DEF 14A of HP Inc
Filed Feb 26, 2024 · FY20230000047217-24-000013
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )
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| ☑ | Filed by the Registrant | ☐ | Filed by a Party other than the Registrant |
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| 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 Rule 14a-12 |
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HP Inc. (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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| 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 14a-6(i)(1) and 0-11 |
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Message from the Chief Executive Officer Dear Stockholders:
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| Reflecting back on our 2023 fiscal year, there are many reasons to be optimistic about the future of our company. I realize that may sound a bit counter-intuitive, given the external challenges that constrained growth across the industry. We certainly were not immune to these dynamics, with net revenue down 15 percent to $53.7 billion. But when you take a closer look at the underlying health of our business and our progress against our long-term growth priorities, you see a company on the rise. And I’m incredibly proud of the way our team performed last year in a tough environment. We innovated across Personal Systems and Print to strengthen our portfolio. We delivered mid-single-digit growth in our key growth areas, which collectively drove approximately 20 percent of our total company revenue. We demonstrated operational excellence across the business and exceeded our gross annualized structural cost savings target for the year—the combination of which enabled us to deliver strong operating margins. Simply put, it was a year of steady progress. We grew our quarterly non-GAAP operating profit and non-GAAP diluted net earnings per share sequentially throughout our 2023 fiscal year. Our second half results were significantly stronger than the first. And our Future Ready plan is enabling us to better serve our customers while driving long-term sustainable growth and value creation. Innovating in the Age of AI Looking ahead, we see significant opportunities to accelerate innovation and growth in the age of AI. Few technologies have had such a significant impact in such short period of time. The convergence of highly accessible computing power with massive amounts of data and deep learning will create new growth opportunities in our core business, help to accelerate our growth in services and subscriptions, and drive internal productivity. Our biggest opportunity is within Personal Systems. The ability to run generative AI applications on a PC will enable more personalized experiences while offering key advantages versus cloud-based AI applications, including faster speed, better security and privacy protections, and lower cost of implementation. We’re excited to launch our first AI PCs later this year, and we believe the overall PC category growth rate can double over the next three years as we drive market adoption and penetration. Creating the Future of Work In addition to AI, another topic on the mind of many customers today is hybrid work. The truth is, a lot of companies are struggling to keep employees engaged, productive and secure in a post-pandemic world. As IT departments work to overcome these challenges, it is opening the door for us to meet a wider range of customer needs than ever before. This is an enormous opportunity for HP, and we are focused on architecting our portfolio to become the hybrid work solutions leader. HP’s portfolio across computing, printing and video conferencing is uniquely positioned to win in the market. We also have an installed base of more than 350 million end points leveraging data and telemetry—and our ability to run AI applications on top of this data will make us an indispensable partner to companies looking to simplify IT management, improve productivity and security, and create better employee experiences. | | | | Our Future Ready plan is enabling us to better serve our customers while driving long-term sustainable growth and value creation.” |
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| 2024 PROXY STATEMENT | 1 |
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| Message from the Chief Executive Officer |
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| Earning the Trust of our Customers Underpinning all of this is our brand. It’s one of HP’s greatest strengths, and it has stood the test of time because it is trusted by customers and consumers around the world. This is something we will never take for granted, and our teams work hard to earn this trust every single day. This starts with security, as we are continuing to expand our endpoint security solutions to protect a growing number of devices across a growing number of locations. And it extends into our communities through the progress we are making against our Sustainable Impact agenda. More than 60 percent of our 2022 fiscal year revenue was derived from products and services that meet leading environmental standards and reduce our environmental impact―and we will share our latest progress when we release our sustainability report later this year. This work is driving innovation, helping to win deals and receiving widespread recognition—such as being named one of the “Most Sustainable Companies” by Barron’s, one of America’s “Most Just Companies” by JUST Capital and CNBC, and one of the “Best Employers for Diversity” by Forbes. Accelerating Growth Through our Future Ready Plan We are excited about the road ahead as we continue driving progress against our Future Ready plan. As you know, the plan has three key pillars. First and foremost, we are orienting our portfolio around profitable growth—both in our core businesses, as well as the attractive adjacencies we have identified. Throughout 2024, you will see us place a big emphasis on AI to unleash a new category of devices. We will launch new PC and print solutions that enable flexibility, simplicity, security, and sustainability for customers in a hybrid world. And we will shift more of our offerings to subscriptions, which will create greater value for customers and drive recurring revenue for our business. All of this supports our strategy to accelerate in our key growth areas. Collectively, we expect our Hybrid Systems, Gaming, Workforce Solutions, Consumer Subscriptions, Industrial Graphics and 3D businesses to grow to at least $15 billion in revenue by our 2026 fiscal year—with services, software and subscriptions accounting for at least 30% of this mix. Second, we are continuing to develop the operational capabilities needed to support our growth, including a more flexible and resilient supply chain. We are also driving the next phase of our digital transformation, which is being accelerated by AI to automate new processes and workflows. We are continuing to reduce our structural costs, well on our way to delivering $1.6 billion dollars in gross annual run-rate structural savings by the end of our 2025 fiscal year. And we are advancing our sustainability initiatives aligned with the targets we have set. The third pillar of our plan is focused on our people. We continue to strengthen our talent and culture to achieve our goals. We have added several strong executive leaders to support our strategy. We are investing in training and development across the company to ensure our teams have the skills needed to win in our markets. And all of this is rooted in our longtime culture of diversity, equity and inclusion―which helps us to attract and retain top talent from around the world and better understand the needs of the customers we serve. A Compelling Investment Our Future Ready plan supports a clear and compelling investment thesis. We have market-leading portfolios in the PC and Print categories. We have significant opportunities to accelerate in key growth areas where we are currently under-indexed, which will be accretive to our margins over time. We have world-class operational capabilities to deliver on our targets and drive structural cost reductions. And we are committed to a shareholder-friendly capital return strategy. All of this gives us confidence in our ability to deliver sustained revenue, non-GAAP operating profit, non-GAAP diluted net earnings per share, and free cash flow growth. While the external environment will remain volatile, and our progress may not always be linear, we are heading in the right direction and well-positioned for the future. I look forward to continuing to share our progress in the coming quarters. Thank you for the trust you have placed in HP with your investment. | | Saludos, Enrique Lores President and CEO |
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Message from the Chair To our Stockholders: We are pleased to invite you to attend HP Inc.’s annual meeting of stockholders to be held on Monday, April 22, 2024 at 2:00 p.m., Pacific Time. This year’s annual meeting will be a virtual meeting of stockholders, conducted via live audio webcast.
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| During fiscal 2023, HP delivered significant progress against our strategic priorities in the face of a challenging external environment. Our performance reinforced the Board’s confidence that our executive team will continue to execute on the initiatives we have set forth, allowing us to capitalize on opportunities when the market improves and new innovations, such as AI, come to the fore. With our market-leading PC and Print business, attractive portfolio of growth businesses and globally trusted brand, we believe HP is well positioned for the future. Importantly, not only have we executed against our business priorities, we have done so while staying true to our values. For example, we were recognized as one of the World’s Most Ethical Companies by Ethisphere for the fourth year in a row. Moreover, we continued our commitment to diversity, equity and inclusion, with women representing approximately 33% of HP’s full time executive positions globally and 45% of our U.S. hires in fiscal 2023 being ethnically diverse. This commitment is also reflected in our Board, with 58% of our Board nominees identifying as gender and/or ethnically diverse and three of our four committee chairs being women. Our Board brings a unique set of perspective, skills, and proven experience enabling us to provide effective oversight and strategic advice to HP’s management. This was most recently illustrated by the appointment of David Meline to our Board in November 2023. David brings significant experience in driving operational performance, scaling growth businesses and delivering strong financial performance across industries, which we believe will be invaluable to HP. Your vote is important. Regardless of whether you participate in the annual meeting, we hope you vote as soon as possible. You may vote by proxy online or by phone, or, if you received paper copies of the proxy materials by mail, you may also vote by mail by following the instructions on the proxy card or voting instruction card. Voting online or by phone, written proxy or voting instruction card ensures your representation at the annual meeting regardless of whether you attend the virtual meeting. For details about how to attend the meeting online, submit questions before or during the meeting, and information on the business to be conducted at the annual meeting, please refer to the accompanying Notice of Annual Meeting and Proxy Statement. Thank you for your ongoing support of, and continued interest in, HP Inc. Sincerely, Chip Bergh Chair of the Board | | | | With our market-leading PC and Print business, attractive portfolio of growth businesses and globally trusted brand, we believe HP is well positioned for the future.” |
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| 2024 PROXY STATEMENT | 3 |
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Notice of Annual Meeting of Stockholders This notice of annual meeting of HP’s stockholders (the “annual meeting”), proxy statement and form of proxy for HP Inc. (“HP” or the “Company”) are being distributed and made available on or about February 26, 2024.
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| | Time and Date 2:00 p.m., Pacific Time, on Monday, April 22, 2024 | | Place Online at www.virtualshareholdermeeting.com/HPQ2024 | | Record Date February 22, 2024 |
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Items of Business
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| Board Proposals | | Board Recommendation | | Page | | 1 | To elect the 12 Directors named in this proxy statement | | FOR each director nominee | 14 | | 2 | To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 31, 2024 | | FOR | 47 | | 3 | To approve, on an advisory basis, the Company’s named executive officer compensation (“say on pay” vote) | | FOR | 49 | | 4 | To approve the Fourth Amended and Restated HP Inc. 2004 Stock Incentive Plan | | FOR | 83 | | 5 | To approve an amendment to the Company’s Certificate of Incorporation to limit the liability of officers as permitted by law. | | FOR | 90 | | Stockholder Proposal | | | | | | 6 | To consider and vote on a stockholder proposal described in this proxy statement, if properly presented at the meeting | | AGAINST | 94 | | Such other business as may properly come before the meeting | | | | |
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| Voting | Virtual Meeting Admission Stockholders of record as of February 22, 2024, will be able to participate in the annual meeting by visiting our annual meeting website at www.virtualshareholdermeeting.com/HPQ2024. To participate in the annual meeting, you will need the 16-digit control number included on your notice of Internet availability of the proxy materials, proxy card or on the instructions that accompanied your proxy materials. If you have any questions about your control number, please contact the bank, broker, or other nominee that holds your shares. The annual meeting will begin promptly at 2:00 p.m., Pacific Time. Online check-in will begin at 1:30 p.m., Pacific Time, and you should allow ample time for the online check-in procedures. Annual Meeting Website The online format used by HP Inc. for the annual meeting also allows us to communicate more effectively with you. Stockholders can submit questions in advance of the annual meeting, by visiting our annual meeting website at www.proxyvote.com/HP. Stockholders can also access copies of our proxy statement and annual report at the annual meeting website. Adjournments and Postponements Any action on the items of business described above may be considered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed. By order of the Board of Directors, Rick Hansen SVP, Deputy General Counsel, Corporate, and Corporate Secretary | | Internet www.proxyvote.com/HP prior to the meeting Telephone 1-800-690-6903 During the meeting please visit www.virtualshareholdermeeting.com/ HPQ2024 Mail You can vote by mail by requesting a paper copy of the materials, which will include a proxy card. Return the card to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | | | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to Be Held on April 22, 2024. The definitive proxy statement and HP Inc.’s 2023 Annual Report are available electronically at www.proxyvote.com/HP. | |
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| Notice of Annual Meeting of Stockholders |
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Your vote is very important. Regardless of whether you plan to virtually attend the annual meeting, we hope you will vote as soon as possible. You may vote your shares over the Internet or via a toll-free telephone number. If you received a paper copy of a proxy or voting instruction card by mail, you may submit your proxy or voting instruction card for the annual meeting by completing, signing, dating and returning your proxy or voting instruction card in the pre-addressed envelope provided. Stockholders of record and beneficial owners will be able to vote their shares electronically at the annual meeting (other than shares held through the HP Inc. 401(k) Plan, which must be voted prior to the meeting). For specific instructions on how to vote your shares, please refer to the section entitled “Questions and Answers—Voting Information” beginning on page 99 of the proxy statement.
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| 2024 PROXY STATEMENT | 5 |
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Proxy Statement Summary The following is a summary of certain key disclosures in our proxy statement. This is only a summary, and it may not contain all the information that is important to you. For more complete information, please review the proxy statement as well as our 2023 Annual Report on Form 10-K. References to “HP,” “the Company,” “we,” “us” or “our” refer to HP Inc.
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| Item 1 | Election of Directors •11 of our 12 Director nominees are independent, including six women and four director nominees who identify as racially/ethnically diverse. •Our Board is led by an independent Chair. •Key information regarding all 12 of our Board nominees is summarized in the table below. | | The Board recommends a vote FOR each Director nominee | | | | | Further information beginning on page 14. |
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| Item 2 | Ratification of Independent Registered Public Accounting Firm •The Audit Committee of the Board has selected Ernst & Young LLP to act as HP’s independent registered public accounting firm for the fiscal year ending October 31, 2024 and seeks ratification of the selection. | | The Board recommends a vote FOR this Proposal | | | | | Further information beginning on page 47. |
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| Item 3 | Advisory Vote to Approve Named Executive Officer Compensation (“Say on Pay” Vote) •Our Board and the HR and Compensation (“HRC”) Committee are committed to an executive compensation program that aligns the interests of our executives with those of our stockholders. To fulfill this mission, we have a pay-for-performance philosophy that drives decisions regarding executive compensation. •Our compensation programs have been structured to balance near-term results with long-term success, mitigate risks, and enable us to attract, retain, focus, and reward our executive team for delivering stockholder value. | | The Board recommends a vote FOR this Proposal | | | | | Further information, including an overview of the compensation of our Named Executive Officers (“NEOs”), beginning on page 49. |
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| Item 4 | Approval of Fourth Amended and Restated HP Inc. 2004 Stock Incentive Plan •The approval of the Amended 2004 Plan would make an additional 45,700,000 shares of common stock available for issuance pursuant to share-based compensation awards granted under the plan. •The Board is asking stockholders to approve the Amended 2004 Plan so that we may continue to use stock options, restricted stock, restricted stock units (“RSUs”) and other share-based compensation awards to attract and retain high-quality employees whose interests are aligned with those of our stockholders. | | The Board recommends a vote FOR this Proposal | | | | | Further information beginning on page 83. |
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| Item 5 | Approval of Amendment to Certificate of Incorporation to Limit the Liability of Officers as Permitted by Law •The approval of an amendment to our Certificate of Incorporation to limit the liability of officers as permitted by a recent amendment to the Delaware General Corporation Law. •The Board is asking stockholders to approve the amendment to our Certificate of Incorporation for the reasons described below under Proposal 5. | | The Board recommends a vote FOR this Proposal | | | | | Further information beginning on page 90. |
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| Item 6 | Stockholder Proposal: Stockholder Ratification of Termination Pay •This stockholder proposal requests that HP’s Board adopt a policy to seek stockholder approval of any senior managers’ new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus. | | The Board recommends a vote AGAINST this Proposal | | | | | Further information beginning on page 94. |
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| 2024 PROXY STATEMENT | 7 |
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Business Highlights HP Inc. is a leading global provider of personal computing and other digital access devices, imaging and printing products, and related technologies, solutions, and services. We sell to individual consumers, small- and medium-sized businesses and large enterprises, including customers in the government, health, and education sectors. We have three reportable segments: Personal Systems, Printing and Corporate Investments. The Personal Systems segment offers commercial and consumer desktops and notebooks, workstations, thin clients, commercial mobility devices, retail point of sale systems, displays, hybrid systems (including video conferencing cameras and solutions, headsets, voice and related software capabilities), software, support and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions and services. Corporate Investments include certain business incubation and investment projects. For our overall strategy, our priorities are strengthening the core, accelerating our growth businesses, driving digital transformation and driving long-term value creation. We are focused on advancing our leadership in our core personal systems and printing markets, while continuing to modernize these businesses to excel in the hybrid world. We plan to invest in additional growth areas where our brand and IP provide a competitive advantage to disrupt industries. We strive to transform how we work and to become a more digitally powered and data enabled company, and significantly reduce structural costs. We have an incredible channel network, passionate employees and a culture committed to being Future Ready.
