Mary Dillon has been the CEO of Ulta Beauty, Inc. (NASDAQ:ULTA) since 2013. This analysis aims first to contrast CEO compensation with other large companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mary Dillon’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Ulta Beauty, Inc. has a market cap of US$14b, and is paying total annual CEO compensation of US$7.5m. (This is based on the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.1m. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$11m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Ulta Beauty has changed over time.
Is Ulta Beauty, Inc. Growing?
Ulta Beauty, Inc. has increased its earnings per share (EPS) by an average of 28% a year, over the last three years In the last year, its revenue is up 18%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Ulta Beauty, Inc. Been A Good Investment?
Boasting a total shareholder return of 40% over three years, Ulta Beauty, Inc. has done well by shareholders. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
It appears that Ulta Beauty, Inc. remunerates its CEO below most large companies. Many would consider this to indicate that the pay is modest since the business is growing. And given most shareholders are probably very happy with recent returns, you might even think that Mary Dillon deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. But it is even better if company insiders are also buying shares with their own money. So you may want to check if insiders are buying Ulta Beauty shares with their own money (free access).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.