Director Compensation and Stock Ownership Guidelines

Employee directors such as Mr. Weisler do not receive any separate compensation for their HP Board activities. Non-employee director compensation is determined annually by the Board acting on the recommendation of the HRC Committee. In formulating its recommendation, the HRC Committee considers market data for our peer group and input from the third-party compensation consultant retained by the HRC Committee regarding market practices for director compensation.

Each non-employee director serving during fiscal 2017 was entitled to receive an annual cash retainer of $100,000. Non-employee directors may elect to defer up to 50% of their annual cash retainer. There were two non-employee directors who elected to defer. In lieu of the annual cash retainer, non-employee directors may elect to receive an equivalent value of equity either entirely in RSUs or in equal values of RSUs and stock options.

Each non-employee director also received an annual equity retainer of $200,000 for service during fiscal 2017. Under special circumstances, the annual equity retainer may be paid in cash. No annual equity retainer was paid in cash during fiscal 2017. Typically, the annual equity retainer is paid at the election of the director either entirely in RSUs or in equal values of RSUs and stock options. The number of shares subject to the RSU awards is determined based on the fair market value of our stock on the grant date, and the number of shares subject to the stock option awards is determined as of the grant date based on a Black-Scholes-Merton option pricing formula. Non-employee directors are entitled to receive dividend equivalent units with respect to RSUs, but not stock options. RSUs and stock options generally vest after one year from the date of grant. In addition, non-employee directors may elect to defer the settlement of all RSUs received as part of the director compensation program until either (a) upon the first to occur of the director’s death, disability (as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) or when the director no longer serves as a member of the HP Board of Directors (a “Separation From Service” as defined in Section 409A) or (b) as of April 1 of a given year; however, non-employee directors may not defer the settlement of any stock options received.

In fiscal 2017, when the Board was led by both a non-executive Chairman and a Lead Independent Director, the Board approved an annual retainer for the Lead Independent Director in the amount of $35,000. With the departure of our non-executive Chairman Ms. Whitman on July 26, 2017 and the appointment of Mr. Bergh as independent Chairman of the Board on that same date, the role of Lead Independent Director was eliminated. The Board accordingly canceled any further annual retainer payment for the Lead Independent Director role and began payment of a $200,000 annual retainer for the independent Chairman consistent with the previously set Chairman fee (pro-rated based on the date Mr. Bergh began service as the independent Chairman). In addition to the annual cash and equity retainers and the Lead Independent Director and Chairman retainers described above, the non-employee directors who served as chairs of standing committees during fiscal 2017 received cash retainers for such service. The Board approved annual cash retainers for committee chairs as follows for fiscal 2017:

  • $25,000 for the Audit Committee Chair;
  • $20,000 for the HRC Committee Chair; and
  • $15,000 for Chairs of other Board standing committees.

Each non-employee director also receives $2,000 for Board meetings attended in excess of ten meetings per Board year (which begins in March and ends the following February), and $2,000 for each committee meeting attended in excess of a total of ten meetings of each committee per Board year.

Non-employee directors are reimbursed for their expenses in connection with attending Board meetings (including expenses related to spouses when spouses are invited to attend Board events), and non-employee directors may use the Company aircraft for travel to and from Board meetings and other company events.