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| FY23 performance highlights | | | Net revenue | $4.6 billion non-GAAP operating profit1 | | By key segment and business unit | | | | | | | $3.1 billion non-GAAP free cash flow1 |
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| Scale and Reach |
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| (1)Non-GAAP operating profit and non-GAAP free cash flow are non-GAAP financial measures. Please refer to “Reconciliation of GAAP Measures to Non-GAAP Measures” on page 106 for a description and reconciliation of these non-GAAP financial measures relative to reported GAAP financial measures. (2)Based on CQ3’23 IDC Quarterly Tracker. (3)As of October 31, 2023. | | | | | | | Market leader #1 In PCs (ex-China) and Print2 | | | | | | Innovation & IP 23k+ Patents | | | | | | Scale 170+/58k Countries/Employees3 |
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Key Growth Areas
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| | | | | Gaming | Hybrid Systems | Consumer Subscriptions |
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| | | | | Industrial Graphics | Workforce Solutions | 3D & Personalization |
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Future Ready Enabling increased investment in our key growth areas to drive long term value creation by the end of fiscal 2025
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| Digital Transformation | | Portfolio Optimization | | Operational Excellence |
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| 2024 PROXY STATEMENT | 9 |
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Sustainable Impact At HP, we believe how we do things is just as important as what we do. Through our Sustainable Impact program, we incorporate efforts to tackle key issues in Climate, Human Rights, and Digital Equity. Our strategy
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| | | | | Climate action Taking urgent and decisive action with an aim to achieve net zero carbon emissions across our entire value chain, give back more to forests than we take, and innovate our products and services for a more circular economy. | Human rights Building a culture of equity and empowerment within HP and beyond, where diversity is sought out and celebrated, and where universal human rights are understood and respected. | Digital equity Accelerating equitable access to education, healthcare, and economic opportunity for those who are traditionally excluded so they can participate and thrive in a digital economy. | | | | |
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| For more information about our Sustainable Impact agenda, and to reach our annual Sustainable Impact Report, please see the Sustainability section of our website at https://www.hp.com/us-en/hp-information/sustainable-impact.html. The content of our website is not incorporated by reference into this proxy statement or in any other report or document we file with the Securities and Exchange Commission (the “SEC”), and any references to our website are intended to be inactive textual references only. Our Sustainable Impact Report includes disclosures aligned with the following ESG frameworks: Sustainability Accounting Standards Board (SASB), Task Force on Climate-Related Financial Disclosure (TCFD), Global Reporting Initiative (GRI), and the World Economic Forum International Business Council (WEF IBC). The Board and its committees actively oversee HP’s Sustainable Impact, strategy and related risks. For information regarding the Board’s role in overseeing HP’s Sustainable Impact, please refer to “Spotlight on Board Oversight of ESG” on page 37. |
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Recognition
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| | | | | Ranked 3rd in America for environmental, social and governance performance | “A List” designation for its score in Climate and Water and remains the only company in the technology sector to report on its forest rating | Named one of the 100 Most Sustainable Corporations in the World for the 8th year in a row | | | | | | Recognized as one of the World’s Most Ethical Companies for the 4th year in a row | Recognized for the 6th year in a row (3rd year for Sustained Excellence) | Member of the DJSI World and DJSI North America Indices in 2023, ranking 1st in the industry and listed on the world index for the 12th year in a row | | | | | | Received a score of 100% on the Human Rights Campaign 2022 Corporate Equality Index for LGBTQ Equality | Included in the top 10 companies by revenue for clean energy for the 5th year in a row | Included in the CNBC JUST 100 list for the sixth consecutive year, ranking first in the technology hardware category |
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| | | | HP earned a Platinum Recognition level from EcoVadis for the 14th consecutive year that HP has been recognized for its sustainability practices | Named one of the Best Top Hispanic Employers |
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* “World’s Most Ethical Companies” and “Ethisphere” names and marks are registered trademarks of Ethisphere LLC.
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| 2024 PROXY STATEMENT | 11 |
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Participating in Our Annual Meeting HP’s current virtual format allows stockholders to submit questions and comments in our stockholder forum both before and during the meeting. We respond to all stockholder submissions received through the forum in writing on our investor relations website. The virtual meeting format allows our stockholders to engage with us no matter where they live in the world and is accessible and available on any internet-connected device, be it a phone, a tablet, or a computer. We are able to reach a base of stockholders that is broader than just those who can travel to an in-person meeting. The virtual meeting gives us the opportunity to respond in thoughtful detail to every question our stockholders may have, rather than just the limited number of questions stockholders are able to ask at in-person meetings, which are answered without an opportunity for further information gathering or meaningful reflection. All of these benefits of a virtual meeting allow all of our stockholders to engage with us. Stockholders can submit questions in advance of the annual meeting by visiting our annual meeting website at www.proxyvote.com/HP. All questions received, both during and prior to the meeting, are presented as submitted, uncensored and unedited except for certain personal details for data protection purposes. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition. Please visit our HP investor events page at https://investor.hp.com to read previously answered questions.
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| Please join us for our Virtual Annual Meeting at www.virtualshareholder meeting.com/HPQ2024. | To participate in the annual meeting, you will need the 16-digit control number included on your notice of Internet availability of the proxy materials, on your proxy card or on the instructions that accompanied your proxy materials. | |
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We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call:
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| 1-855-449-0991 (Toll-free) 1-720-378-5962 (Toll line) | |
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Table of Contents
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| Corporate governance and board of directors | | | | | 14 | | | Board Proposal No. 1 Election of Directors | 14 | | About Our Corporate Governance | 33 | | | Vote Required | 14 | | Stockholder Engagement | 41 | | | Who We Are | 14 | | Related-Person Transactions Policies and Procedures | 42 | | | How We Are Selected | 26 | | How We Are Compensated | 44 | | | How We Are Organized | 28 | | | | | Audit matters | | | | | 47 | | | Board Proposal No. 2 Ratification of Independent Registered Public Accounting Firm | 47 | | Principal Accountant Fees and Services | 48 | | | Vote Required | 47 | | Pre-Approval of Audit and Non-Audit Services Policy | 48 | | | Report of the Audit Committee of the Board of Directors | 47 | | | | | Executive compensation | | | | | 49 | | | Board Proposal No. 3 Advisory Vote to Approve Named Executive Officer Compensation | 49 | | Board Proposal No. 4 Approval of the Fourth Amended and Restated HP Inc. 2004 Stock Incentive Plan | 83 | | | Vote Required | 49 | | Vote Required | 83 | | | Compensation Discussion and Analysis | 50 | | | | | | HR and Compensation Committee Report on Executive Compensation | 66 | | | | | | Executive Compensation Tables | 67 | | | | | Amendment to Certificate of Incorporation | | | | | 90 | | | Board Proposal No. 5 Approval of Amendment to Certificate of Incorporation to limit the liability of officers as permitted by law | | | Summary of Amendment | 90 | | | | 90 | | Reasons for Amendment | 91 | | | Vote Required | 90 | | Effectiveness of Amendment | 91 | | Ownership of our stock | | | | | 92 | | | Common Stock Ownership of Certain Beneficial Owners and Management | 92 | | | | | Stockholder proposal | | | | | 94 | | | Stockholder Proposal: Stockholder Ratification of Termination Pay | 94 | | Board Response and Recommendation | 95 | | | Proposal 6 – Shareholder Opportunity to Vote on Excessive Golden Parachutes | 94 | | Vote Required | 96 | | Other matters | | | | | 97 | | | Questions and Answers | 97 | | | | | Forward-Looking Statements | | | | | 105 | | Reconciliation of GAAP Measures to Non-GAAP Measures | | | | | 106 | | Annex A: Fourth Amended and Restated HP Inc. 2004 Stock Incentive Plan | | | | | 107 |
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| 2024 PROXY STATEMENT | 13 |
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Corporate Governance and Board of Directors
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| Board proposal no. 1 | | | Election of directors | | | | The board recommends a vote for each director nominee. |
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The Board of Directors of HP Inc. (the “Board”) currently consists of 14 members (the “Directors”). On the recommendation of the Nominating, Governance and Social Responsibility (“NGSR”) Committee, the Board has nominated the 12 persons named below for election as Directors this year, each to serve for a one-year term and until the Director’s successor is elected and qualified or, if earlier, until his or her resignation or removal. Mr. Banerji and Dr. Suresh are not standing for re-election at this annual meeting. As a result, Mr. Banerji and Dr. Suresh will each step down from the Board and the size of the Board will be reduced to 12 directors, effective at the annual meeting. Vote Required Each Director nominee who receives more “FOR” votes than “AGAINST” votes representing shares of HP common stock present in person or represented by proxy and entitled to be voted at the annual meeting will be elected. If you sign your proxy card but do not give instructions with respect to voting for Directors, your shares will be voted by Enrique Lores, Julie Jacobs and Rick Hansen (or any one of them), as proxy holders, FOR the election of all 12 Board nominees. If you wish to give specific instructions with respect to voting for Directors, you may do so by indicating your instructions when you vote via Internet or by telephone, or on your proxy card or voting instruction card. Director Election Voting Standard and Resignation Policy We have adopted a policy whereby any incumbent Director nominee who receives a greater number of votes “AGAINST” his or her election than votes “FOR” such election will tender his or her offer of resignation for consideration by the NGSR Committee. The NGSR Committee will then make a recommendation to the Board regarding the appropriate response to such an offer of resignation. Who We Are Overview Our Directors bring a diverse mix of highly relevant and complementary skills, experiences and backgrounds, which facilitates strong oversight of HP’s management and HP’s strategy. In November 2023, David Meline, who has served as Chief Financial Officer at two global companies in the biotechnology and pharmaceutical industries, joined the Board. Mr. Meline brings to the Board significant experience driving operational performance, scaling growth businesses and delivering strong financial performance across industries, which the Board believes will be valuable as HP seeks to scale key growth areas of its business.
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Our Director Nominees
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| Name and principal occupation | | Age | HP director since | Committees | Other current public company/public registrant boards | | | Aida M. Alvarez Independent Consultant; Former Administrator, U.S. Small Business Administration & Presidential Cabinet Member | 74 | 2016 | | Stride, Inc. Fastly, Inc. Bill.com Holdings, Inc. | | | Robert R. Bennett Independent Managing Director, Hilltop Investments, LLC | 65 | 2013 | | Liberty Media Corporation | | | Chip Bergh Independent Former President and Chief Executive Officer, Levi Strauss & Co. | 66 | 2015 | | Levi Strauss & Co. | | | Bruce Broussard Independent President and Chief Executive Officer, Humana Inc. | 61 | 2021 | | Humana Inc. | | | Stacy Brown-Philpot Independent Founder and Managing Director, Cherryrock Capital | 48 | 2015 | | Nordstrom, Inc. | | | Stephanie A. Burns Independent Former Chief Executive Officer and Chairman, Dow Corning | 69 | 2015 | | Corning Incorporated Kellanova Company | | | Mary Anne Citrino Independent Senior Advisor and former Senior Managing Director, Blackstone | 64 | 2015 | | Alcoa Corporation | | | Richard L. Clemmer Independent Chairman, Privafy, Inc. | 72 | 2020 | | Aptiv PLC Seagate Technology Holdings plc | | | Enrique Lores President and Chief Executive Officer, HP Inc. | 58 | 2019 | | PayPal Holdings, Inc. | | | David Meline Independent Former Chief Financial Officer, Moderna Inc. | 66 | 2023 | | ABB Ltd. Pacific Biosciences of California, Inc. | | | Judith “Jami” Miscik Independent Senior Advisor, Lazard Ltd. | 65 | 2021 | | General Motors Company Morgan Stanley | | | Kim K.W. Rucker Independent Former Executive Vice President, General Counsel and Secretary of Andeavor | 57 | 2021 | | Celanese Corporation Lennox International Inc. Marathon Petroleum Corporation |
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Committees
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| | Audit Committee | | HR and Compensation Committee | | Chair | | | Finance, Investment and Technology Committee | | Nominating, Governance and Social Responsibility Committee | | |
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| 2024 PROXY STATEMENT | 15 |
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Snapshot of Director Nominees
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| Board Refreshment | | Gender | | Independence | | | 5 | New directors since 2019 | 3 out of 4 | committee chairs are women | 92% | of the Board is Independent | | | | | | | |
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| |
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| Tenure | | | | 5.6 years is the average tenure | | | | 0-3 years | | 4 | | 4-7 years | | 2 | | 8-12 years | | 6 | | Age | | | | 64 years old is the average age | | | | 48-60 | | 3 | | 61-65 | | 4 | | 66-74 | | 5 |
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| Skills and Qualification | | | | | | Current or Former CEO | | Human Capital Management | | | Business and Management | | International Business and Affairs | | | Customer Experience | | Operations | | | Disruptive Innovation | | Risk Management | | | Environmental and Social Responsibility | | Strategic Transactions; M&A | | | Finance and Capital Allocation | | Strategy | | | Government and Government Affairs | | Technology, Cybersecurity and Science |
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| 16 | |
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Skills, Experience and Attributes of Our Director Nominees
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| | | | | | | | | | | | | | | Current or former CEO | | | | | | | | | | | | | | Business and management HP requires a Board well-versed in navigating complexity and capitalizing on business opportunities to further our innovation and growth. | | | | | | | | | | | | | | Customer experience HP’s customers are the foundation of our mission – we continually seek to better serve our customer base with products and solutions that inspire and innovate. | | | | | | | | | | | | | | Disruptive innovation We continually seek to reinvent the Print and PC industries to deliver amazing innovative experiences to our customers – having disruptive innovators on our Board helps inform our strategy. | | | | | | | | | | | | | | Environmental and social responsibility Experience in environmental and social responsibility related issues and topics strengthens the Board’s oversight of HP’s policies and programs relating to these issues and reinforces HP’s commitment to sustainability and social responsibility. | | | | | | | | | | | | | | Finance and capital allocation It is essential that we have Directors with strong financial acumen and experience to provide sound oversight and guide our investment strategies and capital allocation. | | | | | | | | | | | | | | Government and government affairs Government and government affairs experience offers us insight into the regulatory environment of the many jurisdictions in which we operate, their legislative and administrative priorities, and the potential implications for our business. | | | | | | | | | | | | | | Human capital management Experience in talent development, managing compensation, overseeing inclusion and diversity efforts, and establishing culture strengthens the Board’s oversight of HP’s key human capital management strategies and programs. | | | | | | | | | | | | | | International business and affairs HP operates in over 170 countries worldwide, making international business experience a vital perspective on our Board and enabling us to succeed in the many markets in which we operate. | | | | | | | | | | | | | | Operations HP operates one of the world’s largest supply chains – we benefit from Directors who have successfully led complex operations and can help us to optimize our business model. | | | | | | | | | | | | | | Risk management Experience identifying, assessing and managing a broad spectrum of risks enables directors to effectively oversee the most significant risks facing HP. | | | | | | | | | | | | | | Strategic transactions; M&A HP benefits from having Directors with experience leading organizations through significant strategic transactions, including mergers, acquisitions and divestitures. | | | | | | | | | | | | | | Strategy The dynamic and fast-moving markets in which HP operates globally require a Board with strong strategic insights gained through multi-faceted and challenging prior experiences. | | | | | | | | | | | | | | Technology, cybersecurity and science With our deep history of innovation and our reliance on cutting edge R&D, science and engineering, and the importance of cybersecurity to our business, we know that backgrounds in technology and user experience, cybersecurity policy, governance and risk management, and science and design, add valuable and vital components to our Board dialogue. | | | | | | | | | | | | | | Independent | | | | | | | | | | | | | | Women | | | | | | | | | | | | | | Racially/Ethnically diverse | | | | | | | | | | | | | | Tenure (including Hewlett-Packard Company) | 8 | 11 | 8 | 3 | 8 | 8 | 8 | 4 | 4 | 0 | 3 | 2 |
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| 2024 PROXY STATEMENT | 17 |
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Biographies of Director Nominees The biographies describe each Director nominee’s qualifications and relevant experience. The biographies include key qualifications, skills, and attributes most relevant to the decision to nominate candidates to serve on the Board.
