DEF 14A 1 a2230793zdef14a.htm DEF 14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

HEWLETT PACKARD ENTERPRISE COMPANY

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
    (4)   Proposed maximum aggregate value of transaction:
        
 
    (5)   Total fee paid:
        
 

o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
    (2)   Form, Schedule or Registration Statement No.:
        
 
    (3)   Filing Party:
        
 
    (4)   Date Filed:
        
 

Table of Contents

GRAPHIC   2017 PROXY STATEMENT
         
         

 

Patricia F. Russo
Chair of the Board
  Hewlett Packard Enterprise Company
3000 Hanover Street
Palo Alto, CA 94304
www.hpe.com

To our fellow Stockholders:

We are pleased and excited to invite you to attend the second annual meeting of stockholders of Hewlett Packard Enterprise Company on Wednesday, March 22, 2017 at 9:00 a.m., Pacific Time. The annual meeting is a time for us to reflect on our first year of business and share our business strategy. We have much to be proud of including our business performance, our best-in-class governance profile, and our transformative portfolio alignment. We also have much work to do, as we head into our second year with a vision, strategy, and leadership team fully focused on accelerating next.

This year's annual meeting will again be a completely virtual meeting of stockholders, which will be conducted via live webcast. You will be able to attend the annual meeting of stockholders online and submit your questions during the meeting by visiting HPE.onlineshareholdermeeting.com. You also will be able to vote your shares electronically at the annual meeting (other than shares held through our 401(k) Plan, which must be voted prior to the meeting). Hosting a virtual meeting will facilitate stockholder attendance and participation by enabling our stockholders to participate fully from any location around the world. In addition, the online format will allow us to communicate with you in advance of the meeting by visiting www.proxyvote.com for beneficial owners and proxyvote.com/hpe for registered stockholders. Details regarding how to attend the meeting online and the business to be conducted at the annual meeting are more fully described in the accompanying Notice of Annual Meeting and Proxy Statement.

We are pleased to provide access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission's "notice and access" rules. As a result, we are mailing to many of our stockholders a notice of Internet availability instead of a paper copy of this proxy statement and our 2016 Annual Report. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how each of those stockholders can receive a paper copy of our proxy materials, including this proxy statement, our 2016 Annual Report, and a form of proxy card or voting instruction card. All stockholders who do not receive a notice, including stockholders who have previously requested to receive paper copies of proxy materials, will receive a paper copy of the proxy materials by mail unless they have previously requested delivery of proxy materials electronically. Continuing to employ this distribution process will conserve natural resources and reduce the costs of printing and distributing our proxy materials.

Your vote is important to us. Regardless of whether you plan to participate in the annual meeting, we hope you will vote as soon as possible. You may vote by proxy over the Internet or by telephone, or, if you received paper copies of the proxy materials by mail, you may also vote by mail by following the instructions on the proxy card or voting instruction card. Voting over the Internet or by telephone, written proxy or voting instruction card will ensure your representation at the annual meeting regardless of whether you attend the virtual meeting.

Finally, I want to sincerely thank each of you for your ongoing support as a stockholder of Hewlett Packard Enterprise Company.

Sincerely,

GRAPHIC

Patricia F. Russo
Chair of the Board


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

HEWLETT PACKARD ENTERPRISE COMPANY

3000 Hanover Street
Palo Alto, California 94304
(650) 857-1501

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Time and Date   9:00 a.m., Pacific Time, on Wednesday, March 22, 2017

Place

 

Online at HPE.onlineshareholdermeeting.com

Items of Business

 

(1)

 

To elect the 14 directors named in this proxy statement

 

 

(2)

 

To ratify the appointment of the independent registered public accounting firm for the fiscal year ending October 31, 2017

 

 

(3)

 

To approve, on an advisory basis, the company's executive compensation

 

 

(4)

 

To approve the 162(m)-related provisions of 2015 Company Stock Incentive Plan

 

 

(5)

 

To consider such other business as may properly come before the meeting

Adjournments and Postponements

 

Any action on the items of business described above may be considered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed.

Record Date

 

You are entitled to vote only if you were a Hewlett Packard Enterprise Company stockholder as of the close of business on January 23, 2017.

Virtual Meeting Admission

 

Stockholders of record as of January 23, 2017 will be able to participate in the annual meeting by visiting HPE.onlineshareholdermeeting.com. To participate in the annual meeting, you will need the 16-digit control number included on your notice of Internet availability of the proxy materials, on your proxy card or on the instructions that accompanied your proxy materials.The annual meeting will begin promptly at 9:00 a.m., Pacific Time.

Pre-Meeting

 

The online format for the annual meeting also allows us to communicate more effectively with you via www.proxyvote.com for beneficial owners and proxyvote.com/hpe for registered stockholders and you can submit questions in advance of the annual meeting, and also access copies of our proxy statement and annual report.

Voting

 

Your vote is very important to us. Regardless of whether you plan to participate in the annual meeting, we hope you will vote as soon as possible. You may vote your shares over the Internet or via a toll-free telephone number. If you received a paper copy of a proxy or voting instruction card by mail, you may submit your proxy or voting instruction card for the annual meeting by completing, signing, dating and returning your proxy or voting instruction card in the pre-addressed envelope provided. Stockholders of record and beneficial owners will be able to vote their shares electronically at the annual meeting (other than shares held through the Hewlett Packard Enterprise Company 401(k) Plan, which must be voted prior to the meeting). For specific instructions on how to vote your shares, please refer to the section entitled Questions and Answers—Voting Information beginning on page 94 of the proxy statement.
     
By order of the Board of Directors,
    GRAPHIC
    JOHN F. SCHULTZ
Executive Vice President, General Counsel and Secretary

This notice of annual meeting and proxy statement and form of proxy are being distributed
and made available on or about February 6, 2017.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on March 22, 2017.
This proxy statement and Hewlett Packard Enterprise Company's 2016 Annual Report are available electronically at
www.hpe.com/investor/stockholdermeeting2017 and with your 16-digit control number at by visiting www.proxyvote.com for beneficial owners and proxyvote.com/hpe for registered stockholders.


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

PROXY STATEMENT EXECUTIVE SUMMARY

  1

CORPORATE GOVERNANCE

  2

Stockholder Outreach

  2

Corporate Citizenship Through Living Progress Initiative

  3

Hewlett Packard Enterprise Board of Directors

  3

Establishment of the Board

  3

Board and Committee Meetings and Attendance

  6

Board Leadership Structure

  6

Board Structure and Committee Composition

  7

Board Risk Oversight

  11

Succession Planning

  12

Director Evaluations

  12

Director Candidate Selection and Evaluation

  13

Limits on Director Service on Other Public Company Boards

  14

Director Independence

  14

Director Compensation and Stock Ownership Guidelines

  18

Non-Employee Director Stock Ownership Guidelines

  21

Stock Ownership Information

  22

Common Stock Ownership of Certain Beneficial Owners and Management

  22

Section 16(a) Beneficial Ownership Reporting Compliance

  24

Related Persons Transaction Policies and Procedures

  24

Governance Documents

  25

Communications with the Board

  26

PROPOSALS TO BE VOTED ON

  27

PROPOSAL NO. 1 Election of Directors

  27

PROPOSAL NO. 2 Ratification of Independent Registered Public Accounting Firm

  41

PROPOSAL NO. 3 Advisory Vote to Approve Executive Compensation

  42

PROPOSAL NO. 4 Approval of the 162(m)-Related Provisions of 2015 Company Stock Incentive Plan

  44

EXECUTIVE COMPENSATION

  51

Compensation Discussion and Analysis

  51

Executive Summary

  51

Executive Compensation Pay-for-Performance Philosophy

  53

Oversight and Authority over Executive Compensation

  54

Detailed Compensation Discussion and Analysis

  55

Process for Setting and Awarding Fiscal 2016 Executive Compensation

  56

Determination of Fiscal 2016 Executive Compensation

  57

Strategic Rationale for the Year-over-Year Increase in Disclosed Compensation due to One-time Actions

  65

Other Compensation-related Matters

  69

HRC Committee Report on Executive Compensation

  72

Summary Compensation Table

  73

Grants of Plan-Based Awards in Fiscal 2016

  76

Outstanding Equity Awards at 2016 Fiscal Year-End

  78

Option Exercises and Stock Vested in Fiscal 2016

  80

Fiscal 2016 Pension Benefits Table

  80

Fiscal 2016 Non-qualified Deferred Compensation Table

  82

Potential Payments Upon Termination or Change in Control

  83

EQUITY COMPENSATION PLAN INFORMATION

  87

AUDIT-RELATED MATTERS

  88

Principal Accounting Fees and Services

  88

Report of the Audit Committee of the Board of Directors

  90

OTHER MATTERS

  91

QUESTIONS AND ANSWERS

  92

Proxy Materials

  92

Voting Information

  94

Annual Meeting Information

  98

Stockholder Proposals, Director Nominations and Related Bylaw Provisions

  99

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Proxy Statement Executive Summary

The following is a summary of proposals to be voted on at the annual meeting. This is only a summary, and it may not contain all of the information that is important to you. For more complete information, please review the proxy statement as well as our 2016 Annual Report, which includes our Annual Report on Form 10-K. References to "Hewlett Packard Enterprise," "HPE," "the Company," "we," "us" or "our" refer to Hewlett Packard Enterprise Company.

