Palo Alto CEO's pay falls 19.5% to $80 million as board lowers cap on stock awards
Nikesh Arora's salary stays at $1 million; fiscal 2027 performance units are now capped at three times target after shareholder feedback.
Nikesh Arora, the chairman and CEO of Palo Alto Networks, was paid $80,270,519 for fiscal 2026, a drop of 19.5% from the $99,736,336 reported the year before. The $19,465,817 reduction came almost entirely from stock.
His salary stayed at $1 million for a second consecutive year. Stock awards, by far the largest part of his package, were valued at $75,937,806, down from $94,857,838. Those two figures account for $18.9 million of the decline, about 97% of the total drop. His non-equity incentive pay was $1 million, down from $1.2 million.
The stock figures are the values placed on the awards when they were granted, calculated at target performance. They are not what Arora has actually received, which will depend on the company's results and its share price in the years ahead.
The company has also changed the terms for the future. In response to shareholder feedback, it capped the payout on fiscal 2027 performance-share units at three times the target, down from four. The new ceiling is 25% lower than the old one, and it is half the 600% maximum used in fiscal 2024.
"We believe that you will conclude that we have taken meaningful action in response to your feedback," John M. Donovan, the board's lead independent director, wrote to shareholders.
The CEO and his own shares
Arora's personal dealings in the stock have also drawn attention. In March, when the shares were down more than 20% for the year, he bought 68,085 shares for about $10 million, at an average of about $146.88. It was his first open-market purchase since November 2019.
In October, CTech reported, he received about $147.3 million up front under a prepaid variable share forward contract on up to 500,000 shares held through a family trust. The contract settles in October 2029, with a floor price of $342.38 and a cap of $755.25. It is a financing arrangement, not a conventional sale, and he keeps beneficial ownership and voting rights until settlement.
The pay figures and the forward contract are separate, but together they show how much of Arora's wealth is tied to the company's share price, and how closely investors will be watching both.
