fiscal 2022 Annual Report on Form 10-K and this proxy statement.


	Compensation Committee of the Board of Directors

	Catherine A. Halligan (Chair) Michelle L. Collins George R. Mrkonic Gisel Ruiz

This report is not “soliciting material,” is not deemed filed with the SEC, and is not to be incorporated by reference into any Ulta Beauty filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language contained in such filing.

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C		ompensation Discussion and Analysis

Our Company

Ulta Beauty is the largest beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin care products, hair care products, and salon services. Key aspects of our business include:

One-of-a-kind Assortment. We offer guests a differentiated assortment of more than 25,000 products from more than 600 well-established and emerging beauty brands across a variety of categories and price points. We believe we offer the widest selection of beauty categories, including prestige and mass cosmetics, fragrance, haircare, prestige and mass skincare, bath and body products, professional hair products, and salon styling tools.

Store Footprint. We operate more than 1,350 stores predominantly located in convenient, high-traffic locations. With a bright and open store environment, we make it easy for guests to discover new products and services. Our store design, fixtures, and open layout provide the flexibility to respond to consumer trends and changes in our merchandising strategy. We also offer a full-service salon in nearly every store featuring hair, eyebrow, and other beauty services. In addition to our free-standing locations, through our partnership with Target Corporation, we have more than 350 Ulta Beauty at Target shop-in-shops which provide guests with a highly-curated, prestige beauty assortment in a unique and elevated presentation in 1,000 square feet of dedicated space within certain Target locations.

Leading Digital Experiences. Through our website, Ulta.com, and our mobile applications, we offer guests convenient, interactive, and personalized digital experiences. Our digital channels enable always-on shopping and discovery, and our diverse fulfillment options, including buy online pick-up in store, buy online pick-up curbside, ship from store, ship to home, and same-day delivery, provide guests with value and convenience. In addition to e-commerce platforms, we offer guests a variety of unique digital experiences, including virtual try-on and skin analysis tools, which leverage augmented reality capabilities and artificial intelligence tools to provide guests with personalized experiences.

Best-in-Class Loyalty Program. Our best-in-class loyalty program, Ultamate Rewards, enables members to earn points for every dollar spent on products and beauty services at Ulta Beauty, through purchases on our private label and co-branded credit cards, and purchases at Ulta Beauty at Target. In addition to unique membership benefits, members can redeem points for discounts on any product or service at Ulta Beauty. With more than 95% of total sales coming from members, we are uniquely positioned with a deep understanding of our customers and their preferences, enabling us to personalize experiences, recommendations, and promotions through our Customer Relationship Management (CRM) platform and support our brand partners’ growth.

Great Guest Experiences. We cultivate human connection with warm and welcoming guest experiences across all of our channels. Our knowledgeable and approachable store associates, our differentiated service offerings, and our efforts to create relevant, compelling digital content are competitive advantages and enable us to build strong engagement with guests.

We were founded in 1990 as a beauty retailer at a time when prestige, mass, and salon products were sold through distinct channels — department stores for prestige products; drug stores and mass merchandisers for mass products; and salons and authorized retail outlets for professional hair care products. We developed a unique specialty retail concept that offers a broad range of brands and price points, select beauty services, and a convenient and welcoming shopping environment. We define our target consumer as a beauty enthusiast, a consumer who is passionate about the beauty category, uses beauty for self-expression, experimentation, and self-investment, and

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Compensation Discussion and Analysis
Compensation Discussion and Analysis

has high expectations for the shopping experience. We estimate beauty enthusiasts represent approximately 65% of shoppers and account for more than 80% of beauty products and services spend in the U.S.

