UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No.     )

Filed by the Registrant  x

☒                            Filed by a Party other than the Registrant  ¨☐

Check the appropriate box:

PALO ALTO NETWORKS, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

PALO ALTO NETWORKS, INC.

PALO ALTO NETWORKS, INC.

4401 GREAT AMERICA PARKWAY3000 TANNERY WAY

SANTA CLARA, CALIFORNIA 95054

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 10:00 a.m. Pacific Standard Time on Thursday,Monday, December 8, 20169, 2019

Dear Stockholders of Palo Alto Networks, Inc.:

The 20162019 annual meeting of stockholders and any postponements, adjournments or continuations thereof (the “Annual Meeting”) of Palo Alto Networks, Inc., a Delaware corporation, will be held onThursday,Monday, December 8, 20169, 2019 at 10:00 a.m. Pacific Standard Time, at our headquarters, located at 4401 Great America Parkway,3000 Tannery Way, Santa Clara, California 95054, for the following purposes, as more fully described in the accompanying proxy statement:

Our board of directors has fixed the close of business on October 14, 201615, 2019 as the record date for the Annual Meeting. Only stockholders of record on October 14, 201615, 2019 are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement.

On or about October 24, 2016,22, 2019, we expect to mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access our proxy statement and our annual report. The Notice provides instructions on how to vote via the Internet or by telephone and includes instructions on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at the following Internet address: http://www.proxyvote.com. All you have to do is enter the control number located on your proxy card.

YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual Meeting, we urge you to submit your vote via the Internet, telephone or mail as soon as possible to ensure your shares are represented.

We appreciate your continued support of Palo Alto Networks, Inc. and look forward to either greeting you personally at the Annual Meeting or receiving your proxy.

By order of the Board of Directors,

Mark McLaughlin

Nikesh Arora

Chairman and Chief Executive Officer

Santa Clara, California

October 24, 201622, 2019

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON DECEMBER 9, 2019:

THE NOTICE OF 2019 ANNUAL STOCKHOLDERS’ MEETING AND PROXY STATEMENT AND THE 2019 ANNUAL REPORT ONFORM 10-K, ARE AVAILABLE AT WWW.PROXYVOTE.COM.

TABLE OF CONTENTS

PALO ALTO NETWORKS, INC.

PROXY STATEMENT

FOR 20162019 ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 10:00 a.m. Pacific Standard Time on Thursday,Monday, December 8, 20169, 2019

This proxy statement and your proxy card are furnished in connection with the solicitation of proxies by our board of directors for use in connection with the 20162019 annual meeting of stockholders of Palo Alto Networks, Inc. (“Palo Alto Networks” or our “company”), a Delaware corporation, and any postponements, adjournments or continuations thereof (the “Annual Meeting”). The Annual Meeting will be held on Thursday,Monday, December 8, 20169, 2019 at 10:00 a.m. Pacific Standard Time, at our headquarters, located at 4401 Great America Parkway,3000 Tannery Way, Santa Clara, California 95054. A Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to access this proxy statement and our annual report is first being mailed on or about October 24, 201622, 2019 to all stockholders entitled to vote at the Annual Meeting. Information contained on, or that can be accessed through, our website is not intended to be incorporated by reference into this proxy statement and references to our website address in this proxy statement are inactive textual references only.

The information provided in the “question and answer” format below is for your convenience only and is merely a summary of the information contained in this proxy statement. You should read this entire proxy statement carefully.

What matters am I voting on?

You will be voting on:

How does the board of directors recommend I vote on these proposals?

Our board of directors recommends a vote:

Who is entitled to vote?

Holders of our common stock as of the close of business on October 14, 201615, 2019 (the “Record Date”), may vote at the Annual Meeting. As of the Record Date, 91,209,98296,988,344 shares of our common stock were outstanding.outstanding and entitled to vote. In deciding all matters at the Annual Meeting, each stockholder will be entitled to one vote for each share of our common stock held by them on the Record Date. Stockholders may not cumulate votes in the election of directors.

Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, you are considered the stockholder of record with respect to those shares, and the Notice was

provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote in person at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”

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Street Name Stockholders. If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker, bank or other nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares in person at the Annual Meeting unless you follow your broker’sbroker, bank, or other nominee’s procedures for obtaining a legal proxy and present your legal proxy at the Annual Meeting. If you request a printed copy of our proxy materials by mail, your broker, bank or other nominee will provide a voting instruction form for you to use. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank or other nominee as “street name stockholders.”

Can I attend the Annual Meeting?

How do I vote?

If you are a street name stockholder, of record, there are four ways to vote:

Even if you plan to attend the Annual Meeting, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend the Annual Meeting.

If you are a street name stockholder, you will receive voting instructions from your broker, bank or other nominee. You must follow the voting instructions provided by your broker, bank or other nominee in order to direct your broker, bank or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning a voting instruction form, or by telephone or on the Internet. However, the availability of telephone and Internet voting will depend on the voting process of your broker, bank or other

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nominee. As discussed above, if you are a street name stockholder, you may not vote your shares live at the Annual Meeting unless you obtain a legal proxy from your broker, bank or other nominee.

Can I change my vote?

Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

If you are a street name stockholder, your broker, bank or other nominee can provide you with instructions on how to change your vote.vote or revoke your proxy.

What is the effect of giving a proxy?

Proxies are solicited by and on behalf of our board of directors. The persons named in the proxy have been designated as proxies by our board of directors. When a proxy card is properly dated, executed and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instruction of the stockholder. If a proxy card is signed, but no specific instructions are given, the shares represented by such proxy card will be voted in accordance with the recommendations of our board of directors, as described above. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares subject to proxies. If the Annual Meeting is adjourned, the proxy holders can vote your shares subject to proxies when the Annual Meeting is rescheduled, unless you have properly revoked your proxy instructions, as described above.

Why did I receive the Notice instead of a full set of proxy materials?

In accordance with the rules of the Securities and Exchange Commission (“SEC”), we have elected to furnish our proxy materials, including this proxy statement and our annual report, primarily via the Internet. The Notice containing instructions on how to access our proxy materials is first being mailed on or about October 24, 201622, 2019 to all stockholders entitled to vote at the Annual Meeting. Stockholders may request to receive all future proxy materials in printed form by mail or electronically bye-mail by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact of our annual meetings of stockholders.

What is a quorum?

A quorum is the minimum number of shares required to be present for the Annual Meeting to be properly held under our amended and restated bylaws and Delaware law. The presence, in person or by proxy, of a majority of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. A proxy submitted by a stockholder may indicate that all or a portion

of the shares represented by the proxy are not being voted (“stockholder withholding”) with respect to a particular matter. Similarly, a broker may not be permitted to vote shares held in street name on a particular matter in the absence of instructions from the beneficial owner of such shares (“broker non-vote”). See the sectionquestion below titled “How may my broker, bank or other nominee vote my shares if I fail to timely provide voting instructions?” The shares of our common stock subject to a proxy that are not being voted on a particular matter because of either stockholder withholding or a brokernon-vote will count for purposes of determining the presence of a quorum. Abstentions are also counted in the determination of a quorum.

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How many votes are needed for approval of each proposal?

How are proxies solicited for the Annual Meeting?

Our board of directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers, banks or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank or other nominee holds your shares of our common stock. In addition to using the internet, our directors, officers and employees may solicit proxies in person and by mail, telephone, facsimile, or electronic transmission, for which they will not receive any additional compensation. We have retained Saratoga Proxy Consulting LLC to assist us in soliciting proxies for a fee of $15,000,approximately $10,000, plus reasonableout-of-pocket expenses incurred in the process of soliciting proxies.

How may my broker, bank or other nominee vote my shares if I fail to timely provide voting instructions?

Brokerage firms, banks or other nominees holding shares of our common stock in street name for beneficial owners are generally required to vote such shares in the manner directed by the beneficial owner. In the absence of timely directions, your broker, bank or other nominee will have discretion to vote your shares on our sole “routine”

“routine” matter, the proposal to ratify the appointment of Ernst & Young LLP (Proposal No. 2).as our independent registered public accounting firm for our fiscal year ending July 31, 2020. Your broker will not have discretion to vote on the following “non-routine”any other proposals, which are“non-routine” matters, absent direction from you: the election of directors (Proposal No. 1) and the advisory vote on the compensation of our named executive officers (Proposal No. 3).you.

Is my vote confidential?

Proxy instructions, ballots, and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within Palo Alto Networks or to third parties, except as necessary to meet applicable legal requirements, to allow for the tabulation of votes and certification of the vote, or to facilitate a successful proxy solicitation. Occasionally, stockholders provide written comments on their proxy cards, which may be forwarded to management and our board of directors.

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Where can I find the voting results of the Annual Meeting?

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form8-K within four business days after the Annual Meeting, we will file a Current Report on Form8-K to publish preliminary voting results and will provide the final voting results in an amendment to the Current Report on Form8-K as soon as they become available.

I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice, and if applicable, our proxy materials, to multiple stockholders who share the same address unless we receive contrary instructions from one or more of the stockholders sharing the same address. This procedure reduces our printing costs, mailing costs, and fees. Stockholders who participate in householding will continue to be able to access and receive separate copies of the Notice, or if applicable, our proxy materials. Upon written or oral request, we will deliver promptly separate copies of the Notice and, if applicable, our proxy materials, to any stockholder at a shared address which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice or, if applicable, our proxy materials, stockholders may contact us at the following: Palo Alto Networks, Inc., Attention: Investor Relations, 4401 Great America Parkway,3000 Tannery Way, Santa Clara, California 95054 or Tel: (408)753-4000.

Stockholders who hold shares of our common stock in street name may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.

What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?

Stockholder Proposals

Stockholders may present proper proposals for inclusion in our proxy statement and for consideration at the next annual meeting of stockholders by submitting their proposals in writing to our Corporate Secretary in a timely manner. For a stockholder proposal to be considered for inclusion in our proxy statement for our 20172020 annual meeting of stockholders, our Corporate Secretary must receive the written proposal at our principal executive offices not later than June 26, 2017.24, 2020. In addition, stockholder proposals must comply with the requirements ofRule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding the inclusion of stockholder proposals in company-sponsored proxy materials. ProposalsStockholder proposals should be addressed to:

Palo Alto Networks, Inc., Attention: Corporate Secretary, 4401 Great America Parkway,3000 Tannery Way, Santa Clara, California 95054.

Our amended and restated bylaws also establish an advance notice procedure for stockholders who wish to present a proposal before an annual meeting of stockholders but do not intend for the proposal to be included in our proxy statement. Our amended and restated bylaws provide that the only business that may be conducted at an annual meeting is business that is (i) specified in our proxy materials with respect to such annual meeting, (ii) otherwise properly brought before the annual meeting by or at the direction of our board of directors, or (iii) properly brought before the annual meeting by a stockholder of record entitled to vote at the annual meeting who has delivered timely written notice to our Corporate Secretary, which notice must contain the information specified in our amended and restated bylaws. To be timely for our 20172020 annual meeting of stockholders, our Corporate Secretary must receive the proper written notice at our principal executive offices:

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In the event that we hold our 20172020 annual meeting of stockholders more than 30 days before or more than 60 days after theone-year anniversary of the Annual Meeting, then notice of a stockholder proposal that is not intended to be included in our proxy statement must be received no earlier than the close of business on the 120th day before such annual meeting and no later than the close of business on the later of the following two dates:

If a stockholder who has notified us of his, her or its intention to present a proposal at an annual meeting does not appear to present his, her or its proposal at such annual meeting, we are not required to present the proposal for a vote at such annual meeting.

Recommendation and Nomination of Director Candidates

You may recommend director candidates for consideration by our nominating and corporate governance committee. Any such recommendations should include, among other requirements, information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our common stock and a signed letter from the candidate confirming willingness to serve on our board of directors, and should be directed to our Corporate Secretary at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see the section titled “Board“Board of Directors and Corporate Governance—Stockholder Recommendations for Nominations to the Board of Directors.Directors.”

In addition, our amended and restated bylaws permit stockholders or a group of stockholders that wish to nominate one or more directors for election at an annual meeting of stockholders.stockholders to submit such request pursuant to our company’s proxy access bylaw provision. To nominate a director, the stockholder must provide the information required by the proxy access provision of our amended and restated bylaws. In addition, the stockholder must give timely notice to our Corporate Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Corporate Secretary withinat our principal executive offices:

Availability of Bylaws

A copy of our amended and restated bylaws may be obtained by accessing our public filings on the SEC’s website at www.sec.gov. You may also contact our Corporate Secretary at our principal executive offices for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

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PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our business affairs are managed under the direction of our board of directors, which is currently composed of tenthirteen members. EightTen of our directors are independent within the meaning of the listing standards of the New York Stock Exchange (“NYSE”) and SEC rules and regulations. Our board of directors is divided into three staggered classes of directors. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring.

Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist ofone-third of our directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

On October 16, 2019, Sridhar Ramaswamy, one of our Class II directors, informed us that he is not standing forre-election at the Annual Meeting. Additionally, on October 18, 2019, Frank Calderoni, one of our Class III directors, informed us that he is resigning from our board of directors effective as of the date of our Annual Meeting. We thank each of Messrs. Calderoni and Ramaswamy for their service to our company and board of directors.

The names and certain other information as of October 22, 2019 for each of the nominees for election as a director, and for each of the continuing andnon-continuing members of the board of directors are set forth below. All information is as of October 20, 2016.

