DEF 14A of Palo Alto Networks Inc, Oct 27, 2023

DEF 14A of Palo Alto Networks Inc

Filed Oct 27, 2023 · FY20230001308179-23-001049

Open on EDGAR

  1. DIRECTORS

    DIRECTORS

  2. Nominee Directors

    Nominee Directors

  3. Nominee Directors

    | Nikesh Arora | | | | Age: 55 Director Since: 2018 Skills and Experience: | Committee Membership: Corporate Development Committee Other Current Public Company Boards: Compagnie Financière Richemont | |

  4. Nominee Directors

    | BACKGROUND Nikesh Arora has served as the Chair of our Board and Chief Executive Officer since June 2018. Prior to joining us, from 2016 through 2018 Mr. Arora was an angel investor and from June 2016 through December 2017, Mr. Arora served as an advisor to SoftBank Group Corp., a multinational conglomerate company (“SoftBank”). From July 2015 through June 2016, Mr. Arora served as president and chief operating officer of SoftBank and from July 2014 through June 2015, Mr. Arora served as vice chair and chief executive officer of SoftBank Internet and Media, a subsidiary of SoftBank. Prior to SoftBank, from December 2004 through July 2014, Mr. Arora held multiple senior leadership operating roles at Google, Inc., including serving as senior vice president and chief business officer, from January 2011 to June 2014. Mr. Arora also serves on the board of Compagnie Financiere Richemont S.A., a public Switzerland-based luxury goods holding company. Mr. Arora previously served on the boards of Sprint Corp., a communications services company, from November 2014 to June 2016, Colgate-Palmolive Company, a worldwide consumer products company focused on the production, distribution and provision of household, health care and personal care products, from March 2012 to September 2014, SoftBank from 2014 to 2016, and Yahoo! Japan, an internet company, from 2015 to 2016. Mr. Arora holds an M.S. in Business Administration from Northeastern University, an M.S. in Finance from Boston College, and a B.Tech in electrical engineering from the Institute of Technology at Banaras Hindu University. | QUALIFICATIONS AND EXPERIENCE Mr. Arora was chosen to serve on our Board due to his leadership skills and experience as the chief architect of the Company’s strategic vision, as well as his thorough knowledge of all aspects of our business. Through his extensive career in executive leadership, he brings expertise in leading and scaling technology businesses, risk management oversight, and in-depth knowledge of the cybersecurity and technology sectors. |

  5. Nominee Directors

    | Aparna Bawa INDEPENDENT | | | | Age: 45 Director Since: 2021 Skills and Experience: | Committee Membership: Audit Committee, Compensation and People Committee, Security Committee, Corporate Development Committee Other Current Public Company Boards: None | |

  6. Nominee Directors

    | BACKGROUND Aparna Bawa has served as a member of our Board since May 2021. Ms. Bawa has served as the Chief Operating Officer of Zoom Video Communications, Inc., a video communications company, since May 2020. Ms. Bawa served as Zoom’s Chief Legal Officer from August 2019 to May 2020, its General Counsel from September 2018 to May 2020 and its Secretary from December 2018 to November 2020. Prior to Zoom Video Communications, Ms. Bawa served as Senior Vice President and General Counsel of Magento, Inc., an e-commerce platform company, from June 2017 until its acquisition by Adobe Inc. in June 2018. From November 2012 to May 2017, Ms. Bawa served as Vice President, General Counsel and Secretary of Nimble Storage, Inc., an enterprise flash storage company, which was acquired by Hewlett Packard Enterprise in April 2017. Ms. Bawa holds a B.Sc. in Accounting from Marquette University and a J.D. from Harvard Law School. | QUALIFICATIONS AND EXPERIENCE Ms. Bawa was selected to serve on our Board due to her senior leadership and management experience at public technology companies, risk management oversight expertise, and legal and business operations expertise. She has extensive experience in technology companies. |

  7. Nominee Directors

    | | Industry and IT/Technical | | Senior Leadership | | Financial | | Diverse Backgrounds and Experiences | | Cybersecurity | | Sales, Marketing and Brand Management |

  8. Nominee Directors

    | | Global/International | | Governance, Risk Oversight and Compliance | | Emerging Technologies and Business Models | | Human Capital Management | | Public Company Board Experience |

  9. Nominee Directors

    | 48 | |

  10. Nominee Directors

    | Carl Eschenbach INDEPENDENT | | | | Age: 56 Director Since: 2013 Skills and Experience: | Committee Membership: Security Committee Other Current Public Company Boards: Workday | |

  11. Nominee Directors

    | BACKGROUND Carl Eschenbach has served as a member of our Board since May 2013. Mr. Eschenbach is Co-CEO of Workday, Inc., an on-demand financial management and human capital management software vendor, a position he has held since December 2022. Prior to Workday, Mr. Eschenbach was a general partner at Sequoia Capital Operations, LLC, a venture capital firm, since April 2016. Prior to joining Sequoia Capital Operations, LLC, Mr. Eschenbach served as Chief Operating Officer and President of VMware, Inc., a provider of cloud and virtualization software and services, a role he held from December 2012 to February 2016. Mr. Eschenbach previously served as VMware’s President and Chief Operating Officer from April 2012 to December 2012, as VMware’s Co-President, Customer Operations from January 2011 to April 2012 and as VMware’s Executive Vice President of Worldwide Field Operations from May 2005 to January 2011. Prior to joining VMware in 2002, he was Vice President of North America Sales at Inktomi from 2000 to 2002. Mr. Eschenbach also held various sales management positions with 3Com Corporation, Lucent Technologies Inc. and EMC. Mr. Eschenbach currently serves on the board of Workday, Inc. Mr. Eschenbach received an electronics technician diploma from DeVry University. | QUALIFICATIONS AND EXPERIENCE Mr. Eschenbach was selected to serve on our Board because of his extensive experience in the technology industry and his previous public company management experience. He brings to our Board over 30 years of operational and sales experience in the technology industry, and has extensive experience in risk management oversight and scaling large organizations, as well as a deep knowledge of high-growth companies. Mr. Eschenbach also has extensive public company board experience. |

  12. Nominee Directors

    | Lorraine Twohill INDEPENDENT | | | | Age: 52 Director Since: 2019 Skills and Experience: | Committee Membership: ESG and Nominating Committee (Co-Chair), Security Committee Other Current Public Company Boards: None | |

  13. Nominee Directors

    | BACKGROUND Lorraine Twohill has served as a member of our Board of directors since April 2019. Ms. Twohill currently serves as Google LLC’s (formerly Google, Inc.) Chief Marketing Officer, a position she has held since June 2009. From July 2003 until June 2009, Ms. Twohill served as Google’s Head of Marketing Europe, Middle East and Africa. Ms. Twohill previously served on the board of directors of Williams-Sonoma, Inc., a consumer retail company that sells kitchenwares and home furnishings, from January 2012 until May 2017. Ms. Twohill holds joint honors degrees in International Marketing and Languages from Dublin City University. | QUALIFICATIONS AND EXPERIENCE Ms. Twohill was selected to serve on our Board due to her leadership skills and extensive marketing knowledge, with over 25 years of experience. She has deep management and business operations experience, as well as risk management oversight experience. She provides the Board with valuable insights into brand management and the global issues facing technology companies today. |

  14. Nominee Directors

    | | Industry and IT/Technical | | Senior Leadership | | Financial | | Diverse Backgrounds and Experiences | | Cybersecurity | | Sales, Marketing and Brand Management |

  15. Nominee Directors

    | | Global/International | | Governance, Risk Oversight and Compliance | | Emerging Technologies and Business Models | | Human Capital Management | | Public Company Board Experience |

  16. Nominee Directors

    | 2023 Proxy Statement | 49 |

  17. Continuing Directors

    Continuing Directors

  18. Continuing Directors

    | John M. Donovan LEAD INDEPENDENT DIRECTOR | | | | Age: 62 Director Since: 2012 Skills and Experience: | Committee Membership: Compensation and People Committee, ESG and Nominating Committee (Co-Chair), Security Committee (Chair), Corporate Development Committee (Chair) Other Current Public Company Boards: Lockheed Martin Corporation | |

  19. Continuing Directors

    | BACKGROUND John M. Donovan has served as a member of our Board since September 2012. Since May 2019, Mr. Donovan has served as Chair of The President’s National Security Telecommunications Advisory Committee. Mr. Donovan worked at AT&T Inc., a provider of telecommunication services, since April 2008, first as Chief Technology Officer and subsequently as Chief Executive Officer—AT&T Communications until his resignation, effective October 1, 2019. From November 2006 to April 2008, Mr. Donovan was Executive Vice President of Product, Sales, Marketing and Operations at Verisign. From November 2000 to November 2006, Mr. Donovan served as Chair and CEO of inCode Telecom Group Inc., a provider of strategy and consulting services to the telecommunications industry. Prior to joining inCode, Mr. Donovan was a Partner with Deloitte Consulting where he was the Americas industry practice director for telecommunications. Mr. Donovan serves on the board of directors of Lockheed Martin Corporation, an aerospace, defense and technology company. Mr. Donovan holds a B.S. in Electrical Engineering from the University of Notre Dame and an M.B.A. from the University of Minnesota. | QUALIFICATIONS AND EXPERIENCE Mr. Donovan was selected to serve on our Board because of his technical knowledge and extensive business leadership, management, operations and risk management oversight experience, as a result of serving as the Chief Technology Officer and later the Chief Executive Officer of AT&T Communications. He is skilled in overseeing global information, software development, supply chain, network operations and big data organizations and has expertise in cybersecurity, artificial intelligence and machine learning. |

  20. Continuing Directors

    | Dr. Helene D. Gayle INDEPENDENT | | | | Age: 67 Director Since: 2021 Skills and Experience: | Committee Membership: ESG and Nominating Committee, Security Committee Other Current Public Company Boards: Organon, The Coca-Cola Company | |

  21. Continuing Directors

    | BACKGROUND Dr. Helene D. Gayle has served as a member of our Board since May 2021. Dr. Gayle has been President of Spelman College since July 2022. Prior to this position, Dr. Gayle served as President and Chief Executive Officer of The Chicago Community Trust, a community foundation dedicated to improving the Chicago region through strategic grant making, civic engagement and inspiring philanthropy, from 2017 to 2022. Dr. Gayle previously served as Chief Executive Officer of McKinsey Social Initiative, an independent non-profit organization, from 2015 to 2017 and as President and Chief Executive Officer of CARE USA, a leading international humanitarian organization, from 2006 to 2015. From 2001 to 2006, she was an executive in the Global Health program at the Bill & Melinda Gates Foundation. Dr. Gayle began her career in public health at the U.S. Centers for Disease Control in 1984, and held positions of increasing responsibility over her 20-year tenure there, ultimately becoming the director of the National Center for HIV, STD and TB Prevention and achieving the rank of Assistant Surgeon General and Rear Admiral in the United States Public Health Service. Dr. Gayle earned a Bachelor of Arts degree in Psychology from Barnard College of Columbia University, an M.D. from University of Pennsylvania and a Masters in Public Health from Johns Hopkins University. She currently serves as a member of the board of directors of The Coca-Cola Company, a beverage company, and Organon & Co., a pharmaceutical company. Dr. Gayle previously served as a member of the board of directors of Colgate-Palmolive Company, a global consumer products company, from 2010 to 2021. | QUALIFICATIONS AND EXPERIENCE Dr. Gayle was selected to serve on our Board because of her senior leadership and chief executive officer experience and broad international exposure and emerging market experience, as well as her governmental and non-profit expertise, risk management expertise and corporate governance experience as a director of private and public companies. |

  22. Continuing Directors

    | | Industry and IT/Technical | | Senior Leadership | | Financial | | Diverse Backgrounds and Experiences | | Cybersecurity | | Sales, Marketing and Brand Management |

  23. Continuing Directors

    | | Global/International | | Governance, Risk Oversight and Compliance | | Emerging Technologies and Business Models | | Human Capital Management | | Public Company Board Experience |

  24. Continuing Directors

    | 50 | |

  25. Continuing Directors

    | James J. Goetz INDEPENDENT | | | | Age: 57 Director Since: 2005 Skills and Experience: | Committee Membership: Audit Committee, Corporate Development Committee, Security Committee Other Current Public Company Boards: Intel | |

  26. Continuing Directors

    | BACKGROUND James J. Goetz has served as a member of our Board since April 2005. Mr. Goetz has been a managing member of Sequoia Capital Operations, LLC, a venture capital firm, since June 2004, where he focuses on cloud, mobile, and enterprise companies. Mr. Goetz currently serves on the board of directors of Intel Corporation and several privately held companies. Mr. Goetz has previously served on the boards of directors of Barracuda Networks, Inc., a data security and storage company from 2009 to 2017, Nimble Storage, Inc., a data storage company, from 2007 to 2017, Jive Software, Inc., a provider of social business software, from 2007 until 2015, and Ruckus Wireless, Inc., a manufacturer of wireless (Wi-Fi) networking equipment, from 2012 until 2015. Mr. Goetz holds an M.S. in Electrical Engineering with a concentration in Computer Networking from Stanford University and a B.S. in Electrical Engineering with a concentration in Computer Engineering from the University of Cincinnati. | QUALIFICATIONS AND EXPERIENCE Mr. Goetz was selected to serve on our Board because of his senior leadership, technology, information technology (IT), business development and cybersecurity experience, and knowledge of emerging technologies, arising from his experience as a partner of a venture capital firm, where he focuses on cloud mobile, and enterprise technology investments, as well as providing guidance and counsel to a wide variety of internet and technology companies. He also brings his experience as a senior management leader in network, data security and storage, software, and manufacturing companies, through various senior roles and other board experiences. Mr. Goetz also has extensive public company board experience. |

  27. Continuing Directors

    | Right Honorable Sir John Key INDEPENDENT | | | | Age: 61 Director Since: 2019 Skills and Experience: | Committee Membership: Audit Committee, Compensation and People Committee (Chair), Security Committee Other Current Public Company Boards: ANZ Bank New Zealand Ltd, Australia & New Zealand Banking Group Ltd | |