On November 1, 2015, HP Inc., formerly known as Hewlett-Packard Company (referred to in this proxy statement as "HP", "HPI", "HP Inc.", "HP Co.", "Parent", or "our former parent") spun-off Hewlett Packard Enterprise Company, pursuant to a separation and distribution agreement. To effect the spin-off, HP Inc. distributed all of the shares of Hewlett Packard Enterprise common stock owned by HP Inc. to its stockholders on November 1, 2015. Holders of HP Inc. common stock received one share of Hewlett Packard Enterprise common stock for every share of HP Inc. stock held as of the record date. As a result of the spin-off, we now operate as an independent, publicly-traded company.

ANNUAL MEETING OF STOCKHOLDERS

Time and Date  

9:00 a.m., Pacific Time, on Wednesday, March 22, 2017

Place  

Online at HPE.onlineshareholdermeeting.com

Record Date  

January 23, 2017

PROPOSALS TO BE VOTED ON AND BOARD VOTING RECOMMENDATIONS

    Proposal 1

Election of Directors

The Nominating, Governance and Social Responsibility Committee has nominated our current 14 directors for re-election at the annual meeting to hold office until the 2018 annual meeting. Information regarding the skills and qualifications of each nominee can be found on page 27.

Recommendation: Our Board recommends a vote FOR the election to the Board of each of the 14 nominees.

          Proposal 2

Ratification of Independent Registered Public Accounting Firm

The Audit Committee has appointed, and is asking stockholders to ratify, Ernst & Young LLP ("EY") as the independent registered public accounting firm for fiscal 2017. Information regarding fees paid to and services rendered by EY can be found on page 41.

Recommendation: Our Board recommends a vote FOR the ratification of the appointment.

   
                        
    Proposal 3

Advisory Vote to Approve Executive Compensation

Our Board of Directors and HR and Compensation Committee of the Board are committed to excellence in corporate governance and to executive compensation programs that align the interests of our executives with those of our stockholders. Information regarding our programs can be found on page 42.

Recommendation: Our Board recommends a vote FOR the approval of the compensation of our named executive officers.

          Proposal 4

Approve 162(m)-Related Provisions of 2015 Company Stock Incentive Plan

We are asking stockholders to approve certain provisions as required in order for HPE to continue to be eligible for a federal tax deduction for "performance-based compensation" awarded to certain officers under our equity plan. Information can be found on page 44.

Recommendation: Our Board recommends a vote FOR the approval of the relevant provisions of the Hewlett Packard Enterprise Company 2015 Stock Incentive Plan (as amended and restated on January 25, 2017).

   

HEWLETT PACKARD ENTERPRISE

 

|  1


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance

Our Board of Directors is committed to excellence in corporate governance. We know that our long-standing tradition of principled, ethical governance benefits you, our stockholders, as well as our customers, employees and communities, and we have developed and continue to maintain a governance profile that aligns with industry-leading standards. We believe that the high standards set by our governance structure have had and will continue to have a direct impact on the strength of our business. The following table presents a brief summary of highlights of our governance profile, followed by more in-depth descriptions of some of the key aspects of our governance structure.

    Board Conduct and Oversight       Independence and Participation       Stockholder Rights    
 
   

Rigorous stock ownership guidelines, including a 7x base salary requirement for the CEO

Regular risk assessment

Standards of Business Conduct, applied to all directors, executive officers and employees

Annual review of developments in best practices

Significant time devoted to succession planning and leadership development efforts

Annual evaluations of Board, committees, and individual directors

     

Independent Chair

12 of 14 directors are independent by NYSE standards

Executive sessions of non-management directors generally held at each Board and committee meeting

Audit, HRC, and NGSR Committees are each made up entirely of independent directors

Governance guidelines express preference for the separation of the Chair and CEO roles

     

Proxy Access Right for eligible stockholders holding 3% or more of outstanding common stock for at least three years to nominate up to 20% of the Board

Special Meeting Right for stockholders of an aggregate of 25% of voting stock

All directors annually elected; no staggered Board

Majority voting in uncontested director elections

No "Poison Pill"

No supermajority voting requirements to change organizational documents

Expansive direct engagement with stockholders

   

STOCKHOLDER OUTREACH

We have designed a multi-faceted stockholder outreach program focused on providing relevant and accessible information to, and soliciting feedback from, our stockholders. The key elements of our stockholder outreach program are the Fall Securities Analyst Meeting, the Winter Board Outreach Program and the Spring Annual Stockholders Meeting.

    Securities Analyst Meeting           Board Outreach Program           Annual Stockholders Meeting    
    Purpose: Provide an overview of our strategic vision for the upcoming year

Format: Publicly broadcast, so you can access the same information that analysts do

          Purpose: Prioritize understanding and responding to your specific perspective and concerns

Format: Members of management and our Board meet investors, in a one-on-one setting

          Purpose: Provide a corporate update and a forum for management and the Board to answer stockholder questions

Format: Completely virtual, so you can join, free of cost, from anywhere

   

2  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Our comprehensive stockholder engagement program is supplemented by our year-round investor relations outreach program that includes post-earnings communications, roadshows, bus tours, one-on-one conferences, group meetings, technology webcasts, and general availability to respond to investor inquiries.

We design our outreach program to provide continuous and meaningful stockholder engagement and participation. Our committed Board of Directors and management team value these interactions and invest meaningful time and resources to ensure that they have an open line of communication with stockholders. During fiscal 2017, our extensive board outreach efforts included off-season engagement with holders of more than 37% of our outstanding common stock as of October 2016. Our discussions with institutional investors involved such topics as corporate strategy, recent significant transactions, capital allocation, governance trends and policies, compensation, and corporate citizenship and responsibility. Additionally, our virtual meeting format and pre-meeting forum for our 2016 annual meeting provided for effortless attendance and participation for all our stockholders around the world. Stockholders and other stakeholders may directly communicate with our Board by contacting: Secretary to the Board of Directors, 3000 Hanover Street, MS 1050, Palo Alto, California 94304; e-mail: bod-hpe@hpe.com.

CORPORATE CITIZENSHIP THROUGH LIVING PROGRESS

We take a thoughtful approach to our global citizenship efforts, called our Living Progress program. This initiative is overseen by the NGSR Committee which regularly reviews, assesses, reports and provides guidance to management and the Board regarding HPE's policies and programs relating to global citizenship and the impact of HPE's operations on employees, customers, suppliers, partners and communities worldwide. Our commitment to corporate citizenship has been rewarded, earning us the distinction of Industry Leader in the 2016 Dow Jones Sustainability Index. HPE holds the highest industry score globally in five DJSI sections: Corporate Governance, Innovation Management, Corporate Citizenship & Philanthropy, Digital Inclusion and Labor Practice Indicators and Human Rights. HPE was also ranked #4 on Gartner's Top 10 and Master High-Tech Supply Chains for 2016, receiving a perfect sustainability score. A few highlights of our Living Progress initiative are detailed below.

    Human Progress           Economic Progress           Environmental Progress    
    Uncompromising stance on human rights

Sustainable, responsible supply chain

          Economic contributions to communities worldwide

HPE Company Foundation disaster relief, education, and employee donation efforts

          Ecological solutions

Product return and recycling

Environmentally conscious operations

   

HEWLETT PACKARD ENTERPRISE BOARD OF DIRECTORS

Establishment of the Board

As our former parent company prepared to separate into two independent, publicly traded companies, Hewlett Packard Enterprise and HP Inc., the Parent NGSR Committee established two new boards to provide excellent strategic direction and oversight to both companies. In late 2014, the Parent NGSR Committee, working with management and an outside director search firm, embarked on a thorough, global search with a focus on finding world-class directors with the diversity of skills, experience, ethnicity and gender to best compliment those of the existing directors, resulting in exceptional leadership for both companies.

HEWLETT PACKARD ENTERPRISE

 

|  3


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

The Parent NGSR Committee used a variety of methods for identifying and evaluating nominees for director, solicited recommendations from stockholders and diversity advocate groups, and examined each candidate's professional background and business history extensively to achieve a balance of knowledge, experience and capability on our board. The selection criteria for new directors included:

    high professional and personal ethics and values consistent with our longstanding values and standards;

    broad policy-making experience in business, government, education, technology or public service;

    diversity of background and experience, including: senior leadership and operating experience in a publicly listed company; board experience in a publicly listed company; financial, industrial/technical, brand marketing or international expertise; and

    experience as an investor with a commitment to enhancing stockholder value and representation of the interests across our stockholder base.

Finally, each candidate was evaluated to assess whether he or she (i) had appropriate time to devote to the board and company, (ii) did not have any real or perceived conflicts, (iii) demonstrated the ability to develop a good working relationship with other members of the board of directors, and (iv) would contribute to the board's working relationship with senior management.