Executive Summary

This Compensation Discussion and Analysis (“CD&A”) describes the material elements of our executive compensation program during fiscal 2022. It also provides an overview of how and why our Compensation Committee arrived at the specific compensation decisions for our named executive officers for fiscal 2022, including the key factors that the Compensation Committee considered in determining named executive officer compensation. Below is an overview of some of these key factors:

●

We grew sales and earnings. The Ulta Beauty team delivered outstanding results for the year. Net sales increased to a record $10.2 billion, 18.3% over fiscal 2021. Operating income increased 26.3% to $1.6 billion, or 16.1% of net sales, compared to $1.3 billion, or 15.0% of net sales, in fiscal 2021.

●

We engaged with customers across all platforms. We increased the number of members in our Ultamate Rewards loyalty program by 8.6% to a record 40.2 million members. We strengthened category margins and improved our ability to optimize promotions. Our real estate portfolio is healthy and we continue to expand our digital capabilities. Between our Buy Online Pick Up in Stores (“BOPIS”) and our ship-from-store capabilities, about 31% of our digital orders this year were fulfilled by stores, up from 28% last year. Reflecting growing consumer trends, we enhanced our Conscious Beauty platform, added 12 Black-Owned and founded brands to our assortment and launched our MISE Accelerator Program to support early-stage BIPOC brands prepare for retail readiness. In addition, we expanded the Wellness Shop, a cross-category platform that offers guests self-care for the mind, body, and spirit.

●

We delivered results for our stockholders. We delivered positive stockholder returns in fiscal 2022, and our five-year total stockholder return (“TSR”) covering fiscal 2018-2022 was more than 125%, which included generating positive returns in fiscal 2020, one of the most challenging years as we navigated through the impact of COVID-19 pandemic and its related impact on the Company. We maintained our balance sheet strength throughout the period, ending fiscal 2022 with $737.9 million of cash and cash equivalents. Since 2014, Ulta Beauty has purchased 16.2 million shares of its common stock for $4.8 billion, while continuing to make strategic growth investments.

●

We successfully navigated global supply chain challenges and tight labor markets. We remain well-positioned to meet guest needs and delivered for our guests and stockholders during a challenging and evolving business climate. We take a holistic approach to caring for our associates offering comprehensive benefits including specialized programs addressing mental and maternal health. Our focus on creating a working environment where every associate can be their authentic self and where they can grow their careers is reflected in our associate recruiting, retention and engagement.

●

We ensured our compensation programs reflected evolving business expectations. Our Compensation Committee approved a short-term incentive program that was tied to a full-year earnings before taxes (“EBT”) goal set at the beginning of the year. The Compensation Committee maintained the pre-COVID mix of equity it had returned to for fiscal 2021, with performance-based restricted stock units (“PBSs”), stock options and restricted stock units (“RSUs”) delivering 50%, 30% and 20% of the target value, respectively, to Named Executive Officers (the “NEOs”). The Compensation Committee approved PBSs that returned to our pre-COVID practice of using two-year financial performance goals, subject to a cumulative three-year TSR modifier and three-year vesting.

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	Compensation Discussion and Analysis
	Compensation Discussion and Analysis

Compensation Overview

This CD&A describes the Company’s executive compensation program and explains how the Compensation Committee made compensation decisions for the following NEOs related to fiscal 2022:


Named Executive Officer			Title
David C. Kimbell			Chief Executive Officer
Scott M. Settersten			Chief Financial Officer, Treasurer and Assistant Secretary
Jodi J. Caro			General Counsel, Chief Risk & Compliance Officer
Anita J. Ryan (1)			Chief Human Resources Officer
Kecia L. Steelman			Chief Operating Officer

Ms. Ryan was named Chief Human Resources Officer (“CHRO”) effective April 5, 2022.

Our compensation programs for fiscal 2022 are summarized below.

●

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.

●

The annual incentive plan is tied solely to full-year EBT attainment.

●

For the standard annual award of equity 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 incentive vehicles provides a balanced approach and is in line with the compensation philosophy to attract, retain and motivate the executive 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 has lapsed.

The alignment of performance and pay in fiscal 2022 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. The Compensation Committee chose to use EBT 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. 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 TSR modifier as described below.

