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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

Check the appropriate box:

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)

 

Payment of Filing Fee (Check all boxes that apply):

No fee required

Fee paid previously with preliminary materials

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

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When

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Where

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Who

10:00 am CDT
on Tuesday,
June 11, 2024

Virtual meeting at
www.virtualshareholdermeeting.com/ULTA2024

Stockholders of
Record as of
April 12, 2024

Meeting Agenda

Proposals

   

Board
Recommendation

   

For more
information

1

To elect Michelle L. Collins, Catherine A. Halligan, David C. Kimbell, Patricia A. Little, George R. Mrkonic, Lorna E. Nagler, Heidi G. Petz,
and Michael C. Smith as directors to hold office until the 2025 Annual Meeting of Stockholders

FOR
(all nominees)

Page 8

2

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for our fiscal year 2024, ending February 1, 2025

FOR

Page 19

3

To vote on an advisory resolution to approve the Company’s executive compensation

FOR

Page 48

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 2024 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/ULTA2024 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.

Table of Contents

Voting

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

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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 June 10, 2024

or
1-800-690-6903
for registered ownership up until
11:59 pm CDT, on June 10, 2024

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 58.

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
Shareholders, banks and brokers may call: (212) 750-5833

Proxy Materials

This Notice of Annual Meeting, proxy statement, and form of proxy are being distributed and made available around April 24, 2024.

By order of the Board of Directors.

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

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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

15

Non-Employee Director Compensation for Fiscal 2023

17

Proposal Two — Ratification of Appointment of Independent Registered Public Accounting Firm

19

Fees to Independent Registered Public Accounting Firm

20

Audit Committee

21

Report of the Audit Committee of the Board Of Directors

22

Compensation Committee

23

Report of the Compensation Committee of the Board Of Directors

25

COMPENSATION DISCUSSION AND ANALYSIS

26

Proposal Three — Advisory Resolution on Executive Compensation

48

CEO Pay Ratio

50

Pay Versus Performance

50

STOCK OWNERSHIP

54

CERTAIN RELATIONSHIPS AND TRANSACTIONS

57

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

58

MISCELLANEOUS

64

Important notice regarding the availability of proxy materials for the annual meeting of stockholders to be held on June 11, 2024. The proxy statement and Annual Report to Stockholders for the year ended February 3, 2024 are available at https://ulta.com/investor. Brokers cannot vote for Proposals 1 or 3 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 2024 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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F

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), over the last several years the Board has enhanced our corporate governance practices, policies, structures, and functioning, taking into account ongoing corporate governance trends, peer practices, and views and perspectives of our stakeholders. These enhancements include:

Declassifying the Board and providing 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;
Providing that directors may be removed by the holders of a majority of the shares then entitled to vote at an election of directors, with or without cause;
Replacing all supermajority voting standards for amendments to our Certificate of Incorporation with a majority standard;
Replacing all supermajority voting standards for amendments to our Bylaws with a majority standard;
Adopting a director resignation policy in uncontested director elections;
Updating our Corporate 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 six 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 & 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 annual ESG reports since 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.

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

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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 & 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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Board of Directors Meetings and Committees

During the fiscal year ended February 3, 2024 (“fiscal 2023”), the Board of Directors held five meetings. The Board of Directors has an Audit Committee, a Nominating & Corporate Governance Committee, and a Compensation Committee. During fiscal 2023, 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 2023 Annual Meeting of Stockholders.

The following table provides the composition of each of our committees as of April 12, 2024:

Director

  

  

Nominating &
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, CEO

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

1.Additional information regarding the Nominating & Corporate Governance Committee can be found starting on page 5.
2.Additional information regarding the Audit Committee can be found starting on page 21.
3.Additional information regarding the Compensation Committee can be found starting on page 23.

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, competitive and reputational risks, as well as climate related and environmental 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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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 & 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 & 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 policy prohibiting use of corporate funds to support political campaigns. The Nominating & 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 & 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 will not be eligible to stand for election at the next annual meeting unless the Nominating & 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.

MAJORITY VOTE STANDARD FOR ELECTION OF DIRECTORS AND DIRECTOR RESIGNATION POLICY

Our Bylaws require that, in an uncontested election, each director will be elected by a majority of the votes cast by the shares present virtually or represented by proxy and entitled to vote at the Annual Meeting, such that the number of shares voted “for” a director nominee must exceed the number of shares voted “against” that director nominee. A plurality voting standard is applicable to any contested election of directors. A “contested election of directors” is one in which the number of nominees for director is greater than the number of directors to be elected.

Our Corporate Governance Guidelines require that, following any election of directors other than a contested election of directors, any incumbent director who was a nominee and who did not receive a majority of the votes cast by the shares present virtually or represented by proxy and entitled to vote at the meeting must promptly tender his or her resignation to the Board for consideration by the Board.

Our Corporate Governance Guidelines further provide that a recommendation on whether or not to accept such a resignation will then be made by the Nominating & Corporate Governance Committee or, if each member of the Nominating & Corporate Governance Committee did not receive the required majority vote or the Nominating & Corporate Governance Committee is otherwise unable to act, a majority of the Board will appoint a special committee of independent directors for the purpose of making a recommendation to the Board (the committee with authority to act is referred to as “Nominating Committee”). If no independent directors received the required

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majority vote, our Corporate Governance Guidelines require that the Board act on the resignations. Within 60 days following certification of the stockholder vote, the Nominating Committee will recommend to the Board the action to be taken. Any director who tenders his or her resignation will not participate in the Nominating Committee recommendation or Board action regarding whether to accept the resignation. The Board will determine whether or not to accept the resignation within 90 days following certification of the stockholder vote in accordance with the procedures and factors set forth in our Corporate Governance Guidelines.

Nominating & Corporate Governance Committee

The Nominating & 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 & 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.

During fiscal 2023, the Nominating & Corporate Governance Committee was composed of the following independent directors: Ms. Halligan, Mr. MacDonald, Mr. Mrkonic, and Mr. Smith. Mr. Mrkonic serves as the current Chair of the Committee. The Nominating & Corporate Governance Committee met five times during fiscal 2023.

Nominating & Corporate Governance Committee Charter

The Nominating & 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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Nomination Process — Qualifications

Pursuant to its charter, the Nominating & 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 & 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.

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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.

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We interview candidates and deliberate

The Nominating & 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 & 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 & 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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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 & 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 February 3, 2024, 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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PROPOSAL ONE
ELECTION OF DIRECTORS

In 2023, our stockholders approved an amendment to our Certificate of Incorporation to declassify our Board and move to one-year terms, such that the Board will be fully declassified by the 2025 Annual Meeting of Stockholders. As a result, the current term of office for our Class II directors expires at this Annual Meeting and the term for our Class III directors expires at the 2025 Annual Meeting of Stockholders. The directors previously designated as Class I directors now have terms that expire annually. Vacancies on our Board of Directors may be filled by persons elected by a majority of the remaining directors. A director elected by our Board of Directors to fill a vacancy, including a vacancy created by an increase in size of our Board of Directors, will serve for the remainder of the term of the class of directors (if any) in which the vacancy occurred and until that director’s successor is elected.

The Board of Directors is presently composed of eleven members, ten of whom are non-employee, independent directors. Each director was elected to the Board of Directors to serve until a successor is duly elected and qualified or until his or her resignation, removal, or death.

