DEF 14A of Hewlett Packard Enterprise Co
Filed Feb 12, 2025 · FY20240001645590-25-000024
Director compensation and stock ownership guidelines
Director compensation and stock ownership guidelines Non-employee director compensation is determined by the Board, acting on the recommendation of the HRC Committee. When determining and recommending compensation, the HRC Committee annually considers market data for our peer group, which is the same group used for HPE’s executive compensation benchmarking purposes (see “Executive compensation—Compensation discussion and analysis—Other compensation-related matters—Fiscal 2024 peer companies”) as well as input from Frederic W. Cook & Co., Inc. (“FW Cook”), the independent compensation consultant retained by the HRC Committee. Directors who are employees of the Company or its affiliates — currently, only our President and CEO, Antonio Neri — do not receive separate compensation for their Board service. The HRC Committee intends to set director compensation levels to align with that of our peer group companies and appropriately reflect the directors’ time commitment and responsibilities. A competitive compensation package is important because it enables attraction and retention of highly qualified directors who are critical to our long-term success. For board year 2024, FW Cook conducted a review of director compensation levels relative to our peer group. Results of their review indicated HPE’s director compensation program was aligned with the Company’s overall philosophy. As such, the HRC Committee determined not to recommend changes for the 2024 board year. The HRC Committee intends to conduct director compensation reviews annually. During board year 2024, non-employee directors received compensation for their service as shown in the chart below:
Director compensation and stock ownership guidelines
| Pay component | Director compensation(1) | Additional information | | Annual cash retainer(2) | $115,000 | May elect to receive up to 100% in HPE stock(3), which may be deferred(4) | | Annual equity retainer | $240,000 granted in RSUs(5) | May defer up to 100%(4) | | Meeting fees | $2,000 for each board meeting in excess of ten | Paid in cash | | | $2,000 for each committee meeting in excess of ten (per committee) | May elect to receive up to 100% in HPE stock(3), which may be deferred(4) | | Board Chair fee(2) | $200,000 | May elect to receive up to 100% in HPE stock(3), which may be deferred(4) | | Committee chair fees(2) | Audit committee: $30,000 HRC committee: $25,000 All others: $20,000 | May elect to receive up to 100% in HPE stock(3), which may be deferred(4) | | Stock ownership guidelines | 5x annual cash retainer (i.e., $575,000) | Shares counted toward the guideline include those held by the director, directly or indirectly, and deferred vested RSUs. Should be met within five years of election to the Board |
Director compensation and stock ownership guidelines
1.For purposes of determining director compensation, we use a compensation year that generally commences with the date on which the annual stockholders meeting is held and ends one day prior to the following year’s annual stockholders meeting date. However, this does not coincide with our November through October fiscal year. Therefore, the pay components for the director compensation program for fiscal 2024 reflect program guidelines during both the 2023 and 2024 board years. The 2023 board year began in April 2023 and ended April 2024. The 2024 board year began in April 2024 and will continue until April 2025. 2.Annual cash retainers, as well as Chair and committee chair fees paid in cash, are paid in quarterly installments. 3.Annual cash retainers and Chair or committee chair fees received in shares of HPE stock in lieu of cash are delivered quarterly in four equal grants. Meeting fees received in shares of HPE stock are delivered at the end of the board year. 4.Deferral elections are made annually and are effective for the following calendar year. For calendar year 2024, directors were permitted to elect to defer, until termination of service from the Board, all or a portion of any compensation received in the form of RSUs or shares of HPE stock. 5.RSUs generally vest on the earlier of the date of the annual stockholder meeting in the following year or after one year from the date of grant. Directors receive dividend equivalent units with respect to RSUs. Non-employee directors are reimbursed for their expenses in connection with attending Board meetings.
Director compensation and stock ownership guidelines
| HPE 2025 PROXY STATEMENT | 35 |
Fiscal 2024 director compensation
Fiscal 2024 director compensation The following table provides information regarding compensation for directors who served during fiscal 2024:
Fiscal 2024 director compensation
| Name | Fees earned or paid in cash(1) ($) | Stock awards(2)(3) ($) | All other compensation ($) | Total ($) | | Patricia F. Russo | 157,500 | 397,474 | — | 554,974 | | Daniel Ammann(4) | 56,250 | — | — | 56,250 | | Pamela L. Carter | 140,000 | 240,000 | — | 380,000 | | Raymond J. Lane | — | 354,979 | — | 354,979 | | Ann M. Livermore | 115,000 | 240,000 | — | 355,000 | | Antonio F. Neri(5) | — | — | — | — | | Raymond E. Ozzie | 135,000 | 240,000 | — | 375,000 | | Gary M. Reiner | — | 374,978 | — | 374,978 | | Jean M. Hobby | 145,000 | 240,000 | — | 385,000 | | Charles H. Noski | 126,667 | 240,000 | — | 366,667 | | Regina E. Dugan | 115,000 | 240,000 | — | 355,000 | | Frank A. D'Amelio | 115,000 | 240,000 | — | 355,000 | | Bethany J. Mayer | 115,000 | 240,000 | — | 355,000 |
Fiscal 2024 director compensation
1.The dollar amounts shown represent the cash portion of the annual retainers, committee chair fees, chair fees, and additional meeting fees earned with respect to service during fiscal 2024. See “Additional information about fees earned or paid in cash in fiscal 2024” below. Any amounts elected to be received as HPE stock in lieu of cash are reflected in the stock awards column. 2.The amounts in this column reflect the grant date fair value of the annual equity retainer in the amount of $240,000, granted in the form of RSUs in fiscal 2024, as well as the following compensation voluntarily elected to be received in shares or deferred units of HPE stock in lieu of all or a portion of the annual cash retainer, and chair and additional meeting fees (where applicable) during fiscal 2024: Ms. Russo received $157,474, Mr. Lane received $114,979, and Mr. Reiner received $134,978 in shares of HPE stock. The number of shares of HPE stock granted in lieu of cash is determined using the closing stock price on the last day of the board quarter (rounded to the nearest share). All or a portion of the stock awards may have been deferred based on the director’s compensation election. 3.Represents the grant date fair value of the annual equity retainer granted in fiscal 2024, calculated in accordance with applicable accounting standards relating to share-based payment awards. For awards of RSUs, that amount is calculated by multiplying the closing price of HPE’s stock on the date of grant by the number of units awarded. 4.Mr. Ammann served as a board member during board year 2023 and did not seek reelection at our 2024 annual meeting of stockholders for the 2024 board year. Amounts represent a prorated amount paid in fiscal 2024 for his time served in board year 2023. 5.As our CEO, Mr. Neri did not receive any compensation for his board service. Please see the “Executive compensation—Compensation discussion and analysis” section (the “CD&A”) for details regarding Mr. Neri’s fiscal 2024 compensation.
Fiscal 2024 director compensation
| 36 | HPE 2025 PROXY STATEMENT |
Director nominee experience and qualifications
Director nominee experience and qualifications The Board annually reviews the appropriate skills and characteristics required 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. In addition, the Board believes that each director should possess certain attributes, as reflected in the Board membership criteria described below. Our Corporate Governance Guidelines and our Bylaws contain the current Board membership criteria that apply to nominees recommended for a position on the Board. Under those criteria, members of the Board should have the highest professional and personal ethics and values, consistent with our long-standing values and standards. They should have broad experience at the policy-making level in business, government, technology, or public service. They should be committed to enhancing stockholder value and should have sufficient time to carry out their duties and to provide insight and practical wisdom based on experience. In addition, the NGSR Committee takes into account a potential director’s ability to contribute to the diversity of background, experience, and skills represented on the Board, and it balances these considerations when assessing the composition of the Board. Directors’ service on other boards of public companies should be limited to a number that permits them, given their individual circumstances, to effectively and responsibly perform all director duties. Each director must represent the interests of all of our stockholders. The Board uses these, the minimum criteria for directors and director nominees set forth in our Bylaws, and other criteria as appropriate to evaluate potential nominees. The Board believes that all the nominees named below are highly qualified and have the skills and experience required for effective service on the Board. The nominees’ individual biographies below contain more specific information about their experiences, qualifications, and skills that led the Board to nominate them. There are no family relationships among our executive officers and directors. All of the nominees have indicated that they will be available to serve as directors. In the event that any nominee should become unavailable, the proxy holders, Antonio F. Neri, Marie Myers, and David Antczak, will vote for a nominee or nominees designated by the Board or the Board may decrease the size of the Board.