Fiscal 2017 Director Compensation
Name Fees Earned or
Paid in Cash(1)
($)
Stock 
Awards(2)
($)
Option Awards(2)
($)
All Other 
Compensation
($)
Total
($)
Aida Alvarez 99,931    200,007 0 299,938
Shumeet Banerji 114,921    200,007 0 314,928
Carl Bass(3) 10,315    300,011 0 310,326
Robert R. Bennett 116,921    200,007 0 316,928
Charles “Chip” V. Bergh 165,712    100,004 100,001 365,717
Stacy Brown-Philpot 103,931    200,007 0 303,938
Stephanie A. Burns 70,685    200,007 0 270,692
Mary Anne Citrino 28,983    150,015 150,002  0   329,000
Rajiv L. Gupta 67,804    0  0   67,804
Stacey Mobley 99,931    200,007 0  0   299,938
Subra Suresh 101,931    200,007 0  0   301,938
Dion J. Weisler(4) —      —   —
Margaret C. Whitman(5) (6) 155,047 150,002  0   305,049
  1. For purposes of determining director compensation, the board year begins in March and ends the following February, which does not coincide with our November through October fiscal year. Cash amounts included in the table above represent the portion of the annual retainers, committee chair fees, and Lead Independent Director fees earned with respect to service during fiscal 2017, as well as any additional meeting fees paid during fiscal 2017. Mr. Gupta, Ms. Whitman, and Mr. Bass all departed our Board during fiscal 2017, on April 24, 2017, July 26, 2017, and September 26, 2017, respectively. Accordingly, they each received a pro-rata portion of the annual cash or chair retainer fees earned for their services during each respective board quarter. See “Additional Information about Fees Earned or Paid in Cash in Fiscal 2017” below.
  2. Represents the grant date fair value of stock awards and option awards granted in fiscal 2017 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 HP’s stock on the date of grant by the number of units awarded. For option awards, that amount is calculated by multiplying the Black-Scholes-Merton value determined as of the date of grant by the number of options awarded. For information on the assumptions used to calculate the value of the stock awards, refer to Note 6 to our Consolidated Financial Statements in our Annual Report on Form 10-K/A for the fiscal year ended October 31, 2017, as filed with the SEC on December 14, 2017. See “Additional Information about Non-Employee Director Equity Awards” below.
  3. Effective upon Mr. Bass’s departure from the Board on September 26, 2017, the vesting of his outstanding restricted stock units granted to him in fiscal 2017 for his Board service was accelerated.
  4. Mr. Weisler has served as President and CEO of HP since November 1, 2015. Accordingly, he does not receive compensation for his Board service.
  5. Effective upon Ms. Whitman’s departure from the Board on July 26, 2017, the vesting of her outstanding restricted stock units granted to her in fiscal 2017 for her Board service was accelerated, and the post-departure exercise period of certain of her vested but unexercised options was extended from 90 days to one year. Accordingly, the fair market value of the equity awarded to her varies slightly from that of HP’s other directors.
  6. As Chairman of the Board, Ms. Whitman was eligible for an additional annual cash retainer of $200,000. She declined this retainer for fiscal 2017.
Additional Information about Fees Earned or Paid in Cash in Fiscal 2017
Name Annual
Retainers(1)
($)
Committee Chair,
Lead Independent
Director, and
Chairman Fees(2)
($)
Additional
Meeting Fees(3)
($)
Total
($)
Aida Alvarez 99,931 0 0 99,931
Shumeet Banerji 99,931 14,990 0 114,921
Carl Bass 0 10,315 0 10,315
Robert R. Bennett 99,931 14,990 2,000 116,921
Charles “Chip” V. Bergh 99,931 65,781 0 165,712
Stacy Brown-Philpot 99,931 0 4,000 103,931
Stephanie A. Burns 66,712 1,973 2,000 70,685
Mary Anne Citrino 0 24,983 4,000 28,983
Rajiv L. Gupta 46,370 21,435 0  67,804
Stacey Mobley 99,931 0 0 99,931
Subra Suresh 99,931 0 2,000 101,931
Margaret C. Whitman 0 0 0  0
  1. The board year begins in March and ends the following February, which does not coincide with HP’s November through October fiscal year. The dollar amounts shown include cash annual retainers earned for service during the last four months of the March 2016 through February 2017 Board year and cash annual retainers earned for service during the first eight months of the March 2017 through February 2018 Board year. This also includes cash earned in the period described that was deferred by director election into the 2005 Executive Deferred Compensation Plan, which provides that directors may elect when to receive their deferred cash annual retainer. Directors may not receive their deferred cash annual retainer earlier than January 2020. In the case of a termination of service, directors can elect to receive the deferred money in the January following the termination of the service if the date occurs prior to the specified distribution year elected. 
  2. Committee chair fees are calculated based on service during each Board term. The dollar amounts shown include such fees earned for service during the last four months of the March 2016 through February 2017 Board term and fees earned for service during the first eight months of the March 2017 through February 2018 Board term.
  3. Additional meeting fees are calculated based on the number of designated Board meetings and the number of committee meetings attended during each Board term. The dollar amounts shown include any additional meeting fees paid during fiscal 2017 for service in the 2016 Board term ending February 2017. Additional meeting fees for the 2017 Board term, if any, will be paid during fiscal 2018.
Additional Information about Non-Employee Director Equity Awards