The allocation of legacy HP Co. board members to the new Hewlett Packard Enterprise Board was finalized upon completion of the assessment of the full portfolio of skills and experience of current and prospective board members in such a manner to achieve an optimal mix for each post-separation board and an effective committee composition, while maintaining strong continuity and institutional knowledge on each resulting board. Eight of our 14 directors are legacy Hewlett-Packard Company directors.

We are committed to implementing and following high standards of corporate governance, which we believe are vital to the success of our business, creation of value for our stockholders and maintenance of our integrity in the marketplace. Our commitment to excellence in governance policies and practices, inherited from the long-standing tradition of our former parent, Hewlett-Packard Company, has flourished throughout our first year of business.

The following page includes a skills and qualifications matrix highlighting many of the key experiences and competencies our directors bring to Hewlett Packard Enterprise Company.

4  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Hewlett Packard Enterprise Company Board of Directors
Skills and Qualifications


 


 


Daniel Ammann


Marc L.
Andreessen


Michael J.
Angelakis


Leslie A.
Brun


Pamela L.
Carter


Klaus
Kleinfeld


Raymond J.
Lane


Ann M.
Livermore


Raymond E.
Ozzie


Gary M.
Reiner


Patricia F.
Russo


Lip‑Bu
Tan


Margaret C.
Whitman


Mary Agnes
Wilderotter
Risk and Compliance
Experience identifying, mitigating, and managing risk in enterprise operations helps our directors effectively oversee our Enterprise Risk Management program which is vital to customer and stockholder protection.
· · · · · ·
Financial and Audit
Experience in accounting and audit functions and ability to analyze financial statements and oversee budgets is key to supporting the Board's oversight of our financial reporting and functions.
· · · · ·
Business Development and Strategy
Experience in setting and executing long-term corporate strategy is critical to the successful planning and execution of our long-term vision.
· · · · · · · · · · · · · ·
Investment
Experience in venture and investment capital underlies our capital allocation decisions and ensures that the investors' view of our business is incorporated in board discussions.
· · · · · · · ·
Executive Level Leadership
Experience in executive positions within enterprise businesses is key to the effective oversight of management.
· · · · · · · · · · · · · ·
Business Ethics
Experience in and continued dedication to the highest levels of ethics and integrity within the enterprise context underpins the holistic commitment of HPE to operate with integrity.
· · · · · · · · · · · · · ·
Extensive Industry Leadership
Experience at the executive level in the technology sector enhances our Board's ability to oversee management in a constantly changing industry.
· · · · · · · · · · · ·
Legal, Regulatory and Public Policy
Experience in setting and analyzing public policy supports Board oversight of our business in heavily regulated sectors.
· ·
Corporate Governance
Experience on other public company boards provides insight into developing practices consistent with our commitment to excellence in corporate governance.
· · · · · · · · · · · ·
International
Experience operating in a global context by managing international enterprises, residence abroad, and studying other cultures enables oversight of how HPE navigates a global marketplace.
· · · · · · ·

HEWLETT PACKARD ENTERPRISE

 

|  5


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Board and Committee Meetings and Attendance

Our Board has five regularly scheduled meetings and an annual meeting of stockholders each year, in addition to special meetings scheduled as appropriate. During fiscal 2016, our Board held 17 meetings. In addition, our five committees held a total of 44 meetings. Each of the five regularly scheduled Board meetings held during fiscal 2016 included an executive session, consisting of only non-management directors, and one included a private session consisting of only independent directors. The Board expects that its members will rigorously prepare for, attend and participate in all Board and applicable Committee meetings and each annual general meeting of stockholders. When directors are unable to attend a meeting, it is our practice to provide all meeting materials to the director, and the Chair or the relevant committee chair consults with and apprises the director of the meeting's subject matter. In addition to participation at Board and committee meetings, our directors discharged their responsibilities throughout the year through personal meetings and other communications, including considerable telephone contact with our Chair, our CEO and other members of senior management regarding matters of interest.

Each of our 14 incumbent directors attended at least 75% of the total number of meetings of the Board of Directors and the total number of meetings held by all committees of the Board of Directors on which each such director served, during the period for which each such director served.

Directors are also encouraged to attend our annual meeting of stockholders. Last year, each of our directors was in attendance.

Board Leadership Structure

The Board is currently led by an independent director, Patricia F. Russo, Chair of the Board. Our Bylaws and Corporate Governance Guidelines permit the roles of chair of the Board and chief executive officer to be filled by the same or different individuals, although the Corporate Governance Guidelines express a preference for the separation of the two roles. This flexibility allows the Board to determine whether the two roles should be combined or separated based upon our needs and the Board's assessment of its leadership from time to time. The Board believes that our stockholders are best served at this time by having an independent director serve as Chair of the Board. Our Board believes this leadership structure effectively allocates authority, responsibility, and oversight between management and the independent members of our Board. It gives primary responsibility for the operational leadership and strategic direction of the Company to our CEO, while the Chair facilitates our Board's independent oversight of management, promotes communication between senior management and our Board about issues such as management development and succession planning, executive compensation, and company performance, engages with stockholders, and leads our Board's consideration of key governance matters.

The Chair  

presides at all meetings of the Board, including executive sessions of the independent directors,

oversees the planning of the annual Board calendar, schedules and sets the agenda for meetings of the Board in consultation with the other directors, and leads the discussion at such meetings,

chairs the annual meeting of stockholders,

is available in appropriate circumstances to speak on behalf of the Board, and

performs such other functions and responsibilities as set forth in our Corporate Governance Guidelines or as requested by the Board from time to time.

 

6  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Board Structure and Committee Composition

As of the date of this proxy statement, the Board has 14 directors and the following five standing committees: (1) Audit Committee; (2) Finance and Investment Committee; (3) HR and Compensation Committee; (4) Nominating, Governance, and Social Responsibility Committee; and (5) Technology Committee. The current committee membership and the function of each of these standing committees are described below. Each of the standing committees operates under a written charter adopted by the Board. All of the committee charters are available on our website at investors.hpe.com/governance/committees#committee-charters. Each committee reviews and reassesses the adequacy of their charter annually, conducts annual evaluations of their performance with respect to their duties and responsibilities as laid out in the charter, and reports regularly to the Board with respect to the committees' activities. Additionally, the Board and each of the committees has the authority to retain, terminate and receive appropriate funding for outside advisors as the Board and/or each committee deems necessary.

The composition of each standing committee is as follows:

Independent Directors
Audit
FIC
HRC
NGSRC
Tech
Daniel Ammann       GRAPHIC            
Marc L. Andreessen       GRAPHIC           GRAPHIC
Michael J. Angelakis   GRAPHIC   GRAPHIC            
Leslie A. Brun   GRAPHIC       GRAPHIC        
Pamela L. Carter   GRAPHIC       GRAPHIC        
Klaus Kleinfeld           GRAPHIC   GRAPHIC    
Raymond J. Lane       GRAPHIC           GRAPHIC
Raymond E. Ozzie       GRAPHIC           GRAPHIC
Gary M. Reiner       GRAPHIC       GRAPHIC   GRAPHIC
Patricia F. Russo                    
Lip-Bu Tan               GRAPHIC   GRAPHIC
Mary Agnes Wilderotter   GRAPHIC       GRAPHIC        
Other Directors
                 
Ann M. Livermore       GRAPHIC            
Margaret C. Whitman                    

HEWLETT PACKARD ENTERPRISE

 

|  7


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)
Audit Committee
For financial reporting process and audit
   

Members

 

Skills and Experiences

Michael J. Angelakis

  Financial Statement Review

Leslie A. Brun

  Audit

Pamela L. Carter

  Compliance

Mary Agnes Wilderotter, Chair

  Risk Management

Risk Oversight Role and Primary Responsibilities:

    Audit

Oversee the performance of our internal audit function

Review the qualifications, independence, work product and performance of the independent public accounting firm and evaluate and determine the firm's compensation

          Compliance Processes

Oversee our compliance with legal and regulatory requirements

Conduct investigations into complaints concerning federal securities laws

Review results of significant investigations, and management's response to investigations

   
 
                        
    Financial Reporting

Oversee financial reporting process

Review and discuss earnings press releases

Review the audit and integrity of our financial statements

          Risk Management

Review identified risks to HPE

Review risk assessment and management policies

   
 

Required Qualifications:

Each director on the Audit Committee must be independent within the meaning of the New York Stock Exchange ("NYSE") standards of independence for directors and audit committee members, and must meet applicable NYSE financial literacy requirements, each as the Board determines. Finally, at least one director on the Audit Committee must be an "audit committee financial expert," as determined by the Board in accordance with SEC rules. The Board determined that each of Ms. Wilderotter, Chair of the Audit Committee, Mr. Angelakis and Mr. Brun, is an audit committee expert.