The affirmative vote of the holders of a majority of the votes cast by the shares present virtually or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the nominees for election, assuming the election is uncontested (a plurality voting standard applies in contested elections). For this purpose, a majority of the votes cast means that the number of shares voted “for” a director’s election must exceed the number of shares voted “against” that director’s election. Abstentions and broker non-votes will be counted towards a quorum but will not be counted for any purpose in determining whether the nominees have been elected. For additional information on our majority voting in uncontested elections of directors policy and our policy on incumbent director resignation in an uncontested election, please see “Corporate Governance— Majority Vote Standard for Election of Directors and Director Resignation Policy” above.

Summary of Qualifications and Experience of Director Nominees and Directors Continuing in Office

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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Board Diversity Matrix (As of June 11, 2024*)

Total Number of Directors

11

Did Not

Female

Male

Non-Binary

Disclose Gender

  

  

(#)

  

  

(#)

  

  

(#)

  

  

(#)

  

Part I: Gender Identity

Directors

6

5

Part II: Demographic Background

African American or Black

1

1

Alaskan Native or Native American

Asian

Hispanic or Latinx

1

1

Native Hawaiian or Pacific Islander

White

4

3

Two or More Races or Ethnicities

LGBTQ+

1

Did Not Disclose Demographic Background

Part III: Other

Directors' Average Tenure (Years)

6.2

Directors' Average Age (Years)

59.8

Independent Directors

10

*Assumes all directors standing for election are elected

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INFORMATION ABOUT OUR DIRECTOR NOMINEES

What are you voting on?

You are being asked to elect Michelle L. Collins, Catherine A. Halligan, David C. Kimbell, Patricia A. Little, George R. Mrkonic, Lorna E. Nagler, Heidi G. Petz, and Michael C. Smith as directors for terms to expire at the 2025 Annual Meeting of Stockholders and until their successors are elected and qualified or until their resignation, removal, or death.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE

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Table of Contents

  Corporate Governance

Nominees For Election:

Michelle L. Collins

   

Catherine A. Halligan

INDEPENDENT DIRECTOR

COMMITTEES

ñ

Audit

ñ

Compensation

Director Since: 2014

Age: 64

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INDEPENDENT DIRECTOR

COMMITTEES

ñ

Compensation (Chair)

ñ

Nominating & Corporate Governance

Director Since: 2012

Age: 60

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DIRECTOR QUALIFICATIONS

Ms. Collins contributes to the Board extensive experience in corporate finance and business consulting, including evaluating, investing in, monitoring and exiting private equity investments, as well as advising growth companies as an investment banker with deep corporate governance expertise.

KEY SKILLS AND EXPERTISE

ñ

Finance: Gained deep expertise in corporate finance from her senior leadership and advisory roles at private equity and investment banking firms, including as the Co-Founder and Managing Director of Svoboda Capital Partners LLC, a private equity firm that manages over $400 million of capital.

ñ

Distribution: Acquired through her experience as a principal in the Corporate Finance Department at William Blair & Company, LLC, where she advised on public equity offerings, working closely with clients in the specialty retail, direct marketing, catalogue and distribution businesses.

ñ

Governance: Attained over 30 years of service on both public and private corporate boards across a wide range of industries as an independent board member.

CAREER HIGHLIGHTS

CAMBIUM LLC – a business and financial advisory firm

ñ

President (since 2007)

SVOBODA CAPITAL PARTNERS, LLC – a leading private equity firm

ñ

Member, Advisory Board (since 2007)

ñ

Co-Founder and Managing Director (1998–2006)

WILLIAM BLAIR & COMPANY, LLC – a multinational investment bank and financial services firm

ñ

Principal, Corporate Finance Department (1992–1997)

OTHER BOARD DIRECTORSHIPS

ñ

Ryan Specialty Holdings, Inc. (NYSE: RYAN) (since 2021)

ñ

Canadian Imperial Bank of Commerce (TSX: CM) (NYSE: CM) (since 2017)

ñ

CIBC Bancorp USA/CIBC Bank USA (since 2017)

ñ

Health Care Service Corporation (2009–2021)

ñ

Arrowstream, Inc. (2009–2010)

ñ

Blue Cross, Blue Shield of Illinois (2006–2009)

ñ

CDW Corporation (NASDAQ: CDW) (1996–2007)

EDUCATION

ñ

B.A., Yale University

ñ

M.B.A., Harvard Graduate School of Business

DIRECTOR QUALIFICATIONS

Ms. Halligan contributes to the Board over 20 years of experience in digital transformation, marketing, omnichannel business capabilities and e-commerce in the retail and SaaS industries. Ms. Halligan has a proven track record developing high growth online platforms and strategic brand and marketing strategies to drive exceptional customer experience and contributes to the board her extensive public corporate board expertise.

KEY SKILLS AND EXPERTISE

ñ

E-commerce & Digital/Technology: Developed from her experiences leading e-commerce and digital sales growth and transformation strategies for prominent retailers, including Walmart.com, Williams-Sonoma, and Blue Nile, in addition to her leadership and strategic advisory experience with Software-as-a-Service (SaaS) companies.

ñ

Retail: Obtained through multiple executive leadership and public board roles across domestic and international retailers with store and digital operations.

ñ

Strategy: Gained from her extensive experience in marketing and e-commerce leadership roles and her tenure as an associate partner at a management consulting firm advising multinational corporations on growth, transformation, branding, and marketing.

CAREER HIGHLIGHTS

POWERREVIEWS INC. (acquired by 1WorldSync in 2023) – leading social commerce network

ñ

SVP, Sales and Marketing (2010–2012)

WALMART (NYSE: WMT) – multinational retail corporation operating department and grocery stores

ñVP, Product Management and MultiChannel integration, Market Development, Global eCommerce, Walmart.com (2009–2010)

ñ

Chief Marketing Officer, Walmart.com (2007–2009)

ñ

VP, Product Management and Multi-Channel Integration (2006–2007)

PROPHET – integrated growth consulting firm

ñ

Associate Partner (2000–2006)

BLUE NILE (acquired by Signet Jewelers in 2022) – leading online jewelry retailer

ñ

VP, Direct Marketing (1999–2000)

WILLIAMS-SONOMA (NYSE: WSM) – US retailer for premium products for the home

ñ

VP, Internet (1996–1999)

GYMBOREE (acquired by The Children’s Place in 2019) – children’s clothing retailer

ñ

VP, Direct Marketing (1995–1996)

OTHER BOARD DIRECTORSHIPS

ñ

JELD-WEN, Inc. (NYSE: JELD) (since 2022)

ñ

Driven Brands, Inc. (NASDAQ: DRVN) (since 2020)

ñ

Ferguson Plc (NYSE: FERG) (since 2019)

ñ

FLIR Systems (acquired by Teledyne in 2021) (2014–2021)

EDUCATION

ñ

B.S., Northern Illinois University

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Table of Contents

Corporate Governance  

David C. Kimbell

   

Patricia A. Little

COMMITTEES

None

Director Since: 2021

Age: 57

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INDEPENDENT DIRECTOR

COMMITTEES

ñ

Audit

Director Since: 2019

Age: 63

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DIRECTOR QUALIFICATIONS

As CEO of Ulta Beauty (NYSE: ULTA), Mr. Kimbell contributes to the Board critical insights into the Company’s operations, leadership, strategy and talent management. With over 25 years of operational and leadership experience in retail and consumer-driven businesses, he has developed a deep understanding of the beauty industry and the strategies needed to succeed in the evolving omnichannel and digital environment, with a proven record of leading and transforming numerous top brands and retailers to create positive impact across multiple stakeholder communities.

KEY SKILLS AND EXPERTISE

ñ

Marketing: Developed from decades in brand management and marketing and merchandise leadership roles for large public companies, including five years overseeing marketing at Ulta Beauty.