Fiscal 2024 compensation results
| Fiscal 2024 incentive program results | | | | | 88% | 104% | 108% | 88% | | Average corporate NEO annual incentive payout as percentage of target | Average business segment NEO annual incentive payout as percentage of target | First segment achievement of the fiscal 2023 PARSUs based on the 2-year performance period as percentage of target | Second segment achievement of the fiscal 2022 PARSUs based on the 3-year performance period as percentage of target(1) |
Executive compensation pay-for-performance philosophy
| What we do | | What we don’t do | | | | Design compensation programs that do not encourage excessive risk-taking | | Enter into individual executive employment agreements | | | Maintain above-market stock ownership guidelines that require the CEO, and other executive officers to hold shares equal to at least 7x and 5x their base salary, respectively | | Provide tax gross-ups for executive perquisites | | | Provide limited executive perquisites | | Pay share-dividend equivalents in our long-term incentive program before vesting of the underlying shares occurs | | | Prohibit hedging or pledging of Company stock by our executive officers and our directors | | Provide supplemental defined benefit pension plans (except in the case of international transfers, as required by law) | | | Maintain a clawback policy that permits the Company to recover all annual and long-term incentives, including those that are performance- and time-based, and goes beyond applicable NYSE requirements | | Engage in liberal share recycling of options or stock appreciation rights | | | Maintain a severance policy that provides for “double-trigger” change in control equity vesting | | | | | Engage an independent compensation consultant for the HRC Committee that does no other work for the Company | | |
Role of the HRC Committee and its advisors
Role of the HRC Committee and its advisors The HRC Committee oversees and provides strategic direction to management regarding all aspects of HPE’s pay program for senior executives. It makes recommendations regarding the compensation of the CEO to the independent members of the Board for approval, and it reviews and approves the compensation of the remaining Section 16 officers. All HRC Committee members are independent non-employee directors with significant experience in executive compensation matters. The HRC Committee engages its own independent compensation consultant as well as its own independent legal counsel. The HRC Committee continued to retain both Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant and Vedder Price, P.C. (“Vedder Price”) as its independent legal counsel in fiscal 2024. FW Cook provided analyses, market comparator benchmarking, and recommendations that informed the HRC Committee’s decisions. All changes to the compensation programs for our NEOs and other Section 16 officers were assessed by FW Cook on behalf of the HRC Committee, and were discussed and approved by the HRC Committee. Pursuant to SEC rules, the HRC Committee assessed the independence of its advisors, and concluded each is independent and that no conflict of interest exists that would prevent FW Cook or Vedder Price from independently providing service to the HRC Committee. Neither FW Cook nor Vedder Price performs other services for the Company, and neither will do so without the prior consent of the HRC Committee chair. FW Cook regularly attends HRC Committee meetings and engages with the HRC Committee chair and the HRC Committee members outside the presence of management. The HRC Committee met seven times in fiscal 2024. FW Cook participated in each meeting, as well as preparatory meetings and executive sessions in the absence of management.
Components and mix of compensation
| Pay component | Role | Determination factors | | Base salary | •Provides fixed portion of annual cash income | •Value of role in competitive marketplace •Criticality of the role •Skills, experience, and performance of individuals compared to the market as well as internal equity | | Annual incentive (i.e., Pay-for-Results or “PfR” Program) | •Provides variable portion of annual cash income •Focuses executives on annual objectives that support long-term strategy and value creation | •Target opportunities based on competitive marketplace, internal equity, and level of experience •Actual payouts based on performance against annual goals at the corporate, business segment (where applicable), and individual level. | | Long-term incentives: •Performance-adjusted restricted stock units (“PARSUs”) •Restricted stock units (“RSUs”) | •Incentivizes long-term sustained financial and stock price performance •Aligns interests of executives with stockholders •Encourages equity ownership •Encourages retention | •Target awards based on competitive marketplace, internal equity, and skills and performance of executive •Realized value based on actual performance against corporate goals, and absolute and relative stock price performance | | All other: •Benefits •Perquisites •Severance protection | •Supports the health and security of our executives, and their ability to save on a tax-deferred basis •Enhances executive productivity | •Competitive marketplace •Level of executive •Standards of good governance |
Process for setting and awarding fiscal 2024 executive compensation
based on the percentage of shares voted (disregarding abstentions and broker non-votes). Based on these Say on Pay outcomes, the HRC Committee believes that our stockholders support the philosophy, strategy, objectives, and administration of our executive compensation programs. Following the close of fiscal 2024, the HRC Committee reviewed actual financial results and MBO performance against preset objective goals under our incentive compensation programs for the year. Actual payouts were determined by reference to performance against the established goals after giving effect to predetermined mechanical adjustments to the annual incentive program (see additional details in the “Fiscal 2024 annual incentives” narrative) and a discretionary adjustment for the fiscal 2022 PARSUs to remove income related to the Russia and Belarus businesses from the goal measurement (see additional details in the “Vesting achievement under the fiscal 2022-2024 PARSU award cycle” narrative), which if left unchanged would have artificially inflated the base years in the year-over-year growth calculation and depressed the payout in a manner not consistent with the HRC Committee’s intent in granting the awards. In addition, the HRC Committee met in executive session without members of management present to review Mr. Neri’s fiscal 2024 performance, and the independent members of the Board approved Mr. Neri’s fiscal 2024 incentive amount.
Fiscal 2024 base salary
Fiscal 2024 base salary Our executives receive a limited percentage of their target total direct compensation in the form of base salary, which reinforces our philosophy of linking pay to performance. The HRC Committee positioned executive base salaries to be within a competitive range of the market median for comparable positions at our peer companies, and to generally comprise approximately 10% to 15% of the NEOs’ overall target total direct compensation, which is consistent with the practice of our peer group companies. The NEOs are paid an amount of base salary sufficient to attract qualified executive talent and maintain a stable management team. Mr. MacDonald’s base salary was increased to $600,000, effective at the beginning of fiscal 2024, to reflect time and proficiency in role and maintain our competitive position to market. No other NEOs received a base salary increase for fiscal 2024.
Fiscal 2024 annual incentives
Fiscal 2024 annual incentives
Pay-for-Results (“PfR”) program design
Pay-for-Results (“PfR”) program design Our NEOs were eligible to earn an annual cash incentive award under the Hewlett Packard Enterprise Company 2021 Stock Incentive Plan, as amended, for fiscal 2024. The target annual incentive awards for fiscal 2024 were set at 200% of base salary for Mr. Neri, 150% of base salary for Ms. Myers and Mr. Schultz, 125% of base salary for Ms. Russo and Mr. MacDonald, and 150% of base salary for Mr. Cox for the portion of the fiscal year he served as interim CFO and 80% of base salary otherwise.
Pay-for-Results (“PfR”) program design
Corporate revenue, incremental Intelligent Edge revenue, HPE annualized revenue run-rate, and non-GAAP operating profit (i.e., non-GAAP earnings from operations) metrics were used for the fiscal 2024 annual incentives for all corporate NEOs. The weighting mix for corporate revenue, incremental Intelligent Edge revenue and HPE annualized revenue run-rate were updated from fiscal 2023 weightings of 35%, 5%, and 10% respectively, to reinforce the importance of our strategic growth areas including our as-a-service transition. The annual incentive programs for Ms. Russo and Mr. MacDonald were based on business segment results. For Ms. Russo, the metrics were business segment revenue, business segment operating profit (i.e., business segment earnings from operations), HPE annualized revenue run-rate, and business segment as-as-service orders. As was reported in our April 1, 2024 Form 8-K, the HRC Committee updated its initially approved metrics for Mr. MacDonald’s annual incentive program in order to reflect expansion in his scope of duties that occurred after the initial metrics were approved. In connection with this April 1, 2024 approval, the HRC Committee established Mr. MacDonald’s annual incentive metrics as business segment revenue, business segment operating profit, business segment services orders, and AI hardware orders. These metrics were important annual measures to drive stockholder value through the Company’s strategy and business results. The achievement of certain individual performance-based MBO goals may result in a range between a 20% increase and 20% decrease to financial funding to determine the final annual incentive payout for each NEO. The MBO goals were established at the beginning of the performance period and were measured objectively following the end of the fiscal year. The specific metrics, their linkage to corporate or business segment results, as applicable, and the weighting that was placed on each, were chosen because the HRC Committee believed: •performance against these metrics enhances value for stockholders, capturing both the top and bottom line; •a balanced weighting with caps on maximum payouts mitigates the likelihood of rewarding executives for taking excessive risk; and •using different measures promotes adequate attention to key value drivers and avoids paying for the same performance twice.