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| Current role Consultant Current public company boards •HP •Stride, Inc. •Fastly, Inc. •Bill.com Holdings, Inc. Prior public company boards •Wal-Mart Stores, Inc. •Opportun Financial Corporation •UnitedHealth Group Inc. | Aida M. Alvarez Independent | | | | Age: 74 | HP Board Committees: HR and Compensation, Nominating, Governance and Social Responsibility Committee | | | Director since: 2016 | | | | Qualifications: Prior Business and Other Experience •Founding Chair, Latino Community Foundation (since 2003) •Administrator, U.S. Small Business Administration (1997–2001) •Director, Office of Federal Housing Enterprise Oversight (1993–1997) •Vice President, First Boston Corporation and Bear Stearns & Co. (prior to 1993) Other key qualifications The Honorable Aida Alvarez brings to the Board a wealth of expertise in media, public affairs, finance, and government. She led important financial and government agencies and served in the Cabinet of U.S. President William J. Clinton as Administrator of the U.S. Small Business Administration. She has also been a public finance executive, has chaired a prominent philanthropic organization and was an award-winning journalist. The Board also benefits from Ms. Alvarez’s knowledge of investment banking and finance. Skills Business and Management, Environmental and Social Responsibility, Finance and Capital Allocation, Government and Government Affairs, Strategy | |
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| 18 | |
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| Current role Managing Director, Hilltop Investments, LLC, a private investment company (since 2005) Current public company boards •HP •Liberty Media Corporation Prior public company boards •Warner Bros. Discovery, Inc. •Sprint Corporation •Demand Media, Inc. •Discovery Holding Company •Liberty Interactive Corporation •Sprint Nextel Corporation | Robert R. Bennett Independent | | | | Age: 65 | HP Board Committees: Audit, Finance, Investment and Technology Committee | | | Director since: 2013 | | | | Qualifications: Prior Business and Other Experience •President, Discovery Holding Company (2005–2008) •President and Chief Executive Officer, Liberty Media Corporation (1997–2005) •Served in a variety of other executive roles at Liberty Media between 1990 and 1997, including as its principal financial officer from 1991 until 1997 Other key qualifications Mr. Bennett brings to the Board in-depth knowledge of the media and telecommunications industry and his knowledge of the capital markets and other financial and operational matters. Additionally, as a result of his positions at Liberty Media, Mr. Bennett brings experience leading organizations through significant strategic transactions, including acquisitions, divestitures and integration. Mr. Bennett also has an in-depth understanding of finance and has held various financial management positions during his career including serving as CFO of a public company. Skills Business and Management, Finance and Capital Allocation, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| Current role Former President and Chief Executive Officer of Levi Strauss & Co., an apparel/retail company (September 2011 - January 2024) Current public company boards •HP •Levi Strauss & Co. Prior public company boards •VF Corporation | Chip Bergh Chair, Independent | | | | Age: 66 | HP Board Committees: HR and Compensation, Nominating, Governance and Social Responsibility Committee | | | Director since: 2015 Chair since: 2017 | | | | Qualifications: Prior Business and Other Experience •Group President, Global Male Grooming, Procter & Gamble Co. (2009–September 2011) •In 28 years at Procter & Gamble, Mr. Bergh served in a variety of executive roles, including managing business in multiple regions worldwide Other key qualifications Mr. Bergh brings to the Board extensive experience in executive leadership at large global companies and international business management. From his more than 40 years at Levi Strauss and Procter & Gamble, Mr. Bergh has a strong operational and strategic background with significant experience in brand management. He also brings public company governance experience as a board member and committee member of other public and private companies. Skills Business and Management, Customer Experience, Environmental and Social Responsibility, Finance and Capital Allocation, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| 2024 PROXY STATEMENT | 19 |
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| Current role President, Chief Executive Officer, and Director of Humana Inc., a healthcare company (CEO since 2013) Current public company boards •HP •Humana Inc. Prior public company boards •KeyCorp | Bruce Broussard Independent | | | | Age: 61 | HP Board Committees: Nominating, Governance and Social Responsibility, HR and Compensation Committee | | | Director since: 2021 | | | | Qualifications: Prior Business and Other Experience •Chief Executive Officer, McKesson Specialty/US Oncology, Inc. (January 2008–December 2011) •In 11 years at US Oncology, Inc., which was acquired by McKesson in December 2010, served in a number of senior executive roles, including Chief Financial Officer, President, Chief Executive Officer and Chairman of the Board Other key qualifications Mr. Broussard brings to the Board extensive experience in executive leadership at large global companies and international business management. From his experience at Humana and US Oncology, Mr. Broussard has significant expertise in the healthcare and health technology sectors. He also brings public company governance experience as a board member and committee member of other public companies. Skills Business and Management, Customer Experience, Environmental and Social Responsibility, Finance and Capital Allocation, Government and Government Affairs, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| Current role Founder and Managing Director; Cherryrock Capital (since 2023) Current public company boards •HP •Nordstrom, Inc. Prior public company boards •None | Stacy Brown-Philpot Independent | | | | Age: 48 | HP Board Committees: Audit, Nominating, Governance and Social Responsibility Committee | | | Director since: 2015 | | | | Qualifications: Prior Business and Other Experience •Member of Investment Committee, Softbank Opportunity Fund (June 2020-June 2023) •Chief Executive Officer, TaskRabbit, an online labor interface company (April 2016–August 2020) •Chief Operating Officer, TaskRabbit (January 2013–April 2016) •Entrepreneur-in-Residence, Google Ventures, the venture capital investment arm of Google, Inc., a technology company (“Google”) (May 2012–December 2012) •Senior Director of Global Consumer Operations, Google (2010–May 2012) •Prior to 2010, Ms. Brown-Philpot served in a variety of Director-level positions at Google •Prior to joining Google in 2003, Ms. Brown-Philpot served as a senior analyst and senior associate at the financial firms Goldman Sachs and PwC Other key qualifications Ms. Brown-Philpot brings to the Board extensive operational, analytical, financial, and strategic experience. In addition to her role as CEO of TaskRabbit from 2016 to 2020, Ms. Brown-Philpot’s decade of experience leading various operations at Google and her prior financial experience from her roles at Goldman Sachs and PwC provide unique operational and financial expertise to the Board. Skills Business and Management, Customer Experience, Disruptive Innovation, Environmental and Social Responsibility, Finance and Capital Allocation, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategy, Technology, Cybersecurity and Science | |
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| 20 | |
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| Current role Director Current public company boards •HP •Corning Incorporated •Kellanova Company Prior public company boards •GlaxoSmithKline plc •Manpower, Inc. | Stephanie A. Burns Independent | | | | Age: 69 | HP Board Committees: Finance, Investment and Technology, HR and Compensation Committee (Chair) | | | Director since: 2015 | | | | Qualifications: Prior Business and Other Experience •Chief Executive Officer, Dow Corning Corp., a silicon-based manufacturing company (2004–May 2011) •President, Dow Corning (2003–November 2010) •Executive Vice President, Dow Corning (2000–2003) Other key qualifications Dr. Burns has more than 30 years of global innovation and business leadership experience and brings significant expertise in scientific research, product development, issues management, science and technology leadership, and business management to the Board. Her leadership experience includes growing Dow Corning Corporation through materials innovation, investing in solar applications and expanding into emerging markets. Dr. Burns also brings public company governance experience to the Board as a member of boards and board committees of other public companies. Skills Business and Management, Customer Experience, Environmental and Social Responsibility, Finance and Capital Allocation, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| Current role Senior Advisor and former Senior Managing Director, Blackstone, an investment firm (since 2004) Current public company boards •HP •Alcoa Corporation Prior public company boards •Health Net, Inc. •Dollar Tree Inc. •Barclays •Ahold Delhaize | Mary Anne Citrino Independent | | | | Age: 64 | HP Board Committees: Audit (Chair), Finance, Investment and Technology Committee | | | Director since: 2015 | | | | Qualifications: Prior Business and Other Experience •Managing Director, Global Head of Consumer Products Investment Banking Group, and Co-head of Health Care Services Investment Banking, Morgan Stanley (1986–2004) Other key qualifications The Board benefits from Ms. Citrino’s extensive experience advising a broad range of clients in the consumer products industry through her roles at Blackstone. In addition, Ms. Citrino’s more than 30-year career as an investment banker provides the Board with substantial knowledge regarding business operations and strategy, as well as valuable financial and investment expertise. She also brings public company governance experience as a member of boards and board committees of other public companies. Skills Business and Management, Finance and Capital Allocation, International Business and Affairs, Risk Management, Strategic Transactions; M&A, Strategy | |
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| 2024 PROXY STATEMENT | 21 |
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| Current role Chairman, Privafy, Inc. (since January 2019) Current public company boards •HP •Aptiv PLC •Seagate Technology Holdings plc Prior public company boards •NCR Corporation •NXP Semiconductors N.V. •i2 Technologies, Inc. | Richard L. Clemmer Independent | | | | Age: 72 | HP Board Committees: Audit, Finance, Investment and Technology Committee (Chair) | | | Director since: 2020 | | | | Qualifications: Prior Business and Other Experience •Chief Executive Officer and Executive Director, NXP Semiconductors N.V., a semiconductor company (January 2009–May 2020) •Senior Advisor, Kohlberg Kravis Roberts & Co. (May 2007–December 2008) •President and Chief Executive Officer, Agere Systems Inc. (October 2005–April 2007) Other key qualifications Mr. Clemmer brings to the Board significant leadership experience in the high tech industry, including experience with semiconductor, storage, e-Commerce, and software companies, and brings valuable experience leading organizations through strategic transactions. In his roles at NXP Semiconductors and Agere Systems, Mr. Clemmer oversaw the successful execution of a number of key strategic transactions, including the acquisition and integration of several companies and business units. Skills Business and Management, Customer Experience, Disruptive Innovation, Finance and Capital Allocation, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| Current role President and Chief Executive Officer, HP (since November 2019) Current public company boards •HP •PayPal Holdings, Inc. Prior public company boards •None | Enrique Lores President, Chief Executive Officer and Director | | | | Age: 58 | HP Board Committees: N/A | | | Director since: 2019 | | | | Qualifications: Prior Business and Other Experience •President, Imaging and Printing Solutions, HP Inc. (November 2015–October 2019) •Separation Leader, Hewlett-Packard Company (2014–October 2015) •Senior Vice President & General Manager, Business Personal Systems, Hewlett-Packard Company (2013–2014) •Senior Vice President, Worldwide Customer Support & Services, Hewlett-Packard Company (2011–2013) •Senior Vice President, Worldwide Sales and Solutions Partner Organization, Hewlett-Packard Company (2008–2011) •Vice President & General Manager, Large Format Printing, Hewlett-Packard Company (2003–2008) •Vice President, Imaging & Printing Group, EMEA, Hewlett-Packard Company (2001–2003) •Experience in a variety of roles at Hewlett-Packard Company (1989–2001) Other key qualifications Mr. Lores’ international business and leadership experience, and his service in multiple facets of the HP business worldwide, provide the Board with an enhanced global perspective. Mr. Lores’ more than 30 years of experience in the information and technology industry with HP, and his position as HP’s Chief Executive Officer, provide the Board with valuable industry insight and expertise. Skills Business and Management, Customer Experience, Disruptive Innovation, Environmental and Social Responsibility, Finance and Capital Allocation, Government and Government Affairs, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| 22 | |
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| Current role Director Current public company boards •HP •ABB Ltd. •Pacific Biosciences of California, Inc. Prior public company boards •None | David Meline Independent | | | | Age: 66 | HP Board Committees: Audit, Finance, Investment and Technology Committee | | | Director since: 2023 | | | | Qualifications: Prior Business and Other Experience •CFO, Moderna Inc., a biotechnology and pharmaceutical company (June 2020–September 2022) •CFO and Executive Vice President, Amgen Inc., a biotechnology company (July 2014– December 2019) •CFO and Senior Vice President (2011–2014) and Vice President, Corporate Controller and Chief Accounting Officer (2008–2011), 3M Company •In 20 years at General Motors, Mr. Meline served in a variety of finance and management roles Other key qualifications Mr. Meline brings to the Board deep background and breadth of experience in finance, capital allocation, manufacturing and technology. From his prior CFO roles at three major global companies, Mr. Meline has experience driving operational performance, scaling growth businesses and delivering strong financial performance across industries. Mr. Meline also provides the Board with substantial knowledge in the biotechnology and pharmaceutical sectors. Skills Business and Management, Customer Experience, Disruptive Innovation, Environmental and Social Responsibility, Finance and Capital Allocation, Government and Government Affairs, Human Capital Management, International Business and Affairs, Operations, Risk Management, Strategic Transactions; M&A, Strategy, Technology, Cybersecurity and Science | |
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| Current role Senior Advisor, Lazard Geopolitical Advisory Group (since 2022) Current public company boards •HP •General Motors Company •Morgan Stanley Prior public company boards •EMC Corporation •Pivotal Software, Inc. | Judith “Jami” Miscik Independent | | | | Age: 65 | HP Board Committees: Audit, Nominating, Governance and Social Responsibility Committee | | | Director since: 2021 | | | | Qualifications: Prior Business and Other Experience •CEO and Vice Chairman (2015-2022) and President (2009-2015), Kissinger Associates, Inc. •Global Head of Sovereign Risk, Lehman Brothers (2005–2008) •Distinguished 22-year career at the Central Intelligence Agency, including serving as the Deputy Director for Intelligence from 2002 to 2005 •Director for Intelligence Programs, National Security Council (1995–1996) Other key qualifications Ms. Miscik brings to the Board significant experience in international affairs, intelligence and risk assessment and a vast understanding of the geopolitical and macroeconomic landscapes gained from her roles in the public and private sectors. In her role as CEO of Kissinger Associates, an international geopolitical consulting firm, Ms. Miscik developed strategies for clients operating in overseas environments and advises on geopolitical and macroeconomic risks. Prior to entering the private sector, Ms. Miscik built a distinguished 22-year career in intelligence, ultimately serving as the Deputy Director for Intelligence at the Central Intelligence Agency. Skills Business and Management, Finance and Capital Allocation, Government and Government Affairs, International Business and Affairs, Operations, Risk Management, Strategy, Technology, Cybersecurity and Science | |
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| 2024 PROXY STATEMENT | 23 |
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| Current role Director Current public company boards •HP •Celanese Corporation •Lennox International Inc. (through February 29, 2024) •Marathon Petroleum Corporation Prior public company boards •None | Kim K.W. Rucker Independent | | | | Age: 57 | HP Board Committees: Audit, Nominating, Governance and Social Responsibility Committee (Chair) | | | Director since: 2021 | | | | Qualifications: Prior Business and Other Experience •Executive Vice President, General Counsel and Secretary, Andeavor, an integrated marketing, logistics and refining company, and General Counsel of Andeavor Logistics LP, a midstream energy infrastructure and logistics company (2016-2018) •Executive Vice President, Corporate & Legal Affairs, General Counsel and Corporate Secretary, Kraft Foods Group, Inc., a food and beverage company (2012–2015) •Senior Vice President, General Counsel and Chief Compliance Officer (2008–2012) and Corporate Secretary (2009–2012), Avon Products, Inc. •Senior Vice President, Corporate Secretary and Chief Governance Officer, Energy Future Holdings Corp. (formerly TXU Corp.) (2004–2008) •Former Partner in the Corporate & Securities group at Sidley Austin LLP, a law firm Other key qualifications Ms. Rucker is a seasoned business executive who brings to the Board decades of leadership and corporate governance, strategic transactions, and human capital experience. Through her roles at Andeavor, Kraft Foods Group, Avon Products and Energy Future Holdings and as a board member of several large public companies, she has substantial experience in a wide array of business matters, including those facing customer-driven and marketing companies. Moreover, her experience as a former chief legal executive and partner at an international law firm provides the Board with valuable insight on issues relating to complex mergers and acquisitions, regulatory matters, law, corporate governance, internal and external communications, government affairs and community involvement activities. Skills Business and Management, Customer Experience, Environmental and Social Responsibility, Finance and Capital Allocation, Government and Government Affairs, Human Capital Management, International Business and Affairs, Risk Management, Strategic Transactions; M&A, Strategy | |
