Nikesh Arora given $128m to lead Palo Alto Networks
Nikesh Arora, the former president and COO of SoftBank, has been named as the new CEO and chairman of Palo Alto Networks, in a deal worth $128 million.
Announced by the company’s board of directors Arora assumed the new role as of 6 June, succeeding Mark McLaughlin who is transitioning into the new role of vice chairman of the board.
"I am thrilled and honored to join Palo Alto Networks,” said Arora. “I have developed a deep appreciation for the company's culture, values and pioneering spirit as innovators and disruptors and I look forward to working with the entire Palo Alto Networks team on our mission of protecting our customers in the digital age."
According to Bloomberg Arora is set to earn a staggering $128 million in the new role making him one of the highest-paid executives in the US. The healthy pay sum is said to be largely linked to equity and will only be awarded if the company’s shares more than double, while the rest is linked to his job.
$1 million is Arora’s base salary, with an added $1 million target bonus plus $40 million of restricted stock that vests over seven years. Arora has stock options valued at $66 million that will vest in increments if the shares climb at least 150%, he’ll receive all of them if the stock price quadruples. The company will also match up to $20 million of stock purchases Arora makes in his first month on the job with restricted shares that vests over four years.
Commenting on Arora’s appointment, McLaughlin said: "The company is executing extremely well and is the clear leader in next-generation security. Over the course of several quarters, I have been discussing succession planning with the board and I couldn't be more pleased that we have found a leader in Nikesh who is ideally suited to take the company on the next leg of its journey. I look forward to working with Nikesh as we transition and serving as vice chairman of the board."
Prior to his appointment with Palo Alto Networks, Arora served as president and chief operating officer at SoftBank, before that he was chief business officer at Google. Upon his leaving SoftBank Masayohi Son, praised him in saying: "He brought world class execution skills to SoftBank, as evidenced in our myriad of investments over the last year, as well as the complex monetisation of our Alibaba stake, and most recently our successful sale of Supercell. I am indebted to him for his contributions."
For Google Arora was grew the company’s search business from $2 billion in revenues to over $60 billion, all while leading a team of more than 20,000, during his time there.
“As we move forward in this era of digital and security transformation, there is no better person to lead Palo Alto Networks than Nikesh Arora. The board of directors is very pleased to have such a proven business and technology leader who brings demonstrated leadership and ability to scale to the company," Daniel J Warmenhoven, lead independent director.
The company recently announced strong financial results for Q3 2018. For the period the company reported earnings of $567.1 million indicating growth of 31% for the period. Product revenue grew 31% year-on-year (YoY) to $215.2 million and billings grew 33% YoY to $721 million.
We had a strong fiscal third quarter 2018 and will be reporting top line and bottom line results above all our third quarter guided ranges," said Kathy Bonanno, Palo Alto Networks’ chief financial officer.