Pay-for-Results (“PfR”) program design
| Fiscal 2024 PfR | | | | Financial performance metrics | Definition(1) | Rationale for metric | | Corporate revenue | Net revenue as defined and reported in HPE’s Annual Report on Form 10-K for fiscal 2024 | Reflects top line financial performance, which is a strong indicator of our long-term ability to drive stockholder value | | Business segment revenue | Business segment net revenue, including intersegment net revenue, as defined and reported in HPE’s Annual Report on Form 10-K for fiscal 2024 | | | Corporate operating profit | Non-GAAP earnings from operations(2), as defined and reported in HPE’s Annual Report on Form 10-K for fiscal 2024 | Reflects operational financial performance which is directly tied to stockholder value on a short-term basis | | Business segment operating profit | Segment earnings from operations, as defined and reported in HPE’s Annual Report on Form 10-K for fiscal 2024 | | | Corporate annualized revenue run-rate(3) | Annualized revenue run-rate, as defined and reported in HPE’s Annual Report on Form 10-K for fiscal 2024 | Reinforces the importance of our as-a-service transition | | Business segment as-a-service or services orders | Business as-a-service or services attach orders as defined and reported in HPE’s internal orders results | Reflects both long-term top line and short-term operational financial performance tied to stockholder value | | AI hardware orders | AI hardware orders as defined and reported in HPE’s internal order results | |
Discussion of fiscal 2024 MBOs
| Annual base salaryx | Target annual incentive %x | Corporate/BU performance %X | MBO modifier (+/- 20% of financial funding) | = | Annual incentive payout ($) |
Discussion of fiscal 2024 MBOs
| Fiscal 2024 PfR program annual incentive payout | | | | | | | | | | Annual incentive target (% of salary) | % of target annual incentive funded | | | | | Named executive officer | Annual salary ($) | | Financial metrics (1) (% of target) | MBO Modifier (% of target) | Actual payout (1) (% of target) | Actual payout ($) | | Antonio Neri | 1,300,000 | 200 | 75 | 120 | 90 | 2,350,318 | | Marie Myers(2) | 676,136 | 150 | 75 | 120 | 90 | 916,809 | | John Schultz | 800,000 | 150 | 75 | 115 | 87 | 1,039,564 | | Fidelma Russo | 750,000 | 125 | 30 | 110 | 33 | 306,892 | | Neil MacDonald | 600,000 | 125 | 175 | 110 | 192 | 1,442,063 | | Jeremy Cox(3) | 650,000 | 94 | 75 | 100 | 75 | 461,956 |
Discussion of fiscal 2024 MBOs
1.Financial metrics and Actual payout percentages are rounded. 2.Ms. Myers’ annual salary and target annual incentive have been prorated based on her hire date. 3.Mr. Cox’s fiscal 2024 incentive was based on a proration of his 150% target incentive percentage through January 14, 2024 and his 80% target incentive percentage thereafter.
Long-term incentives
Long-term incentives
Fiscal 2024 award mix
•PARSUs support the objectives of linking realized value to the achievement of critical financial and operational objectives, and stockholder alignment. The earned award is based on two- and three-year results against predetermined corporate performance goals and relative long-term stockholder returns. •RSUs support retention and are linked to stockholder value and ownership, which are also important goals of HPE’s executive compensation program. Annual RSUs vest ratably over three years from the date of grant. Note: Consistent with long-term incentives granted to the Company’s other Senior Vice Presidents, Mr. Cox’s fiscal 2024 long-term incentives were granted in the form of 100% restricted stock units.
Fiscal 2024 annual LTI grant values
Fiscal 2024 annual LTI grant values The HRC Committee, and in the case of Mr. Neri, the independent members of the Board, approved the value of fiscal 2024 annual LTI awards for the NEOs based on factors such as competitive market data, internal equity, individual performance, and the executives’ potential future contributions. The Plan grants the HRC Committee the authority to manually make certain adjustments to PARSU performance metrics when certifying PARSU vesting results, including in cases where unforeseen or extraordinary events outside of the control of management result in impacts on HPE’s financial results.
Fiscal 2024 annual LTI grant values
| Fiscal 2024 annual LTI target award values ($) | | | | | Named executive officer | PARSUs (50%)(1) | RSUs (50%) | Total LTI value (100%) | | Antonio Neri | 8,000,000 | 8,000,000 | 16,000,000 | | Marie Myers(2) | 3,937,500 | 3,937,500 | 7,875,000 | | John Schultz | 3,375,000 | 3,375,000 | 6,750,000 | | Fidelma Russo | 3,000,000 | 3,000,000 | 6,000,000 | | Neil MacDonald | 2,500,000 | 2,500,000 | 5,000,000 | | Jeremy Cox | N/A | 3,500,000 | 3,500,000 |
Fiscal 2024 annual LTI grant values
1.These values do not include the incremental accounting charge for modification of the fiscal 2022 PARSUs’ non-GAAP net income goal as described in the “Vesting achievement under the fiscal 2022-2024 PARSU award cycle” section and disclosed in rows marked with footnote 5 in the “Fiscal 2024 Grants of Plan-Based Awards” table. 2.For Ms. Myers, excludes one-time make-whole grant of restricted stock units as described in the “Fiscal 2024 leadership changes” section above. These values represent the target dollar value of awards granted. The actual grant date fair value used for accounting and disclosure purposes may vary. For more information on NEO grants of PARSUs and RSUs during fiscal 2024, see the “Fiscal 2024 grants of plan-based awards” table.
Fiscal 2024 PARSUs
Fiscal 2024 PARSUs The PARSUs were structured to have two- and three-year performance periods that began at the start of fiscal 2024 and continue through the end of fiscal 2025 and 2026, respectively. Under this program, fifty percent of the PARSUs are eligible for vesting based on performance over two years with continued service, and fifty percent are eligible for vesting based on performance over three years with continued service. The two- and three-year performance measures are each based on HPE’s non-GAAP net income growth and a modifier dependent upon relative TSR performance against the S&P 500 constituents. We use both two- and three-year performance and vesting periods to reward for achieving mid- and long-term results given business mix transformation, market volatility and unpredictability, and talent retention. The PARSUs granted to our NEOs measure non-GAAP net income growth to drive accountability for all aspects of revenue, costs, expenses, depreciation on past capital expenditures, and taxes, which we believe are all key drivers of stockholder value. Internal non-GAAP net income goals were set after consideration of historical performance, internal budgets, and external expectations.
Fiscal 2024 PARSUs
| | | Two- and three-year performance periods | | | | | Target PARSUs grantedx | Corporate non-GAAP net income performance % | X | Relative TSR modifier (+/- 20% of financial funding) | = | Final PARSUs vested |
Fiscal 2024 PARSUs
| Fiscal 2024 PARSUs | | | | | | | | Segment | Vesting(1) | Non-GAAP net income growth vs. internal goals(2)(3)(4) | | Relative TSR vs. S&P 500 +/- 20% modifier(4) | | Overall payout | | Segment one | 50% after two-year performance period | Max Target Threshold < Threshold | 200% 100% 50% 0% | ≥ 90th percentile 50th percentile ≤ 25th percentile | 1.2x 1.0x 0.8x | 0 - 200% of target | | Segment two | 50% after three-year performance period | Max Target Threshold < Threshold | 200% 100% 50% 0% | ≥ 90th percentile 50th percentile ≤ 25th percentile | 1.2x 1.0x 0.8x | 0 - 200% of target |
Fiscal 2024 PARSUs
1.Performance measurement and vesting occur fifty percent each at the end of the two- and three-year periods, subject to continued service. 2.Non-GAAP net income goals are determined based on the most recent preceding fiscal-year results adjusted by the predetermined year-over-year net income growth rates approved by the HRC Committee at the beginning of the performance period. See the “GAAP to non-GAAP reconciliations” attached as Annex C for additional details regarding non-GAAP net income (i.e., non-GAAP net earnings, or in the case of fiscal 2024, non-GAAP net earnings attributable to HPE in the Company’s Annual Report on Form 10-K for the year ended October 31, 2024). 3.Targets to be disclosed only following the end of the performance periods out of concern for competitive harm. 4.Interpolated for performance between threshold/target and target/maximum achievement levels for net income and relative TSR.
Vesting achievement under the fiscal 2023-2024 PARSU award cycle
Vesting achievement under the fiscal 2023-2024 PARSU award cycle The number of segment one fiscal 2023 PARSUs earned was based on our performance against two-year non-GAAP net income growth rates approved by the HRC Committee at the beginning of the performance period and a modifier dependent upon relative TSR performance against the S&P 500 constituents. The actual performance achievement as a percent of target for the completed two-year performance period as of October 31, 2024 is summarized in the table below:
Vesting achievement under the fiscal 2023-2024 PARSU award cycle
| | | Non-GAAP net income growth (% of target earned) | | | | Relative TSR vs. S&P 500(1) (modifier of achievement %) | | Total payout (% of target vesting) | | | Performance period | YoY target (%) | YoY result (%) | Achievement (%) | 2-year average achievement (%) | | | | | Segment | | | | | | Percentile | Modifier (%) | | | Segment one(2) | FY23(3) | 101 | 106 | 200.0 | 100.0 | 66th Percentile | 107.9 | 107.9 | | | FY24(4) | 105 | 100 | 0.0 | | | | |
Vesting achievement under the fiscal 2023-2024 PARSU award cycle
1.Relative TSR as reported by Bloomberg and calculated using the average closing price of HPE and the S&P 500 companies’ common stock for the beginning and end of the performance period, assuming reinvestment of dividends. 2.Segment one of the fiscal 2023 PARSU performance period began on November 1, 2022 and ended on October 31, 2024. 3.The non-GAAP net income growth threshold and maximum for fiscal 2023 were 99% and 103% respectively. 4.The non-GAAP net income growth threshold and maximum for fiscal 2024 were 102% and 108% respectively. Due to the partial divestiture of H3C during fiscal 2024, on September 25, 2024, the HRC Committee approved a revised baseline to measure fiscal 2023 to fiscal 2024 non-GAAP net income growth; resulting funding achievement for the fiscal 2024 measurement period was 0%.