ñ

Strategy: Obtained through extensive experience developing branding and marketing strategies to drive growth for consumer-centric companies, as well as through direct responsibility for corporate strategy as Ulta Beauty’s President and CEO.

ñ

E-commerce & Digital/Technology: Acquired through his executive roles at leading retail companies with significant E-commerce operations and omnichannel strategies, innovating to bring traditional, customer-centric brands into the digital age.

CAREER HIGHLIGHTS

ULTA BEAUTY (NASDAQ: ULTA)

ñ

Chief Executive Officer (since 2021)

ñ

President (2019–2021)

ñ

Chief Marketing and Merchandising Officer (2014–2019)

U.S. CELLULAR (NYSE: USM) – U.S. mobile network operator

ñ

EVP, Chief Marketing Officer (2011–2012)

SEVENTH GENERATION (acquired by Unilever in 2016) – national leader in sustainable household products

ñ

SVP, Chief Marketing Officer (2011–2012)

PEPSICO (NASDAQ: PEP) – leading multinational food and beverage company

ñ

VP, Marketing (2001–2008)

PROCTOR & GAMBLE (NYSE: PG) – leading multinational consumer goods company

ñ

Brand Manager (1996–2001)

OTHER BOARD DIRECTORSHIPS

ñ

Best Buy (NYSE: BBY) (Since 2023)

EDUCATION

ñ

B.S., DePauw University

ñ

M.B.A., Purdue University

DIRECTOR QUALIFICATIONS

Ms. Little contributes deep financial and leadership expertise to our Board developed over a career of more than 30 years in finance, accounting, and treasury roles with multinational companies, along with a strong track record of supporting the development of profitable, sustainable international business models through strategic capital allocation and disciplined enterprise cost management.

KEY SKILLS AND EXPERTISE

ñ

Finance: Developed throughout her extensive executive leadership career in corporate finance, including serving as CFO of The Hershey Company and Kelly Services Inc. and head of global accounting at Ford Motor Company. In these positions Ms. Little oversaw enterprise financial systems, strategic capital allocation strategies, enterprise risk management function and financial reporting.

ñ

International: Obtained through leadership roles at multinational organizations, including at Ford Motor Company, Kelly Services Inc. and The Hershey Company where she managed an internationally based finance organization.

ñ

Marketing: Gained through her leadership experiences at consumer-oriented and brand-driven companies, developed through cross-functional corporate partnerships to develop effective marketing capital allocation strategies that supported top-line growth.

CAREER HIGHLIGHTS

THE HERSHEY COMPANY (NYSE: HSY) – US multinational confectionary company

ñ

Chief Financial Officer (2015–2019)

KELLY SERVICES, INC. (NYSE: MKC) – a leading provider of staffing and workforce solutions

ñ

Chief Financial Officer (2008–2015)

FORD MOTOR COMPANY (NYSE: F) – US multinational automobile manufacturer

ñ

General Auditor (2006–2008)

ñ

Senior leadership roles in accounting and corporate finance (1984–2006)

OTHER BOARD DIRECTORSHIPS

ñ

McCormick & Company Inc. (NYSE: MKC) (since 2010)

EDUCATION

ñ

B.A., Drake University

ñ

M.B.A., Carnegie Mellon University

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  Corporate Governance

George R. Mrkonic

   

Lorna E. Nagler

INDEPENDENT DIRECTOR

COMMITTEES

ñ

Nominating & Corporate Governance (Chair)

ñ

Compensation

Director Since: 2015

Age: 71

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INDEPENDENT CHAIR OF THE BOARD

COMMITTEES

None

Director Since: 2009

Age: 67

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DIRECTOR QUALIFICATIONS

Mr. Mrkonic contributes to the Board his deep expertise in corporate strategy, finance, governance and industry leadership, stemming from his more than 40 years of experience in the retail and manufacturing industries as a senior executive and director of large public retail companies, providing him with a broad understanding of complex strategic issues facing retail companies.

KEY SKILLS AND EXPERTISE

ñ

Governance: Attained from service on multiple public company boards, including North American and UK retail companies.

ñ

Strategy: Developed through his leadership roles with national retailers, overseeing strategy development and implementation across large retail operations.

ñ

Finance: Gained from his experience serving in senior leadership roles, including as Chief Financial Officer at Herman’s World of Sporting Goods, where he was responsible for financial reporting, development and implementation of capital allocation strategies and internal audit.

CAREER HIGHLIGHTS

BORDERS GROUP, INC. – former book and music retail chain

ñ

Director (1994–2004)

ñ

Vice Chairperson (1994–2002)

ñ

President (1994–1997)

KMART SPECIATLY RETAILING GROUP – group under the nationwide retail chain, Kmart Corporation

ñ

President (1990–1994)

HERMAN’S WORLD OF SPORTING GOODS – former sporting goods retailer

ñ

President and CEO (1981–1987)

ñ

Chief Financial Officer (1981–1986)

OTHER BOARD DIRECTORSHIPS

ñ

AutoZone, Inc. (NYSE: AZO) (since 2006)

ñ

Follett Corporation (2016–2022)

ñ

Maru Group (2016–2022)

ñ

Paperchase Products Limited (2005–2017)

ñ

Brinker International (NYSE: EAT) (2003–2021)

ñ

Syntel, Inc. (acquired by Atos in 2018) (1997–2007; 2009–2016)

EDUCATION

ñ

B.A., Stanford University

ñ

M.A., Stanford University

ñ

M.B.A., Harvard University

DIRECTOR QUALIFICATIONS

Ms. Nagler contributes to the Board nearly 40 years of retail expertise, including first-hand experience leading a wide variety of retail companies. She brings an extensive understanding of merchandising and operations strategies, as well as in-depth knowledge and capabilities in customer loyalty programs with multi-faceted customer bases.

KEY SKILLS AND EXPERTISE

ñ

Retail: Developed through extensive senior leadership experience serving at a variety of national retail companies with a strong track-record of successfully introducing new national brands and transforming customer relations management capabilities.

ñ

Operations: Attained expertise through overseeing all aspects of retail operations, including global supply chain management, merchandizing, marketing, risk and reputation management, and talent engagement.

ñ

Governance: Acquired through service on other public company boards, which enhanced her governance expertise and strengthens our Board’s oversight capabilities.

CAREER HIGHLIGHTS

BEALLS DEPARTMENT STORES, INC. – a department store specializing in home goods, apparel and accessories

ñ

President (2011–2016)

CHRISTOPHER & BANKS CORPORATION (acquired by iMedia Brands, Inc. in 2021) –specialty retailer of women’s clothing

ñ

President, Chief Executive Officer and Director (2007–2010)

CHARMING SHOPPES, INC. (acquired by Ascena Retail Group in 2012) – women’s apparel company

ñ

President of Lane Bryant division (2004–2007)

ñ

President of Catherine Stores division (2002–2004)

KMART CORPORATION (acquired by Transformco in 2019) – national retail chain

ñ

SVP, General Merchandise Manager of Apparel and Jewelry (1999–2002)

ñ

Divisional VP and General Merchandise Manager of Kids and Menswear (1996–1999)

KIDS “R” US – children’s clothing brand of Toys “R” Us

ñ

VP, Divisional Merchandise Manager (1994–1996)

Previous retail experience with MONTGOMERY WARD and MAIN STREET DEPARTMENT STORES

OTHER BOARD DIRECTORSHIPS

ñ

Hibbett, Inc. (NASDAQ: HIBB) (since 2019)

EDUCATION

ñ

B.S., University of Wisconsin

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Table of Contents

Corporate Governance  

Heidi G. Petz

   

Michael C. Smith

INDEPENDENT DIRECTOR

COMMITTEES

ñ

Audit

Director Since: 2022

Age: 49

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INDEPENDENT DIRECTOR

COMMITTEES

ñ

Nominating & Corporate Governance

Director Since: 2019

Age: 54

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DIRECTOR QUALIFICATIONS

Ms. Petz brings over 25 years of professional experience in a variety of commercial and consumer facing industries, including executive leadership and operational expertise within consumer brands and supply chain, and her deep industry knowledge and understanding of the growth drivers behind consumer mindset.