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| 24 | |
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Directors Not Standing for Reelection
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| Current role Co-founder and Partner of Condorcet, LP, an advisory and investment firm (since 2013) Current public company boards •HP •Reliance Industries Limited Prior public company boards •Innocoll AG | Shumeet Banerji Independent | | | | Age: 64 | HP Board Committees: HR and Compensation, Nominating, Governance and Social Responsibility Committee | | | Director since: 2011 | | | | Qualifications: Prior Business and Other Experience •Senior Partner, Booz & Company, a consulting company (May 2012–March 2013) •Chief Executive Officer, Booz & Company (July 2008–May 2012) •President of the Worldwide Commercial Business, Booz Allen Hamilton (February 2008–July 2008) •Managing Director, Europe (2007–2008) and United Kingdom (2003–2007), Booz Allen Hamilton •Faculty, University of Chicago Graduate School of Business Other key qualifications Mr. Banerji brings to the Board a strong understanding of the issues facing companies and governments in both emerging and mature markets around the world as the founder of Condorcet, LP, an advisory and investment firm focused on early and development stage technology companies, and through his two decades of work with Booz & Company. In particular, Mr. Banerji has valuable experience in addressing a variety of complex issues ranging from corporate strategy, organizational structure, governance, transformational change, operational performance improvement, and merger integration. During his career at Booz Allen Hamilton and Booz & Company, he has advised numerous companies on restructuring and M&A, particularly in mature industries. Skills Business and Management, Environmental and Social Responsibility, Finance and Capital Allocation, Human Capital Management, International Business and Affairs, Risk Management, Strategic Transactions; M&A, Strategy | |
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| Current role Professor-at-Large, Brown University & Vannevar Bush Professor Emeritus, Massachusetts Institute of Technology Current public company boards •HP •Singapore Exchange Limited Prior public company boards •None | Subra Suresh Independent | | | | Age: 67 | HP Board Committees: Audit, Finance, Investment and Technology Committee | | | Director since: 2015 | | | | Qualifications: Prior Business and Other Experience •President Emeritus and Distinguished University Professor Emeritus, Nanyang Technological University (January 2018–December 2022) •Senior Advisor, Temasek International Private Ltd. (September 2017–December 2021) •President, Carnegie Mellon University, a global research university (July 2013–June 2017) •Independent Director, Battelle Memorial Institute, Ohio, an international nonprofit that develops and commercializes technology and manages laboratories for government customers (2014–2017) •Director, National Science Foundation, a federal agency charged with advancing science and engineering research and education (October 2010–March 2013) •Dean and the Vannevar Bush Professor of Engineering, School of Engineering (2007–2010), and Professor (1993–2013), Massachusetts Institute of Technology Other key qualifications Dr. Suresh was awarded the National Medal of Science, the highest honor given by the USA to a scientist, by President Biden in October 2023. He holds the distinction of having been elected to all three branches of the U.S. National Academies (Engineering, Sciences and Medicine) in recognition of his considerable scientific and technical accomplishments across engineering, science, and biomedicine. Dr. Suresh’s experience as the president of two prominent research universities and his experience leading new entrepreneurship and innovation bring the Board valuable insights with respect to strategic opportunities and a deep understanding of the organizational, scientific, and technological requirements of ongoing innovation. Skills Business and Management, Disruptive Innovation, Environmental and Social Responsibility, Finance and Capital Allocation, Government and Government Affairs, Human Capital Management, International Business and Affairs, Risk Management, Strategy, Technology, Cybersecurity and Science | |
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| 2024 PROXY STATEMENT | 25 |
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How We Are Selected Identifying and Evaluating Candidates for Director The NGSR Committee uses a variety of methods for identifying and evaluating nominees for Director. The NGSR Committee, in consultation with the Chair, regularly assesses the appropriate size of the Board and candidates and whether any vacancies on the Board are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the NGSR Committee considers various potential candidates for Director. Candidates may come to the attention of the NGSR Committee through current Board members, professional search firms, stockholders or other persons. As part of the search process for each new director, the NGSR Committee actively seeks out diverse candidates to include in the pool from which director candidates are chosen. Identified candidates are evaluated at regular or special meetings of the NGSR Committee and may be considered at any point during the year. In the case of Mr. Meline, a third-party professional search firm identified him as a potential director nominee. Director Nominees and Director Nominees’ Experience and Qualifications The Board annually reviews the desired skills and qualifications of Directors in the context of the current composition of the Board, our operating requirements and the long-term interests of our stockholders. The Board believes that its members should possess a variety of skills, professional experience, and backgrounds in order to effectively oversee our business. HP does not have formal refreshment mechanisms such as mandatory retirement age or term limits for directors; however, we actively monitor the tenure of our directors with a view that our average tenure should not exceed ten years and directors with greater than ten years of service should be closely evaluated. The Board believes that each Director should possess certain attributes, as reflected in the Board membership criteria described below. Our Corporate Governance Guidelines contain the current Board membership criteria that apply to nominees recommended for a position on the Board. Under those criteria, Directors should: •have the highest professional and personal ethics and values, consistent with our long-standing values and standards; •have broad experience at the policy-making level in business, government, education, technology or public service; •be committed to enhancing stockholder value and represent the interests of all of our stockholders; and •have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience (which means that Directors’ service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to responsibly perform all Director duties). In addition, the NGSR Committee takes into account a potential Director’s ability to contribute to the diversity of background (such as race, gender, age and cultural background) and experience represented on the Board, and it reviews its effectiveness in balancing these considerations when assessing the composition of the Board. Although the Board uses these and other criteria as appropriate to evaluate potential nominees, it has no stated minimum criteria for nominees. Our Corporate Governance Guidelines can be found on our website at https://investor.hp.com/governance/governance-documents/default.aspx. In addition, our Bylaws require that to be qualified to serve as a Director and to be eligible to be a Director nominee, each Director and Director nominee: •must not have been an officer or director of a company that is a competitor of HP within the prior three years; and •must not be a named subject of a criminal proceeding (excluding traffic violations and other minor offenses) pending as of the date HP first mails the proxy materials that include the name of the nominee and, within the ten years preceding such date, must not have been convicted in such a criminal proceeding. The Board believes that all the nominees named above are highly qualified and have the skills and experience required for effective service on the Board. All the nominees named above have indicated to us that they will be available to serve as Directors. In the event that any nominee should become unavailable, the proxy holders, Enrique Lores, Julie Jacobs and Rick Hansen, will vote for a substitute nominee or nominees designated by the Board, if it decides to do so. If any substitute nominees are so designated, we will file an amended proxy statement or additional soliciting material that, as applicable, identifies the substitute nominees, discloses that such nominees have consented to being named in the amended proxy statement or additional soliciting material and to serve as directors if elected, and includes certain biographical and other information about such nominees required by the applicable SEC rules. There are no family relationships among our executive officers and Directors.
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| 26 | |
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Annual Self-Evaluation Annually, the Board and each Committee conduct a self-evaluation, overseen by the NGSR Committee.
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| Evaluation Process and Assessment | | The NGSR Committee, working with the independent Chair, determines the process, scope and contents of the Board’s annual self-evaluation. As part of this process, tailored questionnaires for the Board and each Committee are reviewed and approved by the independent Chair and the Chair of the NGSR Committee prior to the distribution to each of the Directors. Topics include: •Board and Committee roles, effectiveness, and topical focus •Board and Committee composition and size •Board oversight of strategic priorities and risk matters •Access to management, experts and internal and external resources | | Review and Discussion | | Following completion of the questionnaires, the Chair of the NGSR Committee and independent Chair meet individually with each director to solicit individual feedback. The results of the Committee evaluations are shared with the Chairs of each Committee on an anonymized basis. The Chair of the NGSR Committee then provides the NGSR Committee and the Board with a summary of responses to the questionnaires. Separately, each Committee Chair additionally reviews the applicable Committee self-evaluation results with members of the relevant Committee. | | Feedback Incorporated | | Policies and practices are enhanced as a result of the self-evaluation results. Examples include enhancements to the Board’s oversight of enterprise risk topics, enhancing Board engagement with top-talent, and enhancements to governance practices and procedures. |
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Stockholder Recommendations and Nominations The policy of the NGSR Committee is to consider properly submitted stockholder recommendations of candidates for the Board. Following verification of the stockholder status of individuals proposing candidates, recommendations are considered collectively by the NGSR Committee at a regularly scheduled meeting. If any materials are provided by a stockholder in connection with the nomination of a Director candidate, such materials are forwarded to the NGSR Committee. In evaluating such nominations, the NGSR Committee seeks to achieve a balance of diverse knowledge, experience and capability on the Board. The NGSR Committee evaluates nominees recommended by stockholders using the same criteria it uses to evaluate all other candidates. Any stockholder recommendations submitted for consideration by the NGSR Committee should include verification of the stockholder status of the person submitting the recommendation and the recommended candidate’s name and qualifications for Board membership and should be addressed to our Corporate Secretary at HP Inc., 1501 Page Mill Road, Palo Alto, California 94304. In addition, our Bylaws permit stockholders to nominate Directors for consideration at an annual stockholder meeting and, under certain circumstances, to include their nominees in the HP proxy statement. For a description of the process for nominating Directors in accordance with our Bylaws, see “Questions and Answers—Voting Information.”
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| 2024 PROXY STATEMENT | 27 |
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How We Are Organized Current Committee Memberships
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| Name | Audit | Finance, Investment and Technology | HR and Compensation | Nominating, Governance and Social Responsibility | | Independent Directors | | | | | | Aida M. Alvarez | | | | | | Shumeet Banerji* | | | | | | Robert R. Bennett | | | | | | Chip Bergh | | | | | | Bruce Broussard | | | | | | Stacy Brown-Philpot | | | | | | Stephanie A. Burns | | | | | | Mary Anne Citrino | | | | | | Richard L. Clemmer | | | | | | David Meline | | | | | | Judith “Jami” Miscik | | | | | | Kim K.W. Rucker | | | | | | Subra Suresh* | | | | | | Other Directors | | | | | | Enrique Lores | | | | |
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| | Member | | Chair | | Audit committee “financial expert” |
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* Mr. Banerji and Dr. Suresh are not standing for re-election at this annual meeting. As a result, Mr. Banerji and Dr. Suresh will each step down from the Board and the size of the Board will be reduced to 12 directors, effective at the annual meeting.
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| 28 | |
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| Chair: Mary Anne Citrino Other members: Robert R. Bennett Stacy Brown-Philpot Richard L. Clemmer David Meline Judith “Jami” Miscik Kim K.W. Rucker Subra Suresh* Number of meetings: 11 We have an Audit Committee established in accordance with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee represents and assists the Board in fulfilling its responsibilities for overseeing our financial reporting processes and the audit of our financial statements. * Dr. Suresh is not standing for re-election at the annual meeting and will step down from the Board, effective at the annual meeting. | | | | Audit Committee | | | Specific duties and responsibilities of the Audit Committee include, among other things: Independent registered public accounting firm •overseeing the appointment, compensation, retention, and performance of the independent registered public accounting firm and discussing with the independent registered public accounting firm its relationships with HP and its independence; and •periodically considering whether there should be a regular rotation of the accounting firm in order to assure continuing independence. Audit & non-audit services; financial statements; audit report •reviewing and approving the scope of the independent registered public accounting firm’s audit, audit-related services and related fees; and •overseeing and reviewing our financial reporting processes and the audit of our financial statements, including the effectiveness of our financial reporting processes and functions. Disclosure controls; internal controls & procedures; legal compliance •overseeing and reviewing our disclosure controls and procedures, internal controls, internal audit function, and corporate policies with respect to financial information and earnings guidance; •overseeing and reviewing the adequacy and effectiveness of HP’s cybersecurity, information and technology security, and data protection programs, procedures, and policies; and •overseeing compliance with legal and regulatory requirements. Risk oversight and assessment •overseeing and reviewing our significant strategic, enterprise and other risks (including significant risks or exposures relating to litigation and other proceedings and regulatory matters that may have a significant impact on our financial statements) and management’s establishment of effective governance, programs, and processes to identify, assess, and mitigate such risks; •reviewing key functional and business risk areas, including specific critical risks identified by our enterprise risk management program; and •reviewing other risks relating to the matters described above and management’s approach to addressing these risks. |
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The Board determined that Ms. Citrino, Chair of the Audit Committee, and each of the other Audit Committee members (Mr. Bennett, Ms. Brown-Philpot, Mr. Clemmer, Mr. Meline, Ms. Miscik, Ms. Rucker and Dr. Suresh) are independent within the meaning of the New York Stock Exchange (“NYSE”) and SEC standards of independence for directors and audit committee members and have satisfied the NYSE financial literacy requirements. Audit Committee Financial Experts The Board also determined that each of Mr. Bennett, Ms. Brown-Philpot, Ms. Citrino, Mr. Clemmer, Mr. Meline and Dr. Suresh is an “audit committee financial expert” as defined by SEC rules. The report of the Audit Committee is included on pages 47-48.