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Compensation Discussion and Analysis

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. Revenue was chosen as a metric as it is a measurement of growth. EBT and revenue are weighted equally at 50%. Each performance metric and its resulting payout operate independently of each other. Payout of the PBS awards is subject to modification to target payout if the Company’s TSR for its 2022-2024 fiscal years decreases by 10% or more and revenue and/or EBT performance meets or 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 stockholders.

We value stockholder engagement and consider the results of our say-on-pay votes.

At our 2022 Annual Meeting of Stockholders, approximately 90% 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.

Philosophy


OUR PHILOSOPHY		HOW WE EXECUTE OUR PHILOSOPHY

Our executive compensation philosophy is to provide compensation opportunities that attract, retain, and motivate talented key executives.		We annually evaluate the competitiveness and effectiveness of our compensation programs against other comparable businesses based on industry, size, and other relevant business factors.

			We link annual incentive compensation to our performance on a key measurable financial goal – EBT – that drives stockholder value.

			We focus a significant portion of the executives’ compensation on equity-based incentives to align interests closely with stockholders.

			We manage “pay for performance” such that pay is clearly linked to business and individual performance.

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	Compensation Discussion and Analysis
	Compensation Discussion and Analysis

Overview of 2022 Compensation

Our fiscal 2022 compensation program consisted of a base salary, annual incentive plan, and long-term incentive plan. This mix of compensation is intended to ensure that total compensation reflects our overall intent to motivate executive officers to meet appropriate performance measures and to align management with stockholders’ long-term interests.

Components of Compensation

The majority of target compensation we offer our NEOs is delivered in variable, performance-based elements.

The material components of our executive compensation program design and their purposes and key characteristics are summarized in the following table:

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 Shares

(50% of award value)

Stock Options (30% of award value)

Restricted Stock Units (20% of award value)

Performance Based

Three-year

As part of our continued emphasis on creating stockholder value, we utilize EBT as the single performance measure for the corporate annual incentive for all officers. This focus on a single financial performance objective reflects the Company’s strong linkage between stockholder value creation and management incentives. Each fiscal year, the Board of Directors approves the EBT target goal. The Compensation Committee then approves the threshold and maximum performance against the EBT target at the beginning of the fiscal year. This target reflected a rigorous goal setting process in which management and the Board worked collaboratively to set stretch targets reflective of our ambitious growth goals which are tied to the company’s operating plans. For fiscal 2022, we achieved record performance with EBT of $1.6 billion, 26.8% growth over 2021, resulting in annual cash incentives for the NEOs payable at 200% of their target annual incentives.

We use PBSs, stock options, and RSUs as a means of providing long-term incentives for our NEOs. PBS awards are tied to the attainment of both two-year EBT growth and two-year revenue growth goals and require a third year of vesting. Payout of the PBS awards is also subject to being modified to target payout if the Company’s TSR for its 2022-2024 fiscal years decreases by 10% or more and revenue and/or EBT performance meets or exceeds target, or if TSR is 10% or more and the revenue and/or EBT performance targets are not met. The first chart below shows the mix of our current CEO’s fiscal 2022 target compensation by component and the portion of total compensation that is performance based. The second chart shows this same data for our other NEOs’ fiscal 2022 target compensation.

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Compensation Discussion and Analysis

The use of stock options and PBSs emphasizes long-term alignment with stockholder value, as the stock options will not have any value unless our share price increases and the PBSs will not vest unless performance goals are met.

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	Compensation Discussion and Analysis

2022 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 current executives and newly hired executives, 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.


ULTA BEAUTY 2022 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.

The Compensation Committee selected a peer group of companies that are generally within 05.x 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.

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Compensation Discussion and Analysis
Compensation Discussion and Analysis

2022 Compensation Components


COMPENSATION COMPONENTS

Base Salary	Annual Incentives	Long-Term Incentive Plan

Base Salary

Base salaries are reviewed annually and are set based on competitiveness versus the external market, talent planning, internal merit increase budgets, individual and Company performance, and internal equity considerations.