KEY SKILLS AND EXPERTISE

ñ

Retail: Obtained through numerous executive roles with leading consumer brand companies, with responsibilities for the oversight of multiple operating segments, including the entire Global Supply Chain organization of Sherwin-Williams (NYSE: SHW), development of shareholder and customer value maximizing operational efficiencies, and navigating rapidly evolving supply chain challenges.

ñ

Marketing: Developed throughout multiple brand and product marketing leadership positions, including at Target, Newell Rubbermaid and most recently, Sherwin-Williams.

ñ

Strategy: Acquired from her current role as Chief Executive Officer and prior leadership roles at Sherwin-Williams, a $23 billion dollar business, overseeing successful execution of a highly differentiated growth strategy predicated on accelerating growth and adaptation to the shifting industry and macroeconomic environment during some of the most challenging periods in the company’s history.

CAREER HIGHLIGHTS

SHERWIN-WILLIAMS (NYSE: SHW) – global leader in paint and coatings manufacturing, development and distribution

ñ

Chief Executive Officer (since 2024)

ñ

President and Chief Operating Officer (2022–2024)

ñ

President, The Americas Group (2021–2022) and Consumer Brands Group (2019–2021)

ñ

SVP, Marketing (2017–2021)

VALSPAR (acquired by Sherwin Williams in 2017) – American manufacturer of paint and coatings

ñ

VP, Marketing (2013–2022)

NEWELL RUBBERMAID (NASDAQ: NWL) – American manufacturer, marketer and distributor of consumer and commercial products

ñ

Various leadership positions (2003–2013), including Director of Marketing

TARGET CORPORATION (NYSE: TGT) – Retail operator of department store chain

ñ

Marketing Manager (2000–2003)

EDUCATION

ñ

B.A., University of Richmond

ñ

M.B.A., Loyola University Maryland

DIRECTOR QUALIFICATIONS

Mr. Smith contributes over 27 years of professional retail experience and a strong understanding of data analytics and logistics through a customer-centric lens. He additionally brings differentiated operational leadership expertise in the financial services, technology and retail markets.

KEY SKILLS AND EXPERTISE

ñ

E-commerce & Digital/Technology: Acquired from his leadership roles at Walmart.com, a $5 billion division, and Walmart (NYSE: WMT) stores, where he led one of the most successful omnichannel offerings in retail through the site to store launch of over 3,500 stores.

ñ

Distribution: As an expert in operations, logistics and driving growth in retail, Mr. Smith’s decade plus of retail leadership, including as Chief Operations Officer at Walmart.com has included responsibilities over inbound and outbound transportation, reverse logistics, customer service, customer experience and order management, as well as managing retailer relationships with national logistics and shipping companies.

ñ

Retail: Developed during his tenure as an innovative consumer sector leader, including as President & Chief Operating Officer at Stitch Fix (NASDAQ: SFIX), where he was instrumental in scaling the business to a public company and oversaw client experience and merchandising.

CAREER HIGHLIGHTS

FOOTWORK – early-staged focused venture capital firm

ñ

Co-Founder and General Partner (since 2021)

STITCH FIX (NASDAQ: SFIX) – online personal styling service and retailer

ñ

President and Chief Operating Officer (2018–2021, COO from 2012–2016 and 2017–2021)

ñ

Interim Chief Financial Officer (2019–2021)

ñ

General Manager, Stitch Fix Men (2016–2017)

WALMART (NYSE: WMT) – multinational retail corporation operating department and grocery stores

ñ

VP and Chief Operations Officer, Walmart.com (2008–2012)

ñ

Sr. Manager and Director (2003–2008)

OTHER BOARD DIRECTORSHIPS

ñ

Stitch Fix (NASDAQ: SFIX) (2020–2022)

ñ

Miller Knoll (formerly Herman Miller) (NASDAQ: MLKN) (since 2019)

ñ

Food52 (2021–2023)

ñ

Mayvenn (2017–2022)

ñ

Imperfect Foods (2017–2021)

ñ

Own The Room (2016–2019)

EDUCATION

ñ

B.A., University of Virginia

ñ

M.B.A., University of California, Berkeley, Haas School of Business

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  Corporate Governance

INFORMATION ABOUT OUR DIRECTORS CONTINUING IN OFFICE

Directors Continuing in Office Until the 2025 Annual Meeting:

Kelly E. Garcia

   

Michael R. MacDonald

INDEPENDENT DIRECTOR

COMMITTEES

ñ

Audit

Director Since: 2022

Age: 49

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INDEPENDENT DIRECTOR

COMMITTEES

ñ

Audit (Chair)

ñ

Nominating & Corporate Governance

Director Since: 2012

Age: 72

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DIRECTOR QUALIFICATIONS

Mr. Garcia contributes to the Board his deep industry-leading expertise developing and implementing strategic technology initiatives to support and improve business operations with a proven track record of revolutionizing online consumer experience with global reach. His experience includes over 25 years of professional technology and leadership experience, including roles with responsibility for digital innovation, development of global commercial software products, e-commerce analytics and customer loyalty, cybersecurity and data privacy.

KEY SKILLS AND EXPERTISE

ñ

Cybersecurity/Privacy: Developed through his experience leading multifunctional teams responsible for building out Domino’s suite of global software platforms and integrations with other service and hardware providers, with special focus on the adoption of cybersecurity and data privacy protocols to ensure the protection of enterprise platforms and consumer information.

ñ

E-commerce & Digital/Technology: Acquired while serving in a number of senior leadership roles, including as Chief Technology Officer at Domino’s where he transformed the online customer experience and continues to earn industry recognition for adopting leading technological innovation tools that elevate the customer experience, including the development of multiple global software platforms integral to Domino’s e-commerce strategy with the integration of mobile ordering and GPS capabilities.

ñ

International: Obtained through executive leadership roles where he was responsible for scaling technology platforms to support Domino’s international operations and various leadership roles overseeing global business and strategic marketing intelligence for international stakeholders while at R. L. Polk.

CAREER HIGHLIGHTS

DOMINO’S PIZZA (NYSE: DPZ) – multinational pizza restaurant chain

ñ

Chief Technology Officer (since 2020)

ñ

SVP, eCommerce Development and Emerging Technologies (2016–2020)

ñ

VP, eCommerce Development (2012–2016)

R. L. POLK & COMPANY (acquired by IHS Inc. in 2013) – leader in global automotive information and analytics solutions

ñ

VP, Business Intelligence and North American Operations (2011–2012)

ñ

VP, Global Application Development (2008–2011)

ñ

Managerial roles in Application Development and Support (2006–2010)

EDUCATION

ñ

B.S., The Ohio State University

DIRECTOR QUALIFICATIONS

Mr. MacDonald contributes to the Board over 30 years of experience in retail knowledge and industry leadership, including first-hand business expertise and overseeing multiple aspects of retail operations, such as managing merchandising, marketing, stores, operations and finance functions. He brings an extensive understanding of evolving customer preferences and consumer engagement strategies obtained through his executive leadership roles developing and executing highly complex retail strategies with several leading North American retailers.