Vesting achievement under the fiscal 2022-2024 PARSU award cycle
Vesting achievement under the fiscal 2022-2024 PARSU award cycle The number of segment two fiscal 2022 PARSUs earned was based on our performance against three-year non-GAAP net income growth rates approved by the HRC Committee at the beginning of the performance period and a modifier dependent upon relative TSR
Vesting achievement under the fiscal 2022-2024 PARSU award cycle
| | | Non-GAAP net income growth (% of target earned) | | | | Relative TSR vs. S&P 500(1) (modifier of achievement %) | | Total payout (% of target vesting) | | | Performance period | YoY target (%) | YoY result (%) | Achievement (%) | 3-year average achievement (%) | | | | | Segment | | | | | | Percentile | Modifier (%) | | | Segment two(2) | FY22(3) | 104 | 106 | 158.2 | 78.6(6) | 75th percentile | 112.4 | 88.3(6) | | | FY23(4) | 110 | 108 | 77.6 | | | | | | | FY24(5) | 110 | 100 | 0.0 | | | | |
Vesting achievement under the fiscal 2022-2024 PARSU award cycle
1.Relative TSR as reported by Bloomberg and calculated using the average closing price of HPE and the S&P 500 companies’ common stock for the beginning and end of the performance period, assuming reinvestment of dividends. 2.Segment two of the fiscal 2022 PARSU performance period began on November 1, 2021 and ended on October 31, 2024. 3.The non-GAAP net income growth threshold and maximum for fiscal 2022 were 100% and 108%, respectively. Prior to the Russia/Belarus-related modification, the YoY growth result was 102% and Achievement was 77.6%. 4.The non-GAAP net income growth threshold and maximum for fiscal 2023 were 105% and 115%, respectively. Prior to the Russia/Belarus-related modification, the YoY growth result was 106% and Achievement was 60.7%. 5.The non-GAAP net income growth threshold and maximum for fiscal 2024 were 105% and 115%, respectively. Due to the partial divestiture of H3C during fiscal 2024, the HRC Committee approved on September 25, 2024 a revised baseline to measure fiscal 2023 to fiscal 2024 non-GAAP net income growth; resulting funding achievement for the fiscal 2024 measurement period was 0%. 6.Prior to the Russia/Belarus-related modification, the 3-year average achievement was 46.1% and total payout was 51.8% of target.
Use of comparative compensation data and compensation philosophy
Use of comparative compensation data and compensation philosophy The HRC Committee reviewed Section 16 officer compensation and compared it to that of executives in similar positions with HPE’s peers for purposes of benchmarking target pay levels. The HRC Committee’s annual review of our peer group resulted in no changes to the peer companies for fiscal 2024. The HRC Committee reviewed and approved the following 19 company peer group, which informed decision making for fiscal 2024 target pay levels:
Use of comparative compensation data and compensation philosophy
| Fiscal 2024 peer companies | | | | Accenture | HP Inc. | NetApp | | ADP | IBM | Qualcomm | | Cisco Systems, Inc. | Intel Corporation | Seagate Technology | | Cognizant | Jabil | Western Digital | | DXC Technology | Juniper Networks | Xerox | | Flex Ltd. | Kyndryl Holdings | | | Honeywell | Micron Technology | |
Use of comparative compensation data and compensation philosophy
continued to set target total direct compensation levels for fiscal 2024 that were generally within a competitive range of the market median, although in some cases it sets higher levels for attraction and retention purposes. The HRC Committee reviews HPE’s peer group annually to assess the appropriateness for competitive benchmarking of executive pay and compensation design.
Fiscal 2025 compensation program
Fiscal 2025 compensation program The HRC Committee approved a fiscal 2025 compensation structure that continues to align our executives’ and stockholders’ interests and reinforce our business strategy. The fiscal 2025 annual incentive program was changed to align the financial performance for all corporate and business segment NEOs under companywide metrics and to replace the MBO modifier with an integrated MBO metric to balance rewarding for HPE financial performance and individual performance. For fiscal 2025, the annual incentive plan performance will be based 80% on HPE financial performance against HPE revenue, HPE operating profit (i.e., non-GAAP earnings from operations), and HPE ARR and 20% on individual MBO performance. The fiscal 2025 long-term incentive program will remain consistent with that of fiscal 2024.
Fiscal 2024 summary compensation table
Fiscal 2024 summary compensation table The following table sets forth information concerning the compensation of our CEO, CFO, and three other most highly compensated executive officers who remained employed at the end of fiscal 2024 (as well as Mr. Cox, who served as interim CFO during a portion of fiscal 2024):
Fiscal 2024 summary compensation table
| Name and principal position(1) | Year | Salary ($)(2) | Bonus ($) | Stock awards ($)(3) | Option awards ($) | Non-equity incentive plan compensation ($)(4) | Change in pension value and nonqualified deferred compensation earnings ($)(5) | All other compensation ($)(6) | Total ($) | | Antonio F. Neri President and Chief Executive Officer | 2024 | 1,300,000 | — | 17,646,855 | — | 2,350,318 | 35,225 | 78,799 | 21,411,197 | | | 2023 | 1,300,000 | — | 15,577,803 | — | 3,053,361 | — | 135,385 | 20,066,549 | | | 2022 | 1,275,000 | — | 13,386,710 | — | 2,352,980 | — | 351,675 | 17,366,365 | | Marie E. Myers(7) Executive Vice President, Chief Financial Officer | 2024 | 676,136 | 500,000 | 11,137,583 | — | 916,809 | — | 12,255 | 13,242,783 | | John F. Schultz Executive Vice President, Chief Operating and Legal Officer | 2024 | 800,000 | — | 7,504,666 | — | 1,039,564 | — | 104,000 | 9,448,230 | | | 2023 | 800,000 | — | 6,750,387 | — | 1,476,350 | — | 94,429 | 9,121,166 | | | 2022 | 800,000 | — | 6,052,518 | — | 971,605 | — | 112,491 | 7,936,614 | | Fidelma M. Russo Executive Vice President, General Manager of Hybrid Cloud and Chief Technology Officer | 2024 | 750,000 | — | 6,051,172 | — | 306,892 | — | 152,481 | 7,260,545 | | Neil B. MacDonald Executive Vice President, General Manager of Server | 2024 | 600,000 | — | 5,391,201 | — | 1,442,063 | — | 71,115 | 7,504,379 | | | 2023 | 550,000 | — | 4,673,358 | — | 624,999 | — | 166,016 | 6,014,373 | | | 2022 | 550,000 | — | 3,089,231 | — | 1,012,761 | — | 33,443 | 4,685,435 | | Jeremy Cox Senior Vice President, Corporate Controller and Chief Tax Officer & Former Interim Chief Financial Officer | 2024 | 650,000 | — | 3,500,007 | — | 461,956 | — | 32,000 | 4,643,963 | | | 2023 | 650,000 | — | 999,994 | — | 850,579 | — | 34,750 | 2,535,323 |
Fiscal 2024 summary compensation table
1.Ms. Myers was hired as CFO effective January 15, 2024. Ms. Russo was not a named executive officer in fiscal 2022 and 2023. Mr. Cox was appointed Interim CFO effective August 25, 2023 through January 14, 2024 and was not a named executive officer in fiscal 2022. 2.Amounts shown represent base salary earned during the fiscal year, as described in the “Fiscal 2024 base salary” section. 3.Amounts shown represent the grant date fair value of all stock awards granted during the applicable fiscal year, calculated in accordance with applicable accounting standards, and the fiscal year 2024 incremental accounting charge for modification of the fiscal 2022 PARSUs’ non-GAAP net income goal measurement as described in the “Vesting achievement under the fiscal 2022-2024 PARSU award cycle” section in the CD&A above and disclosed in rows marked with footnote 5 in the “Fiscal 2024 grants of plan-based awards” table below. The incremental accounting charge related to modification of the fiscal 2022 PARSUs was $1,510,376 for Mr. Neri, $697,098 for Mr. Schultz and $348,547 for Mr. MacDonald. For information on the assumptions used to calculate the fair value of the awards, refer to Note 5, “Stock-Based Compensation” to our “Consolidated Financial Statements” in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024, as filed with the SEC on December 19, 2024. In the case of RSUs, the value is determined by multiplying the number of units granted by the closing price of HPE’s stock on the grant date. For PARSUs awarded in fiscal 2024, amounts shown reflect the grant date fair value of the PARSUs for the two- and three-year performance periods beginning with fiscal 2024, based on the probable outcome of performance conditions related to these PARSUs on the grant date. The 2024 PARSUs include both market-related (relative TSR) and internal (non-GAAP net income) performance goals as described under “Determination of fiscal 2024 executive compensation—long-term incentives.” Consistent with the applicable accounting standards, the grant date fair value of the relative TSR component has been determined using a Monte Carlo simulation model. The table below sets forth the grant date fair value for the PARSUs granted to our NEOs in fiscal 2024.
