Karen Parkhill
HPAbout Karen Parkhill
Chief Financial Officer of HP Inc. since August 5, 2024; previously EVP & CFO of Medtronic (2016–2024), Vice Chair & CFO of Comerica, and CFO of J.P. Morgan Commercial Banking . She holds a BBA and BS in Mathematics from Southern Methodist University and an MBA from the University of Chicago Booth School of Business . HP’s FY24 delivered $53.6B in net revenue, $4.52B non-GAAP operating profit, and $3.32B non-GAAP free cash flow; 2022–2024 PARSU TSR performance was at the 69th percentile versus S&P 500 .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Medtronic plc | EVP & CFO | 2016–2024 | Led finance through pandemic, operating model shift, and innovation-driven strategy . |
| Comerica Incorporated | Vice Chairman & CFO | ~2011–2016 | Guided a large financial services firm’s capital, liquidity, and reporting . |
| J.P. Morgan | CFO, Commercial Banking; MD Investment Banking | ~2007–2011; ~2001–2007 | Led Commercial Banking finance and executed M&A/capital markets across sectors . |
External Roles
| Organization | Position | Committee/Focus | Notes |
|---|---|---|---|
| American Express | Director | Chair, Risk Committee | Current public company board role . |
| Non-profit/academic | Trustee/Board roles | Boys & Girls Clubs of America; Methodist Health System; SMU Cox Exec Board | Prior roles indicated by HP release . |
Fixed Compensation
| Item | Amount/Term | FY24 Actual | Notes |
|---|---|---|---|
| Base salary | $950,000 (CFO role) | $230,303 paid (partial year) | CFO salary level established; partial-year pay after Aug 5 start . |
| Target bonus % | 135% of base salary (CFO) | 85% of target paid (pro-rated) = $264,273 | FY24 corporate metrics + MBO funding led to 85% payout for Parkhill . |
| Sign-on cash bonus | $1,500,000 | 50% in Feb 2025; 50% in Aug 2025, subject to conditions | Repayment obligation if resignation/for-cause before one-year anniversary . |
Performance Compensation
| Component | Metric | Weight | Target | Actual FY24 | Payout/Impact | Vesting/Mechanics |
|---|---|---|---|---|---|---|
| Annual Incentive (Corporate) | GAAP Net Revenue | 25% | $53.6B | $53.6B | 24.9% of target (pre-discretion) | Annual cash bonus; overall financial factor reduced to 60% for parity . |
| Annual Incentive (Corporate) | Adjusted non-GAAP Operating Profit | 25% | $5.1B | $4.8B | 17.1% of target (pre-discretion) | Governor ties revenue/FCF funding to OP thresholds . |
| Annual Incentive (Corporate) | Non-GAAP Free Cash Flow | 25% | $3.4B | $3.3B | 24.3% of target (pre-discretion) | FCF capped when OP below target; total financial reduced to 60% . |
| Annual Incentive (Individual) | MBOs (Culture/People/Sustainable Impact) | 25% | 25.0% | Achieved at target | 25.0% for Parkhill | Qualitative objectives supporting long-term success . |
| RSUs (New-Hire) | Time-vested RSUs | — | $15,000,000 grant | 458,015 units granted | Value set by $15M ÷ Aug 5, 2024 close | Vests one-third on Aug 5, 2025/2026/2027; next tranche vests if involuntary not for cause, others forfeited . |
| LTI Framework for NEOs | PARSUs (EPS 80%; KGA revenue 20%) + TSR modifier | 60% PARSUs / 40% RSUs | Multi-year | EPS Yr1 (FY24) achieved at 80%; TSR modifier neutral in FY22–24 cycle | PARSU payout bands 0–300% with TSR ±50% modifier | 3-year cliff vesting; FY26 KGA revenue determines 20% portion . |
Equity Ownership & Alignment
| Item | Detail | Value |
|---|---|---|
| Beneficial ownership (12/31/2024) | Common shares directly owned | — (no direct shares; unvested RSUs only) . |
| Unvested RSUs outstanding (10/31/2024) | Shares and market value | 461,603 units; $16,396,142 at $35.52 close . |
| Scheduled vesting (RSUs) | Release dates and units | Aug 5, 2025: 152,671; Aug 5, 2026: 152,672; Aug 5, 2027: 152,672 (+ dividend equivalents) . |
| Options | Exercisable/unexercisable | None disclosed for Parkhill . |
| Ownership guidelines | Requirement | 5x base salary within 5 years; NEOs <5 years “on pace” . |
| Hedging/pledging | Policy | Hedging prohibited; pledging/margin largely prohibited for executives . |
Employment Terms
- Severance plan (SPEO): CFO multiple 1.5x base pay plus average bonus (or target if <3 years), subject to 2.99x cap; pro-rata annual bonus and pro-rata vesting of equity on involuntary not-for-cause; double-trigger CIC with full vesting (target for cycles not completed) .