Finance and Investment Committee
For significant treasury matters, strategic transactions, and capital allocation reviews
   

Members

 

Skills and Experiences

Dan Ammann

  Capital Structure and Strategy

Marc L. Andreessen

  Captive Finance

Michael J. Angelakis, Chair

  Venture Capital

Raymond J. Lane

  Enterprise Information Technology

Ann M. Livermore

       

Raymond E. Ozzie

       

Gary M. Reiner

       

8  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Risk Oversight Role and Primary Responsibilities:

    Finance           Investment           Mergers & Acquisitions    

 

 

Oversee significant treasury matters such as capital structure and allocation strategy, global liquidity, borrowings, currency exposure, dividend policy, share issuances and repurchases, and capital spending

Oversee our loans and loan guarantees of third parties

Review capitalization of our Financial Services business

         

Review derivative policy

Review and approve certain swaps and other derivative transactions

Oversee fixed income investments

         

Evaluate and revise our mergers and acquisitions approval policies

Assist the Board in evaluating investment, acquisition, enterprise services, joint venture and divestiture transactions

Evaluate the execution, financial results and integration of completed transactions

   

Required Qualifications:

A majority of the directors on the Finance and Investment Committee must be independent within the meaning of applicable laws and listing standards, as the Board determines.

Human Resources and Compensation Committee
For executive compensation structure and strategy
   

Members

 

Skills and Experiences

 
 

Leslie A. Brun, chair

  Operations

Pamela L. Carter

  Legal and Regulatory Compliance

Klaus Kleinfeld

  Executive Compensation

Mary Agnes Wilderotter

       

Risk Oversight Role and Primary Responsibilities:

    Compensation Structure & Strategy

Discharge the Board's responsibilities relating to the compensation of our executives and directors

Annually review and evaulate management's performance and compensation

Oversee and provide risk management of our compensation structure, including our equity and benefits programs

Review and discuss the Compensation Discussion and Analysis and additional disclosures in compliance with SEC or listing standards

          Human Resources &
Workforce Management

Generally oversee our human resources and workforce management programs

   

Required Qualifications:

Each director on the HRC Committee must be independent within the meaning of applicable laws and listing standards, as the Board determines. In addition, members of the HRC Committee must qualify as "non-employee directors" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended

HEWLETT PACKARD ENTERPRISE

 

|  9

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

(the "1934 Act"), and as "outside directors" for purposes of Section 162(m) of the Internal Revenue Code. The Board determined that each of Mr. Brun, Chair of the HRC Committee, and the HRC Committee members, Ms. Carter, Mr. Kleinfeld, and Mrs. Wilderotter, is independent within the meaning of the NYSE standards of independence for directors and compensation committee members, and for purposes of Rule 16b-3 under the 1934 Act and Section 162(m) of the Internal Revenue Code.

Compensation Committee Interlocks and Insider Participation:

None of our executive officers served as a member of the compensation committee of another company, or as a director of another company, whose executive officers also served on our compensation committee or as one of our directors.

Nominating, Governance, and Social Responsibility Committee
For board evaluation, director nomination, and corporate citizenship
   

Members

 

Skills and Experiences

Klaus Kleinfeld

  Corporate Governance

Gary M. Reiner, Chair

  Operations

Lip-Bu Tan

  Executive and Director Level Leadership Experience

Risk Oversight Role and Primary Responsibilities:

    Corporate Governance           Board Composition    

 

 

Develop and review regularly our Corporate Governance Guidelines

Identify and monitor social, political, and environmental trends and provide guidance relating to public policy matters and global citizenship

Review proposed changes to our Certificate of Incorporation, Bylaws and Board committee charters

Ensure proper attention is given and effective responses are made to stockholder concerns

Design and execute annual evaluations of the Board, committees, and individual directors

Oversee the HRC Committee's evaluation of senior management

         

Identify, recruit and recommend candidates to be nominated for election as directors

Develop and recommend Board criteria for identifying director candidates

Oversee the organization and leadership structure of the Board to discharge its duties and responsibilities properly and efficiently

Evaluate director independence and financial literacy and expertise

   

Required Qualifications:

Each director on the NGSR Committee must be independent within the meaning of applicable laws and listing standards, as the Board determines.

10  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)
Technology Committee
For technology and intellectual property portfolio strategy
   

Members

 

Skills and Experiences

 
 

Marc L. Andreessen

  Entrepreneurship    

Raymond J. Lane

  Research and Development    

Raymond E. Ozzie, Chair

  Venture Capital    

Gary M. Reiner

  Enterprise Information Technology    

Lip-Bu Tan

       

Risk Oversight Role and Primary Responsibilities:

Impact of investment and other actions upon the strength of our intellectual property and technology strategies

Make recommendations to the Board concerning our technology strategies

Assess the health and oversee the execution of our technology strategies

Assess the scope and quality of our intellectual property

Provide guidance on technology as it may pertain to market entry and exit, investments, mergers, acquisitions and divestitures, research and development investments, and key competitor and partnership strategies

Required Qualifications:

Each director on the Technology Committee will have such qualifications as the Board determines.

Board Risk Oversight

The Board, with the assistance of its committees as discussed below, reviews and oversees our enterprise risk management ("ERM") program, which is an enterprise-wide program designed to enable effective and efficient identification of, and management visibility into, critical enterprise risks and to facilitate the incorporation of risk considerations into decision making. The ERM program was established to clearly define risk management roles and responsibilities, bring together senior management to discuss risk, promote visibility and constructive dialogue around risk at the senior management and Board levels and facilitate appropriate risk response strategies.

LOGO

Under the ERM program, management develops a holistic portfolio of our enterprise risks by facilitating business and function risk assessments, performing targeted risk assessments and incorporating information regarding specific categories of risk gathered from various internal Hewlett Packard Enterprise organizations. Management then develops risk response plans for risks categorized as needing management focus and response and monitors other identified risk focus areas. Management provides reports on the risk portfolio and risk response efforts to senior management and to the Audit Committee.

HEWLETT PACKARD ENTERPRISE

 

|  11

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

The Board oversees management's implementation of the ERM program, including reviewing our enterprise risk portfolio and evaluating management's approach to addressing identified risks. Various Board committees also have responsibilities for oversight of risk management that supplement the ERM program. For example, the HRC Committee considers the risks associated with our compensation policies and practices as discussed below, the Finance and Investment Committee is responsible for overseeing financial risks, and the NGSR Committee oversees risks associated with our governance structure and processes. This structure allows specialized attention to and oversight over key risk areas by aligning our carefully crafted committees with risk oversight in their individual areas of expertise. The Board is kept informed of its committees' risk oversight and related activities primarily through reports of the committee chairs to the full Board. In addition, the Audit Committee escalates issues relating to risk oversight to the full Board as appropriate to keep the Board appropriately informed of developments that could affect our risk profile or other aspects of our business. The Board also considers specific risk topics in connection with strategic planning and other matters.

Compensation Risk Assessment

During fiscal 2016, we undertook a review of our material compensation processes, policies and programs for all employees and determined that our compensation programs and practices are not reasonably likely to have a material adverse effect on Hewlett Packard Enterprise. In conducting this assessment, we reviewed our compensation risk infrastructure, including our material plans, our risk control systems and governance structure, the design and oversight of our compensation programs and the developments, improvements and other changes made to those programs, and we presented a summary of the findings to the HRC Committee. Overall, we believe that our programs contain an appropriate balance of fixed and variable features and short- and long-term incentives, as well as complementary metrics and reasonable, performance-based goals with linear payout curves under most plans. We believe that these factors, combined with effective Board and management oversight, operate to mitigate risk and reduce the likelihood of employees engaging in excessive risk-taking behavior with respect to the compensation-related aspects of their jobs.

Succession Planning

Among the HRC Committee's responsibilities described in its charter is to oversee succession planning and leadership development. The Board plans for succession of the CEO and annually reviews senior management selection and succession planning that is undertaken by the HRC Committee. As part of this process, the independent directors annually review the HRC Committee's recommended candidates for senior management positions to see that qualified candidates are available for all positions and that development plans are being utilized to strengthen the skills and qualifications of the candidates. The criteria used when assessing the qualifications of potential CEO successors include, among others, strategic vision and leadership, operational excellence, financial management, executive officer leadership development, ability to motivate employees, and an ability to develop an effective working relationship with the Board.

In fiscal 2016, with the spin-off and merger of our Enterprise Services segment, and the subsequent spin-off and merger of our Software segment under way, we engaged in two robust organization design and talent selection processes to staff both companies, through which management reviewed selection recommendations below the senior leadership level, considering skill sets, performance, potential and diversity. Where the organizational changes altered our pre-existing succession plans, new successors were identified and relevant talent development plans were implemented.

Director Evaluations

The Board conducts an evaluation of the Board, each committee, and individual directors annually. The process approved by the Board involves the NGSR Committee, working with the Board Chair, designing each year's evaluation process, selecting from a variety of elements including external evaluators, written evaluations, and group discussions, based on the current dynamics of the Board and of the Company as well as the method of previous annual evaluations. Because 2016 was HPE's first year as an NYSE-listed

12  |

 

HEWLETT PACKARD ENTERPRISE

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

company, the NGSR Committee elected to conduct self-evaluations of the Board, committees and individual directors using a comprehensive written questionnaire to allow annonymity while establishing a baseline to use for comparison in future evaluations. The written questionnaires completed by our Board for the 2016 self-evaluation included questions intended to gauge effectiveness in board composition and conduct; meeting structure; materials; committee composition and effectiveness; strategic and succession planning; and individual performance. The Corporate Secretary compiled the results which were used by the Board Chair to lead a candid discussion with the Board in Executive Session. A report on the survey results was made available to each director.