Fiscal 2024 summary compensation table
| HPE 2025 PROXY STATEMENT | 95 |
Fiscal 2024 summary compensation table
| Name | Probable outcome of performance conditions grant date fair value ($)* | Maximum outcome of performance conditions grant date fair value ($)* | | Antonio Neri | 8,136,478 | 16,272,956 | | Marie Myers | 4,200,087 | 8,400,175 | | John Schultz | 3,432,572 | 6,865,144 | | Fidelma Russo | 3,051,175 | 6,102,350 | | Neil MacDonald | 2,542,651 | 5,085,303 | | Jeremy Cox | — | — |
Fiscal 2024 summary compensation table
* All amounts shown represent the grant date fair value of the PARSUs subject to the internal non-GAAP net income performance goals and relative TSR modifier (i) based on the probable or target outcome as of the date the goals were set and (ii) based on achieving the maximum level of performance (i.e., 200% of target) for the two- and three-year performance periods beginning in fiscal 2024. The grant date fair value of the PARSUs awarded on December 7, 2023 was $16.40 per unit, which was determined using a Monte Carlo simulation model. Grants are subject to the internal non-GAAP net income performance goals and a relative TSR modifier. 4.All amounts shown represent payouts under the PfR program. Such amounts were earned during the applicable fiscal year but paid after the end of that fiscal year. 5.Amounts shown represent the increase in actuarial present value of NEO pension benefits during the applicable fiscal year, as described in more detail under “Narrative to the fiscal 2024 pension benefits table” below. The amounts reported do not reflect additional accruals, but reflect the passage of one additional year from the prior present value calculation and changes in other actuarial assumptions. The assumptions used in calculating the changes in pension benefits are described in footnote 3 to the “Fiscal 2024 pension benefits table” below. 6.The amounts shown are detailed in the “Fiscal 2024 all other compensation table” below. 7.Ms. Myers’ Bonus amount represents the first of two equal installments of the make-whole cash award, as described in the “Fiscal 2024 leadership changes” section above, paid following her start date of January 15, 2024. The second installment was paid following the one-year anniversary of her start date and will be reported in the fiscal 2025 summary compensation table.
Fiscal 2024 grants of plan-based awards
Fiscal 2024 grants of plan-based awards The following table provides information on awards granted under the PfR program for fiscal 2024, and awards of RSUs and PARSUs granted as part of the fiscal 2024 long-term incentive compensation, all of which are provided under the HPE 2021 Stock Incentive Plan:
Fiscal 2024 grants of plan-based awards
| | | Estimated future payouts under non-equity incentive plan awards(1) | | | Estimated future payouts under equity incentive plan awards(2) | | | All other stock awards: number of shares of stock or units(3) (#) | Grant-date fair value of stock and option awards(4) ($) | | Name | Grant date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Antonio F. Neri | | | | | | | | | | | PfR | | 780,000 | 2,600,000 | 5,200,000 | | | | | | | Annual RSU | 12/7/2023 | | | | | | | 496,278 | 8,000,001 | | Annual PARSU | 12/7/2023 | | | | 198,511 | 496,278 | 992,556 | | 8,136,478 | | Modification of PARSU(5) | 10/30/2024 | | | | | | | | 1,510,376 | | Marie Myers | | | | | | | | | | | PfR | | 304,262 | 1,014,205 | 2,028,410 | | | | | | | Annual RSU | 1/20/2024 | | | | | | | 256,181 | 3,937,502 | | Annual PARSU | 1/20/2024 | | | | 102,472 | 256,181 | 512,362 | | 4,200,087 | | Make-whole RSU(6) | 1/20/2024 | | | | | | | 195,185 | 2,999,993 | | John F. Schultz | | | | | | | | | | | PfR | | 360,000 | 1,200,000 | 2,400,000 | | | | | | | Annual RSU | 12/7/2023 | | | | | | | 209,367 | 3,374,996 | | Annual PARSU | 12/7/2023 | | | | 83,747 | 209,367 | 418,734 | | 3,432,572 | | Modification of PARSU(5) | 10/30/2024 | | | | | | | | 697,098 | | Fidelma Russo | | | | | | | | | | | PfR | | 262,500 | 937,500 | 1,875,000 | | | | | | | Annual RSU | 12/7/2023 | | | | | | | 186,104 | 2,999,996 | | Annual PARSU | 12/7/2023 | | | | 74,442 | 186,104 | 372,208 | | 3,051,175 | | Neil B. MacDonald | | | | | | | | | | | PfR | | 202,500 | 750,000 | 1,500,000 | | | | | | | Annual RSU | 12/7/2023 | | | | | | | 155,087 | 2,500,002 | | Annual PARSU | 12/7/2023 | | | | 62,035 | 155,087 | 310,174 | | 2,542,651 | | Modification of PARSU(5) | 10/30/2024 | | | | | | | | 348,547 | | Jeremy Cox (7) | | | | | | | | | | | PfR | | 183,971 | 613,238 | 1,226,475 | | | | | | | Annual RSU | 12/7/2023 | | | | | | | 217,122 | 3,500,007 |
Fiscal 2024 grants of plan-based awards
1.Amounts represent the range of possible cash payouts for fiscal 2024 awards under the PfR Program.
Fiscal 2024 grants of plan-based awards
| HPE 2025 PROXY STATEMENT | 97 |
Fiscal 2024 grants of plan-based awards
2.Fiscal 2024 PARSU amounts represent the range of shares that may vest at the end of the two- and three-year performance periods applicable to the award, assuming achievement of threshold, target, and maximum performance. Under this program, fifty percent of the PARSUs are eligible for vesting based on performance over two years with continued service, and fifty percent are eligible for vesting based on performance over three years with continued service. The two- and three-year performance measures are each based on HPE’s non-GAAP net income results and a modifier dependent upon relative TSR performance against the S&P 500 constituents. To the extent that our non-GAAP net income performance is below threshold for the performance period, no shares will vest for the applicable tranche. For additional details, see the discussion of PARSU awards under “Determination of fiscal 2024 executive compensation—Long-term incentives—Fiscal 2024 PARSUs.” 3.RSUs vest as to one third of the units on each of the first three anniversaries of the grant date, subject to continued service. 4.See footnote 2 to the “Fiscal 2024 summary compensation table” for a description of the method used to determine the grant date fair value of stock awards. This value may differ from the value represented in the “Fiscal 2024 summary compensation table” due to rounding. 5.As described in the “Vesting achievement under the fiscal 2022-2024 PARSU award cycle” section in the CD&A above, on October 30, 2024, the HRC Committee modified the non-GAAP net income growth goal measurement for segment two of the fiscal 2022 PARSUs to remove income related to the Russia and Belarus businesses from the reported financial results for fiscal 2021 and fiscal 2022 to enable a consistent year-over-year growth comparison. The amounts shown in these rows reflect the grant date fair value of such modifications during fiscal 2024 as computed in accordance with FASB ASC Topic 718 with respect to the fiscal 2022 PARSUs. 6.Represents one-time make-whole RSU grant as described in the “Fiscal 2024 leadership changes” section above. 7.Mr. Cox’s Fiscal 2024 annual incentive was based on a proration of his 150% target incentive percentage through January 14, 2024 and 80% thereafter.
