Fidelma Russo
Hewlett Packard EnterpriseAbout Fidelma Russo
Fidelma M. Russo is Executive Vice President, General Manager of Hybrid Cloud, and Chief Technology Officer at HPE (EVP/GM Hybrid Cloud & CTO since November 2023; CTO since September 2021). She is 61 years old and previously held senior technology leadership roles at VMware (SVP/GM, Cloud Services) and Iron Mountain (CTO & EVP, Global Technology & Operations) . Under her tenure as a senior leader, HPE’s FY24 results included $30.1B net revenue (+3% YoY), non-GAAP diluted EPS of $1.99, and ARR of $1.9B (+49% YoY) . Company TSR (value of a $100 investment) improved to 256 in 2024 from 175 in 2021, indicating positive shareholder value creation over the period overlapping her HPE tenure .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| VMware | SVP & GM, Cloud Services | 2020–2021 | Led cloud services business; operating experience directly relevant to HPE’s hybrid cloud focus |
| Iron Mountain | CTO & EVP, Global Technology & Operations | 2017–2020 | Enterprise-scale technology transformation and operations leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Equinix, Inc. | Director (Audit Committee member) | Since 2022 | Board service at a leading data-center/IXP provider |
Fixed Compensation
| Element (FY2024) | Amount / Terms |
|---|---|
| Base Salary | $750,000 |
| Target Annual Bonus (PfR) | 125% of base salary |
| Actual Annual Incentive Payout | 33% of target = $306,892 |
| All Other Compensation | $152,481 total, including 401(k) match $9,680; NQDC match $13,200; Mobility program $79,990; Tax benefit $31,611; Misc. $18,000 |
| Nonqualified Deferred Compensation (EDCP) | Contributions $130,793; Company match $13,200; Earnings $61,597; FY-end balance $361,886 |
Notes:
- HPE generally targets NEO base salary to comprise ~10–15% of total direct compensation; pay positioned around market median, guided by FW Cook .
Performance Compensation
FY2024 Annual Incentive (PfR) – Design and Outcome
- For Russo (segment leader), PfR was based on: business segment revenue; business segment operating profit (segment EFO); HPE ARR; and business segment as‑a‑service orders (weightings not disclosed for her segment plan) .
- Corporate PfR reference (for corporate NEOs): Revenue 25%, Operating Profit 50%, ARR 15%, Intelligent Edge revenue 10% (corporate funding = 75% of target based on results), but Russo’s funding reflected her segment performance .
- MBO modifier: 110% for Russo (above target based on execution in Hybrid Cloud strategy, Private Cloud AI, HPE Virtualization, Morpheus acquisition, GreenLake advancements) .
- Net result: Financial funding 30% of target; with 110% MBO modifier → 33% of target payout ($306,892) .
| Annual Incentive Metric (Russo) | Weighting | Target | Actual | Payout |
|---|---|---|---|---|
| Business segment revenue | Not disclosed | Not disclosed | Not disclosed | Financial funding 30% (aggregate) |
| Business segment operating profit (EFO) | Not disclosed | Not disclosed | Not disclosed | — |
| HPE ARR | Not disclosed | Not disclosed | Not disclosed | — |
| Segment as‑a‑service orders | Not disclosed | Not disclosed | Not disclosed | — |
| MBO Modifier | ±20% band | 100% | 110% | Applied to financial funding |
| Outcome | — | — | — | 33% of target; $306,892 |
Long-Term Incentives (LTI) – Grants, Metrics, Vesting
- Structure: 50% RSUs (time-based) + 50% PARSUs (performance-based) .
- FY2024 Target Grant Values: RSUs $3,000,000; PARSUs $3,000,000; Total $6,000,000 .
- FY2024 Grants (12/7/2023):
- RSUs: 186,104 units; grant-date fair value $2,999,996; vests ratably over 3 years from grant date .
- PARSUs: Target 186,104 units (threshold/max 0.5x/2.0x of target); grant-date fair value at target $3,051,175; performance periods are two-year (FY2024–FY2025) and three-year (FY2024–FY2026); metric is non‑GAAP net income growth with a relative TSR modifier vs S&P 500 .
| LTI Component | Grant Date | Units / Structure | Metrics | Vesting / Performance Windows | Grant-Date FV |
|---|---|---|---|---|---|
| RSUs | 12/7/2023 | 186,104 units | Time-based | 1/3 per year over 3 years from grant | $2,999,996 |
| PARSUs (Target) | 12/7/2023 | 186,104 units (0.5x–2.0x) | Non‑GAAP net income growth; relative TSR modifier (S&P 500) | 50% based on FY2024–FY2025; 50% based on FY2024–FY2026; continued service | $3,051,175 |
Additional notes:
- FY2023 PARSUs segment one earned at 108% (2-year); FY2022 PARSUs segment two earned at 88% (3-year) after removing Russia/Belarus income for fair comparability; an accounting modification for FY2022 PARSUs was recorded in FY2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 0 shares; <1% of outstanding (1,313,212,053 shares outstanding as of 12/31/2024) |
| Outstanding Unvested RSUs (10/31/2024) | 191,311 units; $3,728,651 value at $19.49 close |
| Outstanding Unearned PARSUs (10/31/2024) | 191,311 target units; $3,728,651 “market/payout” value at $19.49 close (performance-contingent) |
| Stock Options | None; no options granted under 2021 Plan; NEOs do not hold options |
| Stock Ownership Guidelines | CEO 7x salary; other exec officers 5x salary within 5 years; all NEOs held expected position or on target by FY2024-end |
| Hedging/Pledging | Prohibited for executive officers (and directors) |
Implications:
- Low direct share ownership (0) offsets by substantial unvested/unearthed equity, aligning future payoffs with multi-year stock and profit performance .