Director Candidate Selection and Evaluation

Stockholder Recommendations

The policy of the NGSR Committee is to consider properly submitted stockholder recommendations of candidates for membership on the Board as described below under "Identifying and Evaluating Candidates for Directors." In evaluating such recommendations, the NGSR Committee seeks to achieve a balance of knowledge, experience and capability on the Board and to address the membership criteria set forth below under "Proposals to be Voted on—Proposal No. 1 Election of Directors—Director Nominee Experience and Qualifications." Any stockholder recommendations submitted for consideration by the NGSR Committee should include verification of the stockholder status of the person submitting the recommendation and the recommended candidate's name and qualifications for Board membership and should be addressed to:

Corporate Secretary
Hewlett Packard Enterprise Company
3000 Hanover Street MS 1050
Palo Alto, California 94304
Fax: (650) 857-4837 Email:
bod-hpe@hpe.com

Stockholder Nominations

In addition, our Bylaws permit stockholders to nominate directors for consideration at an annual stockholder meeting and, under certain circumstances, to include their nominees in the Hewlett Packard Enterprise proxy statement. For a description of the process for nominating directors in accordance with our Bylaws, see "Questions and Answers—Stockholder Proposals, Director Nominations and Related Bylaw Provisions—How may I recommend individuals to serve as directors and what is the deadline for a director recommendation?" on page 99.

Identifying and Evaluating Candidates for Directors

The NGSR Committee, in consultation with the Chair, assesses the appropriate size of the Board, as well as the alignment of director skills with company strategy, and whether any vacancies on the Board are expected due to retirement or otherwise, or whether the Board would benefit from the addition of a director with a specific skillset. In the event that vacancies are anticipated, or otherwise arise, the NGSR Committee seeks to establish a diverse pool of qualified candidates for consideration. The NGSR Committee also considers board refreshment in its annual evaluation of the Board. We balance our respect for historical knowledge of our company with our regard for fresh perspectives by considering director tenure on a case-by-case basis, rather than imposing arbitrary term limits.

The NGSR Committee uses a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the NGSR Committee through current Board members, professional search firms, stockholders or other persons. Identified candidates are evaluated at regular or special meetings of the NGSR Committee and may be considered at any point during the year. As described above, the NGSR Committee considers properly submitted stockholder recommendations of candidates for the Board to be included in our proxy statement. Following verification of the stockholder status of individuals proposing

HEWLETT PACKARD ENTERPRISE

 

|  13


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

candidates, recommendations are considered collectively by the NGSR Committee at a regularly scheduled meeting. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the NGSR Committee. The NGSR Committee also reviews materials provided by professional search firms and other parties in connection with a nominee who is not proposed by a stockholder. In evaluating such nominations, the NGSR Committee seeks to achieve a balance of knowledge, experience and capability on the Board that will enable the Board to effectively oversee the business. The NGSR Committee evaluates nominees recommended by stockholders using the same criteria as it uses to evaluate all other candidates.

We engage a professional search firm on an ongoing basis to identify and assist the NGSR Committee in identifying, evaluating and conducting due diligence on potential director nominees. In each instance, the NGSR Committee considers the totality of the circumstances of each individual candidate.

Limits on Director Service on Other Public Company Boards

We have a highly effective and engaged Board, and we believe that our directors' outside directorships enable them to contribute valuable knowledge and experience to the HPE Board. Nonetheless, the Board is sensitive to the external obligations of its directors and the potential for overboarding to compromise the ability of these directors to effectively serve on the Board. HPE's Corporate Governance Guidelines limit each director's service on other boards of public companies to a number that permits them, given their individual circumstances, to perform responsibly all director duties and, in all events, this service may not exceed four other public company boards. Further, the ability of each director to devote sufficient time and attention to director duties is expressly considered as part of the annual board self-evaluation process, which aims to evaluate the effectiveness and engagement of HPE's directors, including in the context of their external commitments.

While the Board certainly considers its directors' outside directorships during this evaluation process, the Board recognizes that this is one of many outside obligations which could potentially impair a director's capacity to dedicate sufficient time and focus to their service on the HPE Board. As such, the Board evaluates many factors when assessing the effectiveness and active involvement of each director. Such other factors include:

    The director's attendance at Board and committee meetings.

    The director's participation and level of engagement during these meetings.

    The role played by the director on the Board of HPE, as well as on his or her outside boards, including committee membership and chairmanship.

    The experience and expertise of the director, including both relevant industry experience and service on other (related) public company boards, which enables the director to serve on multiple boards effectively.

We schedule our board and committee meetings up to two years in advance, to ensure director availability and maximum participation. Directors serve for one-year terms; accordingly, there is an opportunity to evaluate annually each director's ability to serve.

Director Independence

Our Corporate Governance Guidelines provide that a substantial majority of the Board will consist of independent directors and that the Board can include no more than three directors who are not independent directors. These standards are available on our website at http://investors.hpe.com/governance/guidelines. Our director independence standards generally reflect the NYSE corporate governance listing standards. In addition, each member of the Audit Committee and the HRC Committee meets the heightened independence standards required for such committee members under the applicable listing standards.

14  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Under our Corporate Governance Guidelines, a director will not be considered independent in the following circumstances:

    (1)
    The director is, or has been within the last three years, an employee of Hewlett Packard Enterprise, or an immediate family member of the director is, or has been within the last three years, an executive officer of Hewlett Packard Enterprise.

    (2)
    The director has been employed as an executive officer of Hewlett Packard Enterprise, its subsidiaries or affiliates within the last five years.

    (3)
    The director has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from Hewlett Packard Enterprise, other than compensation for Board service, compensation received by a director's immediate family member for service as a non-executive employee of Hewlett Packard Enterprise, or pension or other forms of deferred compensation for prior service with Hewlett Packard Enterprise that is not contingent on continued service.

    (4)
    (A) The director or an immediate family member is a current partner of the firm that is our internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm's audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on our audit within that time.

    (5)
    The director or an immediate family member is, or has been in the past three years, employed as an executive officer of another company where any of our present executive officers at the same time serves or has served on that company's compensation committee.

    (6)
    The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, Hewlett Packard Enterprise for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.

    (7)
    The director is affiliated with a charitable organization that receives significant contributions from Hewlett Packard Enterprise.

    (8)
    The director has a personal services contract with Hewlett Packard Enterprise or an executive officer of Hewlett Packard Enterprise.

For these purposes, an "immediate family member" includes a director's spouse, parents, step-parents, children, step-children, siblings, mother-in-law, father-in-law, sons-in-law, daughters-in-law, brothers-in-law, sisters-in-law, and any person (other than tenants or employees) who shares the director's home.

In determining independence, the Board reviews whether directors have any material relationship with Hewlett Packard Enterprise. An independent director must not have any material relationship with Hewlett Packard Enterprise, either directly or as a partner, stockholder or officer of an organization that has a relationship with Hewlett Packard Enterprise, nor any relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In assessing the materiality of a director's relationship to Hewlett Packard Enterprise, the Board considers all relevant facts and circumstances, including consideration of the issues from the director's standpoint and from the perspective of the persons or organizations with which the director has an affiliation, and is guided by the standards set forth above.

HEWLETT PACKARD ENTERPRISE

 

|  15


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

In making its independence determinations, the Board considered transactions occurring since the beginning of fiscal 2014 between Hewlett Packard Enterprise, and/or its former parent HP Inc., as applicable, and entities associated with the independent directors or their immediate family members. The Board's independence determinations included consideration of the following transactions:

    Mr. Ammann is the President of General Motors Company. HP Inc. and/or Hewlett Packard Enterprise have each entered into transactions for the purchase and/or sale of goods and services in the ordinary course of its business during the past three fiscal years with General Motors Company. The amount that HP Inc. or Hewlett Packard Enterprise paid in each of the last three fiscal years to General Motors Company, and the amount received in each fiscal year by HP Inc. or Hewlett Packard Enterprise from General Motors Company, did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of General Motors Company's consolidated gross revenues.

    Mr. Angelakis is a senior advisor to the executive management committee of Comcast Corporation and until July 2015 served as Vice Chairman and Chief Financial Officer of Comcast Corporation. HP Inc. and/or Hewlett Packard Enterprise have each entered into transactions for the purchase and/or sale of goods and services in the ordinary course of its business during the past three fiscal years with Comcast Corporation. The amount that HP Inc. or Hewlett Packard Enterprise paid in each of the last three fiscal years to Comcast Corporation, and the amount received in each fiscal year by HP Inc. or Hewlett Packard Enterprise from Comcast Corporation, did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of Comcast Corporation's consolidated gross revenues.