Fiscal 2024 year-end outstanding equity awards
Fiscal 2024 year-end outstanding equity awards The following table provides information on stock and option awards held by the NEOs as of October 31, 2024:
Fiscal 2024 year-end outstanding equity awards
| | | | | | | Stock awards | | | | | | | Option awards | | | | | | Equity incentive plan awards: number of unearned shares, units or other rights that have not vested(4) (#) | Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested(3)(4) ($) | | Name | Grant date | Number of securities underlying unexercised options exercisable(1) (#) | Equity incentive plan awards number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (2) (#) | Market value of shares or units of stock that have not vested(3) ($) | | | | Antonio F. Neri | 12/9/2021 | — | — | — | — | 148,055 | 2,885,592 | — | — | | | 12/8/2022 | — | — | — | — | 312,726 | 6,095,030 | 243,373 | 4,743,340 | | | 12/7/2023 | — | — | — | — | 510,163 | 9,943,077 | 510,163 | 9,943,077 | | Marie Myers | 1/20/2024 | — | — | — | — | 460,410 | 8,973,391 | 261,315 | 5,093,029 | | John F. Schultz | 12/9/2021 | — | — | — | — | 56,944 | 1,109,839 | — | — | | | 6/21/2022 | — | — | — | — | 11,232 | 218,912 | — | — | | | 12/8/2022 | — | — | — | — | 133,656 | 2,604,955 | 105,462 | 2,055,454 | | | 12/7/2023 | — | — | — | — | 215,225 | 4,194,735 | 215,225 | 4,194,735 | | Fidelma Russo | 12/9/2021 | — | — | — | — | 94,530 | 1,842,390 | — | — | | | 12/8/2022 | — | — | — | — | 194,698 | 3,794,664 | — | — | | | 12/7/2023 | — | — | — | — | 191,311 | 3,728,651 | 191,311 | 3,728,651 | | Neil MacDonald | 12/9/2021 | — | — | — | — | 33,960 | 661,880 | — | — | | | 12/8/2022 | — | — | — | — | 93,134 | 1,815,182 | 73,012 | 1,423,004 | | | 12/7/2023 | — | — | — | — | 159,426 | 3,107,213 | 159,426 | 3,107,213 | | Jeremy Cox | 12/9/2021 | — | — | — | — | 16,543 | 322,423 | — | — | | | 4/20/2022 | — | — | — | — | 26,052 | 507,753 | — | — | | | 12/8/2022 | — | — | — | — | 43,266 | 843,254 | — | — | | | 12/7/2023 | — | — | — | — | 223,197 | 4,350,110 | — | — |
Fiscal 2024 year-end outstanding equity awards
| 98 | HPE 2025 PROXY STATEMENT |
Fiscal 2024 year-end outstanding equity awards
1.The NEOs do not hold any option awards. 2.Stock awards in this column include RSUs and rounded underlying dividend equivalent units accrued through October 31, 2024. The RSUs vest as to one third of the units on each of the first three anniversaries of the grant date, subject to continued service. 3.Value calculated based on the $19.49 closing price of HPE stock on October 31, 2024. 4.The amounts in this column include the second segment of the target fiscal 2023 PARSUs, the first and second segment of the target fiscal 2024 PARSUs, and rounded underlying dividend equivalent units accrued through October 31, 2024. Final vested shares are subject to actual performance of HPE’s non-GAAP net income growth and relative TSR within two- and three-year performance periods, subject to continued service.
Fiscal 2024 options exercises and stock vested
Fiscal 2024 options exercises and stock vested The following table provides information regarding options exercised and stock awards vested for the NEOs during fiscal 2024:
Fiscal 2024 options exercises and stock vested
| | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise(1) ($) | Number of shares acquired on vesting(2) (#) | Value realized on vesting(3) ($) | | Antonio Neri | 365,945 | 1,977,146 | 961,585 | 17,126,634 | | Marie Myers | — | — | — | — | | John Schultz | — | — | 411,798 | 7,361,241 | | Fidelma Russo | — | — | 290,240 | 5,112,868 | | Neil MacDonald | 7,671 | 44,722 | 235,823 | 4,238,967 | | Jeremy Cox | — | — | 84,026 | 1,379,081 |
Fiscal 2024 options exercises and stock vested
1.Reflects the amounts realized based on the number of shares purchased multiplied by the difference between the market price and the exercise price of shares of HPE stock on the date of exercise. 2.Reflects RSUs, the first segment of the fiscal 2022 PARSUs, the second segment of the fiscal 2021 PARSUs, and accrued dividend equivalent shares. 3.Reflects the fair market value of HPE stock on the vesting date for PARSUs, RSUs, and accrued dividend equivalent shares. Fair market value is determined based on the closing price of HPE stock on the applicable vesting date.
Fiscal 2024 pension benefits table
Fiscal 2024 pension benefits table The following table provides information about the present value of accumulated pension benefits payable to each NEO:
Fiscal 2024 pension benefits table
| Name(1) | Plan name(2) | Number of years of credited service (#) | Present value of accumulated benefit(3) ($) | Payments during last fiscal year ($) | | Antonio F. Neri | Nederland Plan | 3.2 | 95,316 | — | | | IRG | 28.5 | 106,760 | — | | Marie Myers | — | — | — | — | | John Schultz | — | — | — | — | | Fidelma Russo | — | — | — | — | | Neil MacDonald | — | — | — | — | | Jeremy Cox | — | — | — | — |
Fiscal 2024 pension benefits table
1.Mr. Neri is the only NEO who is eligible to receive benefits under any HPE defined benefit pension plan. 2.The “Nederland Plan” refers to the Centraal Beheer Algemeen Pensioenfonds or CB APF. “IRG” refers to the International Retirement Guarantee. 3.Because the change in the pension table amounts from those in the prior fiscal year determine the increase in pension value, both the current assumptions as of October 31, 2024, and for the prior fiscal year as of October 31, 2023, have been included in the following description. Mr. Neri participated in an HP Inc. pension plan while employed in the Netherlands. As of October 31, 2024, the present value for this plan is based on a discount rate of 3.53% and mortality in accordance with the AG forecast table 2024. As of October 31, 2023, the assumptions included a discount rate of 4.25% and mortality in accordance with the AG forecast table 2022. The earliest unreduced retirement age in the Nederland Plan is age 67. Due to his transfer from the Netherlands to the U.S. at the request of the Company, Mr. Neri is also covered under the IRG. As of October 31, 2024, the present value of IRG benefits is based on a discount rate of 4.86%, lump sum interest rates of 4.17% for the first five years, 4.76% for the next 15 years and 5.25% thereafter, and applicable mortality. As of October 31, 2023, the assumptions included a discount rate of 5.80%, lump sum interest
Fiscal 2024 pension benefits table
| HPE 2025 PROXY STATEMENT | 99 |
Fiscal 2024 pension benefits table
rates of 5.58% for the first five years, 5.66% for the next 15 years, and 5.56% thereafter, and applicable mortality. The earliest unreduced retirement age for the IRG based on Mr. Neri’s employment history is age 65.
Narrative to the fiscal 2024 pension benefits table
Narrative to the fiscal 2024 pension benefits table HPE does not sponsor any qualified U.S. defined benefit pension plans and only participates in one nonqualified U.S. defined benefit retirement plan for selected international transfers. As a result, no NEO currently accrues a benefit under any U.S. qualified defined benefit pension plan. Benefits previously accrued by an NEO under non-U.S. HPE pension plans are payable to them following termination of employment, subject to the terms of the applicable plan. Mr. Neri, who is a participant in the nonqualified U.S. plan for international transfers, has the potential to accrue an additional benefit under the International Retirement Guarantee (“IRG”), but only in the event that HPE requires him to change the country of his employment.
Fiscal 2024 nonqualified deferred compensation table
Fiscal 2024 nonqualified deferred compensation table The following table provides information about contributions, earnings, withdrawals, distributions, and balances under the EDCP:
Fiscal 2024 nonqualified deferred compensation table
| Name | Executive contributions in last FY(1) ($) | Registrant contributions in last FY(2) ($) | Aggregate earnings in last FY ($) | Aggregate withdrawals/ distributions ($) | Aggregate balance at FY end ($) | | Antonio Neri | — | — | — | — | — | | Marie Myers | 13,600 | — | 791 | — | 14,391 | | John Schultz | 24,000 | — | 583,649 | 209,419 | 2,647,023 | | Fidelma Russo | 130,793 | 13,200 | 61,597 | — | 361,886 | | Neil MacDonald | 9,968 | 8,808 | 455,177 | 129,632 | 2,068,303 | | Jeremy Cox | 956,050 | 13,200 | 1,028,263 | 234,301 | 5,366,989 |
Fiscal 2024 nonqualified deferred compensation table
1.The amounts reported here as “executive contributions” are reported as compensation to such NEOs in the “Fiscal 2024 summary compensation table” above as “salary” or “non-equity incentive plan compensation”.
Fiscal 2024 nonqualified deferred compensation table
| 100 | HPE 2025 PROXY STATEMENT |
Fiscal 2024 nonqualified deferred compensation table
2.The contributions reported here as “registrant contributions” were made in fiscal 2024 with respect to participant base salary deferrals made during fiscal 2023 and 2024 and are reported as compensation to such NEOs in the “Fiscal 2024 summary compensation table” above as “all other compensation”.