  28. Continuing Directors

    | BACKGROUND Right Honorable Sir John Key has served as a member of our Board since April 2019. Sir John was a Member of Parliament for Helensville in New Zealand until April 2017. Sir John served as Prime Minister of New Zealand from November 2008 to December 2016 having commenced his political career as a Member of Parliament for Helensville in July 2002. Prior to his political career, he had a nearly twenty-year career in international finance, primarily for Bankers Trust of New Zealand and Merrill Lynch in Singapore, London and Sydney. Sir John serves as the chair and member of the board of directors of ANZ Bank New Zealand Ltd and is a member of the board of directors of the parent Australia & New Zealand Banking Group Ltd, a public bank that provides various banking and financial products and services and also serves on the board of directors of several privately held companies. He previously served on the board of directors of Air New Zealand Limited, a public airline, from 2017 to 2020. Sir John has a Bachelor of Commerce in Accounting from the University of Canterbury. | QUALIFICATIONS AND EXPERIENCE Sir John was selected to serve on our Board due to his global business leadership and extensive financial, capital markets, and management expertise as former Prime Minister of New Zealand, his extensive background in foreign affairs, and his career in investment banking and finance. He brings extensive experience in policy-making and a global business perspective from his experience and service on other boards, which is especially valuable to us as we grow internationally. |

  29. Continuing Directors

    | | Industry and IT/Technical | | Senior Leadership | | Financial | | Diverse Backgrounds and Experiences | | Cybersecurity | | Sales, Marketing and Brand Management |

  30. Continuing Directors

    | | Global/International | | Governance, Risk Oversight and Compliance | | Emerging Technologies and Business Models | | Human Capital Management | | Public Company Board Experience |

  31. Continuing Directors

    | 2023 Proxy Statement | 51 |

  32. Continuing Directors

    | Mary Pat McCarthy INDEPENDENT | | | | Age: 68 Director Since: 2016 Skills and Experience: | Committee Membership: Audit Committee (Chair), Security Committee, Corporate Development Committee Other Current Public Company Boards: Micron Technology | |

  33. Continuing Directors

    | BACKGROUND Mary Pat McCarthy has served as a member of our Board since October 2016. Ms. McCarthy, now retired, served as Vice Chair of KPMG LLP, the U.S. member firm of the global audit, tax and advisory services firm, until 2011 after attaining such position in 1998. She joined KPMG LLP in 1977 and became a partner in 1987. She held numerous senior leadership positions in the firm, including Executive Director of the KPMG Audit Committee Institute from 2008 to 2011, Leader of the KPMG Client Care program from 2007 to 2008, U.S. Leader, Industries and Markets from 2005 to 2006, and Global Leader, Information, Communication and Entertainment Practice from 1998 to 2004. Ms. McCarthy also served on KPMG’s Management and Operations Committees. Ms. McCarthy earned a Bachelor of Science degree in Business Administration from Creighton University and completed the University of Pennsylvania Wharton School’s KPMG International Development Program. Ms. McCarthy serves as a director of Micron Technology, Inc., a producer of semiconductor devices and previously served on the board of directors of Mutual of Omaha, an insurance company, from 2012 to 2018 and Andeavor Corporation (formerly Tesoro Corporation), a global energy corporation from 2012 to 2018. | QUALIFICATIONS AND EXPERIENCE Ms. McCarthy was selected to serve on our Board because of her deep technical expertise in financial and accounting matters from her experience as the Vice Chair of KPMG LLP, advising numerous companies on financial and accounting matters, as well as her leadership experience as a member of management at KPMG. She is an “audit committee financial expert” with over 40 years of experience in finance, operations and risk management oversight of technology companies, particularly publicly traded companies with knowledge of complex global financial and business matters. In addition, she brings a global business perspective and contributes valuable insights and perspectives to our business and operations from her service on other boards. |

  34. Continuing Directors

    | Nir Zuk | | | | Age: 52 Director Since: 2005 Skills and Experience: | Committee Membership: None Other Current Public Company Boards: None | |

  35. Continuing Directors

    | BACKGROUND Nir Zuk is one of our founders and has served as our Chief Technology Officer and as a member of our Board since March 2005. From April 2004 to March 2005, Mr. Zuk was Chief Security Technologist at Juniper Networks, Inc., a supplier of network infrastructure products and services. From September 2002 until its acquisition by Juniper in April 2004, Mr. Zuk was Chief Technology Officer at NetScreen Technologies, Inc., a provider of ASIC-based Internet security systems. In December 1999, Mr. Zuk co-founded OneSecure, Inc., a provider of prevention and detection appliances, and was Chief Technical Officer until its acquisition by NetScreen in September 2002. From 1994 to 1999, Mr. Zuk served in several technical roles, including Principal Engineer at Check Point Software Technologies Ltd., an enterprise software security company. Mr. Zuk attended Tel Aviv University where he studied Mathematics. | QUALIFICATIONS AND EXPERIENCE Mr. Zuk is a co-founder of Palo Alto Networks, a network security expert and brings a wealth of network security knowledge and industry experience to Palo Alto Networks. He brings business leadership, operational experience, risk management oversight experience, and experience developing technology. He has an in-depth knowledge of the technology and cybersecurity industries. |

  36. Continuing Directors

    | | Industry and IT/Technical | | Senior Leadership | | Financial | | Diverse Backgrounds and Experiences | | Cybersecurity | | Sales, Marketing and Brand Management |

  37. Continuing Directors

    | | Global/International | | Governance, Risk Oversight and Compliance | | Emerging Technologies and Business Models | | Human Capital Management | | Public Company Board Experience |

  38. Continuing Directors

    | 52 | |

  39. Continuing Directors

    The demographic information presented below for our directors is based on voluntary self-identification by each director. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Listing Rule 5605(f). Additional biographical information of our directors and executive officers as of July 31, 2023 is set forth above.

  40. BOARD DIVERSITY MATRIX (AS OF OCTOBER 27, 2023)

    BOARD DIVERSITY MATRIX (AS OF OCTOBER 27, 2023)

  41. BOARD DIVERSITY MATRIX (AS OF OCTOBER 27, 2023)

    | Total Number of Directors | 10 | | | | | | Female | Male | Non- Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 4 | 6 | 0 | 0 | | Part II: Demographic Background | | | | | | African American or Black | 1 | 0 | 0 | 0 | | Alaskan Native or Native American | 0 | 0 | 0 | 0 | | Asian | 1 | 1 | 0 | 0 | | Hispanic or Latinx | 0 | 0 | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | | White | 2 | 5 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | | | | | Did Not Disclose Demographic Background | 3 | | | |

  42. Identification and Evaluation of Director Nominees

    Identification and Evaluation of Director Nominees Our ESG and Nominating Committee uses a variety of methods for identifying and evaluating director nominees. The ESG and Nominating Committee regularly assess the appropriate size, composition and needs of our Board and its respective committees, and the qualification of candidates considering these needs. Some of the qualifications that our ESG and Nominating Committee considers include issues of character, integrity, judgment, diversity (including gender and race), experience of relevance to us and the Board, independence, age, area of expertise, potential conflicts of interest and other commitments. These factors may be weighted differently depending on the individual being considered or the needs of the Board at the time. Nominees must also be able to offer advice and guidance to our Chief Executive Officer based on past experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Director candidates must have sufficient time available in the judgment of our ESG and Nominating Committee to perform all Board and committee responsibilities. Members of our Board are expected to prepare for, attend, and actively participate in all Board and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our ESG and Nominating Committee may also consider such other factors as it may deem, from time to time, are in Palo Alto Networks and our stockholders’ best interests. Our ESG and Nominating Committee will also seek appropriate input from our Chief Executive Officer, from time to time, in assessing the needs of our Board for relevant background, experience, diversity and skills of its members. Our ESG and Nominating Committee considers diversity (whether based on broader principles such as diversity of perspective, experiences, and expertise, as well as factors commonly associated with diversity such as gender, race or national origin) in connection with its evaluation of director candidates, including the evaluation and determination of whether to re-nominate incumbent directors. The committee also considers these and other factors as it oversees the annual Board and committee evaluations. The committee seeks qualified and diverse director candidates, including women and individuals from minority groups, to include in the pool from which director candidates are chosen. Any search firm retained by the committee to find director candidates would be instructed to account for these considerations, including diversity.

  43. Identification and Evaluation of Director Nominees

    | 2023 Proxy Statement | 53 |

  44. Director Compensation

    Director Compensation Our ESG and Nominating Committee has approved a policy for the compensation of the non-employee members of our Board (the “Director Compensation Policy”) to attract, retain and reward these individuals and align their financial interests with those of our stockholders. Only non-employee directors who are not affiliated with investment funds that hold shares of our common stock are eligible for compensation under the Director Compensation Policy. There is no cash compensation paid under the Director Compensation Policy. Initial Award. Under the Director Compensation Policy, when an eligible director initially joins our Board, the eligible director receives an initial award of restricted stock units having a value of $1 million (as determined based on the average closing price of our common stock on Nasdaq during the month prior to the month in which the grant is made). This initial award will vest as to one third of the shares covered by the restricted stock unit award on the first anniversary of the date the eligible director joined our board of directors, and the remaining shares will vest quarterly over the following two years, subject to the director’s continued service as of each such date. Annual Award. Under the Director Compensation Policy, at each annual meeting of stockholders, each eligible director receives an annual restricted stock unit award having a value equal to $300,000 (as determined based on the average closing price of our common stock on Nasdaq during the 30 calendar days ending on the business day prior to the annual meeting). In addition, at each annual meeting of stockholders, our Lead Independent Director receives an additional annual restricted stock unit award having a value equal to $50,000 (as determined based on the average closing price of our common stock on Nasdaq during the 30 calendar days ending on the business day prior to the annual meeting). All annual awards, including the annual awards to the Lead Independent Director, will vest quarterly over a period of one year, subject to the director’s continued service as of each such date. Committee Awards. At each annual meeting of stockholders, the chairpersons and members of the five standing committees of our Board will receive additional annual restricted stock unit awards for committee service having the following values (as determined based on the average closing price of our common stock on Nasdaq during the 30 calendar days ending on the business day prior to the annual meeting):

  45. Director Compensation

    | Board Committee(1) | Chairperson Retainer | Member Retainer | | Audit Committee | $35,000 | $20,000 | | Compensation and People Committee | $25,000 | $15,000 | | ESG and Nominating Committee | $15,000 | $10,000 | | Security Committee | $50,000 | $50,000 |

  46. Director Compensation

    | (1) No additional compensation is paid for serving on the Corporate Development Committee. |

  47. Director Compensation

    Any eligible director who serves as chairperson of a committee is not entitled to a member retainer for the same committee. The committee awards will vest quarterly over a period of one year, subject to the director’s continued service as of each such date.

  48. Director Compensation

    | 2023 Proxy Statement | 55 |

  49. Fiscal 2023 Director Compensation Table

    Fiscal 2023 Director Compensation Table The following table presents summary information regarding the compensation paid to our non-employee directors for our fiscal year ended July 31, 2023.

  50. Fiscal 2023 Director Compensation Table

    | Director(1) | Stock Awards(2) | Total | | Aparna Bawa(3) | $356,383 | $356,383 | | John M. Donovan(3) | $413,931 | $413,931 | | Carl Eschenbach(3) | $337,254 | $337,254 | | Dr. Helene D. Gayle(3) | $346,738 | $346,738 | | James J. Goetz(4) | – | – | | Rt Hon Sir John Key(3) | $380,335 | $380,335 | | Mary Pat McCarthy(3) | $370,850 | $370,850 | | Lorraine Twohill(3) | $361,045 | $361,045 |

  51. Fiscal 2023 Director Compensation Table

    | (1) Asheem Chandna and Mark McLaughlin served on our Board until the date of 2022 Annual Meeting of Stockholders. They did not receive any compensation for our fiscal year ended July 31, 2023. | | (2) The amounts reported in this column represent the aggregate grant date fair value of these restricted stock units (“RSUs”) as computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, or ASC Topic 718. The assumptions used in the valuation of these awards are set forth in the notes to our consolidated financial statements, which are included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2023. These amounts do not necessarily correspond to the actual value that may be recognized by the director upon the vesting of such awards. | | (3) As of July 31, 2023, Ms. Bawa held 3,955 RSUs, Mr. Donovan held 1,287 RSUs, Mr. Eschenbach held 1,048 RSUs, Dr. Gayle held 3,967 RSUs, Rt Hon Sir John Key held 1,182 RSUs, Ms. McCarthy held 1,153 RSUs and Ms. Twohill held 1,122 RSUs. | | (4) Mr. Goetz receives no compensation under the Director Compensation Policy. |

  52. Philosophy and Objectives

    | | Drive the development of a successful and profitable business through our next phase of growth. | | | Create sustainable long-term value for our stockholders by aligning the interests of our executive officers with those of our stockholders. | | | Reward our executive officers for the successful achievement of our financial and strategic growth objectives. | | | Attract, motivate and retain highly qualified executives who possess the skills and leadership necessary to continue to grow our business, and provide compensation packages that are comparable to our peers and the overall competitive market and that are heavily weighted to be based on our performance. |

  53. We Followed Through On Our Commitments

    | | OUR FISCAL 2023 COMMITMENTS | | OUR FOLLOW THROUGH | | Maintain a robust stockholder outreach program | | | | | Provide more transparency in our executive compensation disclosures, as well as more robust CD&A disclosures | | | | | Disclose the target value of equity grants to our NEOs for the completed fiscal year in the CD&A | | | | | Maintain robust stock ownership guidelines | | | | | Make any one-time awards to NEOs outside of the normal grant cycle (other than new hire awards) a majority performance-based and only make such grants in exceptional circumstances | | | | | Annual equity grants to our NEOs to be at least 75% performance-based in line with market best practices | | | | | Require a one-year minimum vesting period for all grants to our Chief Executive Officer and other NEOs going forward, and implement a policy to require our Chief Executive Officer and other NEOs to hold all net shares for one year after vesting subject to certain exceptions | | | | | Use a PSU award design that requires sustained performance over multiple years for any payout | | | | | Include a relative TSR modifier to our executive PSU awards | | | | | Ensure that ongoing incentive goals are considered challenging with targets set at or above management guidance | | | | | Disclose performance targets compared to actual results and corresponding payout scale | | | | | Avoid duplicate performance metrics in our cash incentive plan and PSU awards | | | | | No upward discretionary adjustments except for extraordinary circumstances (such as the COVID-19 pandemic) | | | | | Include an ESG metric into fiscal 2023 cash incentive plan to ensure linkage between compensation and our ESG goals | | | |

  54. Responsible Use of Equity Compensation

    Responsible Use of Equity Compensation In response to the feedback that we have received from our stockholders over the past several fiscal years, the Compensation and People Committee have undertaken a concerted program of reducing our annual stock-based compensation expense, and is committed to further reductions in our stock-based compensation expense as a percentage of revenue in the future. The graph below illustrates our stock-based compensation expense for fiscal years 2021, 2022 and 2023, including as a percentage of revenue.