    Ms. Carter served as a Vice President of Cummins Inc. until April 2015. HP Inc. and/or Hewlett Packard Enterprise have each entered into transactions for the purchase and/or sale of goods and services in the ordinary course of its business during the past three fiscal years with Cummins Inc. The amount that HP Inc. or Hewlett Packard Enterprise paid in each of the last three fiscal years to Cummins Inc., and the amount received in each fiscal year by HP Inc. or Hewlett Packard Enterprise from Cummins Inc., did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of Cummins Inc.'s consolidated gross revenues.

    Mr. Kleinfeld is the Chairman and Chief Executive Officer of Arconic Inc., formerly Alcoa Inc. HP Inc. and/or Hewlett Packard Enterprise have each entered into transactions for the purchase and/or sale of goods and services in the ordinary course of its business during the past three fiscal years with Arconic Inc. The amount that HP Inc. or Hewlett Packard Enterprise paid in each of the last three fiscal years to Arconic Inc., and the amount received in each fiscal year by HP Inc. or Hewlett Packard Enterprise from Arconic Inc., did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of Arconic Inc.'s consolidated gross revenues.

    Mr. Tan is the President and Chief Executive Officer of Cadence Design Systems, Inc. HP Inc. and/or Hewlett Packard Enterprise have each entered into transactions for the purchase and/or sale of goods and services in the ordinary course of its business during the past three fiscal years with Cadence Design Systems, Inc. The amount that HP Inc. or Hewlett Packard Enterprise paid in each of the last three fiscal years to Cadence Design Systems, Inc., and the amount received in each fiscal year by HP Inc. or Hewlett Packard Enterprise from Cadence Design Systems, Inc., did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of Cadence Design Systems, Inc.'s consolidated gross revenues.

    Mrs. Wilderotter's sister, Denise M. Morrison, is the President and Chief Executive Officer of Campbell Soup Company. Ms. Morrison also serves as a director of the Board of Campbell Soup Company. HP Inc. and/or Hewlett Packard Enterprise have each entered into transactions for the purchase and/or sale of goods and services in the ordinary course of its business during the past three fiscal years with Campbell Soup Company. The amount that HP Inc. or Hewlett Packard Enterprise paid in each of the last three fiscal years to Campbell Soup Company, and the amount received in each fiscal year by HP Inc. or

16  |

 

HEWLETT PACKARD ENTERPRISE

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

      Hewlett Packard Enterprise from Campbell Soup Company, did not, in any of the previous three fiscal years, exceed the greater of $1 million or 2% of Campbell Soup Company's consolidated gross revenues.

    Each of Mr. Andreessen, Mr. Angelakis, Mr. Brun, Ms. Carter, Mr. Kleinfeld, Mr. Lane, Ms. Livermore, Mr. Ozzie, Mr. Reiner, Ms. Russo, Ms. Whitman and Mrs. Wilderotter, or one of their immediate family members, is a non-employee director, trustee or advisory board member of another company that did business with HP Inc. or Hewlett Packard Enterprise at some time during the past three fiscal years. These business relationships were as a supplier or purchaser of goods or services in the ordinary course of business.

As a result of this review, the Board has determined the transactions and relationships described above would not interfere with the director's exercise of independent judgment in carrying out the responsibilities of a director. The Board has also determined that, with the exception of Mr. Lane and Ms. Livermore, each current non-employee director, including Mr. Ammann, Mr. Andreessen, Mr. Angelakis, Mr. Brun, Ms. Carter, Mr. Kleinfeld, Mr. Ozzie, Mr. Reiner, Ms. Russo, Mr. Tan, Mrs. Wilderotter and each of the members of the Audit Committee, the HRC Committee and the NGSR Committee, has no material relationship with Hewlett Packard Enterprise (either directly or as a partner, stockholder or officer of an organization that has a relationship with Hewlett Packard Enterprise) and is independent within the meaning of our and NYSE director independence standards. The Board has determined that (i) Mr. Lane is independent by NYSE standards but not under our stricter standards because of his former role as executive chairman of the board of HP Inc., (ii) Ms. Livermore is not independent under either standard because she was an employee of Hewlett Packard Enterprise through October 31, 2016 and was an executive officer of our former parent within the last five fiscal years, and (iii) Ms. Whitman is not independent because of her status as our current President and CEO.

HEWLETT PACKARD ENTERPRISE

 

|  17


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Director Compensation and Stock Ownership Guidelines

Non-employee director compensation is determined 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. Directors who are employees of the Company or its affiliates do not receive any separate compensation for their board activities.

The HRC Committee intends to set director compensation levels at or near the market median to ensure directors are paid competitively for their time commitment and responsibilities relative to directors at companies of comparable size, industry, and scope of operations. As noted above, during fiscal 2016, FW Cook conducted a review of director compensation levels relative to the peer group, which indicated that the current program was providing compensation within the range of the median and thus was aligned with its philosophy. No changes were made to compensation levels as a result of the fiscal 2016 review. The HRC Committee intends to conduct such reviews annually.

During fiscal 2016, non-employee directors were compensated for their service as shown in the chart below:

PAY COMPONENT

DIRECTOR COMPENSATION ADDITIONAL INFORMATION(1)

Annual Cash Retainer

$100,000(2)

For 2015 Board year, may elect to receive 100% in equity(3)

For 2016 board year, may elect to receive up to 100% in HPE Stock(4), which may be deferred for calendar year 2017(5)

Annual Equity Retainer

$175,000 converted to restricted stock units(6)

May defer up to 100%(5)

Meeting Fees

$2,000 for each board meeting in excess of ten

$2,000 for each committee meeting in excess of ten

Paid in cash

For 2016 board year, may elect to receive up to 100% in HPE Stock(4), which may be deferred for calendar year 2017(5)

Chairman of the Board Fee

$200,000

For 2016 board year, may elect to receive up to 100% in HPE Stock(4), which may be deferred for calendar year 2017(5)

Committee Chair Fees

Lead independent director: $35,000

Audit committee: $25,000

HRC committee: $20,000

All others: $15,000

For 2016 board year, may elect to receive up to 100% in HPE Stock(4), which may be deferred for calendar year 2017(5)

Stock Ownership Guidelines

5x annual cash retainer ($500,000)

Shares held by the director, directly or indirectly, and deferred vested RSUs are included in the stock ownership calculation

Must be met within five years of election to the Board

(1)
For purposes of determining director compensation, we use a compensation year that generally commences with the month in which the Annual Stockholders' Meeting is held, and ends the twelfth month after that date. This aligns with our Annual Stockholders' Meeting, but does not coincide with our November through October fiscal year. Therefore, the pay components for the director compensation program for fiscal 2016 reflect program guidelines during both the 2015 and 2016 board years. The 2015 board year began with the launch of HPE in November 2015 and ended in February 2016. The 2016 board year began in March 2016 and will continue until February 2017.
(2)
Annual cash retainer is paid in quarterly installments.
(3)
For the 2015 board year, directors were permitted to elect equity either entirely in RSUs or in equal values of RSUs and stock options.
(4)
Annual cash retainer and chairman 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.
(5)
Deferral elections are made in December, and effective for the following calendar year. For calendar year 2016, directors could defer RSUs received in lieu of cash and up to $50,000 of cash. For calendar year 2017, directors were permitted to elect to defer all or a portion of any compensation received in the form of RSUs or shares of HPE stock.
(6)
RSUs generally vest on the earlier of the date of the annual shareholder meeting in the following year, or after one year from the date of grant. Directors receive dividend equivalent units with respect to RSUs.

18  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

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 company aircraft for travel to and from board meetings and other company events, provided that the aircraft are not otherwise needed for direct business-related activities.

Fiscal 2016 Director Compensation

The following table provides information regarding compensation for directors who served during fiscal 2016:

Name





Fees Earned or
Paid in Cash(1)(2)(3)
($)





Stock Awards(3)(4)
($)





All Other
Compensation
($)




Total
($)
 

Patricia F. Russo

  259,667   175,008     434,675  

Daniel Ammann

  103,886   175,008     278,894  

Marc L. Andreessen

  107,000   175,008     282,008  

Michael J. Angelakis

  120,869   175,008     295,877  

Leslie A. Brun

  127,863   175,008     302,871  

Pamela L. Carter

  105,886   175,008     280,894  

Klaus Kleinfeld

  66,667   175,008     241,675  

Raymond J. Lane

  74,667   175,008     249,675  

Ann M. Livermore(5)

         

Raymond E. Ozzie

  116,000   175,008     291,008  

Gary M. Reiner

  87,667   175,008     262,675  

Lip-Bu Tan

  101,886   175,008     276,894  

Margaret C. Whitman(6)

         

Mary Agnes Wilderotter

  94,183   175,008     269,191  
(1)
Cash amounts included in the table above represent the portion of the annual retainers, committee chair fees, lead independent director fees, if applicable, chairman of the board fees and additional meeting fees earned with respect to service during fiscal 2016. See "Additional Information about Fees Earned or Paid in Cash in Fiscal 2016" below.
(2)
The amounts in this column also include the following compensation received in shares of HPE stock in lieu of cash during the 2016 board compensation year: Messrs. Andreessen and Kleinfeld received $33,333 in shares of HPE stock; Messrs. Lane and Tan and Ms. Russo each received $66,667 in shares of HPE stock; Mr. Reiner received $76,667 in shares of HPE stock.
(3)
The amounts in this column also include the following cash or stock awards that were deferred during fiscal 2016: Mr. Andreessen deferred $33,333 of cash and $116,667 of RSUs; Ms. Russo and Ms. Carter deferred $166,667 of RSUs.
(4)
Represents the grant date fair value of stock 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 HPE's stock on the date of grant by the number of units awarded. For information on the assumptions used to calculate the value of the stock awards, refer to Note 5 to our "Consolidated & Combined 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.
(5)
Ms. Livermore was an employee of HPE during fiscal 2016, and in that capacity, performed various tasks and worked on special projects, including acting as an advisor and providing executive support to the CEO. Accordingly, Ms. Livermore did not receive any separate compensation for her board service. However, Ms. Livermore was paid $850,032 in base salary, received bonuses totaling $1,062,500, and received other compensation totaling $90,856 with respect to her employment with HPE during fiscal 2016. She did not receive any equity awards in fiscal 2016. Ms. Livermore also participated in HPE's benefit programs during fiscal 2016.
(6)
Ms. Whitman served as President and CEO of HPE throughout fiscal 2016. Accordingly, she did not receive any compensation for her board service. Please see the "Executive Compensation" section for details regarding Ms. Whitman's fiscal 2016 compensation.