The NEO base salary increases for fiscal 2022 were:


	2022
	Base Salary	Percentage
Named Executive Officer	($)	Increase
David C. Kimbell	1,225,016	11	%
Scott M. Settersten	767,125	6	%
Jodi J. Caro	620,797	6	%
Anita J. Ryan (1)	510,640	n/a
Kecia L. Steelman	1,000,022	25	%

Ms. Ryan was named CHRO effective April 5, 2022.

In connection with their strong performance in their new roles, Mr. Kimbell received an 11% increase and Ms. Steelman received a 25% increase. In addition, the Compensation Committee approved merit increases of 6% for Mr. Settersten and Ms. Caro. These base salary levels are competitive with the peer and survey data and reflect the Committee’s assessment of the executives’ performance and criticality to the organization.

Annual Incentives

The NEO target annual incentives, shown as a percentage of base salaries, for fiscal 2022 compared to fiscal 2021 were as follows:


	2022		2021
	Annual Incentive		Annual Incentive
Named Executive Officer	Target		Target
David C. Kimbell	180	%	180	%
Scott M. Settersten	100	%	85	%
Jodi J. Caro	65	%	65	%
Anita J. Ryan	65	%	n/a
Kecia L. Steelman	115	%	100	%

Mr. Settersten’s annual incentive target for 2022 was increased from 85% to 100% to better align with the competitive market data. Ms. Steelman’s annual incentive target for 2022 was increased from 100% to 115% to reflect her expanded responsibilities in light of her promotion to COO in June 2021.

In fiscal 2022, target EBT under the annual incentive program was $1.3 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 setting the fiscal 2022 EBT goal, the Committee determined it to be an appropriate stretch goal given there were no clear signs of a sustained overall economic recovery from the COVID-19 pandemic, emerging concerns about an economic recession, uncertainty about the global impact of the war in Ukraine as well as continued concerns over COVID-19 variants and outbreaks.

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	Compensation Discussion and Analysis
	Compensation Discussion and Analysis

The fiscal 2022 annual incentive performance/payout range was as follows:


	2022
	Annual Incentive Performance		As a % of
	Percent to Target		Target
Threshold	87	%	40	%
Target	100	%	100	%
Maximum	110	%	200	%

Based on our EBT performance of $1.6 billion, the annual incentive payout was 200% of target based on EBT performance of greater than 110% to target. The Compensation Committee can use negative discretion to reduce calculated annual incentive payouts but did not apply any downward discretion in fiscal 2022.

Long-Term Incentive Plan

During fiscal 2022, 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 2022 compared to fiscal 2021 were as follows:


	2022		2021
	LTIP Target		LTIP Target
Named Executive Officer	Percentage		Percentage
David C. Kimbell	524	%	410	%
Scott M. Settersten	230	%	230	%
Jodi J. Caro	150	%	150	%
Anita J. Ryan	125	%	n/a
Kecia L. Steelman	350	%	280	%

The Compensation Committee increased the LTIP target percentage for Mr. Kimbell and Ms. Steelman to further align their compensation opportunities with stockholders for long-term value creation and provide market competitive long-term compensation opportunities.

In light of their outstanding performance, the Compensation Committee approved additional RSU awards with a value of $400,000 and $1,000,000, respectively to Ms. Caro and Ms. Steelman as part of the annual grant cycle. The Committee believes that it needs to provide market competitive compensation for its executive team and makes compensation decisions that support that philosophy and are necessary for retention, engagement, and performance by the executive. These awards are scheduled to cliff vest 100% three years from the grant date, subject to continued service through the vesting date.

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Compensation Discussion and Analysis
Compensation Discussion and Analysis

Consistent with our pay-for-performance orientation, the Compensation Committee granted the annual LTIP award with the following mix:



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 ties 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 100% of the target if three-year TSR decreases by 10% or more and revenue and/or EBT performance meets or 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.