KEY SKILLS AND EXPERTISE

ñ

Finance: Gained from his many executive leadership positions, where he was responsible for overseeing capital raising and allocation strategies and corporate finance and reporting functions, in addition to his current role as member of the Frontier Group Holdings Audit Committee. He also brings over a decade of experience as the former CFO of Carson Pirie Scott.

ñ

Retail: Obtained through multiple executive leadership and public board roles across large retailers with store and digital operations.

ñ

Operations: Stemming from his experience transforming large-scale retail operations over the last three decades, in response to changing industry trends, challenging operating environments and evolving consumer preferences, including his experience overseeing DSW’s transformation to a leading omni-channel retailer.

CAREER HIGHLIGHTS

DSW INC. (NYSE: DBI) – leading American footwear and accessories company

ñ

Chairperson, President and CEO (2009–2015)

SHOPKO STORES – multi-department retail, pharmacies and optical center stores

ñ

Chairperson and CEO (2006–2009)

SAKS INC. – luxury department store chain

ñ

CEO and Chairperson (2000–2006)

ñ

Various executive positions (1998–2006)

CARSON PIRIE SCOTT (acquired by Northern Department Stores Group in 1998) – department and furniture store retail chain

ñ

President of Northern Department Stores Group (2000–2006)

ñ

Chairperson and CEO (1999–2000)

ñ

President and CEO (1998–1999)

ñ

President and Chief Operating Officer (1996–1998)

ñ

Executive Vice President and Chief Administrative Officer (1994–1996)

ñ

Executive Vice President and Chief Financial Officer (1990–1994)

OTHER BOARD DIRECTORSHIPS

ñ

Frontier Group Holdings, Inc. (NASDAQ: ULCC) (since 2016)

EDUCATION

ñ

B.B.A., University of Notre Dame

ñ

M.B.A., University of Detroit

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Table of Contents

Corporate Governance  

Gisel Ruiz

   

INDEPENDENT DIRECTOR

COMMITTEES

ñ

Compensation

Director Since: 2022

Age: 53

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DIRECTOR QUALIFICATIONS

Ms. Ruiz contributes to the Board over 26 years of professional retail and leadership experience, including executive and senior management positions with oversight responsibilities spanning across cost optimization, real estate operations, in-store innovation, sustainability and talent management. Her successful track record of leading teams through digital and multi-channel transformation, large scale growth and innovative tech-enabled consumer experience further enhance the Board’s oversight capabilities.

KEY SKILLS AND EXPERTISE

ñ

Retail: Acquired from her deep retail executive leadership experience at Walmart (NYSE: WMT) where she was responsible for the oversight of over 4,100 U.S. Walmart stores, 1.3 million employees and P&L responsibility for the organization's $279 billion in revenue.

ñ

Operations: Gained from Ms. Ruiz’s experience leading complex operations and human resources functions in senior and executive level leadership positions for Walmart U.S. and Sam’s Club, a division of Walmart, where she served as COO overseeing operations, real estate, territory sales, food service operation and in-store innovation for the $65 billion warehouse club.

ñ

International: Obtained from her unique directorships on several private and public, multinational company boards, including her former position on Yihaodian’s Board, China's then fourth largest business to consumer E-commerce website, her service on the board of Walmart de Mexico and leadership role responsible for Walmart International Human Resources, across 27 countries.

CAREER HIGHLIGHTS

SAM’S CLUB – leading membership warehouse retail division of Walmart

ñ

EVP, Chief Operations Officer (2017–2019)

WALMART (NYSE: WMT) – multinational retail corporation operating department and grocery stores

ñ

EVP, International Human Resources (2014–2017)

ñ

EVP, Chief People Officer 2010–2012)

ñ

EVP, Chief Operating Officer (2012–2014)

ñ

Various other leadership roles (1992–2012)

OTHER BOARD DIRECTORSHIPS

ñ

Cracker Barrel (NASDAQ: CBRL) (since 2020)

ñ

Vital Farms (NASDAQ: VITL) (since 2020)

ñ

TelevisaUnivision (since 2020)

ñ

Walmart de Mexico S.A. de C.V (2016–2019)

ñ

Yihaodian (2012–2015)

EDUCATION

ñ

B.S., Santa Clara University

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  Corporate Governance

NON-EMPLOYEE DIRECTOR COMPENSATION FOR FISCAL 2023

We strive to promote an ownership mentality among our key leadership and board of directors.

The Company utilizes equity compensation to encourage our directors to maintain meaningful stock ownership in the Company, aligning directors’ interests with stockholders. As a result, each non-employee director is granted an annual equity retainer totaling $160,000 in the form of restricted stock units (rounded up to the nearest whole share), valued using the share price of our common stock on the date of grant. During fiscal 2023, on the date of our annual meeting, each non-employee director received a grant of 397 restricted stock units that will vest on June 1, 2024.

Each non-employee director is paid an annual cash retainer. In addition, the Non-Executive Chair and each Committee Chair receives an additional cash retainer for serving in those roles. Cash payments are paid pro-rata in quarterly installments at the end of each fiscal quarter. The Compensation Committee reviews, on a regular basis, market data for the same peer group used to evaluate executive officer compensation gathered by the Compensation Committee’s independent advisor for determining compensation.

The following table sets forth the cash retainer amounts, by role:

Role

Cash Retainer
($)

Non-Employee Director

110,000

Non-Executive Chair

180,000

Audit Committee Chair

30,000

Compensation Committee Chair

30,000

Nominating & Corporate Governance Committee Chair

20,000

The following table provides information related to non-employee director compensation earned for fiscal 2023:

Fees Earned or

Stock

Paid in Cash

Awards (1)

Total

Name

  

  

($)

  

  

($)

  

  

($)

  

Lorna E. Nagler

290,000

160,321

450,321

Michelle L. Collins

110,000

160,321

270,321

Kelly E. Garcia

110,000

160,321

270,321

Catherine A. Halligan

140,000

160,321

300,321

Patricia A. Little

110,000

160,321

270,321

Michael R. MacDonald

140,000

160,321

300,321

George R. Mrkonic

130,000

160,321

290,321

Heidi G. Petz

110,000

160,321

270,321

Gisel Ruiz

110,000

160,321

270,321

Michael C. Smith

110,000

160,321

270,321

1.Amounts shown represent the grant date fair value as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“ASC 718”). For a discussion of the assumptions made in the valuation reflected in this column, see Note 15 to the consolidated financial statements for fiscal 2023 contained in our Annual Report on Form 10-K filed on March 26, 2024.

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Corporate Governance  

The following table sets forth the outstanding restricted stock units held by our non-employee directors as of February 3, 2024:

Restricted Stock

Name

  

  

Units (#)

  

Lorna E. Nagler

 

397

Michelle L. Collins (1)

 

397

Kelly E. Garcia

397

Catherine A. Halligan

 

397

Patricia A. Little (1)

397

Michael R. MacDonald

 

397

George R. Mrkonic

 

397

Heidi G. Petz

397

Gisel Ruiz

397

Michael C. Smith

 

397

1.Ms. Collins and Ms. Little elected to defer the restricted stock units received in fiscal 2023 until their retirement or termination from the Board of Directors. 

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  Corporate Governance

PROPOSAL TWO
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 2024, ending February 1, 2025.