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| 2024 PROXY STATEMENT | 29 |
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| Chair: Richard L. Clemmer Other members: Robert R. Bennett Stephanie A. Burns Mary Anne Citrino David Meline Subra Suresh* Number of meetings: 6 The FIT Committee provides oversight of the finance and investment functions of HP. * Dr. Suresh is not standing for re-election at the annual meeting and will step down from the Board, effective at the annual meeting. | | | | Finance, Investment and Technology Committee | | | The Finance, Investment and Technology (“FIT”) Committee’s responsibilities and duties include, among other things: Treasury matters •reviewing or overseeing significant treasury matters such as capital structure and capital allocation strategy, derivative policy, global liquidity, fixed income investments, borrowings and credit facilities, debt issuances and redemptions, currency exposure, dividend policy, share issuances and repurchases, employee benefit fund matters and plan performance, and capital spending. M&A transactions & strategic alliances •overseeing and periodically reviewing with management, significant mergers, acquisitions, divestitures, joint ventures, strategic equity investments or other minority investments, strategic alliances, or similar transactions (“Strategic Transactions”); and •overseeing our integration planning and execution and the financial results of such transactions after integration. Capital allocation •reviewing and overseeing capital investing decisions, capital structure, and the allocation of free cash flow; and •reviewing and overseeing the execution of HP’s strategic plans and capital allocation strategies. Technology strategies & guidance •overseeing and periodically reviewing with management, the scope, direction, quality, incubation of, and investment levels in, our technology, and execution of our technology strategies; and •overseeing and periodically reviewing with management, technology management related to Strategic Transactions and other transactions, including HP’s or a third-party’s technology or intellectual property as it may pertain to, among other things, Strategic Transactions, market entry and exit, new business divisions and spin-offs, R&D investments, and key competitor and partnership strategies. Risk oversight and assessment •overseeing the execution of derivatives and financial risk hedging strategy; •assessing risk and return of financial investments and managing risk levels in the deployment of capital; •reviewing acquisition and integration risks associated with M&A transactions and strategic alliances; and •reviewing other risks relating to the matters described above and management’s approach to addressing these risks. |
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| Chair: Kim K.W. Rucker Other members: Aida M. Alvarez Shumeet Banerji* Chip Bergh Bruce Broussard Stacy Brown-Philpot Judith “Jami” Miscik Number of meetings: 5 The NGSR Committee oversees and represents and assists the Board (and management, as applicable) in fulfilling its responsibilities relating to our corporate governance, Director nominations and elections, HP’s policies and programs relating to global citizenship and other legal, regulatory and compliance matters relating to current and emerging political, environmental, global citizenship and public policy trends. * Mr. Banerji is not standing for re-election at the annual meeting and will step down from the Board, effective at the annual meeting. | | | | Nominating, Governance and Social Responsibility Committee | | | Specific duties and responsibilities of the NGSR Committee include, among other things: Board matters •establishing criteria for Board membership, identifying individuals qualified to serve as directors, and recommending to the Board candidates to be elected or nominated for election as directors, as well as director succession planning; •overseeing and reviewing the size, composition, operation, and calendar of the Board and recommending assignments of Directors to Board committees and chairs of Board committees; and •periodically reviewing the Board’s leadership structure, recommending changes to the Board as appropriate. HP governing documents & corporate governance guidelines & other policies •overseeing and reviewing our governance practices, including our Certificate of Incorporation, Bylaws, Corporate Governance Guidelines and related policies, governance structures, and director-led engagements with HP’s stakeholders concerning such matters. ESG matters •overseeing significant strategies, policies, positions, and goals relating to global citizenship, sustainability, climate change, human rights, and digital equity, as well as the impact of HP’s operations on employees, customers, suppliers, partners, and communities worldwide; •reviewing HP’s annual “Sustainable Impact Report,” which addresses HP’s supply chain and environment and sustainability performance; and •overseeing the policies and programs relating to, and the way HP conducts, its government relations activities. Risk oversight and assessment •identifying, evaluating, and monitoring social, political, and environmental trends, issues, concerns, and risks; •monitoring legislative proposals and regulatory developments that could significantly affect the public affairs of HP; and •reviewing other risks relating to the matters described above and management’s approach to addressing these risks. |
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The Board determined that Ms. Rucker, who serves as Chair of the NGSR Committee, and each of the other NGSR Committee members (Ms. Alvarez, Mr. Banerji, Mr. Bergh, Mr. Broussard, Ms. Brown-Philpot and Ms. Miscik) are independent within the meaning of the NYSE director independence standards.
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| 2024 PROXY STATEMENT | 31 |
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| Chair: Stephanie A. Burns Other members: Aida M. Alvarez Shumeet Banerji* Chip Bergh Bruce Broussard Number of meetings: 5 The HRC Committee discharges the Board’s responsibilities related to the compensation of our executives and Directors and provides general oversight of our compensation structure, including our equity compensation plans and benefits programs. * Mr. Banerji is not standing for re-election at the annual meeting and will step down from the Board, effective at the annual meeting. | | | | HR and Compensation Committee | | | Specific duties and responsibilities of the HRC Committee include, among other things: Executive compensation philosophy, peer group, design, & performance reviews •reviewing the overall compensation philosophy and strategy with respect to HP’s executive officers and reviewing and approving short-term and long-term incentive plan design, structure and goals; •conducting annual performance evaluation of the CEO and recommending all elements of the CEO’s compensation to the independent members of the Board for their review and approval; and •reviewing and approving goals and objectives relevant to other executive officer compensation, evaluating performance based on evaluations undertaken by the CEO and reviewed by the HRC Committee and determining their compensation in accordance with those goals and objectives. Other compensation & employee benefit plans •overseeing and monitoring the effectiveness of non-equity-based benefit plan offerings, including but not limited to non-qualified deferred compensation, fringe benefits, and perquisites and approving any material new employee benefit plan or change to an existing plan. Director compensation •overseeing compensation policies and practices for service on the Board and its committees and recommending to the Board any changes to director compensation. Executive succession planning & leadership development •reviewing senior management selection, recommending the appointment of corporate officers to the Board for approval, overseeing succession planning and leadership development, including guiding the CEO succession planning process in partnership with the Chairman and full Board. People processes and culture, including diversity, equity and inclusion •reviewing employee engagement and cultural initiatives including key training and development programs, Diversity, Equity and Inclusion (DEI) programs and results of the annual employee engagement survey; and •monitoring the key health metrics to evaluate the workforce including workforce diversity, equity and inclusion, pay equity, attrition and retention, talent and learning, employee engagement, key hires, and restructuring. Risk oversight and assessment •assessing whether HP’s overall human resources and compensation structures, policies, programs, and practices establish appropriate incentives and leadership development opportunities for management and other employees, and confirming they do not encourage improper risk taking. |
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The Board determined that Dr. Burns, who serves as Chair of the HRC Committee, and each of the other HRC Committee members (Ms. Alvarez, Mr. Banerji, Mr. Bergh and Mr. Broussard) are independent within the meaning of the NYSE standards of independence for directors and compensation committee members.
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About our Corporate Governance Governance Practices HP has a history of strong corporate governance and we have always led by example, adopting changes in line with our commitment to the highest standards of governance. The following examples highlight some of the key features of our corporate governance policies and practices, including updates we have recently made to strengthen our policies and practices:
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| •Independent Board Chair •Supermajority of independent directors •Reasonable average director tenure •Annual election of directors •Majority vote for directors in uncontested elections •Committee memberships limited to independent directors •Executive sessions of non-employee directors | •Annual Board and committee self-evaluations •Strong Director and officer stock ownership guidelines •Director-shareholder engagement program •One share, one vote •Stockholder right to call a special meeting (15% threshold) •Stockholder right to proxy access (3% threshold for 3 years) •No poison pill |
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Board Leadership Structure The Board periodically evaluates its leadership structure, taking into account the evolving needs of the business and the interests of HP’s stockholders. The Board believes that it is in the best interests of the Company and its stockholders to currently separate the Chair of the Board and Chief Executive Officer roles and for our Chair to be independent. Mr. Bergh serves as our independent Chair of the Board. The Board believes that Mr. Bergh is well suited to serve as Chair and provide constructive, independent and informed guidance and oversight to management given his significant managerial, operational and global experience. Our Board believes that our current structure, with an independent Chair who is well-versed in the needs of a complex business and has strong, well-defined governance duties, gives our Board a strong leadership and corporate governance structure that best serves the needs of HP and its stockholders. The Board also believes that this structure enables Mr. Lores to focus his attention on our business strategy and operations. The Board will continue to evaluate its leadership structure on an ongoing basis and may make changes as appropriate to HP and its future needs.
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| | | | | The independent Chair has the following responsibilities: •oversees the planning of the annual Board calendar; •in consultation with the CEO and the other Directors, schedules, approves and sets the agenda for meetings of the Board and chairs and leads the discussion at such meetings; •chairs HP’s annual meeting of stockholders; •is available in appropriate circumstances to speak on behalf of the Board and for consultation and direct communication with stockholders; •provides guidance and oversight to management; •helps with the formulation and implementation of HP’s strategic plan; •serves as the Board liaison to management; •has the authority to call meetings of the independent Directors and schedules, sets the agenda for, and presides at executive sessions of the independent Directors; •approves information sent to the Board; •reviews/is consulted in preparing agendas for committee meetings; •works with the HRC Committee to coordinate the annual performance evaluation of the CEO; •works with the NGSR Committee to oversee the Board and committee evaluations; and •performs such other functions and responsibilities as set forth in the Corporate Governance Guidelines or as requested by the Board from time to time. | | Chip Bergh Independent Chair | |
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| 2024 PROXY STATEMENT | 33 |
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Executive Sessions During fiscal 2023, the Directors regularly met in executive session, including executive sessions of only the independent Directors. Throughout fiscal 2023, Mr. Bergh served as independent Chair. As such, Mr. Bergh scheduled and chaired each executive session held during fiscal 2023. Any independent Director may request that an additional executive session be scheduled. Board Committees also have regular executive sessions without management present. Meeting Attendance During fiscal 2023, the Board held seven meetings, all of which included executive sessions. During fiscal 2023, we had the following four standing committees, which held the number of meetings indicated in parentheses during fiscal 2023: Audit Committee (11); FIT Committee (6); HRC Committee (5); and NGSR Committee (5). All the committee charters are available on our investor relations website at https://investor.hp.com/governance/governance-documents/default.aspx. Each incumbent Director serving during fiscal 2023 attended at least 75% of the aggregate of all Board and applicable committee meetings held during the period that he or she served as a Director. Directors are encouraged to participate in our annual meeting of stockholders. Nine of our thirteen then-serving Directors attended our last annual meeting, held on April 24, 2023. Director Independence Our Corporate Governance Guidelines, which are available on our website at https://investor.hp.com/governance/governance-documents/ default.aspx, provide that a substantial majority of the Board will consist of independent Directors and that the Board can include no more than three Directors who are not independent Directors. The independence standards can be found as Exhibit A to our Corporate Governance Guidelines. Our Director independence standards are consistent with, and in some respects more stringent than, the NYSE director independence standards. In addition, each member of the Audit Committee meets the heightened independence standards required for audit committee members under the applicable listing and SEC standards and each member of the HRC Committee meets the heightened independence standards required for compensation committee members under the applicable listing and SEC standards. Under our Corporate Governance Guidelines, a Director will not be considered independent in the following circumstances: •The Director is, or has been within the last three years, an employee of HP, or an immediate family member of the Director is, or has been within the last three years, an executive officer of HP. •The Director has been employed as an executive officer of HP or affiliates within the last five years. •The Director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from HP, other than compensation for Board service, compensation received by a Director’s immediate family member for service as a non-executive employee of HP, and pension or other forms of deferred compensation for prior service with HP that is not contingent on continued service. •(A) The Director or an immediate family member is a current partner of the firm that is HP’s internal or external auditor; (B) the Director is a current employee of such a firm; (C) the Director has an immediate family member who is a current employee of such a firm and who personally worked on HP’s audit; or (D) the Director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on HP’s audit within that time. •The Director or an immediate family member is, or has been in the past three years, employed as an executive officer of another company where any of HP’s present executive officers at the same time serves or has served on that company’s compensation committee. •The Director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, HP for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues for such company’s last completed fiscal year. •The Director is affiliated with a charitable organization that receives significant contributions from HP. •The Director has a personal services contract with HP or an executive officer of HP. For these purposes, an “immediate family” member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares the Director’s home. In determining independence, the Board reviews whether Directors have any material relationship with HP. An independent Director must not have any material relationship with HP, either directly or as a partner, stockholder or officer of an organization that has a relationship with HP, nor any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a Director. In assessing the materiality of a Director’s relationship to HP, the Board considers all relevant facts and circumstances, including consideration of the issues from the Director’s standpoint and from the perspective of the persons or organizations with which the Director has an affiliation, and is guided by the standards set forth above.