Nominees for Director

Mark D. McLaughlin has served as our Chief Executive Officer and as a member of our board of directors since August 2011, and as the Chairman of our board of directors since April 2012. From July 2011 through August 2016, Mr. McLaughlin also served as our President. From August 2009 through July 2011, Mr. McLaughlin served as President and Chief Executive Officer and as a director at VeriSign, Inc., a provider of Internet infrastructure services, and from January 2009 to August 2009, Mr. McLaughlin served as President and Chief Operating Officer at VeriSign. From February 2000 through November 2007, Mr. McLaughlin served in several roles at VeriSign, including as Executive Vice President, Products and Marketing. Prior to joining VeriSign, Mr. McLaughlin was Vice President, Sales and Business Development at Signio Inc., an Internet payments company acquired by VeriSign in February 2000. In January 2011, President Barack Obama appointed Mr. McLaughlin to serve on the President’s National Security Telecommunications Advisory Committee. Mr. McLaughlin currently serves on the

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board of directors of Qualcomm, Inc., a global semiconductor company that designs and markets wireless telecommunications products and services. From October 2013 to June 2016, Mr. McLaughlin served on the Board of OPower, Inc., a provider of cloud based software to the utility industry. Mr. McLaughlin holds a B.S. from the U.S. Military Academy at West Point and a J.D. from Seattle University School of Law. Mr. McLaughlin was selected to serve on our board of directors because of the perspective and experience he brings as our Chief Executive Officer and his extensive background in the technology industry.

Asheem Chandna has served as a member of our board of directors since April 2005. Mr. Chandna has been a Partner at Greylock Partners, a venture capital firm, since September 2003, where he focuses on investments in enterprise IT, including security products. From April 2003 to June 2013, Mr. Chandna was a director of Imperva, Inc., a provider of cyber security solutions. From April 1996 to December 2002, Mr. Chandna was Vice President, Business Development and Product Management at Check Point Software. Mr. Chandna currently serves on the board of directors of a number of privately held companies. Mr. Chandna holds a B.S. in Electrical Engineering and an M.S. in Computer Engineering from Case Western Reserve University. Mr. Chandna was selected to serve on our board of directors because of his specific professional experience with Internet security products, his extensive background with enterprise IT companies, and his public and private company board experience.

James J. Goetz has served as a member of our board of directors since April 2005. Mr. Goetz has been a managing member of Sequoia Capital Operations, LLC, a venture capital firm, since June 2005,2004, where he focuses on cloud, mobile, and enterprise companies. Mr. Goetz currently serves on the board of directors of Nimble Storage, Inc., a data storage company,several privately held companies. Mr. Goetz has previously served on the boards of directors of Barracuda Networks, Inc., a data security and storage company and offrom 2009 to 2017, Nimble Storage, Inc., a number of privately held companies. Fromdata storage company, from 2007 until 2015 Mr. Goetz served on the Board of directors ofto 2017, Jive Software, Inc., a provider of social business software, and from 20122007 until 2015, Mr. Goetz served on the board of directors ofand Ruckus Wireless, Inc., a manufacturer of wireless(Wi-Fi) networking equipment.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. Mr. Goetz was selected to serve on our board of directors because of his deep experience with the venture capital industry and providing guidance and counsel to a wide variety of Internet and technology companies.

Mark D. McLaughlin has served as our Vice Chairman since June 2018, and has been a member of our board of our directors since August 2011. During that period, from April 2012 until June 2018 he served as Chairman of our board of directors. Mr. McLaughlin served as our Chief Executive Officer from August 2011 until June 2018 and also served as President from August 2011 through August 2016. From August 2009 through July 2011, Mr. McLaughlin served as President and Chief Executive Officer and as a director at VeriSign, Inc., a provider of Internet infrastructure services, and from January 2009 to August 2009, Mr. McLaughlin served as President and Chief Operating Officer at VeriSign. From February 2000 through November 2007, Mr. McLaughlin served in several roles at VeriSign, including as Executive Vice President, Products and Marketing. Prior to joining VeriSign, Mr. McLaughlin was Vice President, Sales and Business Development at Signio Inc., an Internet payments company acquired by VeriSign in February 2000. In January 2011, President Barack Obama appointed Mr. McLaughlin to serve on the President’s National Security Telecommunications Advisory Committee. Mr. McLaughlin currently serves on, and is the Chairman of, the board of directors of Qualcomm, Inc., a global semiconductor company that designs and markets wireless telecommunications products and services, and previously served on the board of directors of Opower, Inc., a provider of cloud based software to the utility industry. Mr. McLaughlin holds a B.S. from the U.S. Military Academy at West Point and a J.D. from Seattle University School of Law. Mr. McLaughlin was selected to serve on our board of directors because of the perspective and experience he brings as our former Chief Executive Officer and his extensive background in the technology industry.

If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” there-election of Messrs. McLaughlin, Chandna, Goetz, and Goetz.McLaughlin. We expect that each of Messrs. McLaughlin, Chandna, Goetz, and GoetzMcLaughlin will accept such nomination; however, in the event that a director nominee is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for any nominee who shall be designated by our board of directors to fill such vacancy. If you wish to give specific instructions with respect to the voting of directors, you may do so by indicating your instructions on your proxy card or when you vote by telephone or

over the Internet. If you are a street name stockholder and you do not give voting instructions to your broker or nominee, your shares will not be voted on this matter.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH

OF THE NOMINEES NAMED ABOVE.

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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Continuing Directors

Frank CalderoniNikesh Arora has served as a member ofthe Chairman our board of directors and Chief Executive Officer since February 2016.June 2018. Prior to joining us, from 2016 through 2018 Mr. Calderoni hasArora was an angel investor and from June 2016 through December 2017, Mr. Arora served as Executive Vice President, Operationsan advisor to SoftBank Group Corp., a multinational conglomerate company (“SoftBank”). From July 2015 through June 2016, Mr. Arora served as president and Chief Financial Officerchief operating officer of Red Hat, Inc. sinceSoftBank and from July 2014 through June 2015. From May 2004 to January 2015, Mr. CalderoniArora served in various positionsas vice chairman 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 Cisco Systems,Google, Inc., including serving as Executive Vice Presidentsenior vice president and Chief Financial Officer.chief business officer, from January 2011 to June 2014. Mr. Calderoni currentlyArora 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 directors of Nimble Storage, Inc.Sprint Corp., a data storagecommunications services company, from November 2014 to June 2016, Colgate-Palmolive Company, a worldwide consumer products company focused on the production, distribution and Adobe Systems Incorporated, a global software company.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. CalderoniArora holds a B.S.an M.S. in Accounting andBusiness Administration from Northeastern University, an M.S. in Finance from Fordham UniversityBoston College, and an M.B.A.a B.Tech in electrical engineering from Pacethe Institute of Technology at Banaras Hindu University. Mr. CalderoniArora was selectedchosen to serve on our board of directors because of his extensive financial and accounting expertise from his current and prior experience as Chief Financial Officer of various public companies, a deep understanding of financial reporting rules and regulations as well asdue to his extensive experience in thescaling technology industry.businesses and executive leadership at leading edge technology companies.

John M. Donovan has served as a member of our board of directors since September 2012. Mr. Donovan, hasnow retired, worked at AT&T Inc., a provider of telecommunication services, since April 2008, first as Chief Technology Officer and currentlysubsequently as Chief Strategy Officer and Group President—Executive Officer—AT&T Technology and Operations.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 Chairman 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 holds a B.S. in Electrical Engineering from the University of Notre Dame and an M.B.A. from the University of Minnesota. Mr. Donovan was selected to serve on our board of directors because of his extensive experience in the telecommunications industry.

Carl Eschenbach has served as a member of our board of directors since May 2013. Mr. Eschenbach has been a general partner at Sequoia Capital Operations, LLC, a venture capital firm, since April of 2016, and continues to serve as a strategic advisor to VMware, Inc., a provider of cloud and virtualization software and services.2016. Prior to joining Sequoia Capital Operations, LLC, Mr. Eschenbach served as Chief Operating Officer and Co-PresidentPresident 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’sCo-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 also serves on the board of directors of Zoom Video Communications, Inc., a video communications company, and Workday, Inc., anon-demand financial management and human capital management software vendor. Mr. Eschenbach received an electronics technician diploma from DeVry University. Mr. Eschenbach was selected to serve on our board of directors because of his extensive experience in the technology industry and his previous public company management experience.

Right Honorable Sir John Key has served as a member of our board of directors 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 chairman 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. He is also a member of the board of directors of Air New Zealand Ltd, a public domestic and international passenger transport and cargo company. Sir John has a Bachelor of Commerce in Accounting from the University of Canterbury. Sir John was selected to serve on our board of directors due, in part, to his extensive background in foreign affairs and his career in investment banking and finance.

Mary Pat McCarthy has served as a member of our board of directors since October 20, 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 Tesoro Corporation,Micron Technology, Inc., a global petroleum refinery corporationproducer of semiconductor devices and previously served on the board of directors of Mutual of Omaha, a mutualan insurance and banking company.company, and Andeavor Corporation (formerly Tesoro Corporation), a global energy corporation. Ms. McCarthy was selected to serve on our board of directors due, in part, to her background as a memberthe former chairperson of the Audit Committee of each of TesoroAndeavor Corporation and Mutual of Omaha and her financial and accounting expertise from her prior extensive experience as the Vice Chair of KPMG LLP.

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Stanley J. MeresmanLorraine Twohill has served as a member of our board of directors since September 2014. Prior to that, Mr. Meresman wasApril 2019. Ms. Twohill currently serves as Google LLC’s (formerly Google, Inc.) Chief Marketing Officer, a Venture Partner with Technology Crossover Ventures, a private equity firm, from January 2004 through December 2004, andposition she has held since June 2009. From July 2003 until June 2009, Ms. Twohill served as General PartnerGoogle’s Head of Marketing Europe, Middle East and Chief Operating Officer from November 2001 to December 2003. During the four years prior to joining Technology Crossover Ventures, Mr. Meresman was a private investor and board member and advisor to several technology companies. From May 1989 to May 1997, Mr. Meresman was the Senior Vice President and Chief Financial Officer of Silicon Graphics, Inc., a manufacturer of high-performance computing solutions. Prior to Silicon Graphics, he was Vice President of Finance and Administration and Chief Financial Officer of Cypress Semiconductor, a semiconductor company. Mr. Meresman currently serves on the board of directors, and audit chair of LinkedIn Corporation, a business-oriented social networking service, as well as a number of private companies. HeAfrica. Ms. Twohill previously served on the board of directors of ZyngaWilliams-Sonoma, Inc., Meru Networks, Riverbed Technology, Inc.a consumer retail company that sells kitchenwares and Polycom, Inc. Mr. Meresmanhome furnishings, from January 2012 until May 2017. Ms. Twohill holds an M.B.A.joint honors degrees in International Marketing and Languages from the Stanford Graduate School of Business and a B.S. in Industrial Engineering and Operations Research from the University of California, Berkeley. Mr. MeresmanDublin City University. Ms. Twohill was selected to serve on our board of directors due in part, to his background as chairher extensive marketing knowledge, with over 25 years of the audit committee of other public companiesexperience, and his financialher strong insight into brand management and accounting expertise from his prior extensive experience as Chief Financial Officer of two public NYSE-listed companies.global issues.

Daniel J. Warmenhoven,now retired, has served as the Lead Independent Director of our board of directors since March 2012. From October 1994 to August 2009, Mr. Warmenhoven was Chief Executive Officer at NetApp, Inc., a provider of computer storagehybrid cloud data services and data management, and on their board of directors as Executive Chairman from August 2009 through September 2014. Mr. Warmenhoven previously served on the board of directors of Aruba Networks.Networks, a vendor of data networking solutions. Mr. Warmenhoven holds a B.S. degree in Electrical Engineering from Princeton University. Mr. Warmenhoven was selected to serve on our board of directors because of his extensive experience in the technology industry and his public company management and board experience.

Nir Zuk is one of our founders and has served as our Chief Technology Officer and as a member of our board of directors 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. Zukco-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. Mr. Zuk was selected to serve on our board of directors because of the perspective and experience he brings as one of our founders and as one of our largest stockholders, as well as his extensive experience with network security companies.

Non-Continuing Directors

Frank Calderoni has served as a member of our board of directors since February 2016. Since January 2017, Mr. Calderoni has served as Chairman and Chief Executive Officer and a director of Anaplan, Inc., a planning and performance management platform. From June 2015 to January 2017, Mr. Calderoni served as Executive Vice President, Operations and Chief Financial Officer of Red Hat, Inc., a software company. From May 2004 to January 2015, Mr. Calderoni served in various positions at Cisco Systems, Inc., a multinational technology company, including as Executive Vice President and Chief Financial Officer. Mr. Calderoni currently serves on the boards of Adobe Systems Incorporated, a global software company, and Anaplan, Inc., aweb-based enterprise platform for business planning and previously served on the board of directors of Nimble Storage, Inc., a data storage company. Mr. Calderoni holds a B.S. in Accounting and Finance from Fordham University and an M.B.A. from Pace University. Mr. Calderoni was selected to serve on our board of directors because of his extensive financial and accounting expertise from his current and prior experience as Chief Financial Officer of various public companies, a deep understanding of financial reporting rules and regulations as well as his extensive experience in the technology industry.