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	Compensation Discussion and Analysis
	Compensation Discussion and Analysis

PBS awards previously granted in fiscal 2021 were eligible to be earned based on two one-year cumulative revenue and EBT targets follows:


	Revenue – 50% of PBS Value		EBT – 50% of PBS Value
	Percent to Target	Payout	Percent to Target	Payout
Threshold	89%	50%	89%	50%
Target	100%	100%	100%	100%
Maximum	107%	170%	110%	200%

The fiscal 2022 one-year revenue and EBT targets were $9.2 billion and $1.3 billion, respectively. For fiscal 2022, we achieved one-year revenue and EBT of $10.2 billion and $1.6 billion, respectively, resulting in a payout of 170% of target for the revenue component and 200% of target for the EBT component. The fiscal 2021 one-year revenue and EBT targets were $7.3 billion and $673.6 million, respectively. For fiscal 2021, we achieved one-year revenue and EBT of $8.6 billion and $1.3 billion, respectively, resulting in a payout of 170% of target for the revenue component and 200% of target for the EBT component. The award is subject to a target level performance cap if the Company’s three-year TSR is not positive and is not eligible to vest until March 2024.

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Compensation Discussion and Analysis
Compensation Discussion and Analysis

Executive Compensation Policies and Practices

The Compensation Committee and management seek to ensure that our executive compensation and benefits programs align with our core compensation philosophy. We maintain the following policies and practices that serve as the foundation for the compensation program for our NEOs:


What We Do		What We Don’t Do
✔	Pay-for-Performance: Significant amount 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 maintain a robust clawback policy that provides for recovery of incentive compensation in the event of a financial restatement, 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 salary increases or non-performance bonus 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

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	Compensation Discussion and Analysis
	Compensation Discussion and Analysis

Share Ownership Guidelines

The Compensation Committee has established the following share ownership guidelines to strengthen the focus of our senior officers on our long-term goals and further align their interests with stockholders:


Position			Required Amount
CEO			6X Base Salary
Other NEOs			3X Base Salary
Chief Non-NEOs			2X Base Salary

In addition to shares held directly, shares of common stock held in brokerage accounts for the executives’ benefit in trust, through tax qualified retirement plans, PBSs (which have been earned based on performance, but which are still subject to time vesting and the TSR modifier) and RSUs are included in determining whether the ownership requirement has been met and sustained. Executives subject to the guidelines are required to retain at least 50% of the net after-tax shares awarded until they have achieved the required ownership level. All executives are in compliance with our share ownership guidelines.

Clawback Provisions

We maintain a robust compensation recovery or “clawback” policy applicable to all Section 16 officers as well as other associates who receive equity grants or are otherwise selected for coverage.

Under the clawback policy, the Compensation Committee may recover and/or cancel previously granted or earned incentive compensation (including recovery of gains realized thereon) in the event: (a) that Ulta Beauty is required to materially restate its financial or operating results (whether or not there is any fraud or misconduct and whether or not the executive whose compensation is subject to clawback is responsible, but excluding restatements caused by changes in accounting rules, reclassification or other retrospective changes not caused by fraud or misconduct), (b) of fraud or misconduct (regardless of whether the fraud or misconduct is related to a restatement of financial or operating results), (c) of a violation of Ulta Beauty’s Code of Business Conduct, or (d) of a violation of any applicable non-compete, non-solicitation or confidentiality covenants.

In light of rules recently issued by the SEC regarding clawback policies, we expect to review our clawback policy in 2023 following NASDAQ’s adoption of its relevant clawback listing standards and determine at that time whether any updates to our policy are warranted.

No Hedging, Derivatives, Pledging or Margin Accounts

Our insider trading policy prohibits trading in puts, calls, and other derivative securities on our stock and also prohibits the purchase of financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) or otherwise engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of our stock by officers, directors, and associates. In addition, our insider trading policy prohibits our executive officers, directors, and other designated insiders from holding Company stock in