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In making its independence determinations, the Board considered transactions occurring since the beginning of fiscal 2021 between HP and entities associated with the independent Directors or their immediate family members. The Board considered that Mr. Bergh and Mr. Broussard are employed by organizations that did business with HP at some time during the last three fiscal years. The amount received by HP or such other organization in each of the last three fiscal years did not exceed the greater of $1 million or 2% of either HP’s or such organization’s consolidated gross revenues. Additionally, the Board also considered that Mr. Banerji, Mr. Bennett, Ms. Brown-Philpot, Dr. Burns, Ms. Citrino, Mr. Clemmer, Mr. Meline, Ms. Miscik and Ms. Rucker, or one of their immediate family members, is a non-employee director, trustee or advisory board member of another organization that did business with HP at some time during the last three fiscal years. These business relationships were as a supplier or purchaser of goods or services in the ordinary course of business. As a result of this review, the Board has determined the transactions described above would not interfere with the Director’s exercise of independent judgment in carrying out the responsibilities of a Director. The Board has also determined that, with the exception of Mr. Lores, (i) each of HP’s remaining Directors, including Ms. Alvarez, Mr. Banerji, Mr. Bennett, Mr. Bergh, Mr. Broussard, Ms. Brown-Philpot, Dr. Burns, Ms. Citrino, Mr. Clemmer, Mr. Meline, Ms. Miscik, Ms. Rucker and Dr. Suresh, and (ii) each of the members of the Audit Committee, the HRC Committee and the NGSR Committee, has (or had) no material relationship with HP (either directly or as a partner, stockholder or officer of an organization that has a relationship with HP) and is (or was) independent within the meaning of the NYSE and our Director independence standards. The Board has determined that Mr. Lores is not independent because of his status as our current President and CEO. Overboarding Policy Our Corporate Governance Guidelines provide that a Director’s service on other boards of public companies should be limited to a number that permits the Director, given his or her individual circumstances, to perform responsibly all director duties. Further, our Bylaws provide that this service may not exceed five public company boards in total, including HP. To help the Board monitor compliance with these requirements set forth in our Corporate Governance Guidelines and Bylaws, Directors are required to obtain approval from the NGSR Committee prior to agreeing to stand for election to outside, for-profit boards. Throughout the year, we also monitor our Directors’ time commitments and in considering whether to nominate each Director nominee for election at the annual meeting, the NGSR Committee and the Board took into account each Director’s public company leadership positions and other outside commitments and determined that all of our Director nominees are able to perform responsibly all director duties. We review our overboarding policy as part of our annual review of our Corporate Governance Guidelines. We also review the overboarding policies of our institutional investors on an ongoing basis and discuss such policies during investor engagements.
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| 2024 PROXY STATEMENT | 35 |
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Board Operations
Hybrid Work Strategy
| Name(1) | Fees Earned or Paid in Cash(2) ($) | Stock Awards(3) ($) | Total Compensation ($) | | Aida Alvarez | 105,000 | 220,023 | 325,023 | | Shumeet Banerji | 1,648 | 325,025 | 326,673 | | Robert R. Bennett | 108,648 | 220,023 | 328,671 | | Chip Bergh | 200,000 | 325,025 | 525,025 | | Bruce Broussard | 34,904 | 325,025 | 359,929 | | Stacy Brown-Philpot | 111,000 | 220,023 | 331,023 | | Stephanie A. Burns | 130,000 | 220,023 | 350,023 | | Mary Anne Citrino | 41,000 | 325,025 | 366,025 | | Richard L. Clemmer | 20,352 | 325,025 | 345,377 | | Judith “Jami” Miscik | 111,000 | 220,023 | 331,023 | | Kim K.W. Rucker | 129,352 | 220,023 | 349,375 | | Subra Suresh | 111,000 | 220,023 | 331,023 | | Enrique Lores(4) | — | — | — |
Role of Management and the CEO in Setting Executive Compensation
Role of Management and the CEO in Setting Executive Compensation The CEO recommends compensation for non-CEO Section 16 officers for approval by the HRC Committee. The HRC Committee considered market competitiveness, business results, experience, and individual performance when evaluating fiscal 2023 NEO compensation and the overall compensation structure. The Chief People Officer and other members of our executive compensation team, together with members of our finance and legal organizations and the input of the HRC Committee’s independent consultant, work with the CEO to design and develop the compensation program, recommend changes to existing program provisions applicable to NEOs and other senior executives, develop financial and other targets to be achieved under those programs, prepare analyses of financial data, peer comparisons and other briefing materials to assist the HRC Committee in making its decisions, and implement the decisions of the HRC Committee. During fiscal 2023, Mr. Lores provided input to the HRC Committee regarding performance metrics and the setting of appropriate performance targets for his direct reports. Mr. Lores also recommended MBOs for the NEOs and the other senior executives who report directly to him. Mr. Lores is subject to the same financial performance goals as the executives who lead global functions and the businesses, and Mr. Lores’ MBOs and compensation are established by the HRC Committee and recommended to the independent members of the Board for approval. Mr. Lores is not present at the portion of any Board meeting during which his own compensation is discussed and considered. Use of Comparative Compensation Data and Compensation Philosophy The HRC Committee reviews the compensation of our Section 16 officers in comparison to that of executives in similar positions at our peer group companies. Our peer group includes companies we compete with for executive talent due to our geographical proximity and technology industry overlap. The HRC Committee uses this information to evaluate how our pay levels and practices compare to market practices. When determining the peer group, the following characteristics were considered with exceptions made at the HRC Committee’s determination for labor-market relevance: •Direct talent market peers. •U.S.-based companies in the technology sector (excluding distributors, contract manufacturers and outsourced services/IT consulting) with revenues or market cap between 20% and 500% that of HP. •Select general industry companies (industrials, consumer products and telecom) generally meeting size and business criteria that are top-brands and considering continuity. •Review of the peer companies chosen by companies within our proposed peer group and peer business similarity, to evaluate relevance.
Role of Management and the CEO in Setting Executive Compensation
We believe the resulting peer group provides HP and the HRC Committee with a valid comparison and benchmark for the Company’s executive compensation program and governance practices. For fiscal 2023, the HRC Committee removed Seagate from the peer group due to market cap, revenue and operational differences between Seagate and HP. The HRC Committee added Applied Materials and 3M given each company’s overall size, valuation characteristics, global footprints and comparability to the other companies included in HP’s peer group. The HP peer group for fiscal 2023, as approved by the HRC Committee, consisted of the following companies:
2023 Annual Incentives
2023 Annual Incentives The Fiscal 2023 Annual Incentive Plan for the Executive Leadership Team (including the NEOs) consisted of the following three core financial metrics: GAAP net revenue, adjusted non-GAAP operating profit, and non-GAAP free cash flow. Revenue, operating profit and free cash flow are critical value drivers of the long-term commitment that we have made to stockholders to maximize the value of their investments. Beginning in fiscal 2023, each individual metric may fund up to 200% of target; and the maximum annual incentive for each executive is also capped at 200% of target. A fourth component, MBOs, was used to further drive individual performance and achievement of key strategic goals. Each financial metric and the MBOs were weighted at 25% of the target award value. The target annual incentive awards for fiscal 2023 were set at 200% of salary for the CEO and 135% of salary for the CFO, President Personal Systems, and President Imaging Printing & Solutions. The target annual incentive award for the Chief Legal Officer & General Counsel was set at 100% of salary. In addition, payment under the annual incentive plan is contingent on an NEO’s continued service through the end of the fiscal year.
Fiscal 2023 Annual Incentive Plan
Fiscal 2023 Annual Incentive Plan
Fiscal 2023 Annual Incentive Plan
| | Corporate Goals | | | | | | Key Design Elements | GAAP Net Revenue ($ in billions) | Adjusted Non-GAAP Operating Profit ($ in billions) | Non-GAAP Free Cash Flow(1) ($ in billions) | MBOs | % Payout Metric(2) (%) | | Weight | 25% | 25% | 25% | 25% | | | Linkage | Corporate | Corporate | Corporate | Individual | | | Corporate Performance Goals | | | | | | | Maximum | — | — | — | Various | 200 | | Target | $52.0 | $4.9 | $2.6 | Various | 100 | | Threshold | — | — | — | Various | 0 |
Fiscal 2023 Annual Incentive Plan
(1)Maximum funding for non-GAAP free cash flow is capped at 150% of target if adjusted non-GAAP operating profit achievement was below target and is capped at 100% of target if adjusted non-GAAP operating profit achievement was below threshold. If adjusted non-GAAP operating profit achievement was above target, the maximum funding level is 200% for this metric. Maximum and threshold information are not disclosed because such disclosure would result in competitive harm. However, goals are set at levels we believe to be achievable in connection with strong performance. (2)Interpolated for performance between discrete points. Each individual metric may fund up to 200% of target, and the maximum annual incentive for each executive is capped at 200% of target.
Fiscal 2023 Annual Incentive Plan
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Fiscal 2023 Annual Incentive Plan
The specific metrics, their linkage to corporate results, and the weighting that was placed on each were chosen because the HRC Committee believed that: •Performance against these metrics, in combination, enhances value for stockholders, capturing both the top and bottom line, as well as cash and capital efficiency. •A balanced weighting of metrics limits the likelihood of rewarding executives for excessive risk-taking. •Different measures avoid paying for the same performance twice. •MBOs address a range of important topics, including focus areas on Growth, People and Sustainable Impact, which are important to the long-term success of the Company. The following chart sets forth the definition of and rationale for each of the financial performance metrics that was used for the Fiscal 2023 Annual Incentive Plan:
Fiscal 2023 Annual Incentive Plan
| Financial Performance Metrics | Definition(1) | Rationale for Metric | | GAAP Net Revenue | Net revenue as reported in our Annual Report on Form 10-K for fiscal 2023 | Reflects top line financial performance, which is a strong indicator of our long-term ability to drive stockholder value | | Adjusted Non-GAAP Operating Profit(2) | Non-GAAP operating profit, as defined and reported in our fourth quarter fiscal 2023 earnings press release (of $4.6 billion in fiscal 2023) and summarized in footnote (2) below, further adjusted by excluding bonus | Reflects operational financial performance, which is directly tied to stockholder value on a short-term basis. Provides stronger alignment with our long-term strategic and financial plans | | Non-GAAP Free Cash Flow(3) | Net cash provided by operating activities adjusted for net investments in leases and net investments in property, plant and equipment, as reported in our fourth quarter fiscal 2023 earnings press release and summarized in footnote (3) below | Reflects cash management practices, including working capital and capital expenditures, enabling the Company to pursue opportunities that contribute to long-term stockholder value |
Fiscal 2023 Annual Incentive Plan
(1)For purposes of establishing financial performance results under the Fiscal 2023 Annual Incentive Plan, our financial results, whether reported in accordance with GAAP or a non-GAAP measure, may be further adjusted as permitted by guidelines approved by the HRC Committee at the time of establishing the fiscal 2023 financial goals. (2)As summarized above, adjusted non-GAAP operating profit is a non-GAAP measure that is defined as GAAP operating profit (of $3.5 billion in fiscal 2023) adjusted to exclude (i) costs of $1.1 billion related to restructuring and other charges, acquisition and divestiture charges and amortization of intangible assets and (ii) bonus. This additional non-GAAP information is not intended to be considered in isolation or as a substitute for GAAP operating profit. (3)As summarized above, non-GAAP free cash flow is a non-GAAP measure that is defined as net cash provided by operating activities ($3.6 billion in fiscal 2023) adjusted to exclude the impact of net investments in leases ($110 million in fiscal 2023) and net investments in property, plant and equipment ($593 million in fiscal 2023). This additional non-GAAP information is not intended to be considered in isolation or as a substitute for net cash provided by operating activities. Following fiscal 2023, the HRC Committee reviewed performance against the financial metrics and certified the results as follows:
Fiscal 2023 annual incentive performance against financial metrics(1)
Fiscal 2023 annual incentive performance against financial metrics(1)
Fiscal 2023 annual incentive performance against financial metrics(1)
| Metric(1) | Weight(2) | Target ($ in billions) | Result(3) ($ in billions) | Percentage of Target Annual Incentive Funded | | GAAP Net Revenue | 25.0% | $52.0 | $53.7 | 29.1% | | Adjusted Non-GAAP Operating Profit | 25.0% | $4.9 | $4.9 | 25.4% | | Non-GAAP Free Cash Flow | 25.0% | $2.6 | $3.1 | 40.6% | | Total | 75.0% | | | 95.1% (Adjusted to 54%(3)) |
Fiscal 2023 annual incentive performance against financial metrics(1)
(1)Payout governors include that HP adjusted non-GAAP operating profit will need to be achieved at minimum to be eligible for any award related to the HP GAAP net revenue component. Also, non-GAAP free cash flow is capped at 150% of target if HP adjusted non-GAAP operating profit achievement is below target. Non-GAAP free cash flow is capped at 100% of target if HP adjusted non-GAAP operating profit is below minimum. (2)The financial metrics were equally weighted to account for 75% of the target annual incentive. (3)The HRC Committee exercised its discretion to reduce the financial performance funding to 54% in order to create parity with the bonus plan for the broader group of employees within the Company.
Fiscal 2023 annual incentive performance against non-financial component (MBOs)
Fiscal 2023 annual incentive performance against non-financial component (MBOs) Mr. Lores. The HRC Committee determined that Mr. Lores met or exceeded most MBOs but did not achieve certain key growth area targets for the year as the Company navigated a challenging external environment. However, Mr. Lores’ leadership enabled the Company to deliver strong accomplishments for the year while making consistent progress against long-term growth priorities and developing the operational capabilities needed to support our growth. Key accomplishments included the following: •Continued to invest in our Growth Businesses for long term growth. In fiscal 2023, revenue for the Growth Businesses grew mid-single digits year-over-year despite the challenging macro-economic environment.