Sridhar Ramaswamy has served as a member of our board of directors since August 2017. Mr. Ramaswamy has been a Venture Partner at Greylock Partners, a venture capital firm, since October 2018. Prior to joining Greylock Partners, from March 2013 until October 2018, Mr. Ramaswamy served as Senior Vice President Ads & Commerce at Google, Inc., a multinational technology company that specializes in internet-related services and products. From 2003 to March 2013, Mr. Ramaswamy served in various leadership roles in Google’s engineering group, including as Senior Vice President Engineering. Prior to joining Google, Mr. Ramaswamy served in engineering and other technical roles at E.piphany Inc., Bell Laboratories, Inc., and Telcordia Technologies, Inc. Mr. Ramaswamy holds a B.S. in Computer Science from the India Institute of Technology, Madras India and a M.S. and PhD in Computer Science from Brown University. Mr. Ramaswamy was selected to serve on our board of directors due, in part, to the depth of his technical engineering background and his extensive cloud and infrastructure expertise.

Director Independence

Our common stock is listed on the NYSE. Under the listing standards of the NYSE, independent directors must comprise a majority of a listed company’s board of directors. In addition, the listing standards of the NYSE require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under the listing standards of the NYSE, a director will only qualify as an “independent director” if, in the opinion of that listed company’s board of directors, that director does not have a material relationship with the listed company, either directly or indirectly, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Audit committee members must also satisfy the additional independence criteria set forth inRule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the listing standards of the NYSE. In order to be considered independent for purposes ofRule 10A-3, a member of a listed company’s audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee: (1) accept, directly or indirectly, any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.

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Compensation committee members must also satisfy the additional independence criteria set forth inRule 10C-1 under the Exchange Act and the listing standards of the NYSE. In order for a member of a listed

company’s compensation committee to be considered independent for purposes of the listing standards of the NYSE, the listed company’s board of directors must consider all factors specifically relevant to determining whether a director has a relationship to the listed company that is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (1) the source of compensation of such director, including any consulting, advisory, or other compensatory fee paid by the listed company to such director; and (2) whether such director is affiliated with the listed company, a subsidiary of the listed company, or an affiliate of a subsidiary of the listed company.

Our board of directors has undertaken a review of the independence of each of our directors. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that Ms.each of Mses. McCarthy and Twohill and each of Messrs. Calderoni, Chandna, Donovan, Eschenbach, Goetz, MeresmanKey, Ramaswamy and Warmenhoven do not have a material relationship with our company, either directly or indirectly, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules and regulations of the SEC and the listing standards of the NYSE. In making these determinations, our board of directors considered the current and prior relationships that eachnon-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our common stock by eachnon-employee director and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”

Since the beginning of our last fiscal year through October 15, 2016,2019, we have sold, both directly and through our channel partners, we have sold an aggregate of approximately $49.5$88.1 million, $1.1 million, $14.3 million and $5.4$0.1 million of products and services to AT&T Inc. (“AT&T”), Anaplan, Inc. (“Anaplan”), Google, Inc. and VMware, Inc.Sequoia Capital Operations, LLC (“VMware”Sequoia”), respectively, in arm’s length transactions. In addition, since the beginning of our last fiscal year through October 15, 2016,2019, we have purchased an aggregate of approximately $228,272$0.1 million, $0.9 million and $1,152,244$28.2 million of AT&T, Anaplan and VMwareGoogle, Inc. products and services, respectively, in arm’s length transactions.

We entered into these commercial dealings in the ordinary course of our business. In making the determinations as to which members of our board of directors are independent, our board of directors considered the fact that (1) Mr. Donovan one of our directors, iswas an executive officer of AT&T and thatuntil October 1, 2019, (2) Mr. Eschenbach, one of our directors, wasCalderoni is an executive officer of VMwareat Anaplan, (3) Ms. Twohill is an executive at Google, (4) Mr. Ramaswamy was previously an executive at Google until February 2016.October 2018, and (5) Mr. Eschenbach is a partner and Mr. Goetz is a member at Sequoia. In reviewing these relationships, our board of directors determined these relationships, respectively, do not impede the ability of Mr.Messrs. Donovan, Calderoni, Ramaswamy, Eschenbach or Mr. EschenbachGoetz or Ms. Twohill to act independently on our behalf and on behalf of our stockholders.

Additionally, neither Mr.none of Ms. Twohill or Messrs. Donovan, Calderoni, Ramaswamy, Eschenbach or Mr. EschenbachGoetz take part in the discussion of transactions with AT&T, Anaplan, Google, or VMware, respectively,Sequoia, as applicable, when such transactions are reviewed by the Boardour audit committee or board of Directors.directors. Additionally, AT&T expects its 2016calendar year 2018 net capital expenditures to be in the $22$23 billion range. AT&T’s purchases of our products and services, both directly and through our channel partners, which totaled $49.5$88.1 million since the beginning of our last fiscal year through October 15, 2019, are not material to either us or AT&T. All transactions with AT&T, Anaplan, Google and VMwareSequoia are subject to our rigorous related party transactions review process and policy.

Leadership Structure

Our Corporate Governance Guidelines provide that our board of directors is free to choose its chairperson (the “Chairman”) based on the board of directors’ view of what is in the best interest Palo Alto Networks and its stockholders. The Chairman and Chief Executive may, but need not be, the same person. Mr. McLaughlin currently servesserved as bothour Chairman of and Chief Executive Officer until June 2018 when he resigned as Chief Executive Officer

and became Vice Chairman of our board of directors anddirectors. In June 2018, Mr. Arora was hired as our Chief Executive Officer. Officer to replace Mr. McLaughlin and was unanimously appointed as our Chairman.

Our board of directors believes that the currentour board leadership structure, coupled with a strong emphasis on board independence, provides effective independent oversight of management while allowing our board of directors and management to benefit from each of Mr. McLaughlin’s and Mr. Arora’s leadership and years of experience as an executiveexecutives in the technology industry. ServingBased on Mr. Arora’s executive experience in the technology industry, as well as his management capabilities and leadership experience, our board of directors and as Chief Executive Officer since August 2011,believes Mr. McLaughlinArora is best positioned to identifythe director most capable of effectively identifying strategic priorities, leadleading critical discussion and executeguiding the formulation of our strategy and business plans. Mr. McLaughlin possesses detailed in-depth knowledge of the issues, opportunities, and challenges facing us.plans as Chairman. Independent directors and management sometimes have different

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perspectives and roles in strategy development. Our independent directors bring experience, oversight and expertise from outside of our company, while our Chief Executive Officer brings company specific experience and expertise. Our board of directors believes that Mr. McLaughlin’sArora’s combined role enables strong leadership, creates clear accountability, and enhances our ability to communicate our message and strategy clearly and consistently to stockholders.

Lead Independent Director

Our corporate governance guidelines provide that one of our independent directors should serve as a Lead Independent Director at any time when our Chief Executive Officer serves as the Chairman of our board of directors or if our Chairman is not otherwise independent. Because our Chief Executive Officer, Mr. McLaughlin, isArora, serves as our Chairman, our board of directors has appointedselected Mr. Warmenhoven to serve as our Lead Independent Director. As our Lead Independent Director, Mr. Warmenhoven presides over periodic meetings of our independent directors, serves as a liaison between our Chairman and the independent directors and performs such additional duties as our board of directors may otherwise determine and delegate.

Board Effectiveness; Director Assessment; Board Education

It is important that our board of directors and its committees are performing effectively and in the best interest of Palo Alto Networks and its stockholders. Our board of directors performs an annual self-assessment, overseen by the nominating and corporate governance committee, to evaluate its effectiveness in fulfilling its obligations. Directors are sent questions by our outside legal counsel covering board of directors, committee, self and peer performance. Our outside legal counsel then interviews each director to obtain his or her assessment of the effectiveness of our board of directors and committees, as well as director performance and board of directors’ dynamics, summarizes these individual assessments for discussion with the board of directors and committees, and leads a discussion with the nominating and corporate governance committee and the board of directors. The board of directors then takes such further action as it deems appropriate. In addition, we encourage directors to participate in continuing education programs focused on our business and industry, committee roles and responsibilities, and legal and ethical responsibilities of directors.directors and we reimburse directors for their expenses associated with this participation. We also encourage our directors to attend Palo Alto Networks events such as our annual Ignite conference. Continuing director education is also provided during board meetings and other board discussions as part of the formal meetings and may include internally developed materials and presentations as well as programs presented by third parties.

Board Meetings and Committees

During our fiscal year ended July 31, 2016,2019, the board of directors held seveneleven meetings (including regularly scheduled and special meetings), and no director attended fewer than 75% of the total number of meetings of the board of directors and the committees of which he or she was a member.member, except Ms. Twohill, who attended one of two meetings of the board of directors since her appointment.

Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend. SevenEight of our eighteleven directors at the time attended our 20152018 Annual Meeting of Stockholders, either telephonically or in person.

Our board of directors has an audit committee, a compensation committee, and a nominating and corporate governance committee, each of which has the composition and responsibilities described below. Directors serve on these committees until their resignation or until otherwise determined by our board of directors. All of the directors on the standing committees of our board of directors are independent, and each of these committees is led by a committee chairperson.

Audit Committee

Our audit committee consists of Ms. McCarthy and Messrs. Calderoni and Donovan, and Meresman, with Mr. MeresmanMs. McCarthy serving as Chairman. In connection with her election to the board of directors on October 20, 2016, Ms. McCarthy became a member of our Audit Committee.chair.

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The composition of our audit committee meets the requirements for independence for audit committee members under the listing standards of the NYSE and the rules and regulations of the SEC. Each member of our audit committee also meets the financial literacy and sophistication requirements of the listing standards of the NYSE. In addition, our board of directors has determined that each of Ms. McCarthy and Messrs.Mr. Calderoni and Meresman areis an “audit committee financial experts”expert” within the meaning of the rules and regulations of the SEC. Our audit committee is responsible for, among other things:

Our audit committee operates under a written charter that was adopted by our board of directors and satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our audit committee is available on our website at http://investors.paloaltonetworks.com/. During our fiscal year ended July 31, 2016,2019, our audit committee held seveneight meetings.

Compensation Committee

Our compensation committee consists of Messrs. Chandna, Eschenbach, Goetz and Warmenhoven, with Mr. Chandna serving as Chairman.the chair. The composition of our compensation committee meets the requirements for independence for compensation committee members under the listing standards of the NYSE and the rules and regulations of the SEC. Each member of our compensation committee is also a “non-employee“non- employee director,” as

defined pursuant toRule 16b-3 promulgated under the Exchange Act, and an “outside director,” as defined pursuant to Section 162(m) of the Internal Revenue Code (the “Code”).Code. The purpose of our compensation committee is to discharge the responsibilities of our board of directors relating to compensation of our executive officers. Our compensation committee is responsible for, among other things:

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Our compensation committee operates under a written charter that was adopted by our board of directors and satisfies the applicable rules and regulations of the SEC and the listing standards of the NYSE. A copy of the charter of our compensation committee is available on our website at http://investors.paloaltonetworks.com. During our fiscal year ended July 31, 2016,2019, our compensation committee held six meetings.

Our compensation committee may form subcommittees for any purpose and may delegate to such subcommittees such power and authority as our compensation committee deems appropriate, except such power or authority required by law, regulation or listing standard to be exercised by our compensation committee as a whole.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Messrs. Chandna, Eschenbach, Goetz, Ramaswamy and Warmenhoven, with Mr. Warmenhoven serving as Chairman.the chair. The composition of our nominating and corporate governance committee meets the requirements for independence under the listing standards of the NYSE and the rules and regulations of the SEC. Our nominating and corporate governance committee is responsible for, among other things:

Our nominating and corporate governance committee operates under a written charter that was adopted by our board of directors and satisfies the applicable listing standards of the NYSE. A copy of the charter of our nominating and corporate governance committee is available on our website at http://investors.paloaltonetworks.com/. During our fiscal year ended July 31, 2016,2019, our nominating and corporate governance committee held fivesix meetings.

Compensation Committee Interlocks and Insider Participation

None of the members of our compensation committee is or has been an officer or employee of our company. None of our executive officers currently serves, or in the past year has served, as a member of the board of

directors or compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors or compensation committee.

Considerations in Evaluating Director Nominees

Our nominating and corporate governance committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, our nominating and corporate governance committee will consider the current size and composition of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Some of the qualifications that our nominating and corporate governance committee considers include, without limitation, issues of character, integrity, judgment, diversity (including gender and race), experience of particular relevance to us and the board of directors, independence, age, area of expertise, length of service, 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 of directors at the time.

Nominees must also have the ability 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

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nominating and corporate governance committee to perform all board of director and committee responsibilities. Members of our board of directors are expected to prepare for, attend, and actively participate in all board of director and applicable committee meetings. Given the significant time commitment that board membership requires, the Boardour board of directors generally believes that no director should be a member of more than three public company boards. Other than the foregoing, there are no stated minimum criteria for director nominees, although our nominating and corporate governance committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests. Our nominating and corporate governance committee will also seek appropriate input from our Chief Executive Officer from time to time in assessing the needs of our board of directors for relevant background, experience, diversity and skills of its members.

Our board of directors should be a diverse body, with varying perspectives and experiences. Our nominating and corporate governance 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 tore-nominate incumbent directors. Our nominating and corporate governance committee also considers these and other factors as it oversees the annual board of director and committee evaluations. The nominating and corporate governance committee is committed to seeking out 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 our nominating and corporate governance committee to find director candidates would be instructed to take into account all of the considerations used by our nominating and corporate governance committee including diversity. After completing its review and evaluation of director candidates, our nominating and corporate governance committee recommends to our full board of directors the director nominees for selection.