The Audit Committee of the Board of Directors has appointed Ernst & Young LLP as our independent registered public accounting firm for fiscal 2024, ending February 1, 2025. Services provided to Ulta Beauty by Ernst & Young LLP in fiscal 2023 are described under “Fees to Independent Registered Public Accounting Firm” below. Additional information regarding the Audit Committee is provided on page 21. 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. Ernst & Young LLP rotates the assurance engagement partner on the audit engagement every five years, consistent with independence requirements. A new assurance engagement partner was appointed in fiscal 2024. 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 TWO

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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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 2023 and 2022:

  

  

2023

  

  

2022

  

Audit Fees (1)

$

2,659,000

$

2,351,000

Audit-Related Fees

 

 

Tax Fees (2)

 

927,000

 

1,200,000

All Other Fees (3)

 

715,000

 

410,000

Total

$

4,301,000

$

3,961,000

1.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.
2.Tax fees and expenses in fiscal 2023 consist of $119,000 for tax planning, advisory, and consulting services and $808,000 for tax compliance and preparation services. 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.
3.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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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 2023, the Audit Committee held nine 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 data privacy, 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 2023, the Audit Committee was composed of the following independent directors: Ms. Collins, Mr. Garcia, Ms. Little, Mr. MacDonald, and Ms. Petz (effective June 1, 2023). 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, Mr. MacDonald, and Ms. Petz. 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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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 nine meetings during fiscal 2023.

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 2023, ended February 3, 2024, 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 2024, ending February 1, 2025.

Audit Committee of the Board of Directors

Michael R. MacDonald (Chair)
Michelle L. Collins

Kelly E. Garcia

Patricia A. Little

Heidi G. Petz

1

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 2023, the Compensation Committee was composed of the following directors, all of whom satisfy the independence requirements of NASDAQ: Ms. Collins, Ms. Halligan, Mr. Mrkonic, and Ms. Ruiz. Ms. Halligan serves as the Chair of the Compensation Committee. During fiscal 2023, the Compensation Committee held five 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 Compensation Committee Charter;
establishing, amending, and terminating compensation and benefits plans and administering such plans, including the Company’s Clawback Policy;
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 2023 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 2023, 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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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 and subject to potential clawback;
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, including oversight over clawback of executive compensation.

Compensation Committee Interlocks and Insider Participation

During fiscal 2023, 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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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 2023 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

2

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 specialty 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 approximately 25,000 products from approximately 600 established and emerging beauty brands across a variety of categories and price points. We believe we offer the widest selection of beauty categories, from mass to prestige price points, across cosmetics, fragrance, haircare, 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 beauty services in nearly every store, including a full-service hair salon and a BenefitTM Brow Bar. In addition to our free-standing locations, through our partnership with Target Corporation we have more than 500 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 from distribution center, 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, Ulta Beauty 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

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passionate about the beauty category, uses beauty for self-expression, experimentation, and self-investment, and 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 2023. 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 2023, 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 $11.2 billion (including net sales in the 53rd week of approximately $181.9 million), 9.8% over fiscal 2022. Net sales in the 53rd week were approximately $181.9 million. Operating income was $1.7 billion, or 15.0% of net sales, compared to $1.6 billion, or 16.1% of net sales, in fiscal 2022.

We engaged with customers across all platforms. We increased the number of members in our Ulta Beauty Rewards loyalty program by 8% to a record 43.3 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 37% of our digital orders this year were fulfilled by stores, up from 31% last year. Reflecting growing consumer trends, we enhanced our Conscious Beauty platform, expanded our Black-Owned and founded brand assortment to 50 brands, and welcomed the second cohort of BIPOC brands to our MUSE Accelerator Program to help 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, to all stores.
We delivered results for our stockholders. In a challenging and uncertain economic environment, we maintained our share price for fiscal 2023, and our five-year total stockholder return (“TSR”) covering fiscal 2019-2023 was 73%, which included generating positive returns in fiscal 2020, one of the most challenging years, as we navigated through the impact of the COVID-19 pandemic and its related impact on the Company. We maintained our balance sheet strength throughout the period, ending fiscal 2023 with $766.6 million of cash and cash equivalents. Since 2014, Ulta Beauty has purchased 18.4 million shares of its common stock for $5.8 billion, while continuing to make strategic growth investments.
We made progress on our foundational transformation initiatives. We completed the retrofit of our Greenwood distribution center, began the retrofit of our Dallas distribution center, opened our Greer market fulfillment center, and began construction of our Bolingbrook market fulfillment center. Additionally, we successfully transitioned our Jacksonville, Greer, and Chambersburg distribution facilities and key merchandising processes to our new enterprise resource planning platform, and we converted key merchandising and commerce elements of our digital store to a new architecture. We also built a new enterprise data platform on Google cloud infrastructure, establishing a modern ecosystem for future analytics and data-driven decisioning capabilities, and we completed our rollout of new POS systems, including mobile checkout, in all stores. Our teams enable our success, and we continue to invest to protect and cultivate our world class culture and talent. We offer 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. For the long-term incentive program, the Compensation Committee maintained a mix of equity that provides 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 PBS

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awards that may be earned based upon achievement of two-year financial performance goals, subject to a cumulative three-year TSR modifier and three-year vesting.

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 2023:

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

Chief Human Resources Officer

Kecia L. Steelman (1)

President and Chief Operating Officer

1.Ms. Steelman has been Chief Operating Officer since 2021 and was promoted to President in September 2023.

Our compensation programs for fiscal 2023 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 annual award of equity granted in March, the Compensation Committee awarded NEOs 50% of the target value in the form of PBSs, 30% in the form of stock options, and 20% in the form of time-based RSUs. The Compensation Committee believes that utilizing three different equity incentive vehicles provides a balanced approach and is in line with the compensation philosophy to attract, retain and motivate executives in alignment with stockholders. PBSs align executives and stockholders by incentivizing management to implement the company’s long-term strategies and achieve multiyear EBT and revenue goals; stock options incent executives to increase the stock price over time, aligning them with the interests of stockholders; and RSUs align the executive and stockholders for the same reason and reward the executive only after the three-year cliff vesting period has lapsed.

The alignment of performance and pay in fiscal 2023 reflects our compensation philosophy.

Executive pay is delivered through a performance-based compensation program that provides the opportunity to earn meaningful compensation upon achievement of superior performance and limits earnings opportunity when results are not satisfactory. Annual incentive opportunity is directly tied to one quantifiable objective performance target: EBT. No awards are paid under this program if a threshold level of EBT is not achieved. In addition, PBSs are earned based on the attainment of two-year EBT growth and two-year revenue growth goals, subject to a three-year TSR modifier as described below.

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Our long-term incentive plan (“LTIP”) is designed to focus on our plan to drive long-term profitable growth.

The LTIP uses PBSs that are earned based on attainment of two-year EBT growth and two-year revenue growth goals and require a third year of vesting to deliver 50% of the target LTI value for our NEOs. The Compensation Committee chose to use revenue as a metric as it is a measurement of growth. EBT was chosen as a metric because of its focus on profitable growth, which is a key indicator of our operating performance and therefore closely tied to stockholder value. EBT and revenue are weighted equally at 50%. Each performance metric and its resulting payout operate independently of each other. The resulting PBS award payout is then subject to modification such that payout will be capped at target if the Company’s TSR for its 2023-2025 fiscal years decreases by 10% or more even if revenue and/or EBT performance exceeds target, or if TSR is 10% or more and the revenue and/or EBT performance targets are not met. The LTIP also includes non-qualified stock options with four-year vesting and time-based RSUs with three-year cliff vesting. Stock options only deliver executive compensation if the share price rises above the fair market value grant price, also aligning executive’s interests in share value growth, and time-based RSUs serve as a retention vehicle and further align associates’ interests with stockholder value.