  55. Responsible Use of Equity Compensation

    | FY21-FY23 SBCE and Percent of Revenue | | |

  56. Responsible Use of Equity Compensation

    | 68 | |

  57. Use of Competitive Data

    Use of Competitive Data To assess the competitiveness of our executive compensation program and to assist in setting compensation levels, at the Compensation and People Committee’s request, Meridian Compensation Partners, our independent compensation consultant, compiled market data from a compensation peer group approved by our Compensation and People Committee and industry surveys, including the Radford Global Technology Executive Compensation Survey. The Compensation and People Committee, with the assistance of Meridian Compensation Partners, then analyzed the market and survey data when making fiscal 2023 compensation decisions.

  58. Competitive Positioning

    Competitive Positioning For fiscal 2023, our Compensation and People Committee continued to compare and analyze our executive compensation program and each component of executive compensation against data from a formal compensation peer group of companies. In the context of our annual executive compensation review, with assistance from Meridian Compensation Partners and input from management, in February 2022, our Compensation and People Committee reviewed the peer group of publicly-traded technology companies used to provide information regarding compensation practices for fiscal 2022 to determine if any changes were appropriate for use for fiscal 2023 pay decisions. In determining which companies to include in the peer group, our Compensation and People Committee considered companies that met some or all of the following updated criteria:

  59. Competitive Positioning

    | ● | had (i) revenue between 0.33 to 3.0 times our revenue, (ii) a market capitalization between 0.33 to 3.0 times our market capitalization, (iii) a market capitalization to revenue ratio greater than 2.0, and (iv) a number of employees between 0.5 to 2.0 times the number of our employees; | | ● | had revenue growth greater than 10% in at least two of the last three years and TSR growth greater than 10% in at least two of the last three years; | | ● | was headquartered on the west coast of the United States, operated in the software industry, provided some cybersecurity services, and was selected by Institutional Shareholder Services as one of our peer companies; and | | ● | whether we were included in the company’s peer group, whether the company’s chief executive officer was a founder with an atypical compensation structure, and the company’s relevant acquisition activity. |

  60. Competitive Positioning

    Based on this review, Arista Networks, Inc., Block, Inc., f5, Inc, Okta, Inc., Snap Inc., Synopsys, Inc. and Twitter, Inc. were removed from the peer group, and Crowdstrike Holdings, Inc., Intuit Inc., Juniper Networks, Inc., Keysight Technologies, Inc., NetApp, Inc., Roper Technologies, Snowflake Inc., and VMware, Inc. were added based on the identified criteria. After these changes, the Company was at the 76th percentile of the peer group in terms of revenue and 89th percentile in terms of market capitalization. The following publicly-traded companies made up our compensation peer group for fiscal 2023:

  61. Competitive Positioning

    | Akamai Technologies, Inc. Autodesk, Inc. Cadence Design Systems, Inc. CrowdStrike Holdings, Inc. Gen Digital Inc. | Fortinet, Inc. Intuit Inc. Juniper Networks, Inc. Keysight Technologies, Inc. NetApp, Inc. | Paychex, Inc. Roper Technologies, Inc. ServiceNow, Inc. Snowflake Inc. Splunk Inc. | SS&C Technologies Holdings, Inc. VMWare, Inc. Workday, Inc. |

  62. Competitive Positioning

    | 2023 Proxy Statement | 71 |

  63. CEO and NEO Pay for Performance Alignment For Fiscal 2023

    | (1) Graph reflects Mr. Arora’s target base salary of $1 million, regardless of any portion that he forwent. | | (2) Does not include the June 2023 long-term performance and retention award. |

  64. MARKET COMPETITIVE PAY LEVELS AND EVOLVING COMPENSATION IN DIRECT RESPONSE TO STOCKHOLDER FEEDBACK

    MARKET COMPETITIVE PAY LEVELS AND EVOLVING COMPENSATION IN DIRECT RESPONSE TO STOCKHOLDER FEEDBACK In designing Mr. Arora’s compensation packages since he joined the Company in 2018, our Board and Compensation and People Committee sought to deliver market-competitive compensation commensurate with Mr. Arora’s capabilities and experience, and reflective of the considerable challenge of leading the Company’s transformation from a provider of hardware delivered security to a provider of security delivered through the cloud, with a platform of products to protect our customers’ enterprise, cloud, endpoints, Security Operation Centers and more. When determining Mr. Arora’s compensation, our Board and Compensation and People Committee listened carefully to stockholder feedback and modified compensation structures in response to that feedback. After his new hire compensation, Mr. Arora’s target compensation has been predominantly performance-based as follows:

  65. MARKET COMPETITIVE PAY LEVELS AND EVOLVING COMPENSATION IN DIRECT RESPONSE TO STOCKHOLDER FEEDBACK

    | 72 | |

  66. MARKET COMPETITIVE PAY LEVELS AND EVOLVING COMPENSATION IN DIRECT RESPONSE TO STOCKHOLDER FEEDBACK

    | | New Hire Compensation | FY19 Target | FY20 Target | FY21 Target | FY22 Target | FY23 Target(1) | | Annual Salary | $1.0M | $1.0M | $1.0M | $1.0M(2) | $1.0M(2) | $1.0M(2) | | Target Bonus | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M | $1.0M | | Time-Based RSUs | $60M (including $20M of matching RSUs) | None | $11M vesting over 3 years | n/a | n/a | n/a | | Performance Stock Units/Stock Options | $66M in performance-based stock options to be earned over 7 years | None | $11M in PSUs vesting over 3 years based on achievement of revenue growth in each year | $21M in PSUs vesting over 4 years (backweighted) based on achievement of normalized billings growth and organic operating margin | $15M in PSUs vesting over 3 years based on achievement of revenue growth and relative TSR metrics | $38M in PSUs vesting at the end of 3 years based on achievement of billings growth and relative TSR metric | | Total Target | $128M | $2M | $24M | $23M | $17M | $40M | | Performance-Based (total compensation)(3) | 52.3% | 50.0% | 50.0% | 95.7% | 94.1% | 97.5% | | Percentile versus peer group - target compensation | | | | | 44th | 92nd |

  67. MARKET COMPETITIVE PAY LEVELS AND EVOLVING COMPENSATION IN DIRECT RESPONSE TO STOCKHOLDER FEEDBACK

    | (1) Does not include the long-term performance and retention award described below. | | (2) Mr. Arora forwent a portion of his annual salary in each of fiscal 2021 through fiscal 2023, in connection with our funding efforts to support colleagues and communities impacted by the COVID-19 pandemic. He opted to receive only approximately $0.3 million of his salary in fiscal 2021, approximately $0.25 million of his salary in fiscal 2022, and approximately $0.75 million of his salary in fiscal 2023. | | (3) These percentages do not take into account the amount of salary Mr. Arora forwent. |

  68. MARKET COMPETITIVE PAY LEVELS AND EVOLVING COMPENSATION IN DIRECT RESPONSE TO STOCKHOLDER FEEDBACK

    The year-over-year increase in Mr. Arora’s equity compensation was attributable to our strong performance during fiscal 2022, while his level of compensation as compared to our compensation peer group, was below the mean target compensation of his peers. The Compensation and People Committee determined that Mr. Arora substantially outperformed his level of compensation, as demonstrated by our one-year TSR at the 92nd percentile of our compensation peer group for fiscal 2022. Accordingly, the Compensation and People Committee determined that an increase in Mr. Arora’s compensation was warranted to reflect his and the Company’s strong performance relative to our compensation peer group. In fiscal 2023, our one-year TSR was at the 99th percentile of our compensation peer group, further demonstrating Mr. Arora’s high level of performance as our Chief Executive Officer.

  69. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD We firmly believe that Mr. Arora is one of only a very few executive leaders who can deliver the caliber of performance critical to the Company’s successful attainment of our next phase of growth. We reach this conclusion based on Mr. Arora’s track record of undeniable success, our extensive conversations with the Company’s leadership team, our regular assessment of company strategy, consistent attention to the marketplace for high-caliber senior executives, and of course the concurrence of the entire Board. The cybersecurity threat landscape is intensifying. Attackers are becoming very sophisticated with the tools they use, and cybercrime has increased 20 times since 2011 to over 1 billion new malicious programs. What we think lies ahead is the challenge and need for cybersecurity products to stop attackers in real-time. To accomplish this, we believe it requires a fundamentally different way of thinking about cybersecurity. The advent of a new generation of artificial intelligence tools and technologies promises to transform the cybersecurity industry. In order for us to remain competitive and continue to lead our industry, we must continue to transform our company through relentless innovation. This is a signal moment of change for the Company, our industry and the broader economy, and Mr. Arora is the right person to navigate us through it.

  70. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | 2023 Proxy Statement | 73 |

  71. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    Prior to exploring and ultimately making the long-term performance and retention award to Mr. Arora, the Compensation and People Committee considered the commitment that we made to our shareholders that one-time equity awards would only be in limited or exceptional circumstances, as further discussed on page 86 of this Proxy Statement. The Compensation and People Committee considered various factors, including:

  72. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | ● | The feedback from our stockholders, which confirmed our Board’s view that many of our stockholders considered retaining Mr. Arora as our Chief Executive Officer is important to our future success. | | ● | The significant drop in Mr. Arora’s unvested equity (as discussed further below). | | ● | The market for Chief Executive Officers with Mr. Arora’s experience and success, and the Compensation and People Committee's belief that Mr. Arora would be at or near the top of the list for many companies in a search for a new Chief Executive Officer, including vacancies in the market at the time Mr. Arora's grant was under consideration by the Compensation and People Committee. | | ● | As described on page 86 of this Proxy Statement, we previously advised stockholders that retention awards could be the basis for making a one-time equity award. |

  73. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    Accordingly, the Compensation and People Committee determined that making a one-time retention award to Mr. Arora was inline and consistent with the commitment we made to our stockholders. Thus, in fiscal 2023, we began exploring with our independent compensation consultant –– Meridian Compensation Partners — equity incentives that would allow us to retain Mr. Arora as our leader for the foreseeable future. The long-range performance and retention award described below is true to our commitment to always carefully align our executive compensation programs with stockholder interests. We followed these principles in designing the award:

  74. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | ● | Demonstrate the Board’s confidence in Mr. Arora and his strategy for the Company’s next phase of growth. | | ● | Retain and engage a proven, successful and industry-leading CEO for at least the next five years so that our stockholders reap the financial rewards that we expect to result from Mr. Arora’s clarity of vision, strategic acumen and operational excellence — just as our stockholders have during the first five years of his tenure. | | ● | Provide an award that, at its core, is performance-based, drives stockholder value creation, and requires significant sustained performance to realize its full value. | | ● | Mitigate the risk of potential employment offers from competitors and private equity firms. | | ● | Take into account the views of our stockholders as expressed to us during our extensive engagement efforts. |

  75. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    The Compensation and People Committee also considered the value of Mr. Arora’s performance-based stock options and other vested stock holdings to the markedly lower amount that is currently projected to vest over the next several years. In doing so, we noted that one impact of the sustained performance of the Company during Mr. Arora’s tenure as our Chief Executive Officer is that he has vested in an average of approximately $102 million of value in each year through fiscal 2023. In addition, we noted that Mr. Arora’s expected vesting value, assuming target performance and no stock price growth, for his existing equity awards will be $69 million in fiscal 2024, $38 million in fiscal 2025, and $42 million in fiscal 2026. Accordingly, it was clear that the value delivered to stockholders in the first five years of Mr. Arora’s tenure resulted in significant compensation to him, but it was also clear that his existing equity awards will not continue to deliver that level of value in the future. Because of this significant vested ownership and the amount that Mr. Arora was projected to vest in over the next several years, the Board determined that a meaningful equity award would be necessary to ensure that such award retains and engages Mr. Arora. Based on the award size described below (and as of the date Mr. Arora’s award was approved), if our growth over the next five years matches our growth during the first five years that Mr. Arora was our Chief Executive Officer, the value of this award will be only approximately 0.36% of our increase in market capitalization. The Board also considered the incremental increase of our market capitalization compared to the realized pay of Mr. Arora from June 1, 2018 (the date we announced Mr. Arora’s appointment as Chief Executive Officer) through

  76. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | 74 | |

  77. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    July 31, 2023 (the last day of fiscal 2023). The realized pay of Mr. Arora was primarily attributable to (i) the vesting of long-term incentive awards that were granted in prior years, (ii) the exercise of stock option awards that were granted in prior years and (iii) performance-based cash incentive award. In June 2023, the Board granted Mr. Arora an entirely performance-based award of PSUs that will not be earned at all unless the Company’s stock price performance through June 2, 2028 is the same as or better than 40% of the companies in the S&P 500. The maximum number of shares that can be earned if the Company’s performance is better than 90% of the companies in the S&P 500 is 750,000 shares. The full scale is shown in this table:

  78. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | | Percentile vs. S&P 500 | Shares Earned | | Performance Thresholds | 90th percentile | 750,000 | | | 75th percentile | 625,000 | | | 55th percentile | 500,000 | | | 40th percentile | 250,000 | | | Below 40th percentile | 0 |

  79. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    In addition, so that outsized performance is not possible if the Company’s stock price does not increase, if our stock price at the end of the performance period is lower than at the beginning of the performance period, then no more than the target number of shares may be earned, even if our performance is better than all of the S&P 500. No shares earned pursuant to this award may be sold before the earlier of (i) the first anniversary of the date on which they vest, or (ii) a change in control of the Company. The long-range performance and retention award made to Mr. Arora is intended to cover a period of five years from the date of grant, and do not anticipate making any additional one-time equity award grants to Mr. Arora during this period. During the performance period for this award, we expect that Mr. Arora will continue to be eligible for annual equity grants determined based on performance and based on the structure of awards granted to the rest of the executive team. MR. ARORA’S LEADERSHIP TRANSFORMED OUR COMPANY After Mr. Arora joined the Company, we set an ambition to become the cybersecurity partner of choice, to innovate and to stay ahead of the curve. To make this a reality, Mr. Arora established three strategic priorities critical to our long-term success: transforming network security, delivering comprehensive cloud native security and revolutionizing security operations. Under Mr. Arora’s leadership, our successful implementation of this strategy has led to:

  80. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | ● | A $57.3 billion increase in market capitalization (as measured by our market capitalization as of May 31, 2018, the day prior to our announcing Mr. Arora as our Chief Executive Officer, and July 31, 2023). | | ● | $3.9 billion returned to our stockholders in fiscal 2019 through fiscal 2023 through our stock repurchase program. | | ● | Compound annual growth rates of 24% and 27% in revenue and billings, respectively, over fiscal 2019 through fiscal 2023, culminating in fiscal year 2023 with record revenue of $6.89 billion and record billings of $9.19 billion. | | ● | An unprecedented acceleration of our product development efforts. | | ● | A significant increase in the trading price of our common stock. |

  81. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | 2023 Proxy Statement | 75 |

  82. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    Additionally, Mr. Arora successfully steered the Company through the unprecedented global impact of the COVID-19 pandemic and ongoing global economic uncertainty throughout fiscal 2023.