The following table provides additional information about non-employee director equity awards, including the stock awards and option awards made to non-employee directors during fiscal 2017, the grant date fair value of each of those awards and the number of stock awards and option awards outstanding as of the end of fiscal 2017:

Name Stock Awards
Granted During
Fiscal 2017
(#)
Option Awards
Granted During
Fiscal 2017
(#)
Grant Date
Fair Value of
Stock and
Option Awards
Granted During
Fiscal 2017(1)
($)
Stock Awards
Outstanding
at Fiscal
Year End(2)
(#)
Option Awards
Outstanding at
Fiscal Year End
(#)
Aida Alvarez 10,650 0 200,007 10,800 0    
Shumeet Banerji 10,650 0 200,007 10,800 0    
Carl Bass 15,975 0 300,011 0 72,816    
Robert R. Bennett 10,650 0 200,007 10,800 0    
Charles “Chip” V. Bergh 5,325 26,110 200,005 14,555 74,654    
Stacy Brown-Philpot 10,650 0 200,007 29,108 0    
Stephanie A. Burns 10,650 0 200,007 10,800 0    
Mary Anne Citrino 7,988 39,165 300,017 21,832 111,981    
Rajiv L. Gupta 0 0 0 0 204,824    
Stacey Mobley 10,650 0 200,007 29,108 0    
Subra Suresh 10,650 0 200,007 29,108 0    
Margaret C. Whitman(3) 7,988 39,165 305,049 0 2,989,458(4)
  1. Represents the grant date fair value of stock and option awards granted in fiscal 2017 calculated in accordance with applicable accounting standards. For awards of RSUs, that number is calculated by multiplying the closing price of HP’s stock on the date of grant by the number of units awarded. For option awards, that amount is calculated by multiplying the Black-Scholes-Merton value determined as of the date of grant by the number of options awarded. For information on the assumptions used to calculate the value of the stock awards, refer to Note 6 to our Consolidated Financial Statements in our Annual Report on Form 10-K/A for the fiscal year ended October 31, 2017, as filed with the SEC on December 14, 2017.
  2. Includes dividend equivalent units accrued with respect to awards of RSUs outstanding at fiscal year end, as well as RSUs granted in previous years, that have been deferred at the election of the director.
  3. Effective upon Ms. Whitman’s departure from the Board on July 26, 2017, the vesting of her outstanding restricted stock units granted to her in fiscal 2017 for her Board service was accelerated, and the post-departure exercise period of certain vested but unexercised options was extended from 90 days to one year. Accordingly, the fair market value of the equity awarded to her varies slightly from that of HP’s other directors.
  4. Includes the number of option awards outstanding that were granted to Ms. Whitman while she served as President and CEO of HP prior to the spin-off of Hewlett Packard Enterprise Company (“HPE”). A portion of Ms. Whitman’s options were converted to options of HPE in connection with the spin-off transaction.

Non-Employee Director Stock Ownership Guidelines

Under our stock ownership guidelines, non-employee directors are required to accumulate, within five years of election to the Board, shares of HP’s stock equal in value to at least five times the amount of their annual cash retainer. Shares counted toward these guidelines include any shares held by the director directly or indirectly, including deferred vested awards.

All non-employee directors with more than five years of service have met our stock ownership guidelines and all non-employee directors with less than five years of service have either met or are on track to meet our stock ownership guidelines within the required time based on current trading prices of HP’s stock. See “Common Stock Ownership of Certain Beneficial Owners and Management” on page 56 of this proxy statement.