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

At our 2023 Annual Meeting of Stockholders, approximately 89% of stockholders indicated their approval of the compensation paid to our NEOs through the advisory vote to approve executive compensation (“say-on-pay”). The Compensation Committee believes that this vote affirms stockholder support of the Company’s approach to executive compensation. Our stockholders have consistently supported our say-on-pay proposals. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for our NEOs. We regularly review and assess our compensation programs to ensure that they are aligned with our business strategies and that the type and mix of short-term and long-term incentive vehicles used continue to align management with stockholders’ interests and reward for high performance.

Feedback from stockholders is an important consideration that the Compensation Committee uses when formulating future compensation programs. The Company actively solicits feedback on a wide range of topics, including executive compensation, corporate governance, and environmental and social responsibility issues.

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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Overview of 2023 Compensation

Our fiscal 2023 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 Units

(50% of award value)

Stock Options (30% of award value)

Restricted Stock Units (20% of award value)

Performance Based

Three-year to Four-year

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 reflects 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 2023, we achieved record performance with EBT of $1.696 billion, 3.2% growth over 2022, but slightly below the challenging target. Having reviewed these results and its assessment of overall performance, the Compensation Committee approved annual cash incentives for the NEOs payable at 97.84% of their target annual incentives.

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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 modification such that payout will be capped at target if the Company’s TSR for its 2023-2025 fiscal years decreases by 10% or more even if revenue and/or EBT performance exceeds target, or if TSR is 10% or more and the revenue and/or EBT performance targets are not met. The first chart below shows the mix of our current CEO’s fiscal 2023 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 2023 target compensation.

Graphic Graphic

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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2023 Executive Compensation Process

What We Do:

Objectives and Considerations:

Compensation Committee Reviews Comparative Pay Levels

We review competitive pay levels among a peer group of retailers with revenues similar to Ulta Beauty, compensation survey data for similarly sized retail companies from the Willis Towers Watson Retail Executive Survey Report, and compensation survey data for similarly sized general industry companies from the Willis Towers Watson CDB General Industry Survey report.

Our CEO Provides Input for Other Executives

The CEO, with input from our human resources department on competitive market positions, recommends to the Compensation Committee the compensation of other executives based on the executive’s performance and internal pay equity among the executives team, as well as talent and succession planning considerations. The CEO does not participate in the discussion or setting of his own compensation.

Compensation Committee Makes Final Determination

The Compensation Committee approves executive compensation after deliberation, taking into account such factors as talent planning, succession, and Company performance. In addition, the Committee considers such factors as total compensation philosophy, individual performance, and the positioning of Ulta Beauty’s executive total compensation levels relative to market.

We consider the nature and job scope of each NEO.

We consider internal pay positioning, taking into account each NEO’s pay components and levels relative to other executives with respect to role, length of time the NEO has served in the NEO’s current position, seniority, and level of responsibility.

We consider the accounting and tax impact of each element of compensation.

We consider competitive pay levels and practices for similar positions among identified data sets.

ULTA BEAUTY 2023 COMPENSATION PEER GROUP

Bath & Body Works, Inc.

Foot Locker, Inc.

Tractor Supply Company

Burlington Stores, Inc.

Lululemon Athletica Inc.

Under Armour, Inc.

Capri Holdings Limited

PVH Corp.

V.F. Corporation

Dick’s Sporting Goods, Inc.

Ross Stores, Inc.

Williams-Sonoma, Inc.

The Compensation Committee selected a peer group of companies that are generally within 0.5x to 3.0x of Ulta’s revenues and/or 0.2x to 4.0x Ulta’s market capitalization and with whom we may compete for talent. The Compensation Committee assesses the peer group annually to ensure the peer group remains relevant from industry, size, and performance perspectives for use in benchmarking pay to inform its decisions.

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  Compensation Discussion and Analysis

2023 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 2023 were:

2023

Base Salary

Percentage

Named Executive Officer

  

  

($)

  

  

Increase

    

David C. Kimbell

 

1,350,003

10

%

Scott M. Settersten

 

805,480

5

%

Jodi J. Caro

 

658,050

6

%

Anita J. Ryan

 

562,016

10

%

Kecia L. Steelman

 

1,065,022

7

%

In connection with their strong performance, Mr. Kimbell and Ms. Ryan each received a 10% increase as the Committee continued to migrate their pay to more market-competitive rates. In addition, the Compensation Committee approved merit increases of 5%, 6%, and 7% for Mr. Settersten, Ms. Caro, and Ms. Steelman, respectively. 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 2023 remained appropriately competitive and were unchanged from 2022 as follows:

2023

Annual Incentive

Named Executive Officer

  

  

Target

  

David C. Kimbell

180

%

Scott M. Settersten

100

%

Jodi J. Caro

65

%

Anita J. Ryan

65

%

Kecia L. Steelman

115

%

In fiscal 2023, target EBT under the annual incentive program was $1.703 billion. This target reflected a rigorous goal-setting process in which management and the Compensation Committee worked collaboratively to set targets reflective of our growth expectations. When approving the fiscal 2023 EBT goal, the Committee determined the goal was appropriate given the prior year’s extraordinary performance over plan, concerns over the economy in an inflationary and rising interest rate environment and substantial capital investments in enterprise systems.

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Compensation Discussion and Analysis  

The fiscal 2023 annual incentive performance/payout range was as follows:

2023

 

Annual Incentive Performance

Payout as a % of

  

  

Percent to Target

  

Target

Threshold

 

87

%

40

%

Target

 

100

%

100

%

Maximum

 

110

%

200

%

Based on our EBT performance of $1.696 billion, the annual incentive payout was 97.84% of target based on EBT performance of less than 100% of target. The Compensation Committee can use negative discretion to reduce calculated annual incentive payouts but did not apply any downward discretion in fiscal 2023.

Long-Term Incentive Plan

During fiscal 2023, we provided long-term incentive awards through grants of PBSs, stock options, and RSUs to our NEOs and certain other associates. Under the LTIP, each eligible associate may receive an award with a value that is targeted to a percentage of base salary, with the ultimate value dependent upon Company performance.

The LTIP awards, shown as a percentage of base salaries, for fiscal 2023 compared to fiscal 2022 were as follows:

2023

2022

LTIP Target

LTIP Target

Named Executive Officer

  

  

Percentage

  

Percentage

    

David C. Kimbell

655

%

524

%

Scott M. Settersten

230

%

230

%

Jodi J. Caro

150

%

150

%

Anita J. Ryan

125

%

125

%

Kecia L. Steelman

350

%

350

%

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

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  Compensation Discussion and Analysis

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

Graphic

PBS   

Stock Options 

RSUs

PBSs granted under the LTIP have the following characteristics:

Stock options granted under the LTIP generally have the following characteristics:

RSUs granted under the LTIP generally have the following characteristics:

tied to achievement of two-year revenue and EBT targets;

50% of PBS grant value tied to attainment of revenue target and 50% of PBS grant value tied to attainment of EBT target;

the number of shares earned can be less or greater than target, including zero, based on Company performance;

following the end of the two-year performance period, a third year of time vesting is required before the number of earned shares is delivered to the recipient; and

the PBS awards are capped at target payout if three-year TSR decreases by 10% or more even if revenue and/or EBT performance exceeds target, or if TSR is 10% or more and the revenue and/or EBT performance targets are not met.

  exercise price equal to the fair market value of our common stock on the date of grant;

  ratable vesting, on an annual basis over a four-year period; and

  ten-year term from the date of grant.

  entitle the holder to receive an equal number of shares of common stock at settlement; and

  cliff vest three years from grant date.