  83. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | Transformed Our Business Through Innovation | | | A transformation that has born a differentiated position that spans our three platforms ●Network Security - Comprehensive Zero Trust Network Security Platform with best-in-class products in multiple form factors - hardware, software and SASE - infused with AI for near real-time protection ●Cloud Security - An integrated platform securing code to cloud against risks and breaches in near real-time ●Security Operations - Built on category leading products - Cortex XDR, XSOAR and Xpanse - and category changing XSIAM | Became an innovation leader by delivering ●74 product releases across our three platforms in fiscal 2023 ●Cortex XSIAM, which uses AI to reimagine how the security operations center works ●Prisma Cloud updates (including three new security modules) ●Prisma Access 4.0 and PAN-OS 11.0 ●Cloud NGFW for AWS, and Cloud NGFW for Azure | | Delivered Zero Trust Security | |

  84. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | Delivered Strong Financial Performance and Stockholder Return | | | ACCELERATING REVENUE GROWTH | DELIVERING TOTAL SHAREHOLDER RETURN | | | 1-Year TSR Palo Alto Networks vs. Percentiles of Peer Group | | ACCELERATING NEXT-GEN SECURITY ARR GROWTH | 3-Year TSR Palo Alto Networks vs. Percentiles of Peer Group | | | |

  85. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | 76 | |

  86. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    STOCKHOLDER DIRECTION AND FEEDBACK John Donovan, our Lead Independent Director, leads our Board’s stockholder engagement efforts. He held 30 and 21 meetings with stockholders, representing 39% and 31% of our outstanding shares (as of June 30, 2022 and June 30, 2023), during fiscal 2022 and fiscal 2023, respectively. When doing so, he personally took on the responsibility of soliciting input and guidance from our stockholders as it relates to Mr. Arora’s compensation, and the Board’s desire to retain Mr. Arora as our Chief Executive Officer for the long-term. Sir John Key, the Chair of our Compensation and People Committee, often joined Mr. Donovan in these meetings. During these meetings, we sought stockholder input regarding the form and quantum of compensation paid to Mr. Arora, and in particular, our stockholders’ views as to whether the Board should seek to retain Mr. Arora for the long term, including through a significant equity award. As a result of these meetings, it became apparent to the Board, as well as the Compensation and People Committee, that our stockholders were very pleased with Mr. Arora’s performance as our Chief Executive Officer. Our stockholders also consistently expressed a desire for the Company to retain Mr. Arora for the long term, and recognized that doing so would represent a significant financial commitment on behalf of the Company. Our stockholders also expressed a strong recommendation that Mr. Arora’s compensation, including any retention compensation, should be consistent with the Company’s pay-for-performance philosophy, with vesting events aligning with performance levels that deliver significant value creation for the Company’s stockholders. In addition, stockholders expressed the view that Mr. Arora’s retention compensation should also be subject to reduction or risk if the Company failed to deliver expected financial performance. Following their meetings with our stockholders, Mr. Donovan and Sir John Key informed the Compensation and People Committee and the independent members of our Board of their engagement with stockholders, including the feedback received from them. The Compensation and People Committee sought to align Mr. Arora’s long-term performance and retention award with the guidance and input provided by our stockholders. In this respect, the Committee included the following features, which it believes aligns with the feedback received by numerous of our stockholders:

  87. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | ● | A five-year cliff, which enhances retention benefits of the award, and only pays out based on sustained performance. Mr. Arora must remain in the employ of the Company throughout the entire duration of the five-year performance period. Failure to do so will result in Mr. Arora receiving no value or compensation from the award. | | ● | A minimum level of required performance, where the award can result in as few as zero shares, if the Company’s performance is less than 40% of the companies in the S&P 500 over the five-year performance period. | | ● | A median performance level that is tied to performance at the 55th percentile of the S&P 500 index, rather than the 50th percentile. | | ● | A graduated payout curve, where Mr. Arora will only receive the maximum level of compensation if the Company delivers exceptional stock price performance, as measured against the S&P 500 index. |

  88. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    During fiscal 2023, the Board’s primary responsibility was to oversee the Company’s efforts to deliver meaningful and sustainable value to our stockholders. As discussed in his letter to our stockholders at the beginning of this Proxy Statement, our Lead Independent Director, John Donovan, believes that retaining Mr. Arora as our Chief Executive Officer for the long-term is critical to fulfilling that responsibility. Since Mr. Arora’s award was granted on June 2, 2023, Mr. Donovan conducted 15 stockholder meetings representing 19% of our shares, and received no major objections from stockholders. Sir John Key participated in numerous of these meetings.

  89. FISCAL 2023 LONG-TERM PERFORMANCE AND RETENTION AWARD

    | 2023 Proxy Statement | 77 |

  90. FISCAL 2023 PROGRAM HIGHLIGHTS

    | ● | No base salary or target annual incentive opportunity increases in fiscal 2023 for continuing NEOs. | | ● | Equity compensation granted in fiscal 2023 was 100% performance-based PSUs. | | ● | Performance measures aligned with business strategy. | | ● | Chief Executive Officer received a long-range performance and retention award to incentivize and reward him for continuing to deliver significant stockholder value. | | ● | Chief Executive Officer donated 25% of his fiscal 2023 base salary. | | ● | Outstanding performance resulted in (i) 150% achievement for our NEOs under the cash incentive plan, (ii) with respect to the PSUs granted to our NEOs in fiscal 2022, a payout percentage of 96% for fiscal 2023 and an rTSR modifier of 1.5 for the two-year performance period that ended in fiscal 2023, and (iii) with respect to the PSUs granted to our NEOs in fiscal 2023, a payout percentage of 193% for fiscal 2023. |

  91. Elements of Compensation

    | | Pay Element | Purpose | Performance Period | Performance Metric | | | Base Salary | Designed to be market-competitive and attract and retain talent | n/a | n/a | | | Annual Cash Incentive Opportunity | Incentivize achievement of near-term financial and operational objectives, consistent with longer-term goals | Annual | Annual revenue for fiscal 2023 Annual organic operating margin for fiscal 2023 | | | Revenue/TSR Performance Stock Units (PSU) | Reward long-term profitability and long-term performance relative to peers Create alignment with stockholders Facilitate executive retention | Three years | Annual billings growth for fiscal 2023, 2024, and 2025 and TSR of the Company relative to indexed companies (the “relative TSR” or “rTSR”) for fiscal 2023 through 2025 |

  92. Quantum of Compensation

    Quantum of Compensation Palo Alto Networks delivered another year of outstanding results for our stockholders in fiscal 2023, with a strong year of financial performance and execution. Our TSR for fiscal 2023 was at the 99th percentile and our three-year TSR was at the 100th percentile of our compensation peer group. The year-over-year increase in Messrs. Arora, Golechha, Klarich and Zuk’s target compensation was attributable to increased performance-based equity awards. Such increased equity compensation was primarily attributable to our strong performance during fiscal 2022, as compared to our compensation peer group. The Compensation and People Committee determined that our NEOs substantially outperformed their level of compensation, as demonstrated by our one-year TSR at the 92nd percentile of our compensation peer group for fiscal 2022. Accordingly, the Compensation and People Committee determined that an increase in compensation was warranted to reflect their and the Company’s strong performance relative to our compensation peer group. In fiscal 2023, our one-year TSR was at the 99th percentile of our compensation peer group, further demonstrating our NEOs’ high level of performance during fiscal 2023. For Mr. Golechha, the increase in his compensation is also related to his growth and performance as our Chief Executive Officer following his promotion to that position. As indicated in the proxy statement for our 2021 annual meeting of stockholders, we anticipated a decrease in the amount of Mr. Jenkins compensation because his fiscal 2022 compensation reflected new hire equity awards.

  93. Quantum of Compensation

    | (1) Does not include the long-range performance and retention award granted to Mr. Arora in June 2023. | | (2) The dollar amounts listed in the table for Mr. Zuk reflect the target value of his total compensation after the conversion of his base salary and target annual cash incentive compensation opportunity from Israeli new shekels to U.S. dollars. Since Mr. Zuk did not receive any increase to his base salary and target annual cash incentive compensation opportunity in fiscal 2023, in this table, the same exchange rate of approximately 0.30 U.S. dollars for one Israeli new shekel was used to convert these elements of his compensation for both fiscal 2022 and fiscal 2023, in order to avoid including any difference in the target value of his total compensation resulting from currency fluctuations. |

  94. Fiscal 2023 Executive Compensation Program Components

    ANNUAL CASH INCENTIVE COMPENSATION We use annual cash incentive compensation to motivate our NEOs to achieve our annual financial and operational objectives, while making progress towards our longer-term strategic and growth goals. Generally, we establish the target annual cash incentive compensation opportunities of our executive officers through arm’s-length negotiation at the time of hire taking into account his or her position, qualifications, experience, prior target annual cash incentive compensation opportunity, and the target annual cash incentive compensation opportunities

  95. Fiscal 2023 Executive Compensation Program Components

    of our other executive officers. Thereafter, our Compensation and People Committee reviews the target annual cash incentive compensation opportunities of each NEO annually and makes adjustments as it determines to be reasonable and necessary in line with the factors described under “Compensation Timeline and Process” above. FISCAL 2023 CASH INCENTIVE PLAN In August 2022, our Compensation and People Committee adopted a cash incentive plan for all employees not paid commissions (including our NEOs) and approved the target levels for the annual financial objectives at levels that were challenging and required substantial skill and effort on the part of senior management. The cash incentive plan included an annual performance period with (i) payouts of up to 100% of the target cash incentive compensation opportunities made on a semi-annual basis based on year to date results and, in the case of the payouts for the first half of fiscal 2023, projected performance for the second half of fiscal 2023 and (ii) payouts for over-performance (referred to as accelerator payments and discretionary payments, as described below) made after the end of the fiscal year. See the section titled “Fiscal 2023 Cash Incentive Plan Measures and Curves” below for additional information regarding the target payout and actual payout under our cash incentive plan. TARGET ANNUAL INCENTIVE COMPENSATION OPPORTUNITIES As in prior years, the target annual cash incentive compensation opportunities for our NEOs were expressed as a percentage of their respective base salaries. NO INCREASE IN TARGET ANNUAL CASH INCENTIVE COMPENSATION FOR ANY NEO IN FISCAL 2023. The table below shows the target annual cash incentive compensation percentage for fiscal 2023 and the corresponding target and maximum dollar values:

  96. Fiscal 2023 Executive Compensation Program Components

    | Name | Target Annual Incentive Compensation Opportunity (as a % of base salary) at end of Fiscal 2023 | Fiscal 2023 Target Annual Incentive Compensation Opportunity | | Fiscal 2023 Maximum Annual Incentive Compensation Opportunity | | | Mr. Arora | 100% | | 1,000,000 | | 1,650,000 | | Mr. Golechha | 100% | | 600,000 | | 990,000 | | Mr. Jenkins | 100% | | 750,000 | | 1,237,500 | | Mr. Klarich | 100% | | 550,000 | | 907,500 | | Mr. Zuk(1) | 100% | ₪ | 1,482,000 | ₪ | 2,445,300 |

  97. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

  98. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    | * Represents revenue of $6,918 million and non-GAAP operating margin of 19.3% for fiscal 2023. |

  99. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    | | FY23 Targets | FY23 Actual | FY23 Payout | | Revenue | $6,918M | $6,893M | 150% of Target | | Organic Operating Margin | 19.3% | 25.2% | |

  100. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    The calculation of organic operating margin is provided in Appendix A to this Proxy Statement. PERFORMANCE REQUIREMENTS AND ESG MODIFIER Under the cash incentive plan, funding would be made as the organic operating margin target and the revenue target are achieved as per the chart above. Achievement above the minimum achievement would increase funding on a non-linear basis, with achievement of 100% of both performance targets resulting in funding at 100% of the target cash incentive compensation opportunity. Payouts of up to 100% of the target cash incentive compensation opportunities are made on a semi-annual basis and any payouts for performance exceeding 100% of the annual targets (referred to as accelerator payments) are paid out as described in the following paragraph.