Stockholder Recommendations for Nominations to the Board of Directors

Our nominating and corporate governance committee will consider candidates for director recommended by stockholders holding at least one percent (1%) of the fully diluted capitalization of our company continuously for at least twelve (12) months prior to the date of the submission of the recommendation, so long as such recommendations comply with our certificate of incorporation and amended and restated bylaws and applicable laws, rules and regulations, including those promulgated by the SEC. The nominating and corporate governance committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws, our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our board of directors includes members with diverse backgrounds,

skills and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should contact our Corporate Secretary in writing. Such recommendations must include information about the candidate, a statement of support by the recommending stockholder, evidence of the recommending stockholder’s ownership of our common stock and a signed letter from the candidate confirming willingness to serve on our board of directors. Our nominating and corporate governance committee has discretion to decide which individuals to recommend for nomination as directors.

Stockholder Nominations to the Board of Directors

Under our amended and restated bylaws, stockholdersa stockholder may also nominate one or more persons for our board of directors.directors for inclusion in the stockholder’s proxy materials. Any such nomination must comply with the requirements set forth in our amended and restated bylaws and recommendations should be sent in writing to our Corporate Secretary at Palo Alto Networks, Inc., 4401 Great America Parkway,3000 Tannery Way, Santa Clara, California 95054.

Under our amended and restated bylaws, eligible stockholders may also nominate persons for our board of directors for inclusion in our proxy statement. This is commonly known as “proxy access.” To be eligible, a single stockholder, or group of up to 20 stockholders, must own 3% of our outstanding stock for at least three years consecutively. The individual stockholder, or group of stockholders, may submit that number of director nominations not exceeding the greater of (a) two or (b) 20% of the number of directors in office. Any such nomination must comply with the requirements set forth in our amended and restated bylaws and recommendations should be sent in writing to our Corporate Secretary at Palo Alto Networks, Inc., 3000 Tannery Way, Santa Clara, California 95054.

Communications with the Board of Directors

Interested parties wishing to communicate with our board of directors or with an individual member or members of our board of directors may do so by writing to the board of directors or to the particular member or members of our board of directors, and mailing the correspondence to our General Counsel or our Legal Department, at Palo Alto Networks, Inc., 4401 Great America Parkway,3000 Tannery Way, Santa Clara, California 95054. Our

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General Counsel or our Legal Department, in consultation with appropriate members of our board of directors, as necessary, will review all incoming communications and, if appropriate, all such communications will be forwarded to the appropriate member or members of our board of directors, or if none is specified, to the Chairman of our board of directors.

Corporate Governance Guidelines and Code of Business Conduct and Ethics

Our board of directors has adopted Corporate Governance Guidelines. These guidelines address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on the Investor Information portion of our website at http://investors.paloaltonetworks.com/. We will post amendments to our Code of Business Conduct and Ethics or waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website.

Risk Management

Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational. We have designed and implemented processes to manage risk in our operations. Management is responsible for theday-to-day management of risks theour company

faces, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of risk management. In its risk oversight role, our board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are appropriate and functioning as designed.

Our board of directors believes that open communication between management and our board of directors is essential for effective risk management and oversight. Our board of directors meets with our Chief Executive Officer and other members of the senior management team at quarterly meetings of our board of directors, where, among other topics, they discuss strategy and risks facing theour company, as well as at such other times as they deem appropriate.

While our board of directors is ultimately responsible for risk oversight, our board committees assist our board of directors in fulfilling its oversight responsibilities in certain areas of risk. Our audit committee assists our board of directors in fulfilling its oversight responsibilities with respect to risk management in the areas of liquidity risk, internal control over financial reporting and disclosure controls and procedures, legal and regulatory compliance, and discusses with management and the independent auditor guidelines and policies with respect to risk assessment and risk management. Our audit committee also reviews our major financial risk exposures and the steps management has taken to monitor and control these exposures. Our audit committee also monitors certain key risks on a regular basis throughout the fiscal year, such as risk associated with internal control over financial reporting and liquidity risk. Our nominating and corporate governance committee assists our board of directors in fulfilling its oversight responsibilities with respect to the management of risk associated with board organization, membership and structure, and corporate governance. Our compensation committee assesses risks created by the incentives inherent in our compensation programs and policies. Finally, our board of directors reviews strategic and operational risk in the context of reports from the management team, including data privacy and cybersecurity, receives reports on all significant committee activities at each regular meeting, and evaluates the risks inherent in significant transactions.

Succession Planning

The BoardOur board of directors and management team recognize the importance of continually developing our talented employee base. Accordingly, our management team conducts an annual talent review of the current senior leadership

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positions. In addition, our CEO annually reviews a succession plan for the CEO position, using formal criteria to evaluate potential internal and external successors and also interim candidates in the event of an emergency situation. In conducting its evaluation, the Boardour board of directors considers organizational needs, competitive challenges, leadership/management potential and development, and emergency situations.

As part of our succession planning, in 2018, Mr. Arora became our Chief Executive Officer, succeeding Mr. McLaughlin, who resigned after nearly seven years as Chief Executive Officer. Mr. McLaughlin continues to serve as Vice Chairman of the board of directors. This transition exemplifies the board’s ongoing commitment to recruiting, cultivating and developing executive talent to meet our company’s organizational and strategic needs.

Director Stock Ownership Guidelines

Our board of directors believes that our directors and executive officers should hold a meaningful financial stake in theour company in order to further align their interests with those of our stockholders and therefore adopted stock ownership guidelines on August 26, 2016.in fiscal 2017. Under the guidelines, eachnon-employee director must own the lesser of (i) company stock with a value of three times the annual cash retainer for board service or (ii) 6,875 shares. Ournon-employee directors are required to achieve ownership of our common stock within five years of the later of August 26, 2016 or such director’s appointment or election date as applicable.

See the section titled “Executive Compensation—“Discussion of our Fiscal 2019 Executive Compensation Program—Other Compensation Policies—Stock Ownership and Compensation Recovery Policies”Policy” for additional details on our executive ownership guidelines.

Director Compensation

In fiscal 2013, ourOur nominating and corporate governance committee has approved a policy for the compensation of thenon-employee members of our board of directors (the “Director Compensation Policy”) to attract, retain, and reward these individuals and align their financial interests with those of our stockholders. Onlynon-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. The Director Compensation Policy was amended in September 2014, effective for fiscal 2015. There is no cash compensation paid under the Director Compensation Policy.

Initial Award. Under the Director Compensation Policy, and prior to its recent amendment, when an eligible director initially joinedjoins our board of directors, the eligible director receivedreceives an initial award of restricted stock units having a value between $750,000 toof $1 million (as determined based on the average closing price of our common stock on the NYSE during the 30 calendar days prior to the date of grant). The value of this initial award has been subsequently increased to $1 million effective the beginning of fiscal 2015. 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, and prior to its recent amendment, at each annual meeting of stockholders, each eligible director receivedreceives an annual restricted stock unit award having a value equal to $200,000$300,000 (as determined based on the average closing price of our common stock on the NYSE during the 30 calendar days prior to the date of grant). The value of the annual award has been subsequently increased to $300,000 effective the beginning of fiscal 2015. In addition, at each annual meeting of stockholders, our Lead Independent Director will receivereceives 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 the NYSE during the 30 calendar days prior to the date of grant). 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.

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Committee Awards. At each annual meeting of stockholders, the chairpersons and members of the three standing committees of our board of directors 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 the NYSE during the 30 calendar days prior to the date of grant):

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.

Fiscal 20162019 Director Compensation Table

The following table presents summary information regarding the compensation paid to ournon-employee directors for our fiscal year ended July 31, 2016.2019.

Workforce Diversity

We are committed to diversity in our workforce and recognize diversity as a business imperative. An inclusive and diverse culture is vital to the continued growth of our company. The board of directors continuously oversees our diversity efforts and monitors our progress toward increasing diversity.

- 18 -In 2017, we received a stockholder proposal requesting, among other things, disclosure of various information relating to the diversity of our workforce. At the 2017 Annual Meeting of Stockholders, a substantial number of our stockholders supported this proposal.

We are committed to expanding our inclusion and diversity initiatives and publicly sharing our workforce diversity data. Beginning in 2018 and continuing in 2019, in response to both the stockholder proposal described above and our conversations with stockholders, we provide a significant amount of information on our website concerning the diversity of our workforce and our inclusion initiatives. For example, we now publicly disclose ourEEO-1 form, which has been updated to provide information as of December 31, 2018. AnEEO-1 form is a report filed with the Equal Employment Opportunity Commission that describes the racial, ethnic and gender composition of our U.S. workforce. This form, along with a chart that shows the information graphically, is available athttps://www.paloaltonetworks.com/about-us/inclusion-diversity.

We are proud of our responsiveness to stockholders on this important issue. We will continue to monitor the diversity of our workforce and ways that we can communicate our efforts in this area to stockholders.

Gender Pay Equity

Our conversations with stockholders also highlighted the importance of gender pay equity. We agree that this is an important topic. We are committed to equal pay. Throughout our company, we strive to ensure that our compensation is fair and equitable. We are committed to eliminating unexplainable differences in pay and have made pay equity analyses part of our yearly review process. As a result, we have taken steps to successfully address pay gaps globally. As with workforce diversity, we will continue to monitor this important issue and appropriately communicate our efforts.

PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Our audit committee has appointed Ernst & Young LLP (“EY”), independent registered public accountants, to audit our financial statements for our fiscal year ending July 31, 2017. During our fiscal year ended July 31, 2016,2020. EY has served as our independent registered public accounting firm.firm since 2009.

At the Annual Meeting, our stockholders are being asked to ratify the appointment of EY as our independent registered public accounting firm for our fiscal year ending July 31, 2020. Our audit committee is submitting the selection of EY to our stockholders because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of EY will be present at the Annual Meeting, and they will have an opportunity to make statements and will be available to respond to appropriate questions from our stockholders.

Notwithstanding the selection of EY and even if our stockholders ratify the selection, our audit committee, in its discretion, may appoint another independent registered public accounting firm at any time during our fiscal year if our audit committee believes that such a change would be in the best interests of Palo Alto Networks and its stockholders. At the Annual Meeting, our stockholders are being asked to ratify the appointment of EY as our independent registered public accounting firm for our fiscal year ending July 31, 2017. Our audit committee is submitting the selection of EY to our stockholders because we value our stockholders views on our independent registered public accounting firm and as a matter of good corporate governance. Representatives of EY will be present at the Annual Meeting, and they will have an opportunity to make statements and will be available to respond to appropriate questions from our stockholders.

If our stockholders do not ratify the appointment of EY, our board of directors may reconsider the appointment.

Fees Paid to the Independent Registered Public Accounting Firm

The following table presents fees for professional audit services and other services rendered to our company by EY for our fiscal years ended July 31, 20152018 and 2016.2019.

Auditor Independence

In our fiscal year ended July 31, 2016,2019, there were no other professional services provided by EY that would have required our audit committee to consider their compatibility with maintaining the independence of EY.

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Audit Committee Policy onPre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm

Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (the “PCAOB”) regarding auditor independence, our audit committee is responsible for the appointment, compensation and oversight of the work of our independent registered public accounting firm. In recognition of this responsibility, our audit committee has established a policy for thepre-approval of all audit and permissiblenon-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services.

Before engagement of the independent registered public accounting firm for the next year’s audit, the independent registered public accounting firm submits a detailed description of services expected to be rendered during that year for each of the following categories of services to our audit committee for approval:

Our audit committeepre-approves particular services or categories of services on acase-by-case basis. The fees are budgeted, and our audit committee requires our independent registered public accounting firm and management to report actual fees versus budgeted fees periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage the independent registered public accounting firm for additional services not contemplated in the originalpre-approval. In those instances, the services must be pre-approved by our audit committee before our independent registered public accounting firm is engaged.engaged, the services must bepre-approved by our audit committee or approved by the chair of the audit committee and later ratified by the audit committee. Any proposed services exceeding these levels or amounts require specificpre-approval by our audit committee. All fees paid to EY for our fiscal year ended July 31, 2016,2019, werepre-approved by our audit committee.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION

OF THE APPOINTMENT OF ERNST & YOUNG LLP.

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REPORT OF THE AUDIT COMMITTEE

The audit committee is a committeeconsists of Ms. McCarthy and Messrs. Calderoni and Donovan. Each member of the board of directors comprised solely ofcommittee is an independent directorsdirector as required by the listing standards of the NYSE and rules and regulations of the SEC. The audit committee operates under a written charter approved by the board of directors, which is available on the Investor Information portion of our web site at www.paloaltonetworks.com. The composition of the audit committee, the attributes of its members and the responsibilities of the audit committee, as reflected in its charter, are intended to be in accordance with applicable requirements for corporate audit committees. The audit committee reviews and assesses the adequacy of its charter and the audit committee’s performance on an annual basis.

The audit committee assists our board of directors in the board’s oversight and monitoring of:

With respect to the company’s financial reporting process, the management of the company is responsible for (1) establishing and maintaining internal controls and (2) preparing the company’s consolidated financial statements. Our independent registered public accounting firm, Ernst & Young LLP (“EY”), is responsible for auditing these financial statements. It is the responsibility of the audit committee to oversee these activities. It is not the responsibility of the audit committee to prepare or certify our financial statements or guarantee the audits or reports of the independent auditors. These are the fundamental responsibilities of management and our independent registered public accounting firm.

The audit committee is responsible for the appointment, compensation, retention, and oversight of the work performed by EY. In fulfilling its oversight responsibility, the audit committee carefully reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters, performance of the independent auditors, and the extent to which the independent registered public accounting firm may be retained to performnon-audit services.

