Nikesh Arora
Palo Alto NetworksAbout Nikesh Arora
Nikesh Arora, 57, has served as Chair of the Board and Chief Executive Officer of Palo Alto Networks since June 2018; he previously held senior leadership roles at Google (SVP & Chief Business Officer) and SoftBank (President & COO; CEO of SoftBank Internet & Media), and holds an MS in Business Administration (Northeastern), MS in Finance (Boston College), and B.Tech in Electrical Engineering (IIT BHU) . Under his tenure, PANW highlighted TSR outperformance versus its 2025 compensation peer group and the S&P 500; the pay-versus-performance table shows $100 invested grew to $407 for PANW vs $281 for the peer group (as of FY2025), alongside FY2025 revenue of $9.22B and Non‑GAAP EPS of $3.34 with FY2022–FY2025 CAGRs of 19% (revenue) and 38% (Non‑GAAP EPS) . Strategic execution included platformization across network, cloud, and security operations, new AI-driven products, and M&A such as Protect AI and the proposed acquisition of CyberArk to add identity security .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Google, Inc. | SVP & Chief Business Officer; prior senior leadership roles | 2011–2014 (SVP & CBO); 2004–2014 overall | Led global commercial operations in a period of material expansion |
| SoftBank Group Corp. | President & COO | 2015–2016 | Ran global operations at a major technology conglomerate |
| SoftBank Internet & Media (subsidiary) | Vice Chair & CEO | 2014–2015 | Led digital/media investments and operations |
| SoftBank Group Corp. | Advisor | 2016–2017 | Strategic advisory to executive leadership |
| Angel investor | Investor | 2016–2018 | Early-stage and strategic investments |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Uber Technologies, Inc. | Director | Current | Public company board seat |
| Compagnie Financière Richemont S.A. | Non‑executive Director | Current | Public company board seat (Switzerland) |
| Sprint Corp. | Director | 2014–2016 | Prior public board |
| Colgate‑Palmolive Company | Director | 2012–2014 | Prior public board |
| SoftBank Group Corp. | Director | 2014–2016 | Prior public board |
| Yahoo! Japan | Director | 2015–2016 | Prior public board |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | 750,000 | 1,000,000 | 1,000,000 |
| Target Bonus ($) | — | — | 1,000,000 (cash incentive target) |
| Actual Cash Bonus Paid ($) | 1,500,000 | 1,200,000 | 1,200,000 |
| Perquisites/All Other Compensation ($) | 3,800,885 | 1,686,522 | 2,678,498 (includes CEO security program, aircraft, auto, and related taxes) |
CEO Security Program (FY2025): personal use of chartered aircraft $870,276; company‑leased automobile $89,298; company paid $315,801 of taxes on imputed income; total perquisites approx. $2,678,498 .
Performance Compensation
Annual Cash Incentive (FY2025)
| Component | Weighting | Target | Actual | Payout/Notes |
|---|---|---|---|---|
| Revenue | Not disclosed | $9,112M | $9,222M | 120% of target for revenue curve |
| Organic Operating Margin (non‑GAAP, “organic”) | Not disclosed | 27.8% | 29.1% | Payouts determined by non‑linear curves; threshold >10% below target yields zero |
| Overall CEO cash incentive | — | $1,000,000 | $1,200,000 | Implies 120% payout vs target |
| Design | — | — | — | Two metrics (revenue, organic op margin) with Corporate Responsibility modifier ±10%; full‑year cap 150% pre‑modifier |
PSU Program (Design and FY2025 Grants)
- Design: 3‑year performance period; two equally important financial measures (average of annual NGS ARR and annual Non‑GAAP EPS across FY2025–FY2027), plus a relative TSR modifier vs S&P 500 (FY2026 target for 1.0x raised to 55th percentile from 50th) .
