Palo Alto Networks, Inc. · NASDAQ:PANW
Palo Alto Networks — Proxy Contest (November 2023)
13 slides from Palo Alto Networks's proxy contest presentation, Nov 29, 2023
Slide 1: Additional Disclosure Regarding Proxy Proposals
Exhibit 99.1 Additional Disclosure Regarding Proxy Proposals November 29, 2023 © 2023 P © 2023 Palo Alt alo Alto Networks, Inc. All rights r o Networks, Inc. All rights reser eserved. ved.
Slide 2: Supplemental Disclosure to Assist Shareholders
Supplemental Disclosure to Assist Shareholders This document provides additional information for Palo Alto Networks’ shareholders to consider when determining how to vote with respect to Proposal 1 (election of directors), Proposal 3 (say-on-pay) and Proposal 4 (share reserve increase for equity pla
Slide 3: We Solicit, Value and Act on Shareholder Input
We Solicit, Value and Act on Shareholder Input ● We ask for shareholder input with respect to compensation decisions. ● We make commitments to our shareholders based on that input. ● We meet our commitments to our shareholders. 3 © 2023 Palo Alto Networks, Inc. All rights reserved.
Slide 4: Compensation Decisions Are Based on a Consistent Framework
Compensation Decisions Are Based on a Consistent Framework ● In our proxy statement, our Compensation and People Committee explained its approach to how it sets executive compensation, and described the shareholder feedback that informed our fiscal 2023 executive compensation program. ● We made 14 ke
Slide 5: NEO Compensation is Fully Aligned with our Commitments
NEO Compensation is Fully Aligned with our Commitments ● Our fiscal 2023 named executive officer (“NEO”) compensation was 95% at risk (97.5% for our CEO), with 100% of equity compensation performance based. ● Our annual incentive program was earned based on both top line (revenue) and bottom line (orga
Slide 6: Company Performance Validates NEO Compensation
Company Performance Validates NEO Compensation ● Our executive team delivered extraordinary shareholder value in 2022 and the Compensation and People Committee decisions with respect to 2023 compensation were validated by our fiscal 2023 performance. ○ Our fiscal 2022 performance was at the 92nd perce
Slide 7: CEO Retention Award Will Promote Shareholder Value
CEO Retention Award Will Promote Shareholder Value ● CEO was granted a long-term performance and retention award that is entirely performance-based. ● Our proxy statement described the painstaking process and compelling rationale for making this award, including not just Mr. Arora’s track record of
Slide 8: Shareholders Should Consider Unique Structure of CEO Retention Award
Shareholders Should Consider Unique Structure of CEO Retention Award Our Compensation and People Committee designed an award, based on the advice of its independent compensation consultant, that incentivizes long-term retention and requires strong, sustained performance. ● The five-year performance p
Slide 9: CEO Perquisites Are Part of a Sound Risk Management Strategy
CEO Perquisites Are Part of a Sound Risk Management Strategy The Compensation and People Committee carefully reviews and approves perquisites every year. ● 91%+ of the reported “All Other Compensation” relates to security measures (including a driving service and a requirement that personal travel b
Slide 10: Stock Plan Proposal - A Track Record of Transparency
Stock Plan Proposal - A Track Record of Transparency ● At the December 2021 annual meeting, shareholders approved a new equity incentive plan with a reserve of 13.2M shares (reflecting an adjustment for our 3:1 September 2022 stock split). When asking for initial approval, we advised shareholders tha
Slide 11: Stock Plan Proposal - Use of Equity Over Time
Stock Plan Proposal - Use of Equity Over Time Our use of stock-based compensation is aligned with business performance. ● During the three years ending with fiscal 2021 prior to adopting the 2021 plan, our gross burn rate was 5.11% and our net burn rate was 3.75%. Two years later, for the three years
Slide 12: Stock Plan Proposal - Changes in Three-Year Average Usage
Stock Plan Proposal - Changes in Three-Year Average Usage Three Year Averages Fiscal 2021 Fiscal 2022 Fiscal 2023 Performance-based stock options (“PSOs”) granted 2.8 0.2 0.2 PSOs earned 0.4 2.3 2.7 Restricted Stock Units (“RSUs”) granted 10.5 9.0 7.5 Performance-based restricted stock units (“PSUs”
Slide 13: Glass Lewis' Recommendations on Director Nominees Are Not Compelling
Glass Lewis’ Recommendations on Director Nominees Are Not Compelling ● During our 2020 shareholder engagement process, we heard from shareholders that they value the diversity of background and expertise of our directors but that they would like us to increase the number of directors we had with div