In the performance of its oversight function, the audit committee has:

Based on the audit committee’s review and discussions with management and EY, the audit committee recommended to the board of directors that the audited financial statements be included in the Annual Report on Form10-K for the fiscal year ended July 31, 2016,2019, for filing with the Securities and Exchange Commission.

Respectfully submitted by the members of the audit committee of the board of directors:

Stanley J. MeresmanMary Pat McCarthy (Chair)

Frank Calderoni

John M. Donovan

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PROPOSAL NO. 3

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In accordance with the rules and regulations of the SEC, pursuant to Section 14A of the Exchange Act, we are providing our stockholders with the opportunity to vote to approve, on an advisory ornon-binding basis, the compensation of our named executive officers as disclosed in accordance with the rules and regulations of the SEC in the “Executive Compensation”“Executive Compensation” section of this proxy statement. This proposal, commonly known as a “say-on-pay”“say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement.

Thesay-on-pay vote is advisory, and therefore is not binding on us, our compensation committee or our board of directors. Thesay-on-pay vote will, however, provide information to us regarding investor sentiment about our executive compensation philosophy, policies and practices, which our compensation committee will be able to consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our board of directors and our compensation committee value the opinions of our stockholders and to the extent there is any significant vote against the compensation of our named executive officers as disclosed in this proxy statement, we will endeavor to communicate with stockholders to better understand the concerns that influenced the vote and consider our stockholders’ concerns and our compensation committee will evaluate whether any actions are necessary to address those concerns. We currently conduct advisory votes on our named executive officer compensation on an annual basis, and we expect to conduct our next advisory vote at our 2020 annual meeting of stockholders.

We believe that the information we have provided in the section titled “Executive“Executive Compensation,” and in particular the information discussed in the section titled “Executive“Executive Compensation—Compensation Discussion and Analysis,” demonstrates that our executive compensation program has been designed appropriately and is working to ensure management’s interests are aligned with our stockholders’ interests to support long-term value creation. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that Palo Alto Networks, Inc.’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in Palo Alto Networks, Inc.’s proxy statement for the 20162019 Annual Meeting of Stockholders pursuant to the compensation disclosure rules and regulations of the SEC, including the compensation discussion and analysis, the compensation tables and narrative discussion, and other related disclosure.”

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL, ON AN

ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

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EXECUTIVE OFFICERS

The following table identifies certain information about our executive officers as of October 24, 2016.22, 2019. Officers are elected by our board of directors to hold office until their successors are elected and qualified.

Mark D. McLaughlinNikesh Arora has served as Chairman of our board of directors and our 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 chairman 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.

Kathy Bonanno has served as our Executive Vice President, Chief Financial Officer since November 2017. Ms. Bonanno previously served as our Senior Vice President Finance, from November 2016 to November 2017. From when she joined us in April 2014 until November 2016, Ms. Bonanno served as our Vice President Finance. In her 30 years of business experience she has held a variety of senior finance positions, including at Symantec Corporation, a cybersecurity company, and American Airlines, a major U.S. airline. Prior to joining us, from 2009 to 2014 Ms. Bonanno held various senior finance roles at Symantec Corporation, most recently serving as Vice President, FP&A from July 2012 to March 2014. Ms. Bonanno holds an M.B.A. from Texas Christian University and a B.S. in Finance from Arizona State University.

Jean Compeauhas served as our Chief Accounting Officer since February 2018, with responsibility for our tax and accounting functions. Ms. Compeau previously served as our Senior Vice President Corporate Controller, from November 2016 to February 2018. From when she joined us in December 2012 to November 2016, Ms. Compeau served as our Vice President Corporate Controller. In her 20 years of business experience she has held a variety of senior accounting or corporate controller positions, including at Intuitive Surgical, a global company that provides robotic assisted surgery technology, Exodus Communications, Inc., an internet hosting and service provider, and Infoseek Corporation, a search engine company. Prior to joining us, from November 2008 to November 2012, Ms. Compeau served as Corporate Controller of Intuitive Surgical. Ms. Compeau holds a B.A. from the University of California, Los Angeles (UCLA) and is a Certified Public Accountant (Inactive) in California.

Lee Klarich has served as our Chief ExecutiveProduct Officer and as a member of our board of directors since August 2011, and as the Chairman of our board of directors since April 2012. From July 2011 through August 2016,2017. Prior to this appointment, Mr. McLaughlin alsoKlarich served as our President. From August 2009 through July 2011, Mr. McLaughlin served as President and Chief Executive Officer and as a director at VeriSign, Inc., a provider of Internet infrastructure services, and from January 2009 to August 2009, Mr. McLaughlin served as President and Chief Operating Officer at VeriSign. From February 2000 through November 2007, Mr. McLaughlin served in several roles at VeriSign, including as Executive Vice President Productsof Product Management, a role he held since

November 2015. From November 2012 to November 2015, Mr. Klarich served as our Senior Vice President, Product Management and Marketing.our Vice President, Product Management from May 2006 to November 2012. Prior to joining VeriSign,us, Mr. McLaughlin was Vice President, SalesKlarich held various positions at NetScreen Technologies, Excite@Home, and Business Development at Signio Inc., an Internet payments company acquired by VeriSign in February 2000. In January 2011, President Barack Obama appointedPackardBell-NEC. Mr. McLaughlin to serve on the President’s National Security Telecommunications Advisory Committee. Mr. McLaughlin currently serves on the board of directors of Qualcomm, Inc., a global semiconductor company that designs and markets wireless telecommunications products and services. From October 2013 to June 2016, Mr. McLaughlin served on the board of director of OPower, Inc., a provider of cloud based software to the utility industry. Mr. McLaughlinKlarich holds a B.S. in Engineering from the U.S. Military Academy at West Point and a J.D. from Seattle University School of Law.Cornell University.

Steffan C. TomlinsonAmit Singhhas served as our Chief Financial Officerpresident since February 2012. From September 2011November 2018, with responsibility for allgo-to-market functions, including sales, support, consulting, business development, partnerships and enablement. Prior to January 2012,joining us, from May 2016 until October 2018, Mr. Tomlinson was Chief Financial Officer at Arista Networks,Singh served as vice president, business and operations, virtual reality for Google, Inc., a provider of cloud networking solutions.multinational technology company that specializes in internet-related services and products. From April 2011March 2010 to September 2011,May 2016, Mr. Tomlinson was a Partner and Chief Administrative OfficerSingh served as president, Google for Work at Silver Lake Kraftwerk, a private investment firm.Google. From September 20051991 to March 2011,2010, Mr. Tomlinson was Chief Financial Officer of Aruba Networks, Inc., a provider of intelligent wireless LAN switching systems. From 2000 until its acquisition by Juniper Networks, Inc., a supplier of network infrastructure products and services, in 2005, Mr. Tomlinson served inSingh held several roles including Chief Financial Officer,GVP application strategy group at Peribit Networks, Inc.,Oracle Corporation, a providerU.S. multinational computer technology corporation. Mr. Singh holds a bachelor’s degree from Delhi College of WAN optimization technology. Mr. Tomlinson holds an M.B.A. from Santa Clara UniversityEngineering and a B.A.master’s degree in SociologyIndustrial and Management Engineering from Trinity College.Rensselaer Polytechnic Institute.

NirZuk is one of our founders and has served as our Chief Technology Officer and as a member of our board of directors since March 2005. From April 2004 to March 2005, Mr. Zuk was Chief Security Technologist at Juniper.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. Zukco-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.

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2006 to January 2007, Mr. Bonvanie was Senior Vice President of Global Marketing at SAP AG. Mr. Bonvanie holds a B.A. in Economics from Vrije Universiteit Amsterdam.

Mark F. Anderson has served as our President since August 2016. Most recently Mr. Anderson served as the Company’s Executive Vice President, Worldwide Field Operations, a position he held from May 2016 through August 2016. From June 2012 when he joined the Company until May 2016, Mr. Anderson served as our Senior Vice President, Worldwide Field Operations. From October 2004 to May 2012, Mr. Anderson served in several roles, including as Executive Vice President of Worldwide Sales, for F5 Networks, an IT infrastructure company. From March 2003 to September 2004, Mr. Anderson served as Executive Vice President of North American Sales at Lucent Technologies, a telecommunications equipment and services company. Mr. Anderson holds a B.A. in Business and Economics from York University in Toronto, Canada.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our Named Executive Officers, or NEOs, for fiscal 2016 are:2019 were:

Management Changes in fiscal 2019

Our board of directors appointed Mr. Singh as our President, effective as of November 1, 2018, following the resignation of Mark F. Anderson, our Executive Viceformer President, Worldwide Field Operations.

This executive summary provides an overview of:

Fiscal 20162019 Business Highlights

Our executive compensation program is designed to align the compensation of our executive officers with our operatingfinancial and financialoperational performance (both short-term and long-term) and to create significant value for our stockholders. Our executive compensation actions and decisions should be viewed in the context of our financial and operational performance during fiscal 2016,2019, as shown below:

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Strong Revenue Growth (in millions)

Executive Compensation Practices

Our executive compensation program is designed to be heavily weighted towards compensating our executive officers based on company performance.our financial and operational performance and the creation of significant value for our stockholders. To that end, we have implemented executive compensation policies and practices that reinforce our pay“pay for performanceperformance” philosophy and align with sound governance principles. TheDuring fiscal 2019, the following summarizes these policies and practices:practices were in place:

What we do:

What we don’tdo not do:

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The chart below illustrates our commitment to performance-based equity awards for our NEOs. Of all the equity grants in fiscal 2019 (valued on the date of grant) to our NEOs, 78% were in the form of performance-based equity awards and 22% were in the form of time-based restricted stock units.

Stockholder Engagement and our 2018Say-on-Pay Vote

Our compensation committee considers a number of factors in making decisions about our executive compensation program,decisions, including the growth and scale of the company,our business; recent performance against financial targets, a measuredtargets; an analysis of the compensation practices of the companies in our compensation peer group practices, and advice from the committee’sother market data; an analysis of competitive market conditions by its external compensation consultant. Theconsultant; the value of each executive’s position; the skills, tenure, and experience of our executives; the alignment between the market based positions and the actual responsibilities of our executives; each executive’s performance; our executives’ expected future contributions; the incentives provided to our executives to stay with us and drive our continued growth; our CEO’s recommendations (except with respect to his own compensation); internal parity considerations; the value of each executive’s unvested equity holdings; the dilutive effect of our long-term incentive compensation program; and the overall impact that our executives’ compensation would have on stockholder value.

Our compensation committee alsoroutinely considers the results of each annual stockholder advisory vote on the compensation of our Named Executive OfficersNEOs (the“Say-on-Pay” vote) and stockholder feedback on our executive compensation program. We reached out, beforeprogram gathered throughout the year. As part of our 2015regular, ongoing and transparent communications with our

stockholders, we engage with them on a variety of topics through quarterly earnings calls, financial conferences,non-deal road shows and other communication channels. These discussions are generally attended by a combination of our CEO, Chief Financial Officer, Lead Independent Director (who serves on our compensation committee), General Counsel and/or Investor Relations lead.

At the beginning of fiscal 2019, prior to our 2018 Annual Meeting of Stockholders, our management team reached out to our top institutional and other stockholders (who collectively held shares representing an aggregate of approximately 29% of our outstanding shares of common stock) to discuss their views about our executive compensation program, policies and practices, as well as other matters. AlthoughThe stockholder engagement during fiscal 2019 was both targeted and extensive, similar to our practice in prior years.

In the course of these discussions, we received stockholder support forvaluable feedback on our Say-on-Pay proposals in 2013executive compensation program, policies and 2014, we received less than majority stockholder support forpractices, including favorable comments from our 2015 Say-on-Pay proposal.stockholders concerning the introduction of PSOs to our executive compensation program. This feedback was presented to our nominating and corporate governance committee, compensation committee and board of directors.

As has been the compensation committee’s normal cadence for compensation decisions, in the first quarter of fiscal 2016,2019, the compensation committee reviewed and approved the key elements of our fiscal 20162019 executive compensation program. Theseprogram for our executive officers, excluding our CEO who joined us in June of 2018. While these decisions were made prior to receiving our 2015 2018Say-on-Pay voting results, andwhere we continuedreceived less than majority support for our executive compensation practices that were substantially similar to those that had received2018 Say-on-Pay majority stockholder support in 2013 and 2014. Therefore,proposal, the decisions accounted for the feedback receivedgathered from our stockholder engagement effortsfrom previous periods. Following our annual review of our executive compensation philosophy, our compensation committee decided to retain our general approach to executive compensation of aligning certain elements of our executive compensation program with company performance for fiscal 2019 and, in connectionpart due to favorable stockholder feedback, further introduced to the broader executive team PSOs tied to the Stock Price Achievements to ensure that the entire executive team’s interests are aligned with the 2015 Say-on-Pay proposal were not factors considered inour stockholders’ long-term interests. The highlights of our fiscal 20162019 executive compensation decisions. However, the compensation committee considered these voting results and the stockholder feedback among a number of data pointsprogram are described in making executive compensations decisions for fiscal 2017. See the section titled “Discussion of our entitled “Fiscal 2016 Executive Compensation Program—Fiscal 20172019 Executive Compensation Program ChangesOverview” below. We value the opinions of our stockholders, and Decisions.”it is the current intent of our compensation committee to continue to engage in dialogue with our stockholders to solicit feedback throughout the year regarding our executive compensation program, policies and practices.