HEWLETT PACKARD ENTERPRISE

 

|  19

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

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

The following table provides additional information regarding fees earned or paid in cash to non-employee directors in fiscal 2016:

Name





Annual
Retainers(1)
($)







Committee
Chair/ Chairman
Fees(2)
($)







Additional
Meeting Fees(3)
($)




Total
($)
 

Patricia F. Russo

  100,000   151,667   8,000   259,667  

Daniel Ammann

  99,886     4,000   103,886  

Marc L. Andreessen

  100,000   5,000   2,000   107,000  

Michael J. Angelakis

  99,886   14,983   6,000   120,869  

Leslie A. Brun

  99,886   19,977   8,000   127,863  

Pamela L. Carter

  99,886     6,000   105,886  

Klaus Kleinfeld

  66,667       66,667  

Raymond J. Lane

  66,667     8,000   74,667  

Raymond E. Ozzie

  100,000   10,000   6,000   116,000  

Gary M. Reiner

  66,667   15,000   6,000   87,667  

Lip-Bu Tan

  99,886     2,000   101,886  

Mary Agnes Wilderotter

  72,146   18,037   4,000   94,183  
(1)
The dollar amounts shown include annual cash retainers earned for service during the 2015 board compensation year and annual cash retainers earned for service during the first eight months of the 2016 board compensation year. Messrs. Ammann, Angelakis, Brun, and Tan, and Ms. Carter joined the Board as of November 1, 2015. Ms. Wilderotter joined the Board as of February 10, 2016.
(2)
Committee chair fees are calculated based on service during each board compensation year. The dollar amounts shown include such fees earned for service during the 2015 board compensation year and fees earned for service during the first eight months of the 2016 board compensation year.
(3)
Additional meeting fees are calculated based on the number of designated board meetings and the number of committee meetings attended during each board compensation year. The dollar amounts shown include additional meeting fees earned for meetings attended during the 2015 board compensation year and additional meeting fees earned for meetings attended during the first eight months of the 2016 board compensation year.

20  |

 

HEWLETT PACKARD ENTERPRISE

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Additional Information about Non-Employee Director Equity Awards

The following table provides additional information regarding non-employee 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
(#)
















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
(#)
 

Patricia F. Russo

  10,169   175,008   47,112    

Daniel Ammann

  10,169   175,008   14,353    

Marc L. Andreessen

  10,169   175,008   90,286    

Michael J. Angelakis

  10,169   175,008   14,353    

Leslie A. Brun

  10,169   175,008   14,353    

Pamela L. Carter

  10,169   175,008   14,353    

Klaus Kleinfeld

  10,169   175,008   10,225   35,177  

Raymond J. Lane

  10,169   175,008   10,225   359,706  

Raymond E. Ozzie

  10,169   175,008   10,225    

Gary M. Reiner

  10,169   175,008   10,225   186,840  

Lip-Bu Tan

  10,169   175,008   14,353    

Mary Agnes Wilderotter

  10,169   175,008   10,225    
(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 HPE's stock on the date of grant by the number of units awarded. For information on the assumptions used to calculate the fair value of the awards, refer to Note 5 to our "Consolidated & Combined 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 outstanding awards of RSUs during fiscal 2016.

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 Hewlett Packard Enterprise stock equal in value to at least five times the amount of their annual cash retainer. Service on the HP Co. Board of Directors immediately prior to the separation is recognized for purposes of such five-year period. 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 HPE's stock.

HEWLETT PACKARD ENTERPRISE

 

|  21

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

STOCK OWNERSHIP INFORMATION

Common Stock Ownership of Certain Beneficial Owners and Management

The following table sets forth information as of December 31, 2016 concerning beneficial ownership by:

    holders of more than 5% of Hewlett Packard Enterprise's outstanding shares of common stock;

    our directors and nominees;

    each of the named executive officers listed in the Summary Compensation Table on page 73; and

    all of our directors and executive officers as a group.

The information provided in the table is based on our records, information filed with the SEC and information provided to Hewlett Packard Enterprise, except where otherwise noted.

The number of shares beneficially owned by each entity or individual is determined under SEC rules, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the entity or individual has sole or shared voting or investment power and also any shares that the entity or individual has the right to acquire as of February 29, 2017 (60 days after December 31, 2016) through the exercise of any stock options, through the vesting and settlement of RSUs payable in shares, or upon the exercise of other rights. Beneficial ownership excludes options or other rights vesting after February 29, 2017 and any RSUs vesting or settling on or before February 29, 2017 that may be payable in cash or shares at Hewlett Packard Enterprise's election. Unless otherwise indicated, each person has sole voting and investment power (or shares such powers with his or her spouse) with respect to the shares set forth in the following table.

22  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Beneficial Ownership Table

NAME OF BENEFICIAL OWNER
  SHARES OF
COMMON STOCK
BENEFICIALLY OWNED

  PERCENT OF
COMMON STOCK
OUTSTANDING

 
BlackRock(1)     93,619,671     5.6%  
Dodge & Cox(2)   217,529,528   12.5%  
The Vanguard Group(3)     102,891,625     5.9%  
Daniel Ammann   4,128   *      
Marc L. Andreessen(4)     95,722     *      
Michael J. Angelakis(5)   38,128   *      
Leslie A. Brun     4,128     *      
Pamela L. Carter   4,128   *      
Klaus Kleinfeld(6)     47,739     *      
Raymond J. Lane(7)   523,442   *      
Ann M. Livermore(8)     70,444     *      
Raymond E. Ozzie   19,442   *      
Gary M. Reiner(9)     219,216     *      
Patricia F. Russo(10)   52,206   *      
Lip-Bu Tan     7,694     *      
Margaret C. Whitman(11)   8,029,653   *      
Mary A. Wilderotter         *      
Christopher P. Hsu(12)   631,318   *      
Michael G. Nefkens(13)     1,596,332     *      
Antonio F. Neri(14)   621,963   *      
Timothy C. Stonesifer(15)     311,279     *      
Robert Youngjohns(16)   311,871   *      
All current executive officers and directors as a group (23 persons)(17)     14,298,063     *      
*
Represents holdings of less than 1% based on 1,664,856,442 outstanding shares of common stock as of December 31, 2016.

(1)
Based on the most recently available Schedule 13G/A filed with the SEC on January 23, 2017 by BlackRock, Inc. According to its Schedule 13G/A, BlackRock, Inc. reported having sole voting power over 79,270,720 shares, shared voting power over 4,184 shares, sole dispositive power over 93,615,487 shares and shared dispositive power over 4,184 shares beneficially owned. The Schedule 13G/A contained information as of December 31, 2016 and may not reflect current holdings of HPE's stock. The address for BlackRock, Inc. is 55 East 52nd Street, New York, New York 10055.

(2)
Based on the most recently available Schedule 13G/A filed with the SEC on February 12, 2016 by Dodge & Cox. According to its Schedule 13G/A, Dodge & Cox reported having sole voting power over 209,665,719 shares, shared voting power over no shares, sole dispositive power over 217,529,528 shares and shared dispositive power over no shares. The securities reported on the Schedule 13G/A are beneficially owned by clients of Dodge & Cox, which clients may include investment companies registered under the Investment Company Act of 1940 and other managed accounts, and which clients have the right to receive or the power to direct the receipt of dividends from, and the proceeds from the sale of, HPE's stock. The Schedule 13G/A contained information as of December 31, 2015 and may not reflect current holdings of HPE's stock. The address of Dodge & Cox is 555 California Street, 40th Floor, San Francisco, California 94104.

(3)
Based on the most recently available Schedule 13G filed with the SEC on February 16, 2016 by The Vanguard Group, Inc. ("Vanguard"). According to its Schedule 13G, Vanguard reported having sole voting power over 3,344,660 shares, shared voting power over 183,000 shares, sole dispositive power over 99,350,489 shares and shared dispositive power over 3,541,136 shares. The Schedule 13G contained information as of December 31, 2015 and may not reflect current holdings of HPE's stock. The address for Vanguard is The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355.

