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A conversation with the HRC Committee

Tracy Keogh, HP’s Chief Human Resources Officer, talks with Chair of the HRC Committee Stephanie Burns about the Company’s executive compensation program and the Committee’s duties in overseeing its design and implementation.

The Committee consists of Ms. Burns and four of our other independent Directors: Ms. Alvarez, Mr. Banerji, Mr. Bergh and Mr. Mobley. All bring valuable experience and understanding of the role that setting appropriate executive compensation plays in ensuring company performance and stockholder value.

For more information regarding compensation details for all of our NEOs, including our CEO, please see page 31 of the Proxy Statement for our complete Compensation Discussion and Analysis.

TK: Stephanie, so good to have you with us today. You’ve been a member of the HP Board since 2015 and have chaired the HRC Committee since November 2017. Can you talk about the role the HR and Compensation Committee plays?

SB: Certainly. The Committee oversees and provides strategic direction to management regarding our pay-for-performance program. The Committee sets Dion’s compensation, and reviews and approves the compensation of the rest of the leadership team. We also review senior management selections and oversee succession planning. To do this, the Committee works with its own independent compensation consultant to help analyze competitive pay practices and market trends, and to generally strengthen the pay-for-performance relationship and alignment with stockholders. The Committee also gets an update at every meeting on the key people practices and initiatives going on in the organization. Everything from employee engagement to workforce planning to key hires is within our remit.

TK: Can you describe HP’s overall philosophy and strategy on executive compensation?

SB: Our compensation program is closely aligned with HP’s company goals. It focuses on driving the right behaviors while simplifying executive compensation plans. Ultimately it’s designed to help us attract, retain, and reward the executive team for delivering value to stockholders over the long term. We have a pay-for-performance philosophy that forms the foundation for all decisions regarding compensation, with a strong bias towards variable pay in our executive compensation. Our program is also designed to facilitate strong corporate governance. Our executive compensation is aligned with shareholder value through equity-based programs, shareholder value-based performance measures (like relative Total Shareholder Return), and using financial performance measures that executives can control and are closely correlated with shareholder value over time.

TK: Are there specific elements of our program that you’ve found to showcase our best practices?

SB: HP’s program includes many robust best practices and we are continuously working to improve.

Some specific elements of our program that are best-in-class include:

  • We target compensation to approximate the median level among a group of relevant peers, and only go above this level when performance warrants
  • We utilize non-discretionary financial metrics, and specific management objectives in our annual cash incentive plan, which we believe are correlated to long-term value creation
  • We do not use employment contracts with any of our executives, and have consistent and market-aligned severance

TK: Thanks for that great overview Stephanie.