Fiscal 2023 annual incentive performance against non-financial component (MBOs)
| 2024 PROXY STATEMENT | 57 |
Fiscal 2023 annual incentive performance against non-financial component (MBOs)
•Made significant progress in People priorities, advancing diversity, employee experience, and leadership pipeline. •Exceeded our goal for fiscal 2023 in improving workforce diversity and inclusion. •Integrated high performing, diverse leaders into the Executive Leadership Team. Also strengthened the broader executive bench. •Continued to focus on improving employee experience and engagement. •Exceeded our Sustainable Impact goals for acceleration of digital equity and reduction of value chain Greenhouse Gas (“GHG”) emissions. •Achieved digital equity for around 15 million people in fiscal 2023. •Reduced overall value chain absolute GHG emissions by around 10% year-over-year. Ms. Myers. The HRC Committee determined that Ms. Myers met or exceeded most MBOs but did not achieve certain key growth area targets for the year as the Company navigated a challenging external environment. However, Ms. Myers demonstrated leadership, personal accountability, and tireless commitment to HP during another challenging year. The success of our Future Ready plan is a significant example of her leadership impact, resulting in structural savings that are already ahead of plan. Ms. Myers continued to represent HP with credibility among our stockholders and analysts. Mr. Tran. The HRC Committee determined that Mr. Tran met or exceeded most MBOs but did not achieve certain key growth area targets for the year as the Company navigated a challenging external environment. However, Mr. Tran demonstrated leadership in navigating a difficult year for HP and the Print business, showing decisiveness in adjusting to challenging business conditions. Mr. Tran’s leadership also led to continued innovation in our Print portfolio, and he made progress on executing on our business model shifts while rebalancing profitability between Hardware and Supplies. Mr. Tran is a strong and proactive leader with the credibility needed both internally and with external stakeholders to help drive HP’s enterprise goals. Mr. Cho. The HRC Committee determined that Mr. Cho met or exceeded most MBOs but did not achieve certain key growth area targets for the year as the Company navigated a challenging external environment. However, Mr. Cho made significant progress in several important areas, including share gains, implementation of the Personal Systems transformation plan and the successful integration of Poly from an organizational, systems, and process perspective. Mr. Cho continues to be a well-respected and well-regarded leader recognized for his ongoing attention to growth opportunities, his leadership in AI-enabled offerings, and his strong engagement with our external ecosystem. Mr. Cho’s contributions and tireless commitment to HP will continue to help drive the business forward. Ms. Jacobs. The HRC Committee determined that Ms. Jacobs’ MBO performance result was achieved above target. Ms. Jacobs worked closely with HP’s business leaders and provided exceptionally strong leadership support. Ms. Jacobs also made significant progress on building her leadership bench, including rotations of internal talent and critical external hires. Ms. Jacobs’ experience and skillsets allowed her to be a strong partner and advisor in legal and governance matters, while leading the Legal organization through a dynamic environment. Based on the findings of these performance evaluations, the HRC Committee (and, in the case of the CEO, the independent members of the Board) determined performance against MBO metrics for the NEOs as follows:
Fiscal 2023 annual incentive performance against non-financial component (MBOs)
| Named Executive Officer | Target MBO (%) | MBO Funded (%) | | Enrique J. Lores | 25.0 | 22.5 | | Marie Myers | 25.0 | 22.5 | | Tuan Tran | 25.0 | 22.5 | | Alex Cho | 25.0 | 22.5 | | Julie Jacobs | 25.0 | 27.5 |
Fiscal 2023 Annual Incentive Payout
Fiscal 2023 Annual Incentive Payout Based on the level of performance described above on both the financial metrics and MBOs for fiscal 2023, the payouts to the NEOs under the annual incentive plan are listed in the chart below. Total payouts were determined by adding the weighted performance against financial metrics to the weighted performance against the non-financial metrics to determine a total payout as a percentage of the target opportunity for each executive:
Fiscal 2023 Annual Incentive Payout
| | Percentage of Target Annual Incentive Funded | | Total Annual Incentive Payout | | | Named Executive Officer(1) | Financial Metrics (%) | Non-Financial Metrics / MBOs (%) | As % of Target Annual Incentive (%) | Payout ($) | | Enrique J. Lores | 54.0 | 22.5 | 76.5 | 1,989,000 | | Marie Myers | 54.0 | 22.5 | 76.5 | 846,855 | | Tuan Tran | 54.0 | 22.5 | 76.5 | 846,855 | | Alex Cho | 54.0 | 22.5 | 76.5 | 829,815 | | Julie Jacobs | 54.0 | 27.5 | 81.5 | 570,500 |
Fiscal 2023 Annual Incentive Payout
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Long-term Incentive Compensation – Fiscal 2023 Awards
Long-term Incentive Compensation – Fiscal 2023 Awards In order to motivate and reward our NEOs for their contributions towards achieving our business objectives, long-term incentives comprise the majority of each NEO’s total target compensation opportunity with a total long-term incentive target value for each NEO established by the HRC Committee in early fiscal 2023. The long-term incentives consist of a mix of 35% PARSUs, 35% PCSOs and 30% time-based RSUs for our CEO and a mix of 30% PARSUs, 30% PCSOs and 40% time-based RSUs for our other NEOs, and are linked to EPS, relative TSR and stock price performance. The high proportion of performance-based awards (70% and 60%, respectively) reflects our pay-for-performance philosophy. The time-based awards support retention and are linked to stockholder value and ownership, which are important goals of our executive compensation program.
2023 PARSUs
2023 PARSUs The fiscal 2023 PARSUs cliff-vest following the end of a three-year performance period in fiscal 2025. Vesting of the PARSUs is based on achievement of an adjusted non-GAAP EPS goal with a relative TSR “payout modifier.” The EPS goal consists of three annual goals that roll up into our three-year annual average EPS. A relative TSR “payout modifier” is then applied to the EPS average payout at the end of year three to ensure alignment with our stockholders’ experience and stockholder value creation. Relative TSR is measured over the full three-year period based on performance against the S&P 500. The relative TSR modifier is a market-based payout modifier that adjusts payout (-50%, 0% or +50%) so there is alignment with stockholder results. Final payout is subject to an overall maximum of 300% of the target number of shares. This structure is summarized in the charts below:
2023 PARSUs
| PARSU Measures | •Adjusted Non-GAAP EPS(1) – 100% of the units •Relative TSR vs. S&P 500 – “Payout Modifier” | | | | PARSU Measurement Periods | •Earnout and vesting at the end of 3 years, subject to continued service •EPS based on three 1-year goals, set at the beginning of each year(2) •TSR measured over the full 3-years from FY23-25 | | | | PARSU Goal Scoring | •EPS funds payout from zero to 300% of target units according to threshold-target-maximum(3) | | | | | •Max •Above target •Target •Threshold •Below Threshold | 300% 200% 100% 50% 0% | | | | •TSR adds 50% if in the top quartile and subtracts 50% if in the bottom quartile (no adjustment from 25th percentile to 75th percentile). | | | | | •Relative 3-year TSR > S&P 500 75th percentile | | +50% | | | •Relative 3-year TSR is equal to or between S&P 500 25th and 75th percentile | | No change | | | •Relative 3-year TSR < S&P 500 25th percentile | | -50% | | | •Subject to overall 300% of target shares max | | |
2023 RSUs
2023 RSUs 2023 RSUs and related dividend equivalent units vest ratably on an annual basis over three years from the grant date. Three-year vesting is common in our industry and supports executive retention and alignment with stockholder value.
Fiscal 2023 Long-term Incentive Compensation at Target
Fiscal 2023 Long-term Incentive Compensation at Target The following table shows combined total target grant values for annual grants attributable to fiscal 2023. These values represent target opportunities to earn future value-based compensation and are not actual earned amounts, which for PCSOs and PARSUs will be determined after the end of the applicable performance period based on continued employment, stock price growth and performance against pre-established performance goals.
Fiscal 2023 Long-term Incentive Compensation at Target
| Named Executive Officer | PARSUs | PCSOs | RSUs | Total Fiscal 2023 Long-term Incentive Grant | | Enrique J. Lores | $5,985,000 | $5,985,000 | $5,130,000 | $17,100,000 | | Marie Myers | $1,800,000 | $1,800,000 | $2,400,000 | $6,000,000 | | Tuan Tran | $1,815,000 | $1,815,000 | $2,420,000 | $6,050,000 | | Alex Cho | $1,776,900 | $1,776,900 | $2,369,200 | $5,923,000 | | Julie Jacobs | $1,050,000 | $1,050,000 | $1,400,000 | $3,500,000 |
Fiscal 2023 Long-term Incentive Compensation at Target
Values in the Summary Compensation Table are different than the target values described in the table above. In the Summary Compensation Table, amounts reflect the grant date fair value for the EPS component for Year 1 (2023), for which goals were approved in January 2023, and the grant date fair value for the TSR modifier, consistent with accounting standards. Grant date fair values for the EPS component for Year 2 (2024) and Year 3 (2025) are not included in the Summary Compensation Table since EPS goals for those years are approved in their respective fiscal years. The Summary Compensation Table for fiscal 2023 also includes a portion of the fiscal 2022 PARSUs Year 2 EPS (2023) and 2021 PARSUs Year 3 EPS (2023) for which goals were approved in January 2023. For more information on grants to the NEOs during fiscal 2023, see “Executive Compensation—Grants of Plan-Based Awards in Fiscal 2023.”
Fiscal 2023 Long-term Incentive Compensation at Target
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Long-term Incentive Compensation – Continuing Performance Awards from Prior Fiscal Years
Long-term Incentive Compensation – Continuing Performance Awards from Prior Fiscal Years The design of the fiscal 2022 PARSUs is consistent with that of the fiscal 2023 PARSUs. In November of 2022, the HRC Committee determined that fiscal 2022 EPS for fiscal 2022 PARSUs was achieved at 0% based on actual PARSU EPS performance of $3.91 (target of $4.38). In November of 2023, the HRC Committee determined that fiscal 2023 EPS for fiscal 2022 PARSUs was achieved at 76% based on actual PARSU EPS performance of $3.21 (target of $3.33). The final payout for fiscal 2022 PARSUs will also depend on performance in fiscal 2024 along with the three-year relative TSR performance.
Long-term Incentive Compensation – Continuing Performance Awards from Prior Fiscal Years
| | Metric PARSU EPS(1) – 100% | | | Results | | | | | Fiscal 2022 EPS(2) Target: $4.38 | Fiscal 2023 EPS Target: $3.33 | Fiscal 2024 EPS | Average EPS Performance | 3-year TSR Payout Modifier | Total Payout | | Fiscal 2022 PARSUs | 0% | 76% | — | TBD | TBD | TBD | | | | | | | | |
Long-term Incentive Compensation – Continuing Performance Awards from Prior Fiscal Years
(1)EPS for PARSU measurement is calculated using non-GAAP net earnings adjusted to include bonus at target. (2)The actual EPS performance achievement results were adjusted from $4.01 to $3.91 for fiscal 2022 in connection with the revision of financial statements described in the Form 10-Q for the quarter ended July 31, 2023. The adjustment did not impact the payout amount of the fiscal 2022 EPS, which remained at 0%.
2021 PARSUs
HP maintains one corporate aircraft due to our global presence. For security, safety, effectiveness and efficiency purposes, the Company allows executives to use the corporate aircraft for personal reasons. The CEO is required by the Board to use corporate aircraft for all travel, including personal travel. For any such personal use, the NEO is taxed on the value of this usage according to the relevant rules of the Internal Revenue Code, including, in the event an NEO is accompanied on business travel by a guest or family member on the aircraft for personal reasons (if approved by the CEO or CLO), the value of the guest’s or family member’s usage. We do not provide tax gross-ups for the imputed income attributable to personal use. Among our NEOs, Mr. Lores is the only executive who used the corporate aircraft for personal travel during fiscal 2023. In addition, we cover the costs of financial counseling, tax preparation and estate planning services for certain of our executives. These services provide these executives with a better understanding of their compensation and benefits and allow them to focus their attention on our future success. We consider specific personal security measures (for example, security personnel or the installation and maintenance of security measures in and around an executive’s residence) to be appropriate expenses that arise out of the executive’s employment responsibilities and that are necessary to his or her job performance and to ensure the safety of the covered executive and his or her family. The Board and the HRC Committee periodically review and approve the amount and nature of executive officers’ security expenses. Termination and Change in Control Protections The HRC Committee is focused on ensuring that the severance and change of control protections available to our executives are consistent with market practice, provide clarity to prospective and current executives, and will help attract and retain talent. Consistent with this approach, our Section 16 officers (including all of the NEOs) are covered by the Amended and Restated Severance and Long-Term Incentive Change in Control Plan for Executive Officers (the “SPEO”), as subsequently amended. The SPEO is intended to protect our executives and our stockholders and provide a level of transition assistance in the event of an involuntary termination of employment. We have not entered into individual employment agreements or any severance or change in control agreements with our current NEOs.
Severance Benefits in the Event of a Change in Control Under the SPEO
Severance Benefits in the Event of a Change in Control Under the SPEO The SPEO also includes change in control terms for participants (including our NEOs). The benefits provided for involuntary terminations under the SPEO are also provided in connection with a voluntary termination for Good Reason (as defined in the SPEO) that occurs within 24 months after a change in control (“double trigger”). In addition, the SPEO provides for full vesting of outstanding stock options, RSUs, PCSOs and PARSUs upon involuntary termination not for Cause or voluntary termination for Good Reason within 24 months after a change in control, and in situations where equity awards are not assumed by the surviving corporation (a “modified double trigger”). The SPEO further provides that under either a double trigger or modified double trigger, PARSUs and PCSOs will vest based on actual performance with respect to the awards for which the applicable performance period has ended or target performance with respect to the awards for which the applicable performance period has not ended (with vested PCSOs remaining exercisable for one year following the termination date). In addition, in the event of any dispute under the SPEO relating to a participant’s termination of employment within 24 months following a change in control, the Company will reimburse all related legal fees and expenses reasonably incurred by the participant if claims are brought in good faith. We do not provide tax gross ups in connection with terminations, including terminations in the event of a change in control.
Severance Benefits in the Event of a Change in Control Under the SPEO
| 2024 PROXY STATEMENT | 63 |
Severance Benefits in the Event of a Change in Control Under the SPEO
Other Compensation-Related Matters
Accounting and Tax Effects
| Name and Principal Position | Year | Salary(2) ($) | Bonus(3) ($) | Stock Awards(4) ($) | Option Awards(5) ($) | Non-Equity Incentive Plan Compensation(6) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(7) ($) | All Other Compensation(8) ($) | Total ($) | | Enrique J. Lores President and CEO | 2023 | 1,300,000 | — | 10,148,835 | 5,714,757 | 1,989,000 | — | 305,839 | 19,458,431 | | | 2022 | 1,250,000 | — | 12,844,359 | 5,341,057 | 1,445,564 | — | 198,946 | 21,079,926 | | | 2021 | 1,200,000 | — | 10,558,022 | 4,107,368 | 4,440,000 | — | 428,416 | 20,733,806 | | Marie Myers Chief Financial Officer | 2023 | 820,000 | — | 3,929,488 | 1,718,724 | 846,855 | — | 70,575 | 7,385,642 | | | 2022 | 780,000 | | 3,670,097 | 1,739,653 | 608,871 | — | 90,256 | 6,888,877 | | | 2021 | 664,445 | 250,000 | 3,185,034 | 1,216,998 | 1,794,000 | — | 111,091 | 7,221,568 | | Tuan Tran President, Imaging, Printing & Solutions | 2023 | 820,000 | — | 4,113,779 | 1,733,045 | 846,855 | — | 50,536 | 7,564,215 | | | 2022 | 780,000 | — | 5,503,615 | 1,754,919 | 608,871 | — | 44,153 | 8,691,558 | | | 2021 | 715,000 | — | 4,066,688 | 1,673,373 | 1,785,712 | 5,418 | 78,876 | 8,325,067 | | Alex Cho President, Personal Systems | 2023 | 803,500 | — | 4,046,599 | 1,696,667 | 829,815 | — | 41,820 | 7,418,401 | | | 2022 | 780,000 | — | 5,610,175 | 1,754,919 | 582,546 | — | 42,670 | 8,770,310 | | | 2021 | 740,000 | — | 4,552,967 | 1,673,373 | 1,998,002 | 15 | 43,426 | 9,007,783 | | Julie Jacobs(1) Chief Legal Officer & General Counsel | 2023 | 700,000 | 2,000,000 | 1,851,494 | 1,002,586 | 570,500 | — | 28,496 | 6,153,076 | | | 2022 | 58,333 | — | 9,000,011 | — | 32,271 | — | — | 9,090,615 |
Narrative to the Fiscal 2023 Pension Benefits Table
Narrative to the Fiscal 2023 Pension Benefits Table No NEO currently accrues a benefit under any qualified or non-qualified defined benefit pension plan because we ceased benefit accruals in all our U.S.-qualified defined benefit pension plans (and their non-qualified plan counterparts) in prior years. In the case of Mr. Cho, his IRG benefit is based on the U.S. retirement program and since the U.S. pension plans are frozen there is no accrual under that plan. Benefits previously accrued by Mr. Cho under the RP, EBP and IRG and by Mr. Tran under the RP and EBP are payable to them following termination of employment, subject to the terms of the applicable plans.