- Parkhill-specific RSU term: If involuntary not-for-cause and release executed, the next scheduled tranche vests; other unvested RSUs forfeited .
- Clawbacks: Dodd-Frank compliant Mandatory Recovery Policy (restatement-driven) and Misconduct Clawback Policy (three-year lookback) covering cash and equity incentives .
- Contracts: HP does not use fixed-term executive employment contracts for senior executives .
- Insider trading/ownership: Strong insider trading controls; executive stock ownership guidelines; no tax gross-ups on perquisites or CIC; no option repricing without shareholder approval .
Compensation Structure Signals
- Shift to performance equity: Non-CEO NEO long-term mix emphasizes PARSUs (60%) over RSUs (40%), increasing at-risk pay alignment tied to EPS/KGA revenue with TSR modifier .
- FY24 annual bonus governance: Use of payout governors and discretionary reduction of the corporate financial factor to 60% to align with broad employee plan—mitigates windfall risk .
- Say-on-pay support: 91% approval at 2024 annual meeting underscores investor alignment with pay design .
Performance & Track Record (context)
- HP FY24 outcomes: Net revenue $53.6B; non-GAAP operating profit $4.52B; non-GAAP FCF $3.32B; PARSU cycle FY22–24 TSR at 69th percentile, with EPS cycle payout at 52% for FY22 PARSUs .
- Parkhill’s early impact: HRC credited her with “immediate impact,” managing an earnings call, re-starting the transformation office, and aligning teams; MBO funded at 25% .
Risk Indicators & Potential Trading Pressures
- Vesting calendar: Significant RSU releases on Aug 5, 2025/2026/2027 may create periodic selling pressure windows if shares are sold to cover taxes or diversify .
- Retention: Large unvested RSU grant ($15M initial award; 461,603 units outstanding) and SPEO protections reduce near-term departure risk .
- Governance mitigants: Prohibition on hedging/pledging; robust clawbacks; no fixed-term contracts; double-trigger CIC .
- Ownership alignment: 5x salary guideline and performance-weighted LTI support skin-in-the-game, with NEOs <5 years tracking to compliance .
Investment Implications
- Alignment: Pay-for-performance architecture (EPS/KGA revenue with TSR modifier) and ownership rules suggest strong alignment of CFO incentives with shareholder value creation .
- Retention and overhang: The three-year vesting of a sizable new-hire RSU grant is a retention anchor; anticipate potential flow-related effects around annual August vest dates .
- Governance quality: High say-on-pay approval (91%), clawbacks, hedging/pledging bans, and SPEO double-trigger CIC reduce adverse incentive risk and agency costs .
- Execution risk: FY24 financial metrics achieved near target on revenue/FCF but below target on operating profit; CFO’s mandate includes driving operational rigor and growth—watch for improved OP leverage and EPS trajectories reflected in future PARSU cycles .
Key data references: HP 2025 Proxy (DEF 14A) and HP/Medtronic press releases for appointment and biography.