- Shareholder‑responsive changes: maximum PSU payout reduced by 33.3% (from 600%→400% of target) for outstanding PSUs; clearer cash‑plan thresholds; no overlapping one‑time CEO grants beyond June 2023 award .
| Grant (accounting measurement date) | Board/Committee action date | PSU Target (#) | PSU Max (#) | Grant Date Fair Value ($) | |---|---|---|---:|---:|---:| | 8/15/2024 | 8/18/2022 | 580,032 | 1,145,008 | 41,259,851 | | 8/15/2024 | 8/17/2023 | 492,912 | 1,123,228 | 30,831,646 | | 8/20/2024 | 8/15/2024 | 350,656 | 1,087,664 | 22,766,341 |
Additional disclosure: total FY2025 PSU “New Plan Benefits” shown at maximum achievement equate to 1,423,600 shares and $268,674,816 grant‑date fair value for Arora; FY2025 NEO equity was 100% performance‑based .
Equity Ownership & Alignment
Beneficial Ownership (as of 9/15/2025)
| Category | Shares |
|---|---|
| Directly held by Arora | 275,013 |
| Bacchey Investments L.P. (Arora‑related) | 32,010 |
| Nikesh Arora 2025 Annuity Trust (trustee) | 726,542 |
| PSUs vesting within 60 days of 9/15/2025 (subject to deferral elections) | 1,185,721 |
| PSOs exercisable within 60 days of 9/15/2025 | 846,408 (all exercised and sold 9/23/2025 under a Rule 10b5‑1 plan) |
| Deferred RSUs/PSUs (vested, not yet delivered due to deferral) | 1,772,738 (excluded from beneficial tally) |
| Total beneficial ownership | 3,065,694; <1% of shares outstanding (673,720,207 outstanding) |
- Insider activity and selling pressure:
- FY2025 option exercises: 3,909,776 shares exercised; $571,435,374 value realized .
- FY2025 stock vested: 465,850 shares; $87,380,903 value realized, all deferred under the nonqualified plan .
- One‑year post‑vesting holding requirement for NEOs (adopted FY2022) further aligns interests; exceptions for tax withholding and initial hire grants .
Deferred Compensation (FY2025 activity and balance)
| Executive | FY2025 executive contributions ($) | FY2025 earnings/loss ($) | Aggregate balance at FYE ($) |
|---|---|---|---|
| Nikesh Arora | 87,380,903 | 8,173,544 | 307,747,317 |
Plan highlights: deferral permitted for 5–100% of salary, bonuses, and eligible RSUs/PSUs; Section 409A compliant; defaults to notional PANW stock for certain deferrals; paid in shares absent share shortages; company may make discretionary contributions .
Ownership Guidelines and Pledging
- CEO stock ownership guideline: 10x base salary; status “Met” with deadline June 2023 .
- Pledging: board allows limited pledging with strict pre‑approval, 30% LTV cap per executive, aggregate executive pledges capped at $100M; pledged shares can’t count toward ownership guidelines or be under the 1‑year hold .
Employment Terms
Severance and Change‑in‑Control (CIC)
| Scenario | Cash | Equity | Benefits | Notes |
|---|---|---|---|---|
| Involuntary termination (non‑CIC) | 12 months base salary ($1,000,000) | None | 12 months COBRA ($36,012) | Total $1,036,012 |
| Double‑trigger CIC termination (within 12 months) | Lump sum base salary ($1,000,000) + 100% of incentive ($1,000,000) | Not shown for CEO in CIC table | 12 months COBRA ($36,012) | Equity acceleration governed by plan/award terms if not assumed or substituted |
| Death | Bonus $500,000; RSUs/PSUs accelerated at 100% of target; total equity value $358,953,762 at $173.60/sh; total $359,453,762 | — | — | Survivor Benefit Policy accelerates awards; rTSR modifiers deemed neutral |
Plan mechanics on M&A/CIC: if awards are not assumed/substituted, unvested RSUs/PSUs vest at 100% target; options/SARs become exercisable for a limited window; clawbacks apply per policy . Clawback: company maintains SEC/Nasdaq‑compliant compensation recovery policy; 2021 Plan subjects awards and other compensation to clawback/recovery .