Narrative to the fiscal 2024 nonqualified deferred compensation table
Narrative to the fiscal 2024 nonqualified deferred compensation table The amounts reported in the nonqualified deferred compensation table were provided under the EDCP, a nonqualified deferred compensation plan that permits eligible U.S. employees to defer base salary in excess of the amount taken into account under the qualified HPE 401(k) Plan and bonus amounts of up to 95% of the annual incentive bonus payable under the PfR program. In addition, a matching contribution is available under the plan to eligible employees. The matching contribution applies to base salary deferrals on compensation above the Code limits that apply to the qualified HPE 401(k) Plan under the Code, up to a maximum of two times the Code’s compensation limit. In calendar year 2023, the NEOs were eligible for a matching contribution up to 4% on base salary contributions in excess of the Code limit up to a maximum of two times that limit (matching contributions were available on calendar year 2023 base salary from $330,000 to $660,000). In calendar year 2024, the NEOs were eligible for a matching contribution up to 4% on base salary contributions in excess of the Code limit up to a maximum of two times that limit (matching contributions were available on calendar year 2024 base salary from $345,000 to $690,000). In effect, the EDCP permits these executives and all eligible employees to receive a 401(k)-type matching contribution on a portion of base salary deferrals in excess of Code limits. Upon becoming eligible for participation, employees must specify the amount of base salary and/or the percentage of annual incentives to be deferred, as well as the time and form of payment. If termination of employment occurs before retirement (defined under the EDCP as at least age 55 with 15 years of service), 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 Code Section 409A. At retirement (or earlier, if properly elected), benefits are paid according to the distribution election made by the participant subject to any delay required under Code Section 409A. No withdrawals are permitted prior to the previously elected distribution date, other than hardship withdrawals as permitted by applicable law. Amounts deferred or credited under the EDCP are credited with notional investment earnings based on participant investment elections made from among the investment options available under the HPE 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 HPE. No amounts are credited with above-market earnings.
Potential payments upon termination or change in control
Potential payments upon termination or change in control The amounts in the following table generally estimate potential payments that would have been due if an NEO had terminated employment with HPE effective October 31, 2024, 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 HPE 401(k) Plan and payment of accrued vacation where required.
Potential payments upon termination or change in control
| | | | | Long-term incentive programs | | | | Name | Termination scenario | Total(1) ($) | Severance(2) ($) | Stock options ($) | RSUs(3) ($) | PARSUs(3) ($) | | Antonio Neri | Voluntary/For Cause | — | — | — | — | — | | | Disability | 33,610,116 | — | — | 18,923,699 | 14,686,417 | | | Retirement | 33,610,116 | — | — | 18,923,699 | 14,686,417 | | | Death | 33,610,116 | — | — | 18,923,699 | 14,686,417 | | | Not for Cause | 23,589,438 | 7,807,444 | — | 8,476,820 | 7,305,174 | | | Change in Control | 41,417,560 | 7,807,444 | — | 18,923,699 | 14,686,417 | | Marie Myers | Voluntary/For Cause | — | — | — | — | — | | | Disability | 14,066,420 | — | — | 8,973,391 | 5,093,029 | | | Retirement | N/A | N/A | N/A | N/A | N/A | | | Death | 14,066,420 | — | — | 8,973,391 | 5,093,029 | | | Not for Cause | 7,128,092 | 2,690,247 | — | 2,492,592 | 1,945,253 | | | Change in Control | 16,756,667 | 2,690,247 | — | 8,973,391 | 5,093,029 |
Potential payments upon termination or change in control
| HPE 2025 PROXY STATEMENT | 101 |
Potential payments upon termination or change in control
| | | | | Long-term incentive programs | | | | Name | Termination scenario | Total(1) ($) | Severance(2) ($) | Stock options ($) | RSUs(3) ($) | PARSUs(3) ($) | | John F. Schultz | Voluntary/For Cause | — | — | — | — | — | | | Disability | 14,378,631 | — | — | 8,128,441 | 6,250,190 | | | Retirement | 14,378,631 | — | — | 8,128,441 | 6,250,190 | | | Death | 14,378,631 | — | — | 8,128,441 | 6,250,190 | | | Not for Cause | 9,784,234 | 2,972,472 | — | 3,693,654 | 3,118,108 | | | Change in Control | 17,351,103 | 2,972,472 | — | 8,128,441 | 6,250,190 | | Fidelma Russo | Voluntary/For Cause | — | — | — | — | — | | | Disability | 13,094,356 | — | — | 9,365,705 | 3,728,651 | | | Retirement | N/A | N/A | N/A | N/A | N/A | | | Death | 13,094,356 | — | — | 9,365,705 | 3,728,651 | | | Not for Cause | 9,221,508 | 3,100,540 | — | 4,567,365 | 1,553,603 | | | Change in Control | 16,194,896 | 3,100,540 | — | 9,365,705 | 3,728,651 | | Neil B. MacDonald | Voluntary/For Cause | — | — | — | — | — | | | Disability | 10,114,492 | — | — | 5,584,275 | 4,530,217 | | | Retirement | 10,114,492 | — | — | 5,584,275 | 4,530,217 | | | Death | 10,114,492 | — | — | 5,584,275 | 4,530,217 | | | Not for Cause | 7,107,642 | 2,476,250 | — | 2,388,054 | 2,243,338 | | | Change in Control | 12,590,742 | 2,476,250 | — | 5,584,275 | 4,530,217 | | Jeremy Cox | Voluntary/For Cause | — | — | — | — | N/A | | | Disability | 6,023,540 | — | — | 6,023,540 | N/A | | | Retirement | N/A | N/A | N/A | N/A | N/A | | | Death | 6,023,540 | — | — | 6,023,540 | N/A | | | Not for Cause | 3,593,825 | 1,286,436 | — | 2,307,389 | N/A | | | Change in Control | 7,309,976 | 1,286,436 | — | 6,023,540 | N/A |
Potential payments upon termination or change in control
1.The total excludes amounts earned, or benefits accumulated, due to continued service by each NEO through October 31, 2024, including vested stock options, RSUs, PARSUs, accrued retirement benefits, and vested balances in the EDCP, as those amounts are detailed in the preceding tables. The total also excludes amounts each NEO was eligible to receive under the annual PfR program with respect to fiscal 2024 performance. For Mr. Neri, the total excludes amounts payable from the Netherlands pension and IRG programs in which he participates, as those are fully described in the “Fiscal 2024 pension benefits table” above. 2.For Mr. Neri, the amounts reported represent the cash benefits payable under the SPEO (as defined below) at the rate applicable to the CEO (i.e., using 2.0x multiple of base salary plus the three-year average of annual incentive payments). For the other NEOs, the amounts reported are the cash benefits payable in the event of a qualifying termination under the SPEO (i.e., base salary plus the three-year average of annual incentive payments with a 1.5x multiplier for Executive Vice Presidents and Presidents, or a 1.0x multiplier for Senior Vice Presidents). For each NEO, the amounts also include 18 times the difference between the monthly COBRA premium to continue the NEO’s group medical coverage and the monthly standard premium charged to active employees for that same coverage. 3.Value calculated based on the $19.49 closing price of HPE stock on October 31, 2024.
Narrative to the potential payments upon termination or change in control table
Narrative to the potential payments upon termination or change in control table This narrative reflects plans and provisions in effect as of October 31, 2024. In fiscal 2024, Section 16 officers (including all of the NEOs) were covered by our Severance Plan for Executive Officers (the “SPEO”), which is intended to protect HPE and its stockholders, and provide a level of transition assistance in the event of an involuntary termination of employment. Under the SPEO, participants who incur an involuntary termination, not for cause, and who execute a full release of claims following such termination, which release has not been revoked or attempted to be revoked, are eligible to receive severance benefits in an amount determined as a multiple of the sum of base salary and the average of the actual annual incentives paid for the preceding three years. In the case of the CEO, the multiplier is 2.0, and in the case of Executive Vice Presidents and Presidents, the multiplier is 1.5. The multiplier for Senior Vice Presidents who are executive
Narrative to the potential payments upon termination or change in control table
| 102 | HPE 2025 PROXY STATEMENT |
Narrative to the potential payments upon termination or change in control table
officers is 1.0. In all cases, the SPEO cash benefit will not exceed 2.99 times the sum of the executive’s base salary plus target annual incentive as in effect immediately prior to the termination of employment. In addition to the cash benefit, the participants in the SPEO were eligible to receive (1) a pro rata annual incentive award for the year of termination based on actual performance results, (2) pro rata vesting of unvested equity awards if any applicable performance conditions have been satisfied, and (3) a lump-sum health-benefit stipend in an amount equal to 18 months’ COBRA premiums for continued group medical coverage for the executive and his or her eligible dependents, to the extent those premiums exceed 18 times the monthly premiums for active employees in the same plan with the same level of coverage as of the date of termination. Under the SPEO, participants who incur an involuntary termination that is not for cause and does not occur within 24 months after a change in control will receive the calculated severance benefit in four equal installments over a period of 18 months. Participants who incur an involuntary termination not for cause that is within 24 months after a change in control will receive the SPEO’s cash severance benefit in a single lump sum within 75 days of termination.