  101. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    | 82 | |

  102. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    For achievement in excess of 100%, funding would increase on a non-linear basis, based on overperformance on revenue and/or organic operating margin versus the annual targets. The total potential payouts under the cash incentive plan to all participants (which includes any accelerator and/ or discretionary payments) were capped at 150% of the target amounts, before application of the ESG modifier described in the following paragraph. To ensure a linkage between compensation and our ESG goals, we included an ESG modifier for our NEOs in the cash incentive plan for fiscal 2023, which provided for the calculated result to be adjusted up or down by up to 10% based on an ESG scorecard with climate, inclusion and diversity, and human capital metrics. For fiscal 2023, no adjustments to our NEOs’ calculated payouts under the cash incentive plan were made as a result of the ESG modifier, and our Compensation and People Committee made no discretionary changes to cash incentive plan payouts. The following table sets forth the fiscal 2023 scorecard measures and results related to the ESG modifier to our fiscal 2023 cash incentive plan.

  103. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    | ESG Modifier (90% to 110% modifier) | | FY23 ESG Scorecard Measures | FY23 Results | | | Climate | 1.FY23 progress towards our 2030 climate commitment | Exceptional Progress Participation in Silicon Valley Power’s Large Company Green Power Program enable 100% renewable energy for Santa Clara headquarters as of January 1, 2023. Prioritization of LEED certified office buildings, improved our ratio of LEED office space. Achieved CDP’s “A-List” and “Supplier Leaderboard”, ISS Quality Score of 1, MSCI Environment category score of 10 (out of 10) and EPA’s Green Power Leader Award. | | | Inclusion & Diversity | 2.Leadership Representation (Dir+; Women globally; URM in US) | Slower Progress Women: Increased 0.2% to 24.4% from 24.2% at Director and above. URM: Increased 0.1% to 11.5% from 11.4% at Director and above. | | | Human Capital Practices | 3.Employee engagement | Exceptional Progress 41 non-paid for external awards, 93% CEO Approval rating on Glassdoor Achieving return to office targets in key offices – Santa Clara, Bangalore and Tel Aviv. | | | ●Compensation and People Committee assessment is objectively based on the totality of fiscal 2023 results on the scorecard. ●Compensation and People Committee determined, based on the results for fiscal year 2023, there would be no adjustment to the fiscal 2023 cash incentive plan based on the ESG modifier. ●In response to stockholder feedback, we have included expanded disclosure of the scorecard measures (as set forth above). | | |

  104. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    LONG -TERM EQUITY COMPENSATION Our long-term equity compensation is designed to encourage executives to achieve stretch goals in key performance metrics selected to drive long-term performance of our Company and value creation for stockholders. As shown in the graph below, in fiscal 2023, 100% of the long-term equity compensation granted to our NEOS was performance-based.

  105. FISCAL 2023 CASH INCENTIVE PLAN MEASURES AND CURVES

    | 2023 Proxy Statement | 83 |

  106. RSU VS PSU/PSO MIX(1)

    RSU VS PSU/PSO MIX(1)

  107. RSU VS PSU/PSO MIX(1)

    | (1) Values above represent the target value of annual awards to NEOs. Certain grants that were made in July 2019 represented advanced grants for fiscal year 2020 and are reflected as fiscal year 2020 above. Values exclude any new hire awards and Mr. Arora’s fiscal 2023 long-range performance and retention award (which was entirely performance based). |

  108. FISCAL 2023 EQUITY COMPENSATION

    FISCAL 2023 EQUITY COMPENSATION

  109. FISCAL 2023 EQUITY COMPENSATION

    | 100% OF ANNUAL EQUITY GRANTED TO NEOS IN FISCAL 2023 WAS PERFORMANCE-BASED. |

  110. FISCAL 2023 EQUITY COMPENSATION

    In fiscal 2023, 100% of the annual equity awards granted to our NEOs continued to be in the form of PSUs, resulting in the entirety of such equity awards being at risk and performance-based. The Compensation and People Committee determined the size of the awards based on the strong performance, leadership skills and valuable contributions to the Company of our NEOs, especially in the context of the significant transition in our business to expand to a more cloud-centric platform. To determine the size of the fiscal 2023 PSU awards, the Compensation and People Committee utilized the framework developed in partnership with Meridian to identify objective factors - financial performance, stockholder returns and achievement of strategic objectives - that should be considered in determining the size of any compensation. In addition to this assessment, the Compensation and People Committee also considered the individual performance of each NEO to determine the appropriate fiscal 2023 target compensation levels. The table below shows the targeted value of PSU grants made to our NEOs in fiscal 2022 and fiscal 2023, with the actual target number of shares subject to the fiscal 2023 PSUs determined based on the trailing 14-day average closing price as of the date of grant rounded down to the nearest whole share.

  111. FISCAL 2023 EQUITY COMPENSATION

    | Name | Targeted Value for PSUs Granted for fiscal 2022 ($)* | Targeted Value for PSUs Granted in fiscal 2023 ($) | | Mr. Arora | 15,000,000 | 38,000,000 | | Mr. Golechha | 4,000,000 | 9,000,000 | | Mr. Jenkins* | 14,000,000 | 10,000,000 | | Mr. Klarich | 10,000,000 | 15,000,000 | | Mr. Zuk | 3,500,000 | 8,000,000 |

  112. FISCAL 2023 EQUITY COMPENSATION

    | * Mr. Jenkins received the PSU award for fiscal 2022 in connection with his hire. He also received RSUs with a target value of $10,000,000 in connection with his hire, which are not reflected in the table. |

  113. FISCAL 2023 EQUITY COMPENSATION

    Similar to the second tranche of fiscal 2022 PSUs (which was the portion of those PSUs that did not represent a transitional grant), the Compensation and People Committee set a 3-year performance period for the fiscal 2023 PSUs and determined that such PSUs will vest based on the achievement of the performance goals for the Company’s 2023, 2024, and 2025 fiscal years. The number of fiscal 2023 PSUs that become eligible to vest (“Eligible PSUs”) will be equal to the product of (i) the target number of PSUs and (ii) the average of the payout percentages for each fiscal year in the performance period.

  114. FISCAL 2023 EQUITY COMPENSATION

    | 84 | |

  115. FISCAL 2023 EQUITY COMPENSATION

    The payout percentage for a fiscal year will be determined based on whether annual billings growth for the fiscal year is below, at or exceeds the target annual billings growth for the fiscal year, as follows: (i) if the annual billings growth is less than the threshold level (which is 400 bps below the target annual billings growth), the payout will be 0%, (ii) if the annual billings growth is equal to the target annual billings growth, the payout percentage will be 100%, (iii) if the annual billings growth is 600bps above the target annual billings growth, the payout percentage will be 280%, and (iv) if the annual billings growth is at least 700bps above the target annual billings growth, the payout percentage will be 300%. If the annual billings growth is both above the threshold level and between any of the levels described above, the payout percentage will be determined based on linear interpolation between the corresponding payout percentages for those levels. The target annual billings growth will be (i) for the Company’s 2023 fiscal year, 20%, and (ii) for each other fiscal year, a percentage to be determined by the Compensation and People Committee by the end of the first month of such fiscal year. Annual billings growth is the percentage increase in billings in a fiscal year over the billings in the immediately preceding fiscal year. For these purposes, billings is the amount of billings reported on our annual report on Form 10-K or quarterly report on Form 10-Q, as adjusted to exclude the impact of merger and acquisition transactions but with no adjustments for changes in backlog, billings plans, or contract length. The calculation of billings is provided in Appendix A to this Proxy Statement. The number of fiscal 2023 PSUs that vest on November 1, 2025 (up to a maximum of 600% of the target number) will be equal to the product of (x) the number of Eligible PSUs and (y) the rTSR modifier, subject to the applicable NEO’s continued service through the vesting date. A tentative rTSR modifier will be determined based on the TSR of the Company during the performance period relative to the TSRs of the indexed companies (which are the companies that are a component of the S&P 500 Index or any successor index on the last day of the performance period and were also a component of such index on the first day of the performance period) during the performance period, as follows: (i) if the relative TSR is at the 90th percentile or above, the tentative rTSR modifier will be 2.0, (ii) if the relative TSR is at the 75th percentile, the tentative rTSR modifier will be 1.50, (iii) if the relative TSR is at the 50th percentile, the tentative rTSR modifier will be 1.0, and (iv) if the relative TSR is at the 25th percentile or below, the tentative rTSR modifier will be 0.75. If the relative TSR is between any of these thresholds, the tentative rTSR modifier will be determined based on linear interpolation between the corresponding numbers for those thresholds. The rTSR modifier will be equal to the tentative rTSR modifier if the Company’s TSR is 0% or greater, but if the Company’s TSR is less than 0%, then the rTSR modifier will be the lower of the tentative TSR modifier or 1.0. Any fiscal 2023 PSUs that do not become Eligible PSUs due to the minimum performance metrics threshold not being achieved are forfeited without consideration. With respect to annual billings growth, the Compensation and People Committee steepened the curve above and below the target annual billings growth to create a symmetrical pay versus performance relationship that increases the severity of the curve below target (i.e., offering less “protection” for below target performance) and increases the maximum potential payout about target only when performance is exceptional. The changes made to the maximum payout percentage and rTSR modifier in fiscal 2023 were made to strengthen the relationship between pay and performance and add a strict focus on stockholder returns. With respect to the rTSR modifier, the Compensation and People Committee added a strict cap on the modifier of 1.0x if stockholder returns are not positive for the period even if relative performance is exceptional, and added additional upside for significantly above target performance. Based on our actual annual billings growth of 23% (compared to a target of 20%), our Compensation and People Committee determined a payout percentage of 193% for fiscal 2023.

  116. FISCAL 2023 EQUITY COMPENSATION

    | 2023 Proxy Statement | 85 |

  117. FISCAL 2023 EQUITY COMPENSATION

    FISCAL 2022 ACHIEVEMENT WITH RESPECT TO FISCAL 2022 PSUS The fiscal 2022 PSUs were allocated into two halves, each of which included a component that vests based on the achievement of the performance goals for the Company’s 2022 fiscal year, as follows:

  118. FISCAL 2023 EQUITY COMPENSATION

    | ● | for each NEO (other than Mr. Jenkins), (i) 50% of the PSUs vest based on the achievement of the performance goals for the Company’s 2022 and 2023 fiscal years, and (ii) 50% of the PSUs vest based on the achievement of the performance goals for the Company’s 2022, 2023, and 2024 fiscal years; and | | ● | for Mr. Jenkins, (i) 33% of the PSUs vest based on the achievement of the revenue goal for the Company’s 2022 fiscal year, (ii) 33% of the PSUs vest based on the achievement of the performance goals for the Company’s 2022 and 2023 fiscal years (“Jenkins Tranche 2”), and (iii) 34% of the PSUs vest based on the achievement of the performance goals for the Company’s 2022, 2023, and 2024 fiscal years. |

  119. FISCAL 2023 EQUITY COMPENSATION

    The number of PSUs covered by a tranche that become Eligible PSUs will be equal to the product of (i) the target number of PSUs for the tranche and (ii) the average of the payout percentages for each fiscal year in the applicable performance period. Based on our actual annual revenue growth of 25.3% (compared to a target of 25.7%), our Compensation and People Committee determined a payout percentage of 96% for fiscal 2023. For Jenkins Tranche 2 and the first tranche of the fiscal 2022 PSUs granted to each other NEO, the number of fiscal 2022 PSUs that vested in each of these tranches (up to a maximum of 300% of the target number) was equal to the product of (x) the number of Eligible PSUs for the tranche and (y) the rTSR modifier for the tranche, subject to the applicable NEO’s continued service through the certification date. The rTSR modifier for each of these tranches was determined based on relative TSR during the 2-year performance period ending on June 30, 2023, which was at the 97th percentile. Based on this relative TSR for these tranches, the rTSR modifier was 1.5x, and the number of PSUs that vested was 174% of target. OUR APPROACH TO ONE-TIME AWARDS TO NAMED EXECUTIVES The Compensation and People Committee believes it may be necessary from time-to-time to make one-time awards outside of the normal grant cycle in certain circumstances, primarily to attract new executives, internally promote an executive or counter an external competing offer to one of our existing executives for retention purposes. In considering these awards, the Compensation and People Committee follows the following principles:

  120. FISCAL 2023 EQUITY COMPENSATION

    | ● | For new hire awards, time-vested equity should compensate the executive for a portion of the unvested equity they would forfeit from their current role or forgo from a competing offer. Any additional upside should be delivered through performance-based equity, such that a majority of the total equity value is performance-based. | | ● | For promotion and retention awards, the majority of the award should be performance-based and any time vested equity should be granted only if the employee’s existing unvested equity is low compared to market benchmarks or internal peers. |

  121. FISCAL 2023 EQUITY COMPENSATION

    As described under “How We Compensate Our Chief Executive Officer” above, in fiscal 2023, we granted Mr. Arora, our Chief Executive Officer, a long-term performance and retention award that was entirely performance-based to incentivize and reward him for continuing to deliver significant stockholder value.

  122. FISCAL 2023 EQUITY COMPENSATION

    | 86 | |

  123. FISCAL 2023 EQUITY COMPENSATION

    OUTSTANDING PERFORMANCE-BASED AWARDS The following table shows outstanding performance-based grants made to our NEOs as of July 31, 2023 which have remaining performance targets. This table, together with the long-term performance and retention award granted to our CEO as discussed above, illustrates that a significant portion of performance-based awards remain outstanding and continue to incentivize our NEOs’ performance going forward.

  124. FISCAL 2023 EQUITY COMPENSATION

    | Grant | % of Total PSU Grant | Measure Type | FY22 | FY23 | FY24 | FY25 | FY26 | | Executive PSU Program | | | | | | | | | | 50% | Financial Metrics | Revenue Growth | Revenue Growth | Revenue Growth | | | | FY22 Grant (Made August 2021) | | | FY22 Target 27.5% FY22 Actual 29.3% | FY23 Target 25.7% FY23 Actual 25.3% | FY24 Target TBD | | | | | | Relative TSR | 3 Year Relative TSR vs S&P 500 | | | | | | | 100% | Financial Metrics | | Billings Growth | Billings Growth | Billings Growth | | | FY23 Grant (Made August 2022) | | | | FY23 Target 20% FY23 Actual 23.1% | FY24 Target TBD | FY25 Target TBD | | | | | Relative TSR | | 3 Year Relative TSR vs S&P 500 | | | |

  125. FISCAL 2023 EQUITY COMPENSATION

    | Final Payout = Average of Annual Financial Metric Payouts X Relative TSR Modifier | | Start and End of Performance Period |

  126. Employment Agreements

    Employment Agreements Each of our NEOs is a party to an employment arrangement setting forth the material terms of his employment. For a summary of the material terms and conditions of these arrangements, see the section titled “—Executive Employment Agreements.”

