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  ☒                             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)

Payment of Filing Fee (Check the appropriate box):

PALO ALTO NETWORKS, INC.

3000 TANNERY WAY

SANTA CLARA, CALIFORNIA 95054

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 10:00 a.m. Pacific Standard Time on Monday,Wednesday, December 9, 20192020

Dear Stockholders of Palo Alto Networks, Inc.:

The 20192020 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 virtually onMonday,Wednesday, December 9, 20192020 at 10:00 a.m. Pacific Standard Time,, at our headquarters, located at 3000 Tannery Way, Santa Clara, California 95054, for the following purposes, as more fully described in the accompanying proxy statement:

This year’s Annual Meeting of Stockholders will be a virtual meeting conducted via a live webcast. You will be able to listen to the Annual Meeting of Stockholders, submit your questions, and vote during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/PANW2020 and entering the 16-digit control number included in our Notice of Internet Availability of Proxy Materials, on your proxy card, or in the instructions that accompanied your proxy materials.

Our board of directors has fixed the close of business on October 15, 201913, 2020 as the record date for the Annual Meeting. Only stockholders of record on October 15, 201913, 2020 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 22, 2019,20, 2020, 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.

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Annual Meeting, the meeting chair or secretary of the Annual Meeting will convene the meeting at 4:00 p.m. Pacific Time on the date specified above and at the Company’s address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on the Investors page of the Company’s website at https://investors.paloaltonetworks.com.

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,

Nikesh Arora

Chairman and Chief Executive Officer

Santa Clara, California

October 22, 201920, 2020

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON DECEMBER 9, 2019:2020:

THE NOTICE OF 20192020 ANNUAL STOCKHOLDERS’ MEETING AND PROXY STATEMENT AND THE 20192020 ANNUAL REPORT ONFORM 10-K, ARE AVAILABLE AT WWW.PROXYVOTE.COM.

TABLE OF CONTENTS

PALO ALTO NETWORKS, INC.

PROXY STATEMENT

FOR 20192020 ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 10:00 a.m. Pacific Standard Time on Monday,Wednesday, December 9, 20192020

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 20192020 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 virtually on Monday,Wednesday, December 9, 20192020 at 10:00 a.m. Pacific Standard Time,Time. You can attend the Annual Meeting by accessing it online at our headquarters, located at 3000 Tannery Way, Santa Clara, California 95054. Awww.virtualshareholdermeeting.com/PANW2020 where you will be able to listen to the meeting live, submit questions, and vote online. Beginning on or about October 20, 2020, a Notice of Internet Availability of Proxy Materials (the “Notice”(“Notice”) containing instructions on how to access thisour proxy statement for our Annual Meeting and our annual reportfiscal year 2020 Annual Report to Stockholders on Form 10-K (together, the “proxy materials”) is first being mailed on or about October 22, 2019 to all stockholders entitled to vote at the Annual Meeting.our stockholders. 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.

Why are you holding a virtual meeting and how can stockholders attend?

We have adopted a virtual meeting format for our Annual Meeting this year to protect our stockholders and employees in light of the ongoing coronavirus (COVID-19) pandemic. In addition, a virtual meeting format will provide a consistent experience to all stockholders regardless of geographic location and enhance stockholder access and engagement. To participate in our virtual Annual Meeting, including to vote, ask questions and to view the list of registered stockholders as of the record date during the meeting, visit www.virtualshareholdermeeting.com/PANW2020 with your 16-digit control number included in the Notice, on your proxy card, or in the instructions that accompanied your proxy materials.

How can I ask questions during the Annual Meeting?

The virtual format allows stockholders to communicate with us during the Annual Meeting so they can ask questions of our board of directors or management. Stockholder questions may be submitted in the field provided in the web portal during the Annual Meeting for consideration. Detailed guidelines for submitting written questions during the Annual Meeting are available at http://www.virtualshareholdermeeting.com/PANW2020. You can also submit questions in advance of the Annual Meeting by visiting www.proxyvote.com. We will endeavor to answer as many stockholder-submitted questions as time permits that comply with the meeting rules of conduct. We reserve the right to edit profanity or other inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or Company business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition.

What can I do if I need technical assistance during the Annual Meeting?

If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting log-in page.

How do I vote?

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

Even if you plan to attend the virtual 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 virtual 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 nominee. As discussed above, if you are a street name stockholder, you may not vote your shares online at the virtual 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 or revoke your proxy.

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:

How many votes are needed for approval of each proposal?

Who is entitled to vote?

Holders of our common stock as of the close of business on October 15, 201913, 2020 (the “Record Date”), may vote at the Annual Meeting. As of the Record Date, 96,988,34494,965,216 shares of our common stock were outstanding and entitled to vote. In deciding all mattersFor each proposal 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

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 attendparticipate in and vote online at the Annual Meeting. However,Meeting; however, since a beneficial owner is not the stockholder of record, you may not vote your shares in personof our common stock virtually at the virtual Annual Meeting unless you follow your broker, bank, or other nominee’sbroker’s procedures for obtaining a legal proxy and present your legal proxy at the Annual Meeting.proxy. 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, 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.

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 approximately $10,000,$7,500, 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

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 20202021 annual meeting of stockholders, our Corporate Secretary must receive the written proposal at our principal executive offices not later than June 24, 2020.22, 2021. 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. Stockholder proposals should be addressed to:

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

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 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 at 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.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Our business affairs are managed under the direction of our board of directors, which is currently composed of thirteeneleven members. TenEight 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,13, 2020, Daniel J. Warmenhoven, one of our Class III directors, informed us that he is resigning from our board of directors effective as ofnot standing for re-election at the date of our Annual Meeting. We thank each of Messrs. Calderoni and RamaswamyMr. Warmenhoven for theirhis service to our company and board of directors.

The names and certain other information as of October 22, 201920, 2020 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.

Nominees for Director

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 2004, where he focuses on cloud, mobile, and enterprise companies. Mr. Goetz currently serves on the board of directors of several privately held companies. Mr. Goetz has previously served on the boards of directors of Barracuda Networks, Inc., a data security and storage company from 2009 to 2017, Nimble Storage, Inc., a data storage company, from 2007 to 2017, Jive Software, Inc., a provider of social business software, from 2007 until 2015, and Ruckus Wireless, Inc., a manufacturer of wireless(Wi-Fi) networking equipment, from 2012 until 2015. Mr. Goetz holds an M.S. in Electrical Engineering with a concentration in Computer Networking from Stanford University and a B.S. in Electrical Engineering with a concentration in Computer Engineering from the University of Cincinnati. 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. Chandna, Goetz, and McLaughlin. We expect that each of Messrs. Chandna, Goetz, and McLaughlin 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

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.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Continuing Directors

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.

John M. Donovan has served as a member of our board of directors since September 2012. Mr. Donovan, now retired, worked at AT&T Inc., a provider of telecommunication services, since April 2008, first as Chief Technology Officer and subsequently as Chief Executive Officer—AT&T Communications until his resignation, effective October 1, 2019. From November 2006 to April 2008, Mr. Donovan was Executive Vice President of Product, Sales, Marketing and Operations at Verisign. From November 2000