Chief Executive Officer (“CEO”) pay ratio
Chief Executive Officer (“CEO”) pay ratio For fiscal 2024, the median annual total compensation of all employees of HPE (other than our CEO) was $66,886. The annual total compensation of our CEO was $21,411,197. Based on this information, the ratio of the annual total compensation of our CEO to the median annual total compensation of all employees was approximately 320 to 1. We identified the “median employee” by using the following methodology and material assumptions, adjustments, and estimates (consistent with all applicable SEC rules): •we selected August 31, 2024 as the date upon which we would identify the “median employee;” •as of this date, our employee population consisted of approximately 61,347 individuals, excluding employees on leaves of absence who are not expected to return to work; •for purposes of determining our median employee, we excluded employees in certain countries that, in total, resulted in the exclusion of approximately 1,368 employees. This exclusion represents less than 5% of HPE’s total number of employees as permitted under SEC rules; •we used fiscal year-to-date “gross cash earnings” paid through August 31, 2024 as our consistently applied compensation measure. In this context, gross cash earnings includes any salary (including overtime), bonus, and/or commissions. Salaries were annualized for all permanent employees who were hired after the fiscal year began; all foreign currencies were converted to U.S. dollars based on an exchange rate for the relevant period; and •once we identified the median employee, we calculated the elements of the median employee’s fiscal 2024 total annual compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
Chief Executive Officer (“CEO”) pay ratio
| 104 | HPE 2025 PROXY STATEMENT |
Chief Executive Officer (“CEO”) pay ratio
A summary of employees before and after the de minimis exemption is included below: HPE’s employee population included 14,976 U.S. based employees and 46,371 employees outside of the U.S. After excluding 1,368 employees (representing less than 5% of HPE’s total number of employees), as permitted under SEC rules, we identified our median employee from a group of 59,979 employees globally.
Chief Executive Officer (“CEO”) pay ratio
| Excluded employees by country | | | | | Country | # of employees | Country | # of employees | | Portugal | 130 | Peru | 88 | | Argentina | 128 | Chile | 85 | | Greece | 127 | Philippines | 84 | | Denmark | 124 | New Zealand | 79 | | Egypt | 100 | Vietnam | 65 | | Hungary | 99 | Kazakhstan | 34 | | Finland | 96 | Qatar | 28 | | Norway | 89 | Luxembourg | 12 | | | | Total employees excluded | 1,368 |
Chief Executive Officer (“CEO”) pay ratio
This information is being provided for the purposes of compliance with the pay ratio disclosure requirement. Neither the HRC Committee nor HPE management used the pay ratio measure in making compensation recommendations or decisions. SEC rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies.
Pay versus performance
Pay versus performance Pursuant to Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid (“CAP”) for the Company’s CEO (also referred to in this section as the “Principal Executive Officer” or “PEO”) and non-PEO NEOs and certain aspects of the financial performance of the Company. The CAP values disclosed do not reflect the actual amount of compensation paid to our NEOs during the applicable year. The Compensation Committee does not utilize CAP as a basis for making compensation decisions. For information regarding compensation decisions made by our Compensation Committee, refer to the “Compensation Discussion and Analysis” section beginning on page 76.
Pay versus performance
| | Summary Compensation Table total for Principal Executive Officer (“PEO”) ($)(1) | Compensation actually paid to PEO ($)(1)(2) | Average Summary Compensation Table total for Non-PEO NEOs ($)(1) | Average compensation actually paid to Non-PEO NEOs ($)(1)(2) | Value of initial fixed $100 investment based on: | | Net income (millions) ($)(5) | Non-GAAP net earnings (millions) ($)(6) | | Year | | | | | HPE Total shareholder return ($)(3) | Peer group total shareholder return ($)(4) | | | | 2024 | 21,411,197 | 24,011,398 | 8,419,980 | 9,842,051 | 256 | 232 | 2,579 | 2,655 | | 2023 | 20,066,549 | 27,183,439 | 6,469,361 | 4,718,843 | 196 | 153 | 2,025 | 2,832 | | 2022 | 17,366,365 | 12,260,283 | 6,430,178 | 4,807,054 | 176 | 117 | 868 | 2,664 | | 2021 | 19,052,415 | 31,328,118 | 7,668,183 | 11,531,681 | 175 | 147 | 3,427 | 2,602 |
Pay versus performance
1.Mr. Neri served as our CEO in fiscal years 2024, 2023, 2022, and 2021. Non-PEO NEOs in fiscal year 2024 include Mmes. Marie Myers and Fidelma Russo and Messrs. John Schultz, Neil MacDonald, and Jeremy Cox. Non-PEO NEOs in fiscal year 2023 include Messrs. Jeremy Cox, John Schultz, Phil Mottram, Neil MacDonald, and Tarek Robbiati. Non-PEO NEOs in fiscal year 2022 included Messrs. Tarek Robbiati, John Schultz, Alan May, and Neil MacDonald. Non-PEO NEOs in fiscal year 2021 included Messrs. Tarek Robbiati, John Schultz, Alan May, Tom Black, and Keerti Melkote. 2.The amounts shown as Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized or received by the Company’s NEOs. These amounts reflect total compensation as set forth in the Summary Compensation Table for each year, adjusted as described in the table below. The unvested equity fair values were calculated on each of the required measurement dates using valuation assumptions based on criteria that did not materially differ from those used for grant date fair value calculations and in accordance with the methodology used for financial reporting purposes.
Pay versus performance
| HPE 2025 PROXY STATEMENT | 105 |
Pay versus performance
For unvested awards subject to performance-based vesting conditions, the fair values were based on the probable outcome of such performance-based vesting conditions as of the last day of the fiscal year. Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually Paid consist of:
Pay versus performance
| | 2024 | | 2023 | | 2022 | | 2021 | | | | PEO ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | PEO ($) | Average Non-PEO NEOs ($) | | Total compensation from Summary Compensation Table | 21,411,197 | 8,419,980 | 20,066,549 | 6,469,361 | 17,366,365 | 6,430,178 | 19,052,415 | 7,668,183 | | Less: Change in actuarial present value reported in the "change in pension value and nonqualified deferred compensation earnings" column of the SCT | (35,225) | — | — | — | — | — | (16,091) | — | | Plus: Service cost for pension plans | — | — | — | — | — | — | — | — | | Less: Amount reported in the "Stock awards" column of the SCT | (17,646,855) | (6,716,926) | (15,577,803) | (4,873,350) | (13,386,710) | (4,666,732) | (13,118,823) | (5,096,141) | | Plus: Year end fair value of equity awards granted in the year | 16,913,981 | 7,106,175 | 16,871,925 | 3,675,699 | 9,272,474 | 3,316,605 | 19,334,854 | 6,435,366 | | Year over year change in fair value of outstanding and unvested equity awards | 1,514,794 | 504,028 | 1,448,323 | 271,467 | (1,077,275) | (314,568) | 3,119,548 | 1,095,667 | | Fair value as of vesting date of equity awards granted and vested in the year | — | — | — | — | — | — | — | 456,387 | | Change from prior year end in fair value of equity awards granted in prior years that vested in the year | 775,249 | 226,441 | 3,137,192 | 542,955 | (759,020) | (249,551) | 1,586,632 | 515,924 | | Fair value at the end of the prior year of equity awards that failed to meet vesting conditions in the year | — | — | — | (1,518,675) | — | — | — | — | | Value of dividends or other earnings paid on stock or option awards not otherwise reflected in fair value or total compensation | 1,078,256 | 302,353 | 1,237,254 | 151,385 | 844,449 | 291,123 | 1,369,583 | 456,296 | | CAP total | 24,011,398 | 9,842,051 | 27,183,439 | 4,718,843 | 12,260,283 | 4,807,054 | 31,328,118 | 11,531,681 |
Pay versus performance
3.Represents the cumulative TSR of the Company of an initial investment of $100 for the measurement period beginning October 31, 2020, and ending October 31, 2024, 2023, 2022, and 2021, respectively, calculated in accordance with Item 201(e) of Regulation S-K as required under Item 402(v) of Regulation S-K. 4.The Peer Group TSR is based on the S&P Information Technology Index and the value of an initial fixed investment of $100 on October 31, 2020, assuming the reinvestment of any dividends. 5.Reflects GAAP net earnings (or, in the case of fiscal 2024, GAAP net earnings attributable to HPE) as shown in the Company’s Annual Report on Form 10-K for the fiscal years ended October 31, 2024, 2023, 2022, and 2021, respectively. 6.Equal to non-GAAP net income. Similar to our fiscal year ended October 31, 2023, non-GAAP net earnings, as calculated and described in the Company’s Annual Report on Form 10-K for the year ended October 31, 2024 (described therein as non-GAAP net earnings attributable to HPE in the case of fiscal 2024), was selected as the company-selected measure for fiscal year 2024, as it was deemed to be the most important financial performance measure used to link Company performance to CAP to our PEO and average CAP to our other NEOs for fiscal 2024. Please note non-GAAP net earnings may not have been the most important financial performance measure for fiscal years 2022 and 2021, and we may determine a different financial measure to be the company-selected measure in future years.
Pay versus performance
| 106 | HPE 2025 PROXY STATEMENT |