  127. Post-Employment Compensation

    Post-Employment Compensation The employment arrangement for each of our NEOs provides for payments and/or benefits related to an involuntary termination of employment, including in connection with a change in control of our Company, on a “double trigger” basis. We believe that these protections assist us in retaining the services of these individuals. We also believe that these protections serve our business objectives by helping our NEOs maintain continued focus and dedication to their responsibilities to maximize stockholder value, including in the event that there is a potential transaction that could involve a change in control of our Company. The terms of these post-employment compensation arrangements were determined after our Board and Compensation and People Committee reviewed our retention goals for each NEO and an analysis of relevant market data. For a summary of the material terms and conditions of these post-employment compensation arrangements, as well as an estimate of the amounts potentially payable pursuant to such arrangements, see the sections titled “—Executive Employment Agreements” and “—Potential Payments Upon Termination or Change in Control.”

  128. Post-Employment Compensation

    Our Compensation and People Committee has adopted a continued service policy as an additional tool to serve several critical interests when circumstances warrant. These interests include maintaining distinctive executive ability; providing continuity of expertise in servicing our customers; minimizing the business disruption that can follow executive attrition; and solidifying succession planning. Employees holding the title of Senior Vice President or higher are eligible for continued vesting of equity awards if such employee (i) voluntarily resigns from full-time employment; (ii) has attained the age of 55 years and has been continuously employed by the Company as a full-time employee for at least five years as of the date of such resignation or has been continuously employed by the Company as a full-time employee for at least 10 years as of the date of such resignation or transition; and (iii) maintains a continued service relationship with the Company, including by transitioning employment to an advisory role, whether as employee or independent contractor. Eligible employees are not guaranteed benefits under the policy. Each award of benefits under the policy will be individually assessed and determined by the administrator of the policy (which is our Board or Compensation and People Committee), including the determination of which equity awards that will be subject to continued vesting and the related terms and conditions. Eligible employees will enter into a continued service agreement with the Company in a form approved by the administrator.

  129. Risk Assessment and Compensation Practices

    | ● | our cash incentive plan reflects a “pay for performance philosophy” that rewards our NEOs and other eligible employees for achievement of performance targets; | | ● | discretionary bonuses are reserved for extraordinary performance and achievement; |

  130. Risk Assessment and Compensation Practices

    | ● | total compensation features a balance of short- and long-term incentives (LTI), with the majority of pay delivered in LTI for senior executives; | | ● | our equity awards include multi-year vesting schedules requiring long-term employee commitment; | | ● | our performance expectations reward long-term value creation, profitability and excellence; | | ● | our use of multiple performance measures in incentive plans; | | ● | our regular monitoring of short-term and long-term compensation practices to determine whether management’s objectives are satisfied; | | ● | performance goals require sufficient “stretch,” yet are achievable; | | ● | both the short-term and long-term incentive programs have caps for significant upside performance; and | | ● | our independent compensation consultant evaluated and assessed our compensation policies and practices and confirmed that our practices do not encourage excessive risk taking. |

  131. Hedging and Pledging Policies

    Hedging and Pledging Policies Our insider trading policy prohibits our executive officers and members of our board of directors from engaging in derivative securities transactions, including hedging or other transactions that offset, or are designed to hedge or offset, any decrease in the market value of our equity securities and from pledging Company securities as collateral or holding Company securities in a margin account, except, in the case of pledging, with the prior approval of the ESG and Nominating Committee. This policy does not restrict ownership of, or transactions related to, Company-granted awards, such as PSUs, RSUs, employee stock options, and other securities issued by the Company or the deferral of equity awards pursuant to our non-qualified deferred compensation plan. Our executive officers have significant holdings of our stock to align their interests to those of our stockholders. Establishing a conservative pledging policy enables our executive officers to continue to hold those shares, while providing them flexibility in financial planning and allowing them to achieve financial diversification. By enabling our executives to maintain their stock ownership in the Company, our conservative pledging program helps ensure that they continue to have a meaningful financial interest in the success of the Company under their leadership. For these reasons, in fiscal 2022, the Board adopted a conservative policy that allows limited pledging of our stock by our executive officers. Our pledging policy establishes the parameters of pledging arrangements, and provides that any pledging arrangement must be approved in advance by our ESG and Nominating Committee, as well as sets an overall limit of $100 million on the total value of shares pledged by our executive officers (as a group). Under this policy, all pledges of shares of Company stock by our executives must comply with the following requirements:

  132. Hedging and Pledging Policies

    | ● | only outstanding shares held by an individual may be pledged (i.e., no shares subject to options or unvested RSUs, PSUs or other unvested equity awards may be pledged); | | ● | no shares may be pledged that would cause the total value of all pledged shares of our executive officers in the aggregate (as a group) to exceed $100 million; | | ● | pledged shares cannot consist of any shares that remain subject to the Company’s One Year Hold Policy; and | | ● | the stock ownership requirements applicable to our executives are in addition to, and cannot include, pledged shares. |

  133. Tax and Accounting Considerations

    Tax and Accounting Considerations Deductibility of Executive Compensation. Section 162(m) of the Code generally disallows public companies a tax deduction for federal income tax purposes of remuneration in excess of $1 million paid to the chief executive officer and certain other highly compensated executive officers in any taxable year. While our Compensation and People Committee is mindful of the benefit of being able to fully deduct the compensation paid to our NEOs, our Compensation and People Committee believes that we should retain the flexibility to provide compensation to our NEOs that is not fully tax deductible when it believes that such payments are appropriate to attract and retain executive talent or meet other business objectives. Our Compensation and People Committee intends to continue to compensate our NEOs in a manner consistent with the best interests of our Company and our stockholders even if any portion of such compensation is non-deductible. Taxation of “Parachute” Payments. Sections 280G and 4999 of the Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control that exceeds certain prescribed limits and that we (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We did not provide any of our NEOs with a “gross-up” or other reimbursement payment for any tax liability that the NEO might owe as a result of the application of Sections 280G or 4999 during fiscal 2023, and we have not agreed and are not otherwise obligated to provide any NEO with such a “gross-up” or other reimbursement in the future. Accounting for Share-Based Compensation. We follow ASC Topic 718 for our share-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based compensation awards made to employees and directors, including stock options and other stock-based awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our NEOs may never realize any value from their awards. ASC Topic 718 also requires companies to recognize the compensation cost of their share-based compensation awards in their income statements over the period that an executive officer is required to render service in exchange for the option or other award.

  134. Fiscal 2023 Summary Compensation Table

    Fiscal 2023 Summary Compensation Table The following table presents summary information regarding the compensation paid to, or earned by, our Named Executive Officers for our fiscal year ended July 31, 2023.

  135. Fiscal 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Nikesh Arora Chief Executive Officer | 2023 | 750,000(2) | 145,374,318 | 1,500,000 | 3,800,885(3) | 151,425,203 | | | 2022 | 250,000 | 7,007,348 | 1,500,000 | 1,653,129 | 10,410,477 | | | 2021 | 333,333 | 20,355,789 | 1,500,000 | 1,094,736 | 23,283,858 | | Dipak Golechha Chief Financial Officer | 2023 | 600,000 | 7,879,645 | 900,000 | 2,023(4) | 9,381,668 | | | 2022 | 600,000 | 1,868,557 | 900,000 | 251,946 | 3,620,503 | | | 2021 | 325,821 | 8,292,144 | 368,407 | 3,929 | 8,990,301 | | William “BJ” Jenkins President | 2023 | 750,000 | 12,116,568 | 1,125,000 | 31,836(5) | 14,023,404 | | | 2022 | 734,375 | 17,835,150 | 1,125,000 | 1,996 | 19,696,521 | | Lee Klarich Chief Product Officer | 2023 | 550,000 | 15,685,347 | 825,000 | 32,023(6) | 17,092,370 | | | 2022 | 550,000 | 4,671,565 | 825,000 | 1,996 | 6,048,561 | | | 2021 | 550,000 | 9,693,233 | 825,000 | 1,957 | 11,070,190 | | Nir Zuk(7) Founder and Chief Technology Officer | 2023 | 419,515 | 6,961,334 | 629,272 | 76,091(8) | 8,086,212 | | | 2022 | 459,420 | 1,635,031 | 689,130 | 83,576 | 2,867,157 | | | 2021 | 444,073 | 2,907,970 | 666,900 | 63,227 | 4,082,170 |

  136. Fiscal 2023 Summary Compensation Table

    | (1) The amounts reported in the Stock Awards column represent the grant date fair value of the RSUs (including time-based RSUs and PSUs) that were considered, under ASC Topic 718, to have been granted to our Named Executive Officers in each reported fiscal year, as computed in accordance with ASC Topic 718. The disclosure rules for stock awards in the summary compensation table are based on when there is a measurement date under financial accounting rules, because that is when it is possible to determine grant date fair value. As a result, performance-based stock awards are not always disclosed in the summary compensation table during the year that they were legally granted if performance metrics for a portion of the awards are set in a subsequent year. In the table above: |

  137. Fiscal 2023 Summary Compensation Table

    | i. | The amounts included for fiscal 2021 includes the grant date fair value of the portion of PSUs legally granted in fiscal 2019 that were eligible to vest based on achievement against fiscal 2021 revenue growth and the grant date fair value of all of the PSUs legally granted in 2021 because the performance metrics for those PSUs were set in fiscal 2021. | | ii. | The amounts included for fiscal 2022 includes the grant date fair value of the portion of PSUs legally granted in fiscal 2019 that were eligible to vest based on achievement against fiscal 2022 revenue growth and the grant date fair value of approximately 42% (or in Mr. Jenkins’ case, 61%) of the PSUs legally granted in fiscal 2022 because the performance metrics for those PSUs were set in fiscal 2022. | | iii. | The amounts included for fiscal 2023 includes the grant date fair value of approximately 42% (or in Mr. Jenkins’ case, 28%) of the PSUs legally granted in fiscal 2022, the grant date fair value of 1/3rd of the PSUs legally granted in August 2022 and the grant date fair value of all of the PSUs legally granted to Mr. Arora in June 2023 because the performance metrics for those PSUs were set in fiscal 2023. |

  138. Fiscal 2023 Summary Compensation Table

    | The result of this disclosure regime is that the increase in our stock price year over year results in larger grant date fair values reported in years subsequent to the year awards were legally granted because the higher stock price is used to establish the grant date fair value of the portion of an award that is set in those subsequent years. The grant date fair value of the awards included in fiscal 2023, assuming that the highest level of performance conditions will be achieved, is $197,537,575 for Mr. Arora, $20,576,207 for Mr. Golechha, $29,585,267 for Mr. Jenkins, $39,398,890 for Mr. Klarich, and $18,204,373 for Mr. Zuk. The portions of any awards that vest based on the achievement of performance goals (other than relative TSR) for fiscal years after fiscal 2023 do not have a reportable grant date fair value under ASC Topic 718 and are not included in this table. The assumptions used in calculating the grant date fair value of the awards reported in this column are set forth in the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2023. For more information, see footnote 3 to the Fiscal 2023 Grants of Plan-Based Awards Table. Note that the amounts reported in this column do not correspond to the actual economic value that may be received by our Named Executive Officers from their restricted stock units. | | (2) From November 1, 2021 to October 31, 2022, Mr. Arora elected to forgo his salary. |

  139. Fiscal 2023 Summary Compensation Table

    | 2023 Proxy Statement | 93 |

  140. Fiscal 2023 Summary Compensation Table

    | (3) Consists of life insurance premiums of $816, disability insurance premiums of $207, a fee of $30,000 for a regulatory filing related to ownership of our stock, $969 of miscellaneous expenses, personal security costs of $1,660,554 based on invoices provided by a third party security company, approximately $1,822,296 for costs related to personal usage of private aircraft and $286,043 of associated taxes. For purposes of reporting the value of personal usage of private aircraft in this table, we use costs provided by the applicable charter company, which include contracted hourly charges, and fuel charges. On occasion, guests of Mr. Arora also may accompany him, at a de minimis incremental cost to the Company, on the private aircraft. For more information regarding Mr. Arora’s overall security program, and personal usage of private aircraft, see the section entitled “Compensation Discussion and Analysis-Perquisites and Other Benefits” above. | | (4) Consists of life insurance premiums of $816, disability insurance premiums of $207 and 401(k) plan matching contributions by our Company of $1,000. | | (5) Consists of life insurance premiums of $816, disability insurance premiums of $207, reimbursement of expenses related to participation at certain Company events and nominal gift cards of $29,813 and 401(k) plan matching contributions by our Company of $1,000. | | (6) Consists of life insurance premiums of $816, disability insurance premiums of $207 and 401(k) plan matching contributions by our Company of $1,000 and a fee of $30,000 for a regulatory filing related to ownership of our stock. | | (7) For fiscal 2023, Mr. Zuk’s base salary, non-equity incentive compensation and all other compensation was paid in Israeli currency. The amounts set forth in the table reflect the conversion from Israeli currency to U.S. dollars using an average exchange rate of 0.28 U.S. dollars for one Israeli new shekel for fiscal 2023. | | (8) Consists of $812 for expenses related to attendance at certain Company events and nominal gift cards and $813 of associated taxes, $397 for health insurance contributions and $395 of associated taxes, $38,728 contributed for social security and pension benefits and $34,946 contributed for severance benefits under Israeli government schemes. |

  141. CEO Pay Ratio

    CEO Pay Ratio Under SEC rules, we are required to provide information regarding the relationship between the annual total compensation of our Chief Executive Officer and the annual total compensation of our median employee. For our last completed fiscal year, which ended July 31, 2023:

  142. CEO Pay Ratio

    | ● | The median of the annual total compensation of all employees (other than Mr. Arora) of our company and our consolidated subsidiaries in fiscal 2023 was approximately $206,035. This annual total compensation was calculated in accordance with Item 402(c)(2)(x) of Regulation S-K, and reflects, among other things, salary, all bonuses earned, 401(k) contribution matches, life and disability insurance premiums paid by the Company and the aggregate “grant date fair value” of equity awards granted during fiscal 2023. | | ● | Mr. Arora’s annual total compensation, as reported in the Fiscal 2023 Summary Compensation Table included in this Proxy Statement, was $151,425,203. | | ● | Based on the above, for fiscal 2023, the ratio of Mr. Arora’s annual total compensation to the median of the annual total compensation of all employees was approximately 735 to 1. |

  143. CEO Pay Ratio

    This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Securities Act of 1933, as amended, and based upon our reasonable judgment and assumptions. The SEC rules do not specify a single methodology for identification of the median employee or calculation of the pay ratio, and other companies may use assumptions and methodologies that are different from those used by us in calculating their pay ratio. Accordingly, the pay ratio disclosed by other companies may not be comparable to our pay ratio as disclosed above. The methodology we used to calculate the pay ratio is described below.