Terms of the HP Retirement Plan (RP) and HP Excess Benefit Plan (EBP)
Terms of the HP Retirement Plan (RP) and HP Excess Benefit Plan (EBP) Mr. Cho and Mr. Tran earned benefits under the RP and the EBP based on pay and service prior to 2006. The RP is a traditional defined benefit plan that provided a benefit based on years of service and the participant’s “highest average pay rate,” reduced by a portion of Social Security earnings. “Highest average pay rate” was determined based on the 20 consecutive fiscal quarters when pay was the highest. Pay for this purpose included base pay and bonus, subject to applicable IRS limits. Benefits under the RP may be taken in one of several different annuity forms or in an actuarially equivalent lump sum. Mr. Tran was a participant in the RP before November 1, 1993 so he has an HP Deferred Profit Sharing Plan (“DPSP”) balance which is integrated with the RP. Benefits calculated under the RP are offset by the value of benefits earned under the DPSP before November 1, 1993. Together, the RP and the DPSP constitute a “floor-offset” arrangement for periods before November 1, 1993. Benefits not payable from the RP and the DPSP due to IRS limits are paid from the EBP under which benefits are unfunded and unsecured. When an EBP participant terminates employment, the benefit liability is transferred to the EDCP, where an account is established for the participant. That account is then credited with hypothetical investment earnings (gains or losses) based upon the investment election made by participants from among investment options similar to those offered under the HP 401(k) Plan. There is no formula that would result in above-market earnings or payment of a preferential interest rate on this benefit. At the time of distribution, amounts representing EBP benefits are paid from the EDCP in a lump sum or installment form, according to pre-existing elections made by those participants, except that participants with a small benefit or who have not qualified for retirement status (generally, age 55 or older with at least 15 years of continuous service since the last hire date; but for deferrals made during 2023 and in future years, age 55 or older with attainment of at least 70 points (with “points” generally defined as the sum of the participant’s age plus total years of service)) are paid their EBP benefit in January of the year following their termination, subject to any delay required by Section 409A of the Code. Since Mr. Cho became a participant in the RP after November 1, 1993, he has no DPSP balance to be integrated with the RP.
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table HP sponsors the EDCP, a non-qualified deferred compensation plan that permits eligible U.S. employees to defer base pay in excess of the amount taken into account under the qualified HP 401(k) Plan and bonus amounts of up to 95% of the annual incentive bonus payable under the annual incentive plan. In addition, a matching contribution is available under the plan to eligible employees. The matching contribution applies to base pay deferrals of compensation above the IRS limit that applies to the qualified HP 401(k) Plan, up to a maximum of two times that compensation limit (matching contributions made in fiscal 2023 pertained to base pay from $305,000 to $610,000 during calendar year 2022). During fiscal 2023, participants in the EDCP, including the NEOs, were eligible for a matching contribution of up to 4% on base pay contributions in excess of the IRS limit, up to a maximum of two times that limit as noted above. Upon becoming eligible for participation or during the annual enrollment period, employees must specify the amount of base pay and/or the percentage of bonus to be deferred, as well as the time and form of payment. If termination of employment occurs before retirement (defined as at least age 55 and 15 years of continuous service for deferral elections made prior to the January 2023 plan year, or defined as at least age 55 with the attainment of at least 70 points (with “points” generally defined as the sum of the participant’s age plus total years of service), for deferral elections made during the January 2023 plan year and thereafter), distribution is made in the form of a lump sum in January of the year following the year of termination, subject to any delay required under Section 409A of the Code. At retirement (or earlier, if properly elected), benefits are paid according to the distribution election made by the participant at the time of the deferral election, subject to any delay required under Section 409A of the Code. As of the end of fiscal 2023, Mr. Lores, Ms. Myers and Mr. Tran were the only NEOs who were retirement eligible. In the event of death, the remaining vested EDCP account balance will be paid to the designated beneficiary, or otherwise in accordance with the EDCP provisions, in a single lump-sum payment in the month following the month of death. Amounts deferred or credited under the EDCP are credited with hypothetical investment earnings based on participant investment elections made from among the investment options available under the HP 401(k) Plan. Accounts maintained for participants under the EDCP are not held in trust, and all such accounts are subject to the claims of general creditors of HP. No amounts are credited with above-market earnings.
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
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Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
Potential Payments Upon Termination or Change in Control The amounts in the following table estimate potential payments due if a NEO had terminated employment with HP effective October 31, 2023 under each of the circumstances specified below. These amounts are in addition to benefits generally available to U.S. employees upon termination of employment, such as distributions from the retirement plans and the HP 401(k) Plan and payment of accrued vacation where required. Ms. Myers voluntarily resigned as Chief Financial Officer, effective December 31, 2023, and left the Company on January 12, 2024. Ms. Myers did not receive any cash severance in connection with her voluntary resignation and, because she was retirement eligible at the time of her resignation, her outstanding equity became vested consistent with the retirement treatment described in the table below.
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
| | | | | Long Term Incentive Programs(3) | | | | Name | Termination Scenario | Total(1) | Severance(2) | Stock Options | Restricted Stock Units | PARSU | | Enrique J. Lores | Voluntary | $12,779,480 | $— | $563,091 | $9,373,986 | $2,842,403 | | | Disability | $16,560,625 | $— | $563,091 | $9,373,986 | $6,623,548 | | | Retirement | $12,779,480 | $— | $563,091 | $9,373,986 | $2,842,403 | | | Death | $16,560,625 | $— | $563,091 | $9,373,986 | $6,623,548 | | | Not for Cause | $20,660,258 | $7,880,778 | $563,091 | $9,373,986 | $2,842,403 | | | Change in Control | $24,441,403 | $7,880,778 | $563,091 | $9,373,986 | $6,623,548 | | Marie Myers | Voluntary | $5,150,713 | $— | $166,841 | $4,097,315 | $886,557 | | | Disability | $6,666,916 | $— | $166,841 | $4,460,501 | $2,039,574 | | | Retirement | $5,150,713 | $— | $166,841 | $4,097,315 | $886,557 | | | Death | $6,666,916 | $— | $166,841 | $4,460,501 | $2,039,574 | | | Not for Cause | $8,309,881 | $2,884,282 | $166,841 | $4,372,201 | $886,557 | | | Change in Control | $9,551,198 | $2,884,282 | $166,841 | $4,460,501 | $2,039,574 | | Tuan Tran | Voluntary | $5,493,634 | $— | $229,408 | $4,370,112 | $894,114 | | | Disability | $6,656,341 | $— | $229,408 | $4,370,112 | $2,056,821 | | | Retirement | $5,493,634 | $— | $229,408 | $4,370,112 | $894,114 | | | Death | $6,656,341 | $— | $229,408 | $4,370,112 | $2,056,821 | | | Not for Cause | $8,375,835 | $2,882,201 | $229,408 | $4,370,112 | $894,114 | | | Change in Control | $9,538,542 | $2,882,201 | $229,408 | $4,370,112 | $2,056,821 | | Alex Cho | Voluntary/For Cause | $— | $— | $— | $— | $— | | | Disability | $6,577,578 | $— | $229,408 | $4,321,392 | $2,026,778 | | | Retirement | $— | $— | $— | $— | $— | | | Death | $6,577,578 | $— | $229,408 | $4,321,392 | $2,026,778 | | | Not for Cause | $6,088,740 | $2,941,702 | $210,291 | $2,052,638 | $884,109 | | | Change in Control | $9,519,280 | $2,941,702 | $229,408 | $4,321,392 | $2,026,778 | | Julie Jacobs | Voluntary/For Cause | $— | $— | $— | $— | $— | | | Disability | $8,499,512 | $— | $— | $7,671,460 | $828,052 | | | Retirement | $— | $— | $— | $— | | | | Death | $8,499,512 | $— | $— | $7,671,460 | $828,052 | | | Not for Cause | $3,100,671 | $2,131,069 | $— | $693,585 | $276,017 | | | Change in Control | $10,630,581 | $2,131,069 | $— | $7,671,460 | $828,052 |
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
(1)Total does not include amounts earned or benefits accumulated due to continued service by the NEO through October 31, 2023, including vested stock options, PCSOs, RSUs, PARSUs, accrued retirement benefits, and vested balances in the EDCP, as those amounts are detailed in the preceding tables. (2)The amounts reported are the cash benefits payable in the event of a qualifying termination under the SPEO: for the CEO, 2x multiple of base pay plus either the average of the actual annual incentives paid for the preceding three years, or target bonus if the CEO has received an annual incentive for less than three full years at the CEO level by the end of the fiscal year; for other NEOs, 1.5x multiple of base pay plus either the average of the actual annual incentives paid for the preceding three years, or target bonus if the NEO has received an annual incentive for less than three full years at his or her current seniority level by the end of the fiscal year; and includes 18 months’ COBRA premiums for continued group medical coverage for the NEOs and their eligible dependents, based on the cost of premiums under our group health plans as of October 31, 2023. In addition, each NEO would be eligible to receive a pro-rata cash bonus based on actual performance (in the event of a qualifying termination outside of the context of a change in control) or based on target performance (in the event of a qualifying termination within 24 months of a change in control); such amounts have not been included in this column. (3)Upon an involuntary termination not for cause, covered executives receive pro-rata vesting on unvested equity awards as discussed under the heading “Executive Compensation—Compensation Discussion and Analysis—Termination and Change in Control Protections—Severance and Long-term Incentive Change in Control Plan for Executive Officers.” Full vesting of PARSUs based on performance at target levels (to the extent that the actual performance period has not been completed) applies in the event of a termination due to death or disability for all grant recipients. Pro-rata vesting of PARSUs based on actual performance applies in the event of a termination due to retirement for all grant recipients. To calculate the value of unvested PARSUs for purposes of this table, target performance is used unless the performance period has been completed and the results have been recorded as of October 31, 2023. No TSR modifier was applied to such values. Full vesting of
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
| 2024 PROXY STATEMENT | 75 |
Narrative to the Fiscal 2023 Non-Qualified Deferred Compensation Table
unvested PCSOs applies in the event of a termination due to death or disability for all grant recipients. With respect to the treatment of equity in the event of a change in control of HP, the information reported reflects the SPEO-approved change in control terms. As of the end of fiscal 2023, only Mr. Lores, Ms. Myers and Mr. Tran are retirement eligible. Since Mr. Lores, Ms. Myers and Mr. Tran are retirement eligible, amounts included in the event of their voluntary termination include the values of equity awards they would receive on retirement. Values are calculated based on the $26.33 closing price of our stock on October 31, 2023, and for stock options, amounts are based on the difference between such closing price and the exercise price.
Narrative to the Potential Payments Upon Termination or Change in Control Table
Narrative to the Potential Payments Upon Termination or Change in Control Table
HP Retirement Arrangements
| | | | | | Value of initial fixed $100 investment based on: | | | | | Fiscal Year | Summary Compensation Total for PEO1,2 | Compensation Actually Paid to PEO 1,3 | Average Summary Compensation Table Total for Non-PEO NEOs1,4 | Average Compensation Actually Paid to Non-PEO NEOs1,3 | Total Shareholder Return5 | Peer Group Total Shareholder Return6 | Net Income ($ millions)7 | PARSU EPS (Non-GAAP)8,9 | | 2023 | $19,458,431 | $12,858,597 | $7,130,334 | $5,326,216 | $160.80 | $153.29 | $3,263 | $3.21 | | 2022 | $21,079,926 | $11,845,017 | $8,502,188 | $(177,698) | $162.73 | $117.16 | $3,132 | $3.91 | | 2021 | $20,733,806 | $39,088,555 | $8,703,097 | $17,988,299 | $173.59 | $146.93 | $6,541 | $4.12 |
HP Retirement Arrangements
| Reconciliation of Summary Compensation Table Total to Compensation Actually Paid for PEO | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | Summary Compensation Table Total | $19,458,431 | $21,079,926 | $20,733,806 | | Minus: Grant Date Fair Value Amounts of “Option Awards” and “Stock Awards” Granted in Fiscal Year as Reported in the Summary Compensation Table | $(15,863,592) | $(18,185,416) | $(14,665,390) | | Plus: Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | $10,888,050 | $6,312,993 | $25,242,448 | | Plus: Change in Fair Value from Prior Fiscal Year-End to Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | $(2,250,588) | $(1,010,176) | $3,749,546 | | Plus: Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $958,757 | $692,033 | $1,373,949 | | Plus: Change in Fair Value From Prior Fiscal Year-End to Vesting Date of Option and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $(948,316) | $2,100,033 | $1,255,124 | | Plus: Value of Dividends or other Earnings Paid on Option or Stock Awards not Otherwise Reflected in Fair Value or Total Compensation | $615,855 | $855,624 | $1,399,072 | | Compensation Actually Paid | $12,858,597 | $11,845,017 | $39,088,555 |
HP Retirement Arrangements
| Reconciliation of Average Summary Compensation Table Total to Average Compensation Actually Paid for Non-PEO NEOs | Fiscal Year 2023 ($) | Fiscal Year 2022 ($) | Fiscal Year 2021 ($) | | Average Summary Compensation Table Total | $7,130,334 | $8,502,188 | $8,703,097 | | Minus: Average Grant Date Fair Value of “Option Awards” and “Stock Awards” Granted in Fiscal Year as reported in the Summary Compensation Table | $(5,023,096) | $(7,553,788) | $(5,943,351) | | Minus: Average Amount in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” Column of Summary Compensation Table | $— | $— | $(1,358) | | Plus: Average Fair Value at Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Fiscal Year | $3,618,979 | $3,534,097 | $9,975,013 | | Plus: Average Change in Fair Value from Prior Fiscal Year-End to Fiscal Year-End of Outstanding and Unvested Option and Stock Awards Granted in Prior Fiscal Years | $(664,130) | $(245,654) | $2,997,885 | | Plus: Average Fair Value at Vesting of Option and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $266,324 | $117,016 | $547,138 |
Relationship between CAP vs. Cumulative TSR of Company and the Peer Group
| | Compensation Actually Paid (PEO) | | Avg. Compensation Actually Paid (Non-PEO NEOs) | | | Company TSR | | Peer Group TSR |
Relationship between CAP vs. Net Income
| | Compensation Actually Paid (PEO) | | Avg. Compensation Actually Paid (Non-PEO NEOs) | | Net Income (millions) |
Relationship between CAP vs. PARSU EPS
| | Compensation Actually Paid (PEO) | | Avg. Compensation Actually Paid (Non-PEO NEOs) | | | Company Selected Measure (PARSU EPS) | | |
13.Is cumulative voting permitted for the election of Directors?
13.Is cumulative voting permitted for the election of Directors? No, you may not cumulate your votes in the election of Directors. At the 2016 annual meeting, our stockholders approved an amendment to the Certificate of Incorporation eliminating cumulative voting. Therefore, cumulative voting is no longer available to our stockholders.