Alignment with Stockholders and Compensation Best Practices

Pay-for-Performance Corporate Governance
The majority of target total direct compensation for executives is performance-based as well as equity-based to align their rewards with stockholder value We generally do not enter into individual executive compensation agreements
Total direct compensation is targeted at or near the market median We devote significant time to management succession planning and leadership development efforts
Actual realized total direct compensation and pay positioning are designed to fluctuate with, and be commensurate with, actual annual and long-term performance recognizing companywide, business, and individual results We maintain a market-aligned severance policy for executives that does not have automatic single-trigger equity vesting upon a change in control when the acquirer assumes the equity awards
Incentive awards are heavily dependent upon our stock performance, and are measured against objective financial metrics that we believe link either directly or indirectly to the creation of value for our stockholders. In addition, 25% of our target annual incentives are contingent upon the achievement of qualitative objectives that we believe will contribute to our long-term success The HRC Committee utilizes an independent compensation consultant
Our compensation programs are designed to mitigate compensation-related risk to the organization from both a financial and reputational perspective
We maintain stock ownership guidelines for executive officers and non-employee directors
We balance growth and return objectives, top and bottom line objectives, and short and long-term objectives to reward for overall performance that does not over-emphasize a singular focus We prohibit executive officers and directors from engaging in any form of hedging transaction, from holding HP securities in margin accounts and pledging as collateral for loans in a manner that could create compensation-related risk for the Company
A significant portion of our long-term incentives are delivered in the form of performance-adjusted restricted stock units "PARSUs", which vest only upon the achievement of two- and three-year relative TSR and ROIC objectives We conduct a robust stockholder outreach program throughout the year
We provide no U.S. supplemental defined benefit pensions We disclose our corporate performance goals and achievements relative to these goals
We validate our pay-for-performance relationship on an annual basis