  144. CEO Pay Ratio

    | ● | We determined the median of the annual total compensation of our employees as of May 1, 2023 at which time we (including our consolidated subsidiaries) had approximately 14,081 full-time and part-time employees, including interns, approximately 8,148 of whom are U.S. employees, and approximately 5,933 (or approximately 42% of our total employee population) of whom are located outside of the United States. As permitted under the SEC rules, we then determined the median employee as of such date by excluding 138 employees from certain jurisdictions, totaling approximately 1% of our workforce, leaving 13,943 employees in our median analysis. The countries excluded (and the number of individuals in each such country) were as follows: Algeria, Argentina, Azerbaijan, Bulgaria, Dominican Republic, Ecuador, Greece, Guernsey, Hungary, Kenya, Kuwait, Latvia, Luxembourg, Macao, Morocco, Nigeria, Panama, Peru, Romania, Senegal, Slovenia, Sri Lanka, Tunisia, and Ukraine (fewer than ten individuals in each of these countries); Chile, Colombia, Egypt, and Vietnam (fewer than 20 individuals in each of these countries); and the Philippines (fewer than 30 individuals). |

  145. CEO Pay Ratio

    | 94 | |

  146. CEO Pay Ratio

    | ● | To determine the median employee’s compensation, we then compared the sum of (i) the annual base salary of each of these employees for fiscal 2023, plus (ii) the total annual cash incentive bonus, commission or other cash compensation, as applicable, earned by each of these employees for fiscal 2023 as reflected in our payroll records, plus (iii) the aggregate employer benefit, 401(k) contribution benefits and ESPP purchase gains, plus (iv) the aggregate grant date fair value of equity awards that were considered, under ASC Topic 718, to have been granted to these employees in fiscal 2023, as computed in accordance with ASC Topic 718. Compensation paid in foreign currency was converted to U.S. dollars using a spot exchange rate on May 1, 2023. In determining the median total compensation of all employees, we did not make any cost of living adjustments to the compensation paid to any employee outside the U.S. Using this measure, we identified a “median employee” who is a full-time, salaried employee located in the United States. Initially, a different employee had been identified, but in the process of determining that employee’s total compensation in accordance with applicable SEC rules, we recognized that there were anomalous elements in that employee’s compensation which we believe did not reasonably reflect the annual compensation of our employees generally. Consequently, we identified an employee whose amount for the consistently applied compensation measure was very close to the initial employee, but who did not have such unusual elements. | | ● | Once we identified our median employee, we estimated the median employee’s annual total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, yielding the median annual total compensation disclosed above. With respect to Mr. Arora’s annual total compensation, we used the amount reported in the “Total” column of our Fiscal 2023 Summary Compensation Table. |

  147. Fiscal 2023 Grants of Plan-Based Awards

    Fiscal 2023 Grants of Plan-Based Awards The following table presents information regarding the amount of equity awards granted to our Named Executive Officers during our fiscal year ended July 31, 2023.

  148. Fiscal 2023 Grants of Plan-Based Awards

    | | Grant Date | Date of Board or Committee Action to Grant the Award | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(3) | | Name | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Mr. Arora | — | — | 450,000 | 1,000,000 | 1,650,000 | — | — | — | — | — | | | 8/20/21 | 8/17/21 | — | — | — | 18,989 | 50,637 | 151,911 | — | 11,485,379 | | | 8/23/22 | 8/18/22 | — | — | — | 1 | 72,505 | 435,030 | — | 20,338,939 | | | 6/2/23 | 6/2/23 | — | — | — | 250,000 500,000 | | 750,000 | — | 113,550,000 | | Mr. Golechha | — | — | 270,000 | 600,000 | 990,000 | — | — | — | — | — | | | 8/20/21 | 8/17/21 | — | — | — | 5,064 | 13,503 | 40,509 | — | 3,062,727 | | | 8/23/22 | 8/18/22 | — | — | — | 1 | 17,172 | 103,032 | — | 4,816,918 | | Mr. Jenkins | — | — | 337,500 | 750,000 | 1,237,500 | — | — | — | — | — | | | 8/20/21 | 8/17/21 | — | — | — | 11,185 | 29,826 | 89,470 | — | 6,764,437 | | | 8/23/22 | 8/18/22 | — | — | — | 1 | 19,080 | 114,480 | — | 5,352,131 | | Mr. Klarich | — | — | 247,500 | 550,000 | 907,500 | — | — | — | — | — | | | 8/20/21 | 8/17/21 | — | — | — | 12,660 | 33,759 | 101,277 | — | 7,657,151 | | | 8/23/22 | 8/18/22 | — | — | — | 1 | 28,620 | 171,720 | — | 8,028,196 | | Mr. Zuk(4) | — | — | 188,782 | 419,515 | 692,199 | — | — | — | — | — | | | 8/20/21 | 8/17/21 | — | — | — | 4,430 | 11,814 | 35,422 | — | 2,679,630 | | | 8/23/22 | 8/18/22 | — | — | — | 1 | 15,264 | 91,584 | — | 4,281,704 |

  149. Fiscal 2023 Grants of Plan-Based Awards

    | (1) Amounts in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns relate to target incentive compensation opportunities under the fiscal 2023 cash incentive plan and assumes achievement at target levels for our corporate performance measures. For achievement in excess of target, overperformance could be rewarded with a payout of up to 165% of each NEO’s target. The actual amounts paid to our NEOs are set forth in the “Fiscal 2023 Summary Compensation Table” above and the calculation of the actual amounts paid is discussed more fully in the section titled “Fiscal 2023 Executive Compensation Program—Fiscal 2023 Executive Compensation Program Components—Annual Cash Incentive Compensation.” | | (2) Represents PSUs that were considered, under ASC Topic 718, to have been granted in fiscal 2023. The threshold is calculated as if the threshold of Company performance measure was reached and/or the lowest TSR modifier was reached. The maximum is calculated assuming all maximum Company performance targets were met and/or the relative TSR modifier was also at |

  150. Fiscal 2023 Grants of Plan-Based Awards

    | 2023 Proxy Statement | 95 |

  151. Fiscal 2023 Grants of Plan-Based Awards

    | the maximum value. For more information, see the section titled “Fiscal 2023 Executive Compensation Program—Fiscal 2023 Executive Compensation Program Components—Fiscal 2023 Equity Compensation” and with respect to the award of PSUs granted to Mr. Arora in June 2023, “How We Have and Will Continue to Compensate our Chief Executive Officer—Fiscal 2023 Long-Term Performance and Retention Award.” | | (3) The amounts reported in the Grant Date Fair Value of Stock Awards column represent the grant date fair value of the portions of the PSU awards that were considered, under ASC Topic 718, to have been granted in fiscal 2023. The assumptions used in calculating the grant date fair value of the PSUs reported in this column are set forth in the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2023. The value of the PSUs is calculated using a Monte-Carlo simulation valuation performed as of the date of grant by an independent third party. Because the grant date for a PSU under ASC Topic 718 occurs when performance targets are approved, and we approved performance targets only with respect to fiscal year 2023, PSU values in this column include |

  152. Fiscal 2023 Grants of Plan-Based Awards

    | (i) | with respect to PSUs granted in August 2021, 42% of the PSUs granted to Mr. Arora, Golechha, Klarich and Zuk and 20% of the PSUs granted to Mr. Jenkins; | | (ii) | with respect to PSUs granted in August 2022, ⅓ of the PSUs granted; and | | (iii) | with respect to PSUs granted to Mr. Arora in June 2023, all of the PSUs granted. |

  153. Fiscal 2023 Grants of Plan-Based Awards

    | Note that the amounts reported in this column do not correspond to the actual economic value that may be received by our NEOs from their PSU awards. | | (4) The amounts set forth in the table for Mr. Zuk for estimated future payouts under Non-Equity Incentive Plan Awards reflect the conversion from Israeli currency to U.S. dollars using an average exchange rate of 0.28 U.S. dollars for one Israeli new shekel for fiscal 2023. |

  154. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End

    Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End The following table presents information regarding outstanding stock options and other equity awards held by our Named Executive Officers as of July 31, 2023.

  155. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End

    | Named Executive Officer | Grant Date | Option Awards— Number of Securities Underlying Unexercised Options (#) Exercisable | Option Awards— Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Awards— Option Exercise Price ($) | Option Awards— Option Expiration Date | Stock Awards— Number of Shares or Units of Stock That Have Not Vested (#) | Stock Awards— Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Mr. Arora | 6/2/2023(2) | — | — | — | — | — | — | 750,000 | 187,470,000 | | | 8/20/2022(3) | — | — | — | — | — | — | 1,305,090 | 326,220,296 | | | 8/20/2021(4) | — | — | — | — | 105,727 | 26,427,521 | 182,292 | 45,565,708 | | | 10/20/2020(5) | — | — | — | — | 271,164 | 67,780,153 | — | — | | | 6/7/2018(6) | — | — | — | — | 170,232 | 42,551,191 | — | — | | | 6/7/2018(7) | 3,000,000 | — | 66.17 | 12/6/25 | — | — | — | — | | Mr. Golechha | 8/20/2022(3) | — | — | — | — | — | — | 309,096 | 77,261,636 | | | 8/20/2021(4) | — | — | — | — | 28,193 | 7,047,122 | 48,609 | 12,150,306 | | | 3/20/2021(8) | — | — | — | — | 29,088 | 7,270,836 | — | — | | | 12/20/2020(9) | — | — | — | — | 15,126 | 3,780,895 | — | — | | Mr. Jenkins | 8/20/2022(3) | — | — | — | — | — | — | 343,440 | 85,846,262 | | | 8/20/2021(4) | — | — | — | — | 61,531 | 15,380,187 | 109,303 | 27,321,428 | | | 8/20/2021(10) | — | — | — | — | 28,701 | 7,174,102 | — | — | | Mr. Klarich | 8/20/2022(3) | — | — | — | — | — | — | 515,160 | 128,769,394 | | | 8/20/2021(4) | — | — | — | — | 70,485 | 17,618,431 | 121,527 | 30,376,889 | | | 10/20/2020(11) | — | — | — | — | 75,954 | 18,985,462 | — | — | | | 10/20/2018(7) | 1,742,079 | — | 64.50 | 4/19/26 | — | — | — | — | | Mr. Zuk | 8/20/2022(3) | — | — | — | — | — | — | 274,752 | 68,677,010 | | | 8/20/2021(4) | — | — | — | — | 24,669 | 6,166,263 | 42,534 | 10,631,799 | | | 10/20/2020(12) | — | — | — | — | 36,462 | 9,114,042 | — | — | | | 10/20/2018(7) | 1,509,057 | — | 64.50 | 4/19/26 | — | — | — | — |

  156. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End

    | (1) The market value of unvested or unearned shares is calculated by multiplying the number of unvested or unearned shares held by the applicable NEO by the closing market price of our common stock on the Nasdaq on July 31, 2023 (the last trading day of our 2023 fiscal year), which was $249.96 per share. |