Performance & Track Record
- Strategy and outcomes: Under Arora, PANW evolved from a NGFW product company to platform leadership in network, SASE, cloud security, and SecOps, with AI integrated; FY2025 progress included Prisma Access Browser 2.0, SASE/OT advances, Prisma AIRS, Cortex XSIAM 3.0, Protect AI acquisition, and proposed CyberArk acquisition to add identity security .
- Financial momentum: From FY2022 to FY2025, revenue CAGR 19% and Non‑GAAP EPS CAGR 38%; FY2025 revenue $9.22B, NGS ARR $5.58B, RPO $15.8B, Non‑GAAP EPS $3.34 .
- Shareholder returns: TSR since 2018 noted as significantly outperforming the 2025 compensation peer group and S&P 500; $100 initial investment grew to $407 (PANW) vs $280.58 (peer group) as reported in pay‑versus‑performance .
Board Governance (dual‑role implications)
- Roles: Arora serves as Chair and CEO; committee membership includes Corporate Development Committee .
- Independence safeguards: Board annually evaluates leadership structure; in Aug‑2025 reaffirmed combined Chair/CEO with robust Lead Independent Director (John M. Donovan) and nine independent directors, frequent executive sessions, and independent committees . The Lead Independent Director engaged in 14 meetings with holders of 35% of outstanding shares in FY2025 .
- Outside directorships: Boards of Uber (Director) and Richemont (Non‑executive Director) .
Say‑on‑Pay and Shareholder Feedback
- Engagement: Offered meetings to shareholders holding 56% of outstanding shares and met with holders of 53% (as of June 30, 2025) on compensation topics .
- Results and responsiveness: Majority support for Say‑on‑Pay in 2024; changes for FY2025/FY2026 included lowering PSU max to 400%, aligning PSU metrics to NGS ARR and Non‑GAAP EPS, clearly defined cash‑plan thresholds (no payout if either metric >10% below target), and raising TSR modifier target to 55th percentile for FY2026 .
Compensation Committee (context)
- Members signing the FY2025 compensation letter: Rt Hon Sir John Key (Chair), Aparna Bawa, John M. Donovan .
Risk Indicators and Insider Dynamics
- Insider selling pressure: Large FY2025 option exercise/sales (3.91M shares; $571.4M value) and 10b5‑1 planned sale of 846,408 PSOs on 9/23/2025; however, equity grants since 2020 have avoided options, and a one‑year post‑vesting holding period plus substantial deferrals can temper near‑term float from vesting .
- Perquisite tax gross‑ups: Company paid $315,801 of taxes on imputed income tied to aircraft/auto under CEO security program (shareholder‑unfriendly feature but tied to bona fide security risk) .
- Pledging policy: Limited, pre‑approved pledging permitted under capped, conservative framework; pledged shares cannot count toward ownership guidelines .
Investment Implications
- Pay-for-performance alignment with retention: 100% performance‑based equity for NEOs with 3‑year horizons, aggressive targets, and relative TSR modifier should align outcomes with growth, profitability, and shareholder returns, supporting long‑term orientation .
- Near‑term supply signals: The substantial FY2025 option exercises/sales and sizable deferred equity balance suggest managed liquidity events; the one‑year hold and deferrals reduce immediate selling overhang from vesting, but large deliveries around plan settlements remain a monitoring item .
- Governance trade‑off: Combined Chair/CEO persists with a strong Lead Independent Director and majority‑independent board; ongoing shareholder engagement and compensation program refinements mitigate independence concerns tied to dual roles .
- Contract downside protection: CEO severance outside CIC is modest (salary + COBRA; no equity), and CIC benefits are cash‑focused with equity outcomes driven primarily by plan/award terms—limiting windfalls and aligning with market standards for double‑trigger constructs .
All figures and statements are sourced from Palo Alto Networks’ 2025 Proxy Statement (DEF 14A) dated November 7, 2025, with citations provided inline.