Mary Pat McCarthy
Palo Alto NetworksAbout Mary Pat McCarthy
Mary Pat McCarthy is an independent director of Palo Alto Networks, age 70, serving on the board since October 2016; she chairs the Audit Committee and serves on the Security Committee and Corporate Development Committee . She is designated an “audit committee financial expert,” having been Vice Chair of KPMG LLP until 2011 and holding a B.S. in Business Administration from Creighton University and completing Wharton’s KPMG International Development Program . The Board has affirmatively determined she is independent under SEC and Nasdaq standards .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| KPMG LLP (U.S.) | Vice Chair | 1998–2011 | Served on KPMG’s Management and Operations Committees; led global Information, Communication & Entertainment practice (1998–2004) |
| KPMG LLP | Partner | 1987–2011 | Executive Director, KPMG Audit Committee Institute (2008–2011); U.S. Leader, Industries & Markets (2005–2006); Leader, Client Care program (2007–2008) |
| KPMG LLP | Various senior leadership roles | 1977–2011 | Advising companies on financial and accounting matters; oversight experience in finance, operations, and risk management |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Micron Technology, Inc. | Director (public company) | Current | Producer of semiconductor devices; adds global business perspective |
| Mutual of Omaha | Director (public company) | 2012–2018 | Insurance company board experience |
| Andeavor (formerly Tesoro Corporation) | Director (public company) | 2012–2018 | Global energy corporation board experience |
Board Governance
| Committee | Role | Meetings in FY2025 | Notable Governance Details |
|---|---|---|---|
| Audit Committee | Chair | 7 | All members independent; McCarthy is “audit committee financial expert”; responsibilities include auditor selection, independence, ICFR oversight, and related person transaction review |
| Security Committee | Member | 4 | Oversees enterprise cybersecurity, incident response preparedness, and security-related disclosures and risk management |
| Corporate Development Committee | Member | 1 | Reviews and approves strategic acquisitions and investments; operates under written charter |
- Director independence: The Audit, Compensation and People, and Governance and Sustainability Committees are composed solely of and led by independent directors .
- Board attendance: In FY2025, the Board met nine times; except for one director (Bawa at 73%), no director attended fewer than 75% of Board and committee meetings of which they were members, indicating McCarthy’s attendance met ≥75% .
Fixed Compensation
| Component | FY2025 Amount/Status |
|---|---|
| Cash compensation (retainer/fees) | $0; directors receive no cash under the Outside Director Compensation Policy |
| Stock awards (aggregate grant-date fair value) | $381,185 (RSUs) |
| RSUs held at FY2025 year-end | 978 RSUs |
- Policy structure: Annual RSU retainer award value $320,000; Lead Independent Director receives an additional $50,000 RSU award; committee service awards are paid as RSUs (no compensation for Corporate Development Committee); policy was amended in February 2025 to increase certain award values based on competitive analysis by an independent consultant .
- Grant mechanics and vesting: Annual director RSUs are a single grant covering all awards, sized using the straight average closing price over the 30 calendar days ending the day before the annual meeting; they vest quarterly over one year from a December 1 vest start date .
Performance Compensation
| Feature | Director Policy Application |
|---|---|
| Performance metrics tied to director pay | None; director compensation is time-based RSUs (no bonus or performance-conditioned equity) |
| Options to directors | Not indicated; director awards are RSUs under the policy |
| Repricing restrictions | Repricing/exchange of awards not permitted without shareholder approval under the 2021 Equity Incentive Plan |
| Clawback | Awards subject to company clawback policies and applicable laws |
| Tax gross-ups | None in the 2021 Plan |
| Change-of-control treatment (non-employee directors) | Full vesting and lapse of restrictions; performance goals deemed achieved at target for performance-based awards (director service awards) |
Other Directorships & Interlocks
| Company | Relationship to PANW | Potential Interlock/Conflict Notes |
|---|---|---|
| Micron Technology, Inc. | Independent director | No PANW-related party transaction disclosed; Board committees review conflicts of interest and related person transactions through established policies |
Expertise & Qualifications
- Audit committee financial expert under Item 407(d) of Regulation S-K; meets Nasdaq financial sophistication requirements .
- Deep technical expertise in financial/accounting matters from service as KPMG Vice Chair; 40+ years’ experience in finance, operations, and risk oversight at public technology companies .
- Education: B.S. in Business Administration (Creighton); completed Wharton’s KPMG International Development Program .
- Public company board experience and global business perspective; contributes valuable insights to PANW’s operations .
Equity Ownership
| Item | Amount | As of/Notes |
|---|---|---|
| Beneficial ownership (common shares) | 52,500 shares; represents less than 1% of shares outstanding | September 15, 2025; footnote indicates shares held of record by the director |
| Shares outstanding (basis for % calc.) | 673,720,207 | September 15, 2025 |
| RSUs outstanding (held) | 978 RSUs | As of July 31, 2025 |
| Director stock ownership guideline | 5x annual retainer within five years | All non-employee directors compliant as of September 15, 2025 |
| Hedging/Pledging policy | Prohibits derivative transactions; prohibits pledging by directors except with prior Governance & Sustainability Committee approval |
Governance Assessment
- Committee leadership and independence: McCarthy chairs an entirely independent Audit Committee and is recognized as an audit committee financial expert, bolstering investor confidence in financial reporting oversight .
- Engagement: Board held nine meetings in FY2025, and McCarthy met at least the 75% attendance threshold, supporting engagement and effectiveness .
- Compensation alignment: Directors receive no cash; compensation is equity-only via RSUs with quarterly vesting and ownership guidelines (5x retainer), which promotes alignment with shareholders .
- Risk controls: Strong policies include clawbacks, no tax gross-ups, no repricing without shareholder approval, and anti-hedging/controlled pledging—all positive governance signals .
- Potential RED FLAG: Director awards fully accelerate on change of control (non-employee directors), which can be viewed as shareholder-unfriendly; however, this is disclosed and governed under plan terms .
- Conflicts oversight: Related person transactions are reviewed/approved by the Audit Committee under a formal policy; the proxy does not disclose any related person transactions involving Ms. McCarthy, and the Board has affirmed her independence .
- Broader governance: Committee chairs meet with management pre-meeting; executive sessions are routine; independent director access to all committee materials supports board effectiveness .
- Compensation governance: Independent compensation consultant (Meridian) retained; committee determined no conflicts of interest with the consultant’s work, reflecting sound pay governance practice .