Fiscal 20162019 Executive Compensation HighlightsProgram Overview

The key executive compensation decisions in fiscal 2016 were as follows:

Prior to fiscal 2017, we had only granted restricted stock awards, or RSAs, or restricted stock unit awards, or RSUs, subject to time-based vesting to our NEOs. In fiscal 2017, we made significant changes to our compensation program with the introduction of performance-based equity awards alongside the time-based equity awards. Performance-based equity awards were granted in the form of performance-based stock awards, or PSAs, to our NEOs in fiscal 2017. In fiscal 2018, performance-based equity awards were granted to our NEOs (other than Mr. Arora) in the form of performance-based stock unit awards, or PSUs, and in the form of PSOs to Mr. Arora.

For fiscal 2019, we granted time-based RSUs to Ms. Bonanno and Mr. Singh, and we granted performance-based equity awards to our NEOs (other than Mr. Arora) in the form of PSOs because the PSOs reflect our compensation committee’s continued commitment to incorporating performance measures into our long-term equity incentive program which only compensate our NEOs when significant value has been delivered to our stockholders.

In addition, in July 2019, our compensation committee was(i) decided not strictly bound by this target.

Compensation Arrangements with Mr. Singh

On November 1, 2018, our board of directors appointed Mr. Singh as our President. In hiring Mr. Singh, our board of directors approved an employment offer letter setting forth the principal terms and conditions of his employment, including an initial annualized base salary of $750,000 (which was set througharm’s-length negotiation, considering such factors as our focus on new developing markets and the requisite experience and skills that a qualified candidate would need to manage a growing business in a dynamic and ever-changing environment, his proven experience as a business and technology leader, who has previously demonstrated leadership and ability to scale businesses (establishing and helping scale the Google cloud business, leading several thousand people and growing it into a multi-billion dollar business), the prevailing market conditions, market data for base salaries of similarly situated executives, and his prospective role and responsibilities), which is subject to adjustment by the board of directors or compensation committee from time to time, and a target annual cash bonus opportunity of 100% of his base salary (based on the achievement of certain performance objectives established by the board of directors and/or compensation committee), which, for fiscal 2019, waspro-rated for the portion of fiscal 2019 that Mr. Singh was employed by us.

In addition, in connection with his hiring Mr. Singh received the following equity awards:

Similar to the other NEOs that were granted PSOs in fiscal 2019, a primary consideration of the structure of Mr. Singh’s compensation arrangements was that our compensation committee wanted to design an overall compensation package that included a component that provided significant value to him only if all other stockholders realized significant additional value, thereby directly aligning the interest of Mr. Singh with the interests of our stockholders.

For a summary of the material terms and conditions of Mr. Singh’s employment offer letter, including the severance and change in control payments and benefits related to the equity awards described above, see “ —Executive Employment Agreements”and “—Potential Payments Upon Termination or Change in Control” below.

DISCUSSION OF OUR FISCAL 20162019 EXECUTIVE COMPENSATION PROGRAM

This section provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program and each component of our executive compensation program. In addition, we explain how and why our compensation committee arrived at the specific compensation policies and decisions involving our executive officersNEOs for fiscal 2016.2019.

Executive Compensation Philosophy and Objectives

We operate in a highly competitive business environment, which is characterized by frequent technological advances, rapidly changing market requirements and the emergence of new market entrants. To successfully grow our business in this dynamic environment, we must continually develop and refine our products and services to stay ahead of ourend-customers’ needs and challenges. To achieve these objectives, we need a highly talented and seasoned team of technical, sales, marketing, operations, and other business professionals.

We compete with other companies in our industry and other technology companies in the San Francisco Bay Area to attract and retain a skilled management team. To attract and retain qualified executive candidates, our compensation committee recognizes that it needs to develop competitive compensation packages to meet this challenge,challenge. Accordingly, we have embraced a compensation philosophy of offering our NEOs a competitive total compensation program, which we view aseach of the sum of base salary, cash performance-based incentives, equity compensation and employee benefits, eachcomponents of which recognizes and rewards individual performance and contributions to our success, allowingsuccess. This philosophy allows us to attract, retain, and motivate talented executive officers with the skills and abilities needed to drive our desired business results. The specific objectives of our executive compensation program are to:

Compensation Program Design

Our executive compensation program for fiscal 2016,2019 reflected our stage of development as a growing publicly-traded company which is gaining market share and growing revenue, at scale, faster than the competition and the rate of the market. Accordingly, thewe design our executive compensation of our NEOs consisted of base salary, a cash incentive compensation opportunity, equityprogram to provide market-competitive compensation in the form of full value stock-basedbase salary, an annual cash incentive compensation opportunity, a long-term incentive compensation opportunity in the form of equity awards, including time-based RSUs, PSUs, and PSOs, and certain employee health and welfare benefits.

We offer cash compensation in the form of base salaries and annual cash incentive compensation opportunities (with semi-annual payouts). Typically, we have structured our annual cash incentive compensation opportunities to focus on the achievement of specific short-term financial and operational objectives that will further our longer-term growth objectives.

Equity awards for shares of our common stock serve as a key component of our executive compensation program. Currently, we grant full value awards, In fiscal 2019, our compensation committee granted performance-based equity and/or awards without a purchase price including restricted stock unit awards and restricted stock awards,time-based equity to provide appropriate levels of compensation, to ensure that the recipient receives value for the shares regardless of fluctuations in the market price of our common stock,them with effective long-term incentives and to promote stockholder value creation (the value of a recipient’s shares increases only as stockholder value increases). In the future, we may introduce other forms of equity awards, as we deem appropriate, that further our objective of providing long-term incentives to our NEOs while promoting stockholder value creation.

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Finally, we offer our executive officers standard health and welfare benefits that are generally available to our other employees, including medical, dental, vision, life insurance and Section 401(k) retirement plans.

We have not adopted any formal policies or guidelines for allocating compensation between current andlong-term compensation or between cash andnon-cash compensation, although we use competitive market data to develop a general framework for establishing the appropriate pay mix. Within this overall framework, our compensation committee reviews each component of executive compensation separately and also takes into consideration the value of each NEO’s compensation package as a whole and its relative value in comparison to our other NEOs.

Our compensation committee evaluates our compensation philosophy and executive compensation program as circumstances require and reviews executive compensation annually. As part of this review, we expect that our compensation committee will apply our philosophy and the objectives outlined above, together with consideration for the levels of compensation that we would be willing to pay to ensure that our executive compensation remains competitive and that we meet our retention objectives, as well as the cost to us if we were required to find a replacement for a key executive officer.

Compensation-Setting Process

Role of our Compensation Committee

Compensation decisions for our NEOs are made by our compensation committee. Currently, our compensation committee is responsible for reviewing, evaluating and approving the compensation arrangements, plans, policies, and practices for our NEOs and overseeing and administering our cash-based and equity-based compensation plans.

Near the beginning of each fiscal year, our compensation committee, after consulting with our management team and its compensation consultant, considers analyses of compensation data from our compensation peer group as one of several factors that inform its judgment of appropriate parameters for target compensation levels. Our compensation committee generally seeks to provide target total direct compensation that is competitive and, dependent on our performance and other factors including those set forth below, may pay above, at, or below median levels of our compensation peer group. Our compensation committee does not apply a formula or assign relative weights to specific compensation elements. Our compensation committee believes that over-reliance on benchmarking can result in compensation that is unrelated to the value delivered by our executive officers because compensation benchmarking does not take into account the specific performance of our executive officers, our relative size, growth, and performance, or any of our unique circumstances or strategic considerations.

In addition to the foregoing, our compensation committee makes compensation decisions after consideration of several factors, including:

At the beginning of each fiscal year, after taking into consideration the factors noted above, our compensation committee makes decisions with respect to any base salary adjustment and establishes the corporate performance objectives and target annual cash incentive compensation opportunities and equity awards for our executive officers, including our NEOs, for the upcoming fiscal year. With respect to our annual cash incentive compensation plan, our compensation committee determines the applicable goalstarget levels for each corporate performance objective used for each applicable quarterly performance measurement period.

Our compensation committee reviews our executive compensation program from time to time, including any incentive compensation plans, to determine whether they are appropriate, properly coordinated, and achieve their intended purposes, and to make any modifications to existing plans and arrangements or to adopt new plans or arrangements.

Role of Management

In carrying out its responsibilities, our compensation committee works with members of our management team, including our CEO and our Senior Vice President of Human Resources.Chief People Officer. Typically, our management team (together with our compensation committee’s compensation consultant) assists our compensation committee in the execution of its responsibilities by providing information on corporate and individual performance, market data with respect to compensation, and management’s perspective and recommendations on compensation matters.

Typically,In fiscal 2019, except with respect to his own compensation, our CEO will makemade recommendations to our compensation committee regarding compensation matters, including the compensation of our executive officers. OurIn addition, our CEO also participatesparticipated in meetings of our compensation committee, except with respect to discussions involving his own compensation, in which case he leavesis not present for that portion of the meeting.

While our compensation committee solicits the recommendations and proposals of our CEO with respect to compensation-related matters, these recommendations and proposals are only one factor in our compensation committee’s decision-making process.

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Role of Compensation Consultant

Our compensation committee is authorizedhas the authority to retain the services of one or more executiveexternal advisors, including compensation consultants, legal counsel and other advisors, from time to time, as it sees fit, in connection with carrying out its duties.

In fiscal 2016,2019, our compensation committee continued to engage Compensia, Inc. (“Compensia”), a national compensation consulting firm, to assist us in executing our executive compensation strategy and guiding principles, assessing the current target total direct compensation opportunities of our executive officers, including comparing them against competitive market practices, developing a compensation peer group and advising on potential executive compensation decisions for fiscal 2016.2019.

Compensia does not provide any services to us other than the services provided to our compensation committee. Our compensation committee has assessed the independence of Compensia taking into account,

among other things, the factors set forth in Exchange ActRule 10C-1 and the listing standards of the NYSE, and has concluded that no conflict of interest exists with respect to the work that Compensia performs for our compensation committee.

Use of Competitive Data

To assess the competitiveness of our executive compensation program and to assist in setting compensation levels, we refer to industry surveys, including the Radford High-Technology Executive Compensation Survey. In addition, during fiscal 2016,2019, Compensia conducted an analysis of market data on the compensation peer group as approved by our compensation committee.

Competitive Positioning

In fiscal 2016,2019, our compensation committee continued to compare and analyze our executive compensation with thatprogram 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 Compensia and input from management, our compensation committee approved aan updated, improved peer group of publicly-traded technology companies, narrowing the annual revenue and market capitalization criteria, further discussed below. In determining which companies should be in the peer group, our compensation committee considered companies that met some or all of the following criteria: (i) operated in the software, hardware and/or networking industries (focused on software security, to the extent available),a high-technology industry; (ii) had annual revenue between approximately between $300 million$1.0 billion and $1.3$3.0 billion; (iii) had revenue growth greater than 20%; (iv) had a market capitalization between approximately $2.5$7.0 billion and $30.7$25.0 billion; and (v) had a market capitalization as a multiple of annual revenue that was greater than three.at least six times annual revenue. As a result of the application of these criteria, we removed Concur Technologies, which was acquired,added Symantec Corporation and Riverbed Technologies, which was taken private, from our fiscal 2015 compensation peer group. In addition, we added Arista Networks and Tableau Software,Twitter, Inc., which satisfied the above described criteria.criteria, to the peer group. The remainder of the peer group was unchanged from fiscal 2018.

The following publicly-traded companies made up our compensation peer group for the compensatory decisions made during fiscal 2016:2019:

Compensia providedsupplements the peer data with compensation data from surveys of similarly sized companies and uses this combination of market data to provide an analysis of datacompensation for executiveexecutives holding positions comparable to the positions of our executives from the companies in our compensation peer group at the 75th, 60th, 50th and 25th percentiles. Our overall objective was for total cash compensation (i.e., base salary and incentive compensation) for our

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executives, including our NEOs, to be at or around the 60th to the 75th percentile for comparable executives at our compensation peer group companies.executive officers. Our compensation committee was not strictly bound by this target and had discretion to vary fromuses the 60th tomarket data as one reference point in determining the 75th percentile wherecompensation of our executive officers. While our compensation committee deemed it appropriatefocuses on compensation above the 50^th percentile, our compensation committee considers other factors in setting actual compensation. Such factors include our growth and scale; our recent performance against financial targets; the overall competitive market for business reasons.

Based on Compensia’s review, in most cases, prior to pay adjustments inour executives; the fiscal year our NEOs were at or aroundvalue of each executive’s position; the 60th percentileskills, tenure, and experience of our compensation peer groupexecutives; the alignment between the market based positions and the actual responsibilities of our executives; each executive’s performance; our executives’ expected future contributions; the incentives provided to our executives to stay with us and drive our continued growth; our CEO’s recommendations (except with respect to total cashhis own compensation), internal parity considerations; the value of each executive’s unvested equity holdings; the dilutive effect of ourlong-term incentive compensation during fiscal 2015. The cashprogram; the overall impact that these equity awards would have on stockholder value; the results of each annual stockholder advisory vote on the compensation adjustments for fiscal 2016, as described in more detail below, were generally intended so that each NEO would be at or around the 60th to the 75th percentile in terms of cash compensation.

