Director Compensation and Stock Ownership Guidelines

Employee directors such as Mr. Weisler do not receive any separate compensation for their 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. In fiscal 2016, non-employee directors received the compensation described below.

Each non-employee director serving during fiscal 2016 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 2016. Under special circumstances, the annual equity retainer may be paid in cash. No annual equity retainer was paid in cash during fiscal 2016. 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) 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 2016, the Board approved an annual retainer for the Lead Independent Director in the amount of $35,000. In addition to the annual cash and equity retainers, the Lead Independent Director and non-employee directors who served as chairs of standing committees during fiscal 2016 received cash retainers for such service. The Board also approved annual chair retainers as follows:

  • $25,000 for the Audit Committee Chair;
  • $20,000 for the HRC Committee Chair; and
  • $15,000 for other Board 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 2016 Director Compensation

Name Fees Earned or
Paid in Cash(1)
($)
Stock
Awards(2)
($)
Option
Awards(2)
($)
All Other
Compensation
($)
Total
($)
Aida Alvarez 72,465 210,070 0 0 282,535
Shumeet Banerji 116,921 199,997 0 0 316,918
Carl Bass 33,219 207,534 152,185 0 392,938
Robert R. Bennett 122,921 199,997 0 0 322,918
Charles V. Bergh 99,931 157,543 101,457 0 358,931
Stacy Brown-Philpot 99,931 257,536 0 0 357,467
Stephanie A. Burns 33,219 357,540 0 0 390,759
Mary Anne Citrino 58,202 207,534 152,185 0 417,921
Rajiv L. Gupta 158,893 100,004 101,457 0 360,354
Stacey Mobley 99,931 257,536 0 0 357,467
Subra Suresh 99,931 257,536 0 0 357,467
Dion J. Weisler(3)
Margaret C. Whitman 33,219(4) 207,534 152,185 0 392,938

(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 2016, as well as any additional meeting fees paid during fiscal 2016. See "Additional Information about Fees Earned or Paid in Cash in Fiscal 2016" below.

(2) Represents the grant date fair value of stock awards and option awards granted in fiscal 2016 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 for the fiscal year ended October 31, 2016, as filed with the SEC on December 15, 2016. See "Additional Information about Non-Employee Director Equity Awards" below.

(3) Mr. Weisler has served as President and CEO of HP since November 1, 2015. Accordingly, he does not receive compensation for his Board service.

(4) As Chairman of the Board, Ms. Whitman was eligible for an additional annual cash retainer of $200,000. She declined this retainer for fiscal 2016.

Additional Information about Fees Earned or Paid in Cash in Fiscal 2016

Name Annual
Retainers(1)
($)
Committee
Chair/
Lead
Independent
Director
Fees(2)
($)
Additional
Meeting
Fees(3)
($)
Total
($)
Aida Alvarez 72,465 0 0 72,465
Shumeet Banerji 99,931 14,990 2,000 116,921
Carl Bass 33,219 0 0 33,219
Robert R. Bennett 99,931 14,990 8,000 122,921
Charles V. Bergh 99,931 0 0 99,931
Stacy Brown-Philpot 99,931 0 0 99,931
Stephanie A. Burns 33,219 0 0 33,219
Mary Anne Citrino 33,219 24,983 0 58,202
Rajiv L. Gupta 99,931 54,962 4,000 158,893
Stacey Mobley 99,931 0 0 99,931
Subra Suresh 99,931 0 0 99,931
Margaret C. Whitman 33,219 0 0 33,219

(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 2015 through February 2016 Board year and cash annual retainers earned for service during the first eight months of the March 2016 through February 2017 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 2019. 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 2015 through February 2016 Board term and fees earned for service during the first eight months of the March 2016 through February 2017 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 2016 for service in the 2015 Board term ending February 2016. Additional meeting fees for the 2016 Board term, if any, will be paid during fiscal 2017.

Additional Information about Non-Employee Director Equity Awards

The following table provides additional information about nonemployee director equity awards, including the stock awards and option awards made to non-employee directors during fiscal 2016, 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 2016:

Name Stock Awards
Granted
During
Fiscal 2016
(#)
Option
Awards
Granted
During
Fiscal 2016
(#)
Grant Date
Fair Value of
Stock and
Option
Awards
Granted
During
Fiscal 2016(1)
($)
Stock Awards
Outstanding
at Fiscal
Year End(2)
(#)
Option
Awards
Outstanding
at
Fiscal Year
End
(#)
Aida Alvarez 18,305 0 210,070 18,631 0
Shumeet Banerji 17,467 0 199,997 17,778 0
Carl Bass 17,175 72,816 359,719 17,567 72,816
Robert R. Bennett 17,467 0 199,997 17,778 0
Charles V. Bergh 12,809 48,544 259,000 13,123 48,544
Stacy Brown-Philpot 21,542 0 257,536 22,011 0
Stephanie A. Burns 30,276 0 357,540 30,901 0
Mary Anne Citrino 17,175 72,816 359,719 17,567 72,816
Rajiv L. Gupta 8,734 48,544 201,461 8,890 204,824
Stacey Mobley 21,542 0 257,536 22,011 0
Subra Suresh 21,542 0 257,536 22,011 0
Margaret C. Whitman 17,175 72,816 359,719 17,567 5,613,838(3)

(1) Represents the grant date fair value of stock and option awards granted in fiscal 2016 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 for the fiscal year ended October 31, 2016, as filed with the SEC on December 15, 2016.

(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) 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 separation. A portion of Ms. Whitman's options were converted to options of HPE in connection with the separation.

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 58 of this proxy statement.