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Compensation Discussion and Analysis  

As described in our proxy statement filed in 2023, the PBSs granted in 2021 were eligible to be earned based on two one-year cumulative revenue and EBITDA targets for fiscal 2021 and 2022, and subject to a three-year TSR modifier. Achievement in each of fiscal 2021 and 2022 resulted in a payout of 170% of target for the revenue component and 200% of target for the EBT component, which were subject to a performance cap if three-year TSR for fiscal years 2021-2023 was not positive. Based on the average closing stock price for the 20 trading days ending February 3, 2024 of $486.45, the three-year TSR was positive and performance cap was not applied. Therefore, the PBSs vested at 170% of target for the revenue component and 200% of target for the EBT component on March 15, 2024.

PBS awards previously granted in fiscal 2022 were eligible to be earned based on two-year cumulative revenue and EBT targets follows:

Revenue – 50% of PBS Value

EBT – 50% of PBS Value

  

  

Percent to Target

  

Payout

  

Percent to Target

  

Payout

Threshold

 

95

%

50

%

85

%

50

%

Target

 

100

%

100

%

100

%

100

%

Maximum

 

105

%

200

%

110

%

200

%

The two-year cumulative revenue and EBT targets were $19.0 billion and $2.7 billion, respectively and we achieved $21.4 billion and $3.3 billion, respectively, resulting in a maximum 200% earning of the PBS award. The award is subject to a target level payout cap if the Company’s three-year TSR decreases by 10% or more and is not eligible to vest until March 2025.

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  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: Vast majority of compensation is performance-based and not guaranteed

No Excise Tax Gross-Ups: The Company does not provide any excise tax gross-up payments in connection with a change in control

Multiple Performance Metrics and Time Horizons: Use multiple performance metrics focusing on top-line and bottom-line growth and multi-year vesting and measurement periods for long-term incentives

No Repricing or Buyouts of Stock Options: The Company’s equity plan prohibits repricing or buyouts of underwater stock options

Annual Compensation Risk Review: Annually assess risk in compensation programs

No Tax Gross-ups for Perquisites: The Company does not provide tax gross-ups to NEOs for the limited perquisites we provide

Double-Trigger Change in Control: Include “double-trigger” change in control provisions for the vesting of equity awards and the receipt of severance

No Hedging, Derivatives, Pledging or Margin Accounts: NEOs are prohibited from engaging in derivatives and hedging transactions and from holding Company stock in a margin account or pledging Company stock as collateral

Share Ownership Guidelines: NEOs must comply with share ownership requirements

No Dividends on Unearned PBSs and RSUs: No dividends or dividend equivalents are paid on PBSs or RSUs until such PBSs and RSUs become vested and earned

Clawback Policy: We have adopted a clawback policy in compliance with the new SEC rules corresponding Nasdaq listing standards, which provides for the mandatory recovery of incentive compensation in the event of a financial restatement. In addition, our clawback policy permits the recovery of incentive compensation in the event of other misconduct not involving financial restatements, and for breaches of non-compete and other restrictive covenants

No Employment Agreements: No contracts with multi-year guaranteed compensation arrangements

Challenging Performance Objectives: Set challenging performance objectives for Annual Incentive and LTIP

Use of Independent Consultant: The Compensation Committee has retained an independent compensation consultant that performs no other consulting services for the Company and has no conflicts of interest

Limited Perquisites: Provide limited perquisites

Peer Groups: Use appropriate peer groups when establishing compensation

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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 policy applicable to all Section 16 officers as well as other associates who receive equity grants or are otherwise selected for coverage. Effective as of October 2, 2023, our Senior Leadership Clawback Policy (the “Clawback Policy”) is intended to comply with the Nasdaq listing standards adopted pursuant to Rule 10D-1 under the Exchange Act. Under the Clawback Policy, if Ulta Beauty is required to prepare an accounting restatement due to its material noncompliance with financial reporting requirements under the securities laws, we will be required to recover from current and former executive officers any excess of (1) the amount of any incentive compensation received during the three years preceding the date that Ulta Beauty is required to prepare such restatement over (2) the amount of any such incentive compensation that would have been received had it been determined based on the restated amounts, computed without regard to any taxes paid, unless the Compensation Committee determines that such recovery would be impracticable.

In addition, under the Clawback Policy, the Compensation Committee may recover incentive compensation in the event of: (a) fraud or misconduct (regardless of whether the fraud or misconduct is related to a restatement), (b) a violation of Ulta Beauty’s Code of Business Conduct, or (c) a violation of any applicable non-compete, non-solicitation or confidentiality covenants.

For purposes of the Clawback Policy, incentive compensation includes annual and long-term incentives that were paid or vested under any plan or agreement, whether paid or payable in cash and/or shares including any annual bonus, options, SARs, restricted stock, restricted stock units or performance shares (including recovery of gains realized upon the exercise or sale thereof); outstanding incentive awards that have not been earned or vested; and any other compensation that is granted, earned, or vested based wholly or in part upon the attainment of a financial reporting measure.

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 a margin account or pledging our stock as collateral for a loan.

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  Compensation Discussion and Analysis

Long-Term Incentive Granting Policy

We have a general policy of making equity grants (stock options and RSUs) for new executive officers and NEOs once our trading window opens on the third business day following the date our earnings announcements is made for each fiscal quarter. The annual LTIP grant (stock options, PBSs and RSUs) is generally made in the open trading window and at least two days after filing of our Annual Report on Form 10-K. The trading window generally remains open for 30 days (except it only remains open for 10 days following the date our earnings announcement is made for our third fiscal quarter). This timing is therefore generally consistent with when our executives and directors would be allowed to trade in our common stock under our insider trading policy. The Compensation Committee determined that granting stock compensation at this time was prudent in that it allowed for the market to process all reported public information prior to establishing the price as of the grant date. Such a practice thereby eliminates any potential manipulation regarding the timing of stock option grants. All equity grants for executives and NEOs are approved in advance by the Compensation Committee.

Benefits and Perquisites

Executives can defer compensation under our non-qualified deferred compensation plan with matching contributions equal to 100% of contributions made up to 3% of eligible deferred compensation, which is more fully described in the narrative to the 2023 Non-Qualified Deferred Compensation table below. For all eligible associates, we offer a 401(k) plan with matching contributions equal to 100% of the contributions for the first 3% of eligible salary and 50% of the contributions on the next 2% of eligible salary. In addition, we offer group health, life, accident, and disability insurance to eligible associates. Our associates are also entitled to a discount on purchases at our stores.

Change in Control and Severance Plan

The Company has an Executive Change in Control and Severance Plan (the “CIC Plan”), which provides severance and other benefits should an executive be involuntarily terminated in connection with a change in control. We adopted the CIC Plan as a market-based plan that is intended to minimize distraction to our executives by providing financial security in the event of a loss of employment following a change in control. See “Potential Payments upon Termination or Change in Control” below for additional details.

Accounting and Tax Considerations

Historically, our incentive compensation programs have been designed and administered in a manner generally intended to preserve federal income tax deductions. However, the Compensation Committee considers the tax and accounting consequences of utilizing various forms of compensation and retains the discretion to pay compensation that is not tax deductible or could have adverse accounting consequences for Ulta Beauty.

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Compensation Discussion and Analysis  

Summary Compensation Table

The following table sets forth the compensation of our NEOs for fiscal 2023, 2022, and 2021:

Non-Equity

Stock

Incentive

Stock

Option

Plan

All Other

 

Salary