  157. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End

    | 96 | |

  158. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End

    | (2) Represents PSUs that were granted under our 2021 Plan. Values included in the Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested and Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested columns include the maximum values for number of shares and market value (i.e., calculated assuming the highest relative TSR target was met). For more information, see the section titled “How We Have and Will Continue to Compensate Our Chief Executive Officer—Fiscal 2023 Long-Term Performance and Retention Award.” | | (3) Represents PSUs that were granted under our 2021 Plan. Values included in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns include the maximum values for number of shares and market value (i.e., calculated assuming all maximum company performance targets were met and the relative TSR modifier was also at the maximum value). For more information, see the section titled “Fiscal 2023 Executive Compensation Program—Fiscal 2023 Executive Compensation Program Components—Fiscal 2023 Equity Compensation.” | | (4) Represents PSUs that were granted under our 2012 Equity Incentive Plan (the “2012 Plan”). Values included in the “Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested” and “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” columns include the maximum values for number of shares and market value (i.e., calculated assuming all maximum company performance targets were met and the relative TSR modifier was also at the maximum value). Values included in the “Stock Awards—Number of Shares or Units of Stock That Have Not Vested” and “Stock Awards—Market Value of Shares or Units of Stock That Have Not Vested” columns reflect the PSUs that were eligible to vest, as of July 31, 2023, based upon achievement of the specified performance metric. | | (5) Represents PSUs that were granted under our 2012 Plan. A specified performance metric having been achieved, the PSUs that became eligible to vest will vest over a four-year period, with 15% of such PSUs having vested in equal quarterly increments during year two with the first vesting on January 20, 2022; 42.5% of such PSUs vesting in equal quarterly increments during year three; and 42.5% of such PSUs vesting in equal quarterly increments during year four, in each case subject to the executive’s continued service through the applicable vesting date. | | (6) Vested as to 1/7th of the restricted stock units on June 7, 2019 and the remaining restricted stock units vest in equal increments each quarter thereafter with full vesting occurring on June 7, 2025, in each case subject to the executive’s continued service through the applicable vesting date. | | (7) All shares subject to this PSO have vested due to the achievement of certain stock price targets and continued service. | | (8) A specified performance metric having been achieved, the PSUs that became eligible to vest will vest over a four-year period with one fourth (1/4th) of such PSUs having vested on the one-year anniversary of the grant date; and one-sixteenth (1/16th) of such PSUs vesting quarterly thereafter, in each case subject to the executive’s continued service through the applicable vesting date. | | (9) Vests over a four-year period, with one fourth (1/4th) of the restricted stock units having vested on the one-year anniversary of the grant date; and one-sixteenth (1/16th) of the restricted stock units vesting quarterly thereafter, in each case subject to the executive’s continued service through the applicable vesting date. | | (10) Vests over a four-year period, with forty percent (40%) of the restricted stock units having vested on the one-year anniversary of the grant date; thirty percent (30%) of the restricted stock units vesting in equal quarterly increments during the second year; twenty percent (20%) of the restricted stock units vesting in equal quarterly increments during the third year; and ten percent (10%) of the restricted stock units vesting in equal quarterly increments during the fourth year, in each case subject to the executive’s continued service through the applicable vesting date. | | (11) A specified performance metric having been achieved, the PSUs that became eligible to vest will vest over a four-year period, with 25% of such PSUs having vested on October 20, 2021; 25% of such PSUs having vested in equal quarterly increments during year two; 25% of such PSUs vesting in equal quarterly increments during year three; and 25% of such PSUs vesting in equal quarterly increments during year four, in each case subject to the executive’s continued service through the applicable vesting date. | | (12) A specified performance metric having been achieved, the PSUs that became eligible to vest will vest over a four-year period, with 20% of such PSUs having vested during year two with the first vest on January 20, 2022; 40% of such PSUs vesting in equal quarterly increments during year three; and 40% of such PSUs vesting in equal quarterly increments during year four, in each case subject to the executive’s continued service through the applicable vesting date. |

  159. Fiscal 2023 Outstanding Equity Awards at Fiscal Year-End

    | 2023 Proxy Statement | 97 |

  160. Fiscal 2023 Option Exercises and Stock Vested

    Fiscal 2023 Option Exercises and Stock Vested The following table presents information regarding the exercise of stock options and the vesting of stock awards by our NEOs during our fiscal year ended July 31, 2023.

  161. Fiscal 2023 Option Exercises and Stock Vested

    | Named Executive Officer | Option Awards— Number of Shares Acquired on Exercise (#) | Option Awards—Value Realized on Exercise ($) | Stock Awards— Number of Shares Acquired on Vesting (#) | Stock Awards— Value Realized on Vesting ($)(1) | | Mr. Arora | 474,300 | 104,070,289 | 315,510(2) | 58,139,845(2) | | Mr. Golechha | — | — | 26,712 | 5,085,143 | | Mr. Jenkins | — | — | 95,931(3) | 15,882,974(3) | | Mr. Klarich | 270,000 | 55,569,753 | 88,353 | 15,650,779 | | Mr. Zuk | 45,000 | 6,230,576 | 39,309 | 7,035,157 |

  162. Fiscal 2023 Option Exercises and Stock Vested

    | (1) Based on the market price of our Company’s common stock on the vesting date, multiplied by the number of shares vested. | | (2) Includes 245,673 shares (valued at $46,602,103 on vesting) issuable pursuant to RSUs that vested during fiscal 2023 but for which settlement has been deferred under the Company’s deferred compensation plan, as described in the Nonqualified Deferred Compensation section below. | | (3) Includes 65,313 shares valued at $10,642,091 on vesting issuable pursuant to RSUs that vested during fiscal 2023 but for which settlement has been deferred under the Company’s deferred compensation plan, as described in the Nonqualified Deferred Compensation section below. |

  163. Fiscal 2023 Option Exercises and Stock Vested

    We did not sponsor any defined benefit pension or other actuarial plan for our NEOs during our fiscal year ended July 31, 2023.

  164. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation In May 2022, our Compensation and People Committee adopted a deferred compensation plan, which is a non-qualified deferred compensation plan established in compliance with Section 409A of the Code. Participation in the deferred compensation plan is voluntary and limited to U.S. employees of the Company and affiliates that are at the Vice President level or above, as determined by the administrator of the deferred compensation plan, and includes the Company’s executive officers, except Mr. Zuk who is not a U.S. employee. The plan allows eligible participants to defer salary, annual bonuses, commissions, other cash compensation approved by the administrator, time-based RSUs, and PSUs, excluding any compensation that has already been deferred and cash compensation that is not paid through U.S. payroll. The administrator may permit different deferral amounts for each component of compensation and may establish a minimum or maximum deferral amount for each component. Unless otherwise specified by the administrator, participants may defer (i) a minimum of 5% and a maximum of 50% of their annual base salary, (ii) a minimum of 5% and a maximum of 100% of their annual cash bonuses and commission, and (iii) a minimum of 5% and a maximum of 100% of any equity award or, to the extent a participant is permitted to defer the unvested tranche(s) of an equity award, the applicable unvested tranche(s). Participants’ deferrals will be credited to their accounts on the date that deferred compensation would have been paid. Participants will be 100% vested at all times in their deferred cash compensation, and participants’ deferred equity awards will vest according to the provisions of the award. Each participant may allocate his or her deferrals to accounts under the deferred compensation plan that provide for payment of deferred amounts upon specified events, such as the participant’s separation from service or other predetermined times. Participants may elect to receive payment of their account balances in a single lump-sum distribution or in annual installments (as elected by the participant in accordance with the deferred compensation plan), except in certain limited circumstances and provided that payments upon a participant’s death will be provided in a single lump sum. The Company may make discretionary matching, profit sharing, or other contributions to any participant account under the deferred compensation plan, and these contributions will vest according to the schedule specified by the administrator on or before the time the contributions are made. The Company has the discretion to accelerate the vesting of any of these contributions at any time.

  165. Nonqualified Deferred Compensation

    | 98 | |

  166. Nonqualified Deferred Compensation

    Each account under the deferred compensation plan will be credited with earnings on each business day (unless another period is specified by the administrator with respect to a particular investment option), based upon the participant’s investment allocation, with respect to each deferral, among a menu of investment options selected in advance by the administrator. If a participant fails to make an investment allocation with respect to a deferral of an equity award, the deferral will be invested in notional shares of the Company’s common stock. If a participant fails to make an investment allocation with respect to a deferral of any other compensation, the deferral will be invested in a notional mutual fund specified by the administrator. Upon a participant’s death, the balances under all of the participant’s accounts will be paid in a single lump sum no later than the end of the following year. In addition, the administrator has the discretion to accelerate or delay the payment of account balances, as long as such changes are permitted under applicable tax rules and requirements. All accounts will be paid in shares of the Company’s common stock issued under the Company’s equity plan, except that an account will be paid in cash to the extent there are not enough shares available under the Company’s equity plan to make such payment in shares. The following table summarizes the activity under the deferred compensation plan in fiscal 2023.

  167. Nonqualified Deferred Compensation

    | Named Executive Officer | Executive contributions in last fiscal year ($)(1) | Aggregate earnings or loss in last fiscal year ($)(2) | Aggregate balance at last fiscal year end ($)(3) | | Mr. Arora | $46,602,103 | $14,806,320 | $61,408,423 | | Mr. Golechha | — | — | — | | Mr. Jenkins | $10,642,091 | $5,683,546 | $16,325,637 | | Mr. Klarich | — | — | — |

  168. Nonqualified Deferred Compensation

    | (1) Represents the value of the RSUs that vested and were earned and deferred by our Named Executive Officers in fiscal 2023. The value of each vested deferred RSU is based on the closing price of the Company’s common stock on the applicable vesting date No portion of the amount for any Named Executive Officer is included as compensation for fiscal 2023 in the Fiscal 2023 Summary Compensation Table. | | (2) Represents the net increase in the value of the shares underlying our Named Executive Officers’ vested deferred RSUs from the vesting date to July 31, 2023. No portion of the amount for any Named Executive Officer is included as compensation for fiscal 2023 in the Fiscal 2023 Summary Compensation Table. | | (3) Represents the aggregate value of the vested deferred RSUs held by our Named Executive Officers as of July 31, 2023. The value of each vested deferred RSU is based on the closing market price of our common stock on the Nasdaq on July 31, 2023 (which was $249.96). | | For Mr. Arora, (i) $15,956,697 of this amount represents the value of 181,836 RSUs granted to him in fiscal 2018, which were included in the amount reported in the Stock Award column of the Summary Compensation Table for fiscal 2018, and (ii) $45,451,726 of this amount represents the value of 63,837 PSUs granted to him in fiscal 2021, which were included in the amount reported in the Stock Award column of the Summary Compensation Table for fiscal 2021. | | For Mr. Jenkins, (i) $4,305,061 of this amount represents the value of 17,223 RSUs granted to him in fiscal 2022, which were included in the amount reported in the Stock Award column of the Summary Compensation Table for fiscal 2022, and (ii) $12,020,576 of this amount represents the value of 48,090 PSUs granted to him in fiscal 2022, which were included in the amount reported in the Stock Award column of the Summary Compensation Table for fiscal 2022. |

  169. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control

  170. Termination of Employment Unrelated to a Change in Control

    | | Salary Continuation ($) | Target Annual Cash Bonus ($) | Value of Accelerated Equity Awards ($) | | Value of Continued Health Care Coverage Premiums ($) | Total ($) | | Named Executive Officer | | | Restricted Stock and Restricted Stock Units(1) | Options | | | | Mr. Arora | 1,000,000 | — | 101,926,439 | — | 31,713 | 102,958,152 |

  171. Termination of Employment in Connection with a Change in Control

    | | Salary Continuation ($) | Target Annual Cash Bonus ($) | Value of Accelerated Equity Awards ($) | | Value of Continued Health Care Coverage Premiums ($) | | | Named Executive Officer | | | Restricted Stock and Restricted Stock Units(1) | Options | | Total ($) | | Mr. Arora | 1,000,000 | 1,000,000 | 136,757,365 | — | 31,713 | 138,789,078 | | Mr. Golechha | 600,000 | 600,000 | 13,723,054 | — | 31,713 | 14,954,767 | | Mr. Jenkins | 750,000 | 750,000 | 19,684,998 | — | 31,713 | 21,216,711 | | Mr. Klarich | 550,000 | 550,000 | 32,807,250 | — | 31,713 | 33,938,963 | | Mr. Zuk | 419,515 | 419,515 | 13,456,847 | — | — | 14,295,877 |

  172. Pay vs. Performance

    Pay vs. Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation and certain financial performance measures of the Company. For further information concerning the Company’s pay-for-performance philosophy and how executive compensation aligns with the Company’s performance, please see the “Executive Compensation — Compensation Discussion and Analysis” section of this proxy statement.

  173. Pay vs Performance Table

    Pay vs Performance Table

  174. Pay vs Performance Table

    | | Summary Comp Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Comp Table Total for Non- PEO NEOs | Average Compensation Actually Paid for Non- PEO NEOs | Value of $100 initial investment based on | | PANW Net Income (in millions) | Annual Billings Growth | | Year | | | | | PANW TSR | Peer Group TSR | | | | (1) | (2) | (3) | (2) | (4) | (5) | (6) | (7) | (8) | | 2023 | $151,425,203 | $266,368,755 | $12,145,914 | $31,768,696 | $293.01 | $167.84 | $439.7 | 23.1% | | 2022 | $10,410,477 | $208,514,831 | $8,058,186 | $56,805,285 | $195.02 | $132.31 | -$267.0 | 37.0% | | 2021 | $23,283,858 | $219,731,970 | $10,279,163 | $54,811,159 | $155.93 | $140.03 | -$498.9 | 26.7% |

  175. Pay vs Performance Table

    | (1) During each of the years presented, our PEO was Nikesh Arora. During fiscal 2023 and fiscal 2022, our non-PEO NEOs were Dipak Golechha, William “BJ” Jenkins, Lee Klarich and Nir Zuk. During fiscal 2021, our non-PEO NEOs were Dipak Golechha, Lee Klarich, Amit Singh, Luis Felipe Visoso and Nir Zuk. |

  176. Pay vs Performance Table

    | (2) Amounts reported in this column represent (i) the total compensation, as reported in the Summary Compensation Table in our annual proxy statement (“SCT”), for the applicable year for Mr. Arora and (ii) the average of the total compensation, as reported in the SCT in our annual proxy statement, for the applicable year for our non-PEO NEOs. |

  177. Pay vs Performance Table

    | (3) “Compensation actually paid” is calculated in accordance with Item 402(v) of Regulation S-K. The table below sets forth each adjustment made during each year presented in the table to calculate the “compensation actually paid” to our PEO during each year in the table. |

  178. PEO

    | (4) “Compensation actually paid” is calculated in accordance with Item 402(v) of Regulation S-K. The table below sets forth each adjustment made during each year presented in the table to calculate the average “compensation actually paid” to our non-PEO NEOs during each year in the table. |

  179. Relationship Between “Compensation Actually Paid” and Performance Measures

    Relationship Between “Compensation Actually Paid” and Performance Measures In accordance with SEC rules, the charts below illustrate how “compensation actually paid” (CAP) to our NEOs aligns with our company’s financial performance as measured by our total shareholder return, our peer group total shareholder return, our net income, and annual billings growth rate.

  180. BOARD OF DIRECTORS

    BOARD OF DIRECTORS Nikesh Arora Chief Executive Officer and Chair of the Board of Directors Nir Zuk Chief Technology Officer and Director Aparna Bawa Chief Operating Officer Zoom Video Communications, Inc. John M. Donovan Former Chief Executive Officer AT&T Communications Carl Eschenbach Co-Chief Executive Officer, Workday, Inc. Dr. Helene D. Gayle President, Spelman College James J. Goetz Managing Member, Sequoia Capital Rt Hon Sir John Key Former Prime Minister of New Zealand Mary Pat McCarthy Former Vice Chair, KPMG LLP Lorraine Twohill Chief Marketing Officer, Google