- No options or pledging reduces leverage and collateral-based selling pressure; policy-based hedging ban preserves alignment .
Employment Terms
| Term | Detail |
|---|---|
| HPE Start / Roles | CTO since Sept 2021; EVP/GM Hybrid Cloud & CTO since Nov 2023 |
| Employment Agreements | HPE does not enter individual executive employment agreements |
| Clawback | Policy allows recovery of all annual and long-term incentives; goes beyond NYSE requirements |
| Anti‑Hedging/Pledging | Prohibited |
| Severance (Qualifying Termination – Not for Cause) | Cash severance multiple for EVPs = 1.5x base salary + 3‑yr average bonus; Russo: Severance $3,100,540; Total with equity treatment $9,221,508 (includes RSUs $4,567,365; PARSUs $1,553,603) |
| Change‑in‑Control (Double Trigger) | HPE policy: double-trigger equity vesting; Russo: Total potential value $16,194,896; includes Severance $3,100,540; RSUs $9,365,705; PARSUs $3,728,651 |
Performance & Track Record
- FY2024 Company execution: $30.1B net revenue (+3% YoY), non-GAAP diluted EPS $1.99, $2.3B FCF, ARR $1.9B (+49% YoY) .
- Russo’s FY2024 MBOs: above target (110% modifier) driven by Private Cloud AI, HPE Virtualization, Morpheus Data acquisition, GreenLake platform advancements; retention/inclusion goals achieved .
- TSR context: HPE’s Pay-vs-Performance table shows HPE TSR (value of $100) rose to 256 in 2024 (from 175 in 2021), indicating stronger shareholder returns over the period overlapping her tenure .
Compensation Structure Analysis
- Mix and Risk: High at‑risk pay via PfR and multi-year PARSUs; RSUs support retention; NEO base salary typically 10–15% of target TDC (market median philosophy) .
- Annual metrics: For Russo’s BU plan, a balanced scorecard (segment revenue, segment operating profit, ARR, aaS orders) ties cash payout to profitable growth and recurring revenue shift; actual financial underperformance (30% funding) led to a down payout despite above-target MBO, signaling rigor in pay-for-performance .
- LTI metrics: PARSUs focus on non‑GAAP net income growth (comprehensive P&L accountability) with relative TSR as modifier over 2- and 3-year periods, aligning value with both internal performance and market-relative returns .
- Governance: No options, no hedging/pledging, robust clawback, and no tax gross-ups strengthen alignment and risk controls .
Equity & Vesting Calendar (Pressure/Overhang)
- RSUs from 12/7/2023 grant vest 1/3 annually over three years from grant (i.e., equal tranches through 2026, subject to service), potentially creating periodic tax-related sell-to-cover but limited discretionary selling pressure due to policy constraints .
- PARSUs cliff-earn in two segments: end of FY2025 and FY2026, contingent on non‑GAAP net income growth and relative TSR; underperformance reduces realizable value, moderating selling pressure risk .
Related Party / Red Flags
- HPE states related-person transactions are governed by NGSR Committee policy and none material to NEOs were indicated; hedging/pledging prohibited; no option repricings; no individual employment contracts; no tax gross-ups for perquisites .
Compensation Peer Group / Benchmarking
- FW Cook advises the HRC Committee; HPE targets competitive market median for TDC (with exceptions for attraction/retention) using industry-relevant peers and Aon survey data .
Say‑on‑Pay & Shareholder Feedback
- HRC notes Say‑on‑Pay outcomes indicate stockholder support for compensation philosophy and design; Committee maintains consistent programs, with targeted adjustments as needed .
Expertise & Qualifications
- Deep enterprise infrastructure expertise spanning hybrid cloud, cloud services, and large-scale technology operations from VMware and Iron Mountain; currently responsible for HPE’s Hybrid Cloud business and CTO agenda .
- Public company board experience (Equinix), audit oversight exposure .
Investment Implications
- Alignment: Strong metric design and sizeable performance-based equity tie Russo’s realizable pay to profitable growth and TSR; clawback, anti‑hedging/pledging, and no options reduce risk of misalignment .
- Retention: Significant unvested RSUs and PARSUs across multi-year windows, combined with double-trigger CIC and 1.5x severance multiple, support retention through FY2026; low direct share ownership is offset by meaningful unvested equity exposure .
- Execution risk: FY2024 annual incentive outcome (only 33% of target) underscores performance sensitivity; success of Hybrid Cloud initiatives (Private Cloud AI, GreenLake) and segment profitability will drive future payouts and potential insider selling cadence upon vesting .
- Trading signals: Expect periodic sell-to-cover around RSU/PARSU vestings; with no pledging and hedging bans, discretionary selling pressure may be limited; watch Form 4s near vesting dates for additional color (policy-driven windows apply) .