(4)
Includes 80,062 shares that Mr. Andreessen elected to defer receipt of until the termination of his service as a member of the Board.

(5)
Represents 38,128 shares that Mr. Angelakis holds indirectly with his spouse.

(6)
Includes 35,177 shares that Mr. Kleinfeld has the right to acquire by exercise of stock options.

HEWLETT PACKARD ENTERPRISE

 

|  23

Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

(7)
Includes 359,706 shares that Mr. Lane has the right to acquire by exercise of stock options.

(8)
Includes 56,727 shares that Ms. Livermore holds indirectly through a trust with her spouse.

(9)
Includes 186,840 shares that Mr. Reiner has the right to acquire by exercise of stock options.

(10)
Includes 36,888 shares that Ms. Russo elected to defer receipt of until the termination of her service as a member of the Board.

(11)
Includes 66 shares held by Ms. Whitman indirectly through a trust and 6,733,615 shares that Ms. Whitman has the right to acquire by exercise of stock options.

(12)
Includes 446,543 shares that Mr. Hsu has the right to acquire by exercise of stock options.

(13)
Includes 1,012,000 shares held by Mr. Nefkens indirectly through a trust and 1,154,044 shares that Mr. Nefkens has the right to acquire by exercise of stock options.

(14)
Includes 434,128 shares that Mr. Neri has the right to acquire by exercise of stock options.

(15)
Includes 167,844 shares that Mr. Stonesifer has the right to acquire by exercise of stock options.

(16)
Includes 104,475 shares that Mr. Youngjohns has the right to acquire by exercise of stock options.

(17)
Includes 10,982,152 shares that current executive officers and directors have the right to acquire.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act, requires our directors, executive officers and holders of more than 10% of Hewlett Packard Enterprise's stock to file reports with the SEC regarding their ownership and changes in ownership of our securities. Based upon our examination of the copies of Forms 3, 4, and 5, and amendments thereto furnished to us and the written representations of our directors, executive officers and 10% stockholders, we believe that, during fiscal 2016, our directors, executive officers and 10% stockholders complied with all Section 16(a) filing requirements.

RELATED PERSONS TRANSACTIONS POLICIES AND PROCEDURES

We have adopted a written policy for approval of transactions between us and our directors, director nominees, executive officers, beneficial owners of more than five percent (5%) of Hewlett Packard Enterprise's stock, and their respective immediate family members where the amount involved in the transaction exceeds or is expected to exceed $120,000 in a single 12-month period and such "related persons" have or will have a direct or indirect material interest (other than solely as a result of being a director or a less than ten percent (10%) beneficial owner of another entity).

The policy provides that the NGSR Committee reviews certain transactions subject to the policy and decides whether or not to approve or ratify those transactions. In doing so, the NGSR Committee determines whether the transaction is in the best interests of Hewlett Packard Enterprise. In making that determination, the NGSR Committee takes into account, among other factors it deems appropriate:

    the extent of the related person's interest in the transaction;

    whether the transaction is on terms generally available to an unaffiliated third party under the same or similar circumstances;

    the benefits to Hewlett Packard Enterprise;

    the impact or potential impact on a director's independence in the event the related party is a director, an immediate family member of a director or an entity in which a director is a partner, 10% stockholder or executive officer;

    the availability of other sources for comparable products or services; and

    the terms of the transaction.

24  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

The NGSR Committee has delegated authority to the chair of the NGSR Committee to pre-approve or ratify transactions where the aggregate amount involved is expected to be less than $1 million. A summary of any new transactions pre-approved by the chair is provided to the full NGSR Committee for its review at each of the NGSR Committee's regularly scheduled meetings.

The NGSR Committee has adopted standing pre-approvals under the policy for limited transactions with related persons.

Pre-approved transactions include:

    1.
    compensation of executive officers that is excluded from reporting under SEC rules where the HRC Committee approved (or recommended that the Board approve) such compensation;

    2.
    director compensation;

    3.
    transactions with another company with a value that does not exceed the greater of $1 million or 2% of the other company's annual revenues, where the related person has an interest only as an employee (other than executive officer), director or beneficial holder of less than 10% of the other company's shares;

    4.
    contributions to a charity in an amount that does not exceed $1 million or 2% of the charity's annual receipts, where the related person has an interest only as an employee (other than executive officer) or director; and

    5.
    transactions where all stockholders receive proportional benefits.

A summary of new transactions covered by the standing pre-approvals described in paragraphs 3 and 4 above is provided to the NGSR Committee for its review in connection with that committee's regularly scheduled meetings.

Fiscal 2016 Related Person Transactions

We enter into commercial transactions with many entities for which our executive officers or directors serve as directors and/or executive officers in the ordinary course of our business. All of those transactions were pre-approved transactions as defined above or were ratified by the NGSR Committee or our Parent's NGSR Committee. Hewlett Packard Enterprise considers all pre-approved or ratified transactions to have been at arm's-length and does not believe that any of our executive officers or directors had a material direct or indirect interest in any of such commercial transactions. In addition, Mr. Lane's daughter, Kristi Rawlinson, serves as a non-executive employee of Hewlett Packard Enterprise. Prior to becoming an employee in 2013, Ms. Rawlinson previously served as a consultant to ArcSight Inc. and, subsequently, HP Inc., following its acquisition of ArcSight. The amount received by Ms. Rawlinson in her role at Hewlett Packard Enterprise totaled approximately $165,000 in fiscal 2016.

GOVERNANCE DOCUMENTS

We maintain a code of business conduct and ethics for directors, officers and employees known as our Standards of Business Conduct. We also have adopted Corporate Governance Guidelines, which, in conjunction with our Certificate of Incorporation, Bylaws and respective charters of the Board committees, form the framework for our governance. All of these documents are available at investors.hpe.com/governance for review, downloading and printing. We will post on this website any amendments to the Standards of Business Conduct or waivers of the Standards of Business Conduct for directors and executive officers. Stockholders may request free printed copies of our Certificate of Incorporation, Bylaws, Standards of Business Conduct,

HEWLETT PACKARD ENTERPRISE

 

|  25


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Corporate Governance (continued)

Corporate Governance Guidelines and charters of the committees of the Board by contacting: Hewlett Packard Enterprise Company, Attention: Investor Relations, 3000 Hanover Street, Palo Alto, California 94304, www.investors.hpe.com/.

COMMUNICATIONS WITH THE BOARD

Individuals may communicate with the Board by contacting: Secretary to the Board of Directors, 3000 Hanover Street, MS 1050, Palo Alto, California 94304, e-mail: bod-hpe@hpe.com.

All directors have access to this correspondence. In accordance with instructions from the Board, the Secretary to the Board reviews all correspondence, organizes the communications for review by the Board and posts communications to the full Board or to individual directors, as appropriate. Our independent directors have requested that certain items that are unrelated to the Board's duties, such as spam, junk mail, mass mailings, solicitations, resumes and job inquiries, not be posted.

Communications that are intended specifically for the Chair of the Board, independent directors or the non-employee directors should be sent to the e-mail address or street address noted above, to the attention of the Chair of the Board.

26  |

 

HEWLETT PACKARD ENTERPRISE


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Proposals To Be Voted On
Proposal
No. 1:

 
Election of Directors

On the recommendation of the NGSR Committee, the Board has nominated the 14 persons named below for election as directors this year, each to serve for a one-year term or until the director's successor is elected and qualified.

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 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, education, 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 and experience represented on the Board, and it reviews its effectiveness in balancing 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 perform responsibly all director duties. Each director must represent the interests of all of our stockholders. Although the Board uses these and other criteria as appropriate to evaluate potential nominees, it has no stated minimum criteria for 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 information about their experience, qualifications and skills that led the Board to nominate them.

All of the nominees have indicated to us that they will be available to serve as directors. In the event that any nominee should become unavailable, the proxy holders, Margaret C. Whitman, Timothy C. Stonesifer and John F. Schultz, will vote for a nominee or nominees designated by the Board, or the Board may decrease the size of the Board.

There are no family relationships among our executive officers and directors.

        
  Our Board recommends a vote FOR the election to the Board of each of the following nominees.
        

HEWLETT PACKARD ENTERPRISE

 

|  27


Table of Contents

LOGO

 


2017 PROXY STATEMENT

 

 

 

 

 

 

 

 

 

 

Proposals To Be Voted On (continued)

Our 14 current directors have been nominated for re-election at the annual meeting to hold office until the 2018 annual meeting. The following provides a snapshot of the diversity, skills and experience of our director nominees, followed by summary information about each individual nominee.

Board Diversity

GRAPHIC

Nominee Skills and Experience

 

  Core Qualifications possessed by all of our director nominees    

 

 

High professional and personal ethics, consistent with our long-standing values and standards

Sound business judgment

Commitment to enhancing stockholder value

Ability to devote sufficient time and attention to carry out board duties

Leadership experience

Broad experience at the policy-making level in business, government, education, technology or public service