HP INCHPQ
HP INC Stock Compensation Disclosure
Stock-Based Compensation
HP’s stock-based compensation plans include incentive compensation plans and an employee stock purchase plan.
Stock-Based Compensation Expense and Related Income Tax Benefits for Operations
Stock-based compensation expense and the resulting tax benefits for operations were as follows:
| For the fiscal years ended October 31 | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| In millions | |||||||||||||||||
| Stock-based compensation expense | $ | 522 | $ | 452 | $ | 438 | |||||||||||
| Income tax benefit | (88) | (77) | (72) | ||||||||||||||
| Stock-based compensation expense, net of tax | $ | 434 | $ | 375 | $ | 366 | |||||||||||
Cash received from option exercises under the HP Inc 2004 Stock Incentive Plan (the “2004 SIP”) and the HP Inc. 2021 Employee Stock Purchase Plan (the “2021 ESPP”) was $41 million, $72 million, and $51 million in fiscal year 2025, 2024, and 2023, respectively. The benefit realized for the tax deduction from option exercises in fiscal years 2025, 2024 and 2023 was $3 million, $1 million and $2 million, respectively.
Stock-Based Incentive Compensation Plans
HP’s stock-based incentive compensation plan includes equity plan adopted in 2004, as amended and restated (“principal equity plan”). Stock-based awards granted under the equity plan includes restricted stock awards, stock options and performance-based awards. Employees meeting certain employment qualifications are eligible to receive stock-based awards. As of October 31, 2025, the aggregate number of shares of HP’s stock authorized for issuance under the principal equity plan is 668.8 million.
Restricted stock awards are non-vested stock awards that may include grants of restricted stock or restricted stock units. Restricted stock awards and cash-settled awards are generally subject to forfeiture if employment terminates prior to the lapse of the restrictions. Such awards generally vest to three years from the date of grant. During the vesting period, ownership of the restricted stock cannot be transferred. Restricted stock has the same dividend and voting rights as common stock and is considered to be issued and outstanding upon grant. The dividends paid on restricted stock are non-forfeitable. Restricted stock units do not have the voting rights of common stock, and the shares underlying restricted stock units are not considered issued and outstanding upon grant. However, shares underlying restricted stock units are included in the calculation of diluted net EPS. Restricted stock units have forfeitable dividend equivalent rights equal to the dividend paid on common stock. HP expenses the fair value of restricted stock awards ratably over the period during which the restrictions lapse. The majority of restricted stock units issued by HP contain only service vesting conditions. HP also grants performance-adjusted restricted stock units which vest only on the satisfaction of both service and the achievement of certain performance goals including market conditions prior to the expiration of the awards.
Stock options granted under the principal equity plan are generally non-qualified stock options, but the principal equity plan permits some options granted to qualify as incentive stock options under the U.S. Internal Revenue Code. Stock options generally vest over to four years from the date of grant. The exercise price of a stock option is equal to the closing price of HP’s stock on the option grant date. The majority of stock options issued by HP contain only service vesting conditions. HP grants performance-contingent stock options that vest only on the satisfaction of both service and market conditions prior to the expiration of the awards. No stock option awards were granted during the fiscal year 2025. The expenses associated with stock options were not material for any of the periods presented. As of October 31, 2025, the total unrecognized pre-tax stock-based compensation expense related to stock options was $0.2 million, which is expected to be recognized over a weighted-average vesting period of 0.1 years.
RSU and stock option grants provide for accelerated vesting in certain circumstances as defined in the plans and related grant agreements, including termination in connection with a change in control.
Restricted Stock Units
HP uses the closing stock price on the grant date to estimate the fair value of service-based restricted stock units. HP estimates the fair value of restricted stock units subject to performance-adjusted vesting conditions using a combination of the closing stock price on the grant date and a Monte Carlo simulation model. The assumptions used to measure the fair value of restricted stock units subject to performance-adjusted vesting conditions in the Monte Carlo simulation model were as follows:
| For the fiscal years ended October 31 | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Expected volatility(1) | 34.0 | % | 33.9 | % | 44.4 | % | |||||||||||
Risk-free interest rate(2) | 4.0 | % | 4.1 | % | 4.0 | % | |||||||||||
Expected performance period in years(3) | 2.9 | 2.9 | 2.9 | ||||||||||||||
(1)The expected volatility was estimated using the historical volatility derived from HP’s common stock.
(2)The risk-free interest rate was estimated based on the yield on U.S. Treasury zero-coupon issues.
(3)The expected performance period was estimated based on the length of the remaining performance period from the grant date.
A summary of restricted stock units activity is as follows:
| As of October 31 | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Shares | Weighted- Average Grant Date Fair Value Per Share | Shares | Weighted- Average Grant Date Fair Value Per Share | Shares | Weighted- Average Grant Date Fair Value Per Share | ||||||||||||||||||||||||||||||
| In thousands | In thousands | In thousands | |||||||||||||||||||||||||||||||||
| Outstanding at beginning of year | 31,868 | $ | 30 | 30,209 | $ | 31 | 28,688 | $ | 30 | ||||||||||||||||||||||||||
Granted | 20,759 | $ | 34 | 18,262 | $ | 32 | 18,500 | $ | 31 | ||||||||||||||||||||||||||
| Vested | (14,912) | $ | 31 | (14,483) | $ | 33 | (15,291) | $ | 29 | ||||||||||||||||||||||||||
| Forfeited | (3,092) | $ | 32 | (2,120) | $ | 31 | (1,688) | $ | 31 | ||||||||||||||||||||||||||
| Outstanding at end of year | 34,623 | $ | 32 | 31,868 | $ | 30 | 30,209 | $ | 31 | ||||||||||||||||||||||||||
The total grant date fair value of restricted stock units vested in fiscal years 2025, 2024 and 2023 was $465 million, $471 million and $442 million, respectively. As of October 31, 2025, total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock units was $438 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.4 years.
Employee Stock Purchase Plan
HP sponsors the 2021 ESPP, pursuant to which eligible employees may contribute up to 10% of base compensation, subject to certain income limits, to purchase shares of HP’s common stock.
Pursuant to the terms of the 2021 ESPP, employees purchase stock under the 2021 ESPP at a price equal to 95% of HP’s closing stock price on the purchase date. No stock-based compensation expense was recorded in connection with those purchases because the criteria of a non-compensatory plan were met. The aggregate number of shares of HP’s stock authorized for issuance under the 2021 ESPP was 50 million.
Shares Reserved
Shares available for future grant and shares reserved for future issuance under the stock-based incentive compensation plans and the 2021 ESPP were as follows:
| As of October 31 | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| In thousands | |||||||||||||||||
| Shares available for future grant | 100,719 | 144,553 | 133,033 | ||||||||||||||
| Shares reserved for future issuance | 139,863 | 181,463 | 169,503 | ||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Dec 10, 2025 | Showing above |
| 2024 | Dec 13, 2024 | |
| 2023 | Dec 18, 2023 | |
| 2022 | Dec 6, 2022 | |
| 2016 | Dec 15, 2016 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.