Our compensation committee did not formally set a target for equity compensation within our compensation peer group, as our compensation committee’s philosophy with respect to equity compensation was to ensure that our executives had sufficient unvested long-term equity incentives to incentivize them to continue to remain employed with us and create value for our stockholders. As is noted below, our NEOs other than our CEO were becoming fully vested in their pre-IPO equity awards. Therefore, our compensation committee determined that significant grants to certain of our NEOs with vesting heavily weighted towards the latter portion of the service period were important for retention purposes. Our compensation committee believes that targetingexecutives; and stockholder feedback on our overall executive compensation in this manner allows us to stay competitive with our rivals in attracting and retaining executive talent.program.

Fiscal 20162019 Executive Compensation Program Components

The following describes each component of our executive compensation program, the rationale for each, and how the compensation amounts and awards for our NEOs were determined for fiscal 2016.2019.

Base Salary.Salary

Base salary is the primary fixed component of our executive compensation program. We use base salary to compensate our NEOsexecutive officers for services rendered during the fiscal year and to ensure that we remain competitive in attracting and retaining executive talent. Historically, to obtainGenerally, we establish the skills and experience that we believe are necessary to lead our growth, some of our NEOs have been hired from larger organizations. The initial base salaries of these lateral hires were generally establishedour executive officers througharm’s-length negotiations negotiation at the time each NEO was hired,we hire the individual executive officer, taking into account his or her position, qualifications, experience, prior salary level, and the base salaries of our other NEOs.executive officers.

OurThereafter, our compensation committee reviews the base salaries of each NEO annually and makes adjustments as it determines to be reasonable and necessary to reflect the scope of a NEO’s performance, contributions, responsibilities, experience, current salary level, position (in the case of a promotion), and market conditions.positioning, as appropriate.

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In November 2015,October 2018, in connection with its review of our executive compensation program, our compensation committee approved adjustmentsthe base salaries for our NEOs, including an adjustment to the base salary of our NEOsMs. Bonanno to be effective November 1, 2015, as2018. The increase to Ms. Bonanno’s base salary reflected the significance of her responsibilities expected in fiscal 2019 and beyond, her strong performance that warranted a more competitive base salary relative to our compensation peer group, and an adjustment to reflect internal compensation parity considerations when comparing her fiscal 2018 base salary to the other NEOs.

The approved base salary for each NEO for fiscal 2019, except Mr. Singh, is set forth in the table below. Based on Compensia’s review, the then-current base salary level for each NEO (other than Mr. Anderson) was generally at or below the 60th percentile for the comparable executive in our compensation peer group. In order to move target total cash compensation towards the 60th to the 75th percentile for target total cash compensation opportunity within our compensation peer group, our compensation committee approved base salary increases for each NEO as described in the table below.

Fiscal 20162019 Incentive Compensation Plan. In November 2015,October 2018, our compensation committee adopted and approved a sub-plan under our omnibus EmployeeFiscal 2019 Incentive Compensation Plan and approved the target levels for fiscal 2016 (the “Fiscal 2016 Incentive Compensation Plan”). Thethe Fiscal 20162019 Incentive Compensation Plan providesfinancial objectives for the first quarter of fiscal 2019. In November 2018, our compensation committee approved the target levels for the Fiscal 2019 Incentive Compensation Plan financial objectives for the second through fourth quarters of fiscal 2019. The Fiscal 2019 Incentive Compensation Plan provided for potential performance-based incentive payouts to all employees not paid commissions, including our NEOs. TheFurther, the Fiscal 20162019 Incentive Compensation Plan provided opportunities for annual cash incentive compensation payouts based on our actual achievement ofpre-established corporate financial objectives as set forth in our annual operating plan. The target levels for the financial objectives in our annual operating plan were set at levels determined to be

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challenging and requiring substantial skill and effort on the part of senior management. The Fiscal 20162019 Incentive Compensation Plan included quarterly performance periods with semi-annual payouts, including a potential accelerator and discretionary over-performance“over-performance” pool payable at the end of the fiscal year.

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. In November 2015,October 2018, in connection with its review of our fiscal 20162019 executive compensation program, our compensation committee approved adjustmentsdecided to increase the target annual cash incentive compensation opportunities of our NEOs to be effective November 1, 2015, as set forth in the table below. For our NEOs other than Mr. Anderson, the target incentive compensation opportunity as a percentage of base salary did not change, but the target incentive compensation opportunity increased becausefor each of the base salary increase. Prior to the adjustment, the total cash compensation opportunity (i.e., base salary plusMs. Bonanno and Messrs. Klarich and Zuk. These target annual incentive compensation opportunity) for each NEO were generally at or below the 50th percentile for our compensation peer group with respect to total cash compensation. The cash compensation adjustments were generally intended so that the total target cash compensation opportunity for each NEO would be at or aroundin line with the 60th to the 75th percentile ofcompetitive market data (as reflected by our compensation peer group in terms of hisgroup). The Compensation Committee decided to increase (i) Mr. Klarich’s target totalannual cash compensation opportunity.opportunity based on his individual performance and his expanded responsibilities, (ii) Ms. Bonanno’s target annual cash compensation opportunity based on her individual performance and internal compensation parity considerations, and (iii) Mr. Zuk’s target annual cash compensation opportunity based on internal compensation parity considerations. For clarity, the adjustments approved in November 2015October 2018 were effective as of the second quarter of fiscal 2016 and the2019. Mr. Arora’s target annual cash incentive compensation opportunities for the first quarteropportunity remained equal to 100% of fiscal 2016 were the same as those at the end of fiscal 2015.his annual base salary. The target annual cash incentive compensation opportunities established under the Fiscal 20162019 Incentive Compensation Plan for our NEOs, except Mr. Singh, were:

Our compensation committee chose revenue as a performance measure because we are currently a high growth companyfocused on growing our business and revenue is a key metric during this stage of our growth and enhances long-term value creation for our stockholders. Our compensation committee also chose earnings per share as a performance measure because it is an important profitability measure tied to management performance and how much profit we are generating for our stockholders.

In order to receive a payout under the Fiscal 2019 Incentive Compensation Plan both corporate performance measures needed to meet minimumpre-established achievement levels for the relevant performance period. For purposes of the Fiscal 20162019 Incentive Compensation Plan, (x) “revenue” was defined as GAAP revenue as reflected in our quarterly and annual financial statements, consistent with our annual operating plan. Inplan; and (y) “earnings per share” was defined asnon-GAAP net income per share as reflected in our quarterly earnings press releases furnished to the first and secondSEC, adjusted to exclude the effects of incentives paid out under our Fiscal 2019 Incentive Compensation Plan.

Performance Requirements.Under the Fiscal 2019 Incentive Compensation Plan, funding would be made with respect to any particular quarter of fiscal 2016, we achieved revenue of $297.2 million and $334.7 million, respectively, which was approximately 100.8% and 99.93%only if both 97% of the applicable target for each quarter in our Fiscal 2016 Incentive Compensation Plan. Our quarterly targets under the Fiscal 2016 Incentive Compensation Plan scaled from the annual target in a non-linear manner with thefiscal quarter’s revenue target for each quarter increasing as the fiscal year progressed.

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Pay for Performance. Our NEOs were eligible for semi-annual incentive compensation payouts only to the extent, and in the amount, that we met or exceeded 85%92.5% of the applicable fiscal quarter’s revenueearnings per share target for fiscal 2016,are achieved, each as set forth in the Fiscal 20162019 Incentive Compensation Plan. If 85% achievement occurred, then each NEOAchievement of 100% of both performance targets (on an annual aggregated basis) would receive 60%have paid out at 100% of his quarterlythe target annual cash incentive compensation opportunity, paid atand achievement of 104% of the next semi-annual date. Achievement scales were established in a non-linear manner as follows: 90% achievementrevenue target and 110% of the earnings per share target would have paid out at 75%; 95%130% of the target annual cash incentive compensation opportunity (with any such payment in excess of 100% of the target annual cash incentive compensation opportunity referred to as an accelerator).

Achievement above the minimum achievement paid out at 90%; and 100% achievement or more paid out at 100%.required for each fiscal quarter would result in apro-ratednon-linear payout based on the payout percentages specified in the Fiscal 2019 Incentive Compensation Plan. With respect to achievement in excess of 100%, such performance maycould be rewarded at the end of the fiscal year using the “accelerator” described below. Even if we met or exceeded the applicable performance target level, our compensation committee reserved the right to decrease the calculated payout in its discretion.

Accelerator. In addition to the semi-annual payouts under the Fiscal 2016 Incentive Compensation Plan, to the extenta discretionary “over-performance” pool that we exceeded our quarterly and annual performance targets for fiscal 2016, our NEOs were eligible to receive additional annual incentive payouts, at the discretion of our compensation committee and based on each NEO’s individual performance during the fiscal year. This plan feature enabled our compensation committee to consider overachievement of quarterly performance targets in the context of the full fiscal year. The funding of the accelerator is formulaic to the achievement of the applicable revenue targets for each quarter. Any aggregate accelerator payout to a NEO was cappedwould be funded at 200% of theeach NEO’s applicable target annual targetcash incentive compensation opportunity. The cap on total payouts was setopportunity, less any accelerator.

Our compensation committee could use its discretion to manage potentialreduce the actual cash incentive compensation costs and maintain appropriate incentives for our NEOs. We did not exceed our performance targets for fiscal 2016. Accordingly, our compensation committee did not approve accelerator payouts under our Fiscal 2016 Incentive Compensation Plan as shown in the “Fiscal 2016 Summary Compensation Table.”

Discretionary Overperformance Incentive Pool. In addition to our baseline revenue-related incentive arrangement under the Fiscal 2016 Incentive Compensation Plan, our compensation committee reserved the discretion to pay additional payments under the Fiscal 2016 Incentive Compensation Plan.payout. To inform its decision whether to exercise discretion under the Fiscal 20162019 Incentive Compensation Plan, our compensation committee consideredcould consider metrics in our annual operating plan other than revenue or earnings per share to balance the focus of our short-term incentive compensation program. Discretionary paymentsprogram or any other factors or considerations that it deemed relevant, such asone-time accounting adjustments, any item deemed outside of normal operations, and any other extraordinary circumstances.

The total potential payouts under the Fiscal 20162019 Incentive Compensation Plan would only be eligible to be paid if we exceeded each quarterly revenue target. Any(which includes any accelerator and/or discretionary payment would be made after the endpayments) were capped at 300% of the target amounts.

For fiscal year so that2019, our revenue increased by $626 million to $2.9 billion compared to fiscal 2018 and ournon-GAAP earnings per share increased by $1.25 per share compared to fiscal 2018. In light of our strong revenue and earnings per share performance in the first half of fiscal 2019, we achieved, on an aggregated basis, approximately 103% of our revenue targets and approximately 117% of our earnings per share targets. Our compensation committee accordingly decided to pay our NEOs 100% of target on an aggregated basis for the first and second quarters of fiscal 2019 under our Fiscal 2019 Incentive Compensation Plan. During the second half of fiscal 2019, we did not achieve 100% of our revenue or earnings per share targets under the Fiscal 2019 Incentive Compensation Plan. Accordingly, our compensation committee could considerexercised its negative discretion and determined that our annual performance when exercising its discretion with respect to whether itNEOs would makenot receive any payments. Because we did not exceed each quarterly revenue target in fiscal 2016, our compensation committee did not approve annual discretionarycash incentive award payouts under our Fiscal 20162019 Incentive Compensation Plan as shownfor the third and fourth quarters of fiscal 2019.

The annual cash incentive award payouts made to our NEOs for fiscal 2019 under the Fiscal 2019 Incentive Compensation Plan are set forth in the “Fiscal 20162019 Summary Compensation Table.”Table” below.

Equity Compensation

For fiscal 2016, we achieved approximately 100.8%2019, the long-term incentive compensation opportunities of our first quarter revenue target and 99.93%NEOs consisted of PSOs tied to stock price achievements granted to all of our second quarter revenue targetNEOs (except for Mr. Arora) and time-based RSUs granted to Ms. Bonanno and Mr. Singh, as discussed in further detail below. In determining the aggregate value of these equity awards, our compensation committee considered the growth and scale of our business; recent performance against financial targets; the overall competitive market for our NEOs; the value of the NEO’s position; the individual achievement of the NEO; the NEO’s expected future contributions; the skills, tenure, and experience of the NEO; the alignment between the market based position and the actual responsibilities of the NEO; the incentives provided by such equity awards to the NEO to stay with us and drive our continued growth; our CEO’s recommendations (except with respect to his own equity award); the competitive market data prepared by its compensation consultant; the value of the NEO’s vested and unvested equity holdings; internal pay parity considerations; the dilutive effect of our long-term incentive compensation program; and the overall impact that these equity awards would have on stockholder value. Our compensation committee determined that the sizes of these awards were appropriate due to (x) the significance of our NEOs’ expected responsibilities in fiscal 2019 and beyond, (y) in the case of Ms. Bonanno and Messrs. Klarich and Zuk, their strong performance that warranted higher compensation relative to our compensation peer group, and (z) the need to provide them with an appropriate opportunity for reward based on these quarterly results, madethe creation of long-term stockholder value.

In addition, we granted July 2019 RSUs to our NEOs and advanced the timing of the grant of Fiscal 2020 RSUs and Fiscal 2020 PSUs to our NEOs (except Ms. Bonanno), as discussed in further detail below.

Fiscal 2019 PSOs

Each of the PSOs has a first half semi-annual payouts at approximately 100%per share exercise price equal to the closing market price of each NEO’s target semi-annual incentive compensation opportunitya share of our common stock on its grant date (which was $184.24 for Mr. Singh and $193.51 for Ms. Bonanno, and Messrs. Klarich and Zuk). Shares subject to the PSOs become eligible to vest (the “Eligible Option Shares”) upon meeting the Stock Price Achievements as set forth in the table below. We did notThe performance-based vesting requirement will make any payoutthe PSOs eligible to vest in four tranches once the stock price meets the achievement hurdle for 30 consecutive trading days during the second halfperiod set forth below. To the extent that Stock Price Achievements for a PSO have been met,one-fourth (1/4th) of fiscal 2016the Eligible Option Shares will vest annually on each anniversary of the PSO’s grant date, subject to the NEO’s continued service on each vesting date. Upon a “Change in Control” (as described below in the section entitled “—Executive Employment Agreements” and “—Potential Payments Upon Termination or any accelerator or discretionary payment.

The total payoutsChange in Control”) the price payable to our NEOs understockholders at the Fiscal 2016 Incentive Compensation Plan were:closing of the transaction will be the final Stock Price Achievement.

Equity CompensationIn fiscal 2019, none of the Stock Price Achievements were attained and accordingly, none of our NEOs’ PSOs were eligible for vesting based on the time-based vesting schedule.

For fiscal 2016,In November 2018, our compensation committee determinedapproved the amendment of each of the PSOs to grant equity awardsallow the applicable NEO to exercise the PSO before it vests, with the shares acquired through such an exercise subject to our NEOs solely inright to repurchase any such shares that remain unvested upon failure to meet the formapplicable Stock Price Achievement within the relevant performance period or failure to satisfy the time- based vesting requirement at the lower of restricted stock awardsthe exercise price paid for the shares or the then-current fair market value of the shares. During fiscal 2019, none of our common stock. OurNEOs early exercised their PSOs.

The chart below sets forth the number of PSOs granted in October and November 2018 by our compensation committee:

Time-based RSUs Granted to Ms. Bonanno in October 2018 and Mr. Singh in November 2018

In October 2018, the compensation committee made this decision inapproved a time-based RSU for Ms. Bonanno. Additionally, as part based on the fact that restricted stock awards would provide value even if the market price of our common stock fluctuated in the future. In addition,Mr. Singh’s new hire negotiation, our compensation committee took into consideration the potential dilutive effect of theseapproved a time-based RSU for Mr. Singh. The RSU awards noting that restricted stock awards require delivering fewer shares to provide equivalent value as a stock option.

Restricted stock awards were new to us as a public company. Prior to fiscal 2016, equity grants to NEOs had been in the form of restricted stock units. While restricted stock units and restricted stock are generally economically equivalent, restricted stock awards are eligible for a greater tax deduction to us under Section 162(m) of the Code. As a result of this better tax qualification without the loss of economic benefit to the NEO or other adverse impact on us, we shifted from restricted stock units to restricted stock in fiscal 2016.

In November 2015approved by our compensation committee reviewed the unvested equity positions of our NEOs, and the value of all outstanding and unvested equity awards assuming they were exercised. Our compensation committee determined that each of the NEOs to varying degrees had strong unvested equity positions as of the end of calendar 2015, however, the unvested equity positions of our NEOs, with the exception of Mr. McLaughlin, were due to sharply decline in 2016 because of full vesting of pre-IPO equity awards. Our compensation committee gave additional weight to the projected declineare set forth in the outstanding and unvested equity holdings at the end of 2016 when determining the size of the equity awards for our NEOs for fiscal 2016. Our compensation committee also considered equity award grant data provided by Compensia for comparable executives at the companies in our fiscal 2016 compensation peer group.

table below. Our compensation committee determined that these equity awardsRSUs should have a time-based vesting schedule of three years, as opposed to our standard four-year vesting for new-hire awards. Our compensation committee determined that, for purposes of these awards, a three-year vesting schedule appropriately reflected the economic value that it sought to deliver to each NEOvest over that time period and achieved our retention objectives for each NEO due to the anticipated decline in unvested equity positions as of the end of calendar 2015. Additionally, our compensation committee determined that the vesting schedule for Messrs. Anderson’s and Zuk’s awards, and to a lesser extent Mr. Bonvanie’s award, would be heavily weighted towards the second and third years of the service period to promote greater retention in the latter twofour years. Specifically:

In determiningThe chart below sets forth the sizenumber of the fiscal 2016 equity award grants to our NEOs,RSUs granted in October and November 2018 by our compensation committee considered the following factors based on our fiscal 2015 performance:

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Additionally, with respect to Mr. McLaughlin, our compensation committee considered the equity award that he received in fiscal 2015, which (i) reflected the substantial stockholder value that Mr. McLaughlin helped create, (ii) was designed to set his unvested equity holdings to be commensurate with those of other chief executive officers in our compensation peer group that had recent initial public offerings, and (iii) was intended to retain Mr. McLaughlin given that his proven leadership makes him a potential candidate for any important technology CEO position that becomes available. Given the value of Mr. McLaughlin’s fiscal 2015 equity grant and his unvested equity position at the end of 2015, the compensation committee approved an equity grant for fiscal 2016 valued at approximately $5.8 million on the date of grant that approximated the 50^th percentile of the equity awards granted to the chief executive officers of the companies in our fiscal 2016 compensation peer group.

Based on the above considerations, in November 2015, our compensation committee approved grants of restricted stock awards to our NEOs, as follows:committee:

July 2019 RSUs

In July 2019, in recognition of our strong billings performance (which was not a metric measured in the Fiscal 2019 Incentive Compensation Plan) and the decision to not make any payment to our NEOs under the Fiscal 2019 Incentive Compensation Plan for the second half of fiscal 2019, our compensation committee approved the grant of the July 2019 RSUs to each of our NEOs. Each NEO’s July 2019 RSU award is a time-based RSU award that represents approximately 75% of the NEO’s target incentive compensation opportunities under the Fiscal 2019 Incentive Compensation Plan for the second half of fiscal 2019. The July 2019 RSUs vest quarterly during the year following the grant date in four equal increments, subject to the NEO’s continued service on each such vesting date. Accordingly, the July 2019 RSUs provide a longer vesting horizon than payments under the Fiscal 2019 Incentive Compensation Plan for the second half of fiscal 2019 would have provided because the July 2019 RSUs are subject to additional vesting beyond the time when such Fiscal 2019 Incentive Compensation Plan payments would have been made.

The chart below sets forth the number of July 2019 RSUs granted in July 2019 by our compensation committee:

Fiscal 2020 RSUs and Fiscal 2020 PSUs

In July 2019, our compensation committee recognized that the focus of our executives on executing ourlong-term business strategy and the transition of the business during this time period might take longer than anticipated, and could result in a longer time period for the PSOs to realize the intended value. Accordingly, the compensation committee determined that the PSOs held by our executives would likely not compensate our executives for the value of their leadership and contributions during the transition, which would result in the projected total equity compensation payable to our NEOs (other than Ms. Bonanno) during those years falling below competitive market levels. While the PSOs continue to have the potential to deliver meaningfullong-term value if we successfully execute our long-term strategy, the failure of the PSOs to deliver short-term value creates a risk of our NEOs leaving because our NEOs are aware that they will need to devote significant effort and make substantial contributions in order to successfully execute our long-term strategy but, with the exception of Ms. Bonanno, may not receive competitive equity compensation in the near future for those efforts. Accordingly, to help retain our NEOs and strengthen the link between their interests and those of our stockholders, our compensation committee advanced the timing of the grant of our fiscal 2020 equity awards to our NEOs (other than Ms. Bonanno) to the end of fiscal 2019 and approved the grant of the Fiscal 2020 RSUs and Fiscal 2020 PSUs to these NEOs. The target number of shares, covered by each NEO’s Fiscal 2020 RSUs and Fiscal 2020 PSUs, was determined based on the total intended value for a three-year period (as described below) and the closing price of our common stock on the NYSE on July 31, 2019, with the target number of shares allocated 50% to the Fiscal 2020 RSUs and 50% to the Fiscal 2020 PSUs.

The Fiscal 2020 RSUs are time-based RSUs that vest quarterly over a three-year period (beginning in June 2019 for Mr. Arora, November 2019 for Mr. Singh, and October 2019 for Messrs. Klarich and Zuk) in 12 equal increments, subject to the NEO’s continued service.

The Fiscal 2020 PSUs are divided into three equal tranches that cover fiscal 2020, fiscal 2021, and fiscal 2022, respectively.One-third of the target number of shares set forth in the table below represents the target number of shares eligible to be earned and subsequently vest upon achievement of target performance on the annual revenue growth metric for the applicable fiscal year. For purposes of the Fiscal 2020 PSUs, “annual revenue growth” is defined as the percentage increase in our total GAAP revenue in fiscal 2020, fiscal 2021, or fiscal 2022, respectively, over our total GAAP revenue in the immediately preceding fiscal year. The compensation committee chose an annual revenue target as the performance metric for the 2020 PSUs because annual revenue growth is a key indicator of the success of our long-term growth strategy.

For each tranche of Fiscal 2020 PSUs, the number of earned Fiscal 2020 PSU shares that would be eligible fortime-based vesting will be determined as follows:

If we achieved less than 80% of our annual revenue growth target, then all of the shares subject to the tranche of Fiscal 2020 PSUs would be forfeited. If performance was between the applicable tiers described above, then the tranche of Fiscal 2020 PSUs that become eligible for vesting will be scaled linearly.

If we experience a change in control during the performance period, the performance period will be shortened to the end of the most recent fiscal quarter before the date of the change in control, and performance achievement will be measured on apro-rata basis as of the change in control.

Once the number of Fiscal 2020 PSUs that become eligible to vest based on satisfaction of the annual revenue growth performance measure described above is determined for a particular fiscal year, the earned Fiscal 2020 PSU shares for that fiscal year will be eligible to vest according to the following schedule, subject to the applicable NEO’s continued service:

For each of these NEOs, the intended average annual value of the Fiscal 2020 RSUs and Fiscal 2020 PSUs from 2020 through 2022 was intended to be approximately the amount necessary to increase the NEO’s projected equity compensation for each year during that period to the amount of annual equity compensation paid to similar officers of companies in our compensation peer group. The target number of shares covered by each NEO’s Fiscal 2020 RSUs and Fiscal 2020 PSUs was determined based on the total intended value for that three-year period and the closing price of our common stock on the NYSE on July 31, 2019, with such target number of shares allocated 50% to the Fiscal 2020 RSUs and 50% to the Fiscal 2020 PSUs.

Ms. Bonanno did not receive any Fiscal 2020 PSUs in July 2019 because (a) she received time-based RSUs in October while Messrs. Klarich and Zuk only received PSOs and (b) her projected average annual equity compensation for that period was not below the annual equity compensation paid to similar officers of companies in our compensation peer group.

The table below sets forth the number of Fiscal 2020 RSUs and the target number of Fiscal 2020 PSUs granted in July 2019 by our compensation committee:

affordable and competitive in relation to the market, as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.

Perquisites and Other Personal BenefitsBenefits..

In fiscal 2016,2019, we provided limited perquisites to Messrs. AndersonArora and McLaughlin. We provided eachZuk with $10,206, and $13,038, respectively, for spousal travel and expenses to an annual vacation award for top sales performers, which we grossed-up for taxes. In addition, in connection with Mr. Anderson’s relocation and travel from the Washington area to the San Francisco Bay Area we provide Mr. Anderson with a $30,000 automobile allowance.

performers. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual NEO in the performance of his or her duties, to make our NEOs more efficient and effective, and for recruitment, motivation, or retention purposes. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by our compensation committee.

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Fiscal 2017 Executive Compensation Program Changes and Decisions

Our executive compensation program continues to evolve as the company matures, gaining market share and growing, at scale, faster than the competition and the rate of the market. In making decisions about the executive compensation program, our compensation committee considers a number of factors, including the growth of the company, recent performance against financial targets, a measured analysis of our compensation peer group practices, and advice from the committee’s external compensation consultant.

The compensation committee also considers the results of each annual stockholder advisory vote on the compensation of our Named Executive Officers and stockholder feedback on our executive compensation program. As part of our regular and transparent communications with our stockholders we engage with our stockholders on a variety of topics through quarterly earnings calls, financial conferences, non-deal road shows and other communication channels. These discussions are generally attended by a combination of our Chief Executive Officer, Chief Financial Officer, Lead Independent Director (who serves on our compensation committee), General Counsel and/ or Vice President of Investor Relations. In Fiscal 2016, our management team met with representatives at many of our top institutional and other stockholders representing an aggregate of approximately 35% of our outstanding shares. In addition to the feedback noted in the chart below under the heading “Investor Feedback,” these stockholders also expressed appreciation of our outreach efforts. The feedback received was presented to our nominating and corporate governance committee, compensation committee and board of directors. In the first quarter of fiscal 2017, the compensation committee reviewed and approved the key elements of our fiscal 2017 executive compensation program. The changes made for fiscal 2017 are designed to enhance the link between executive pay and company performance, increase market alignment and mitigate risk. With respect to performance-based equity awards, our compensation committee has been discussing the use of a performance-based component in our equity compensation program for several years with the intent to implement it when our compensation committee judged it to be appropriate. The feedback from stockholders, along with the evolution of our fiscal planning process as we matured as a public company, was one factor towards implementing this approach in fiscal 2017. We believe that we have updated our compensation practices and governance in a manner appropriate for a company of our size, in our industry and our stage of growth. Further, our fiscal 2017 executive compensation program was measured against a new set of peer companies that we annually select as we grow. We intend to continue reviewing our executive compensation and governance practices as our company matures. The key changes made by the compensation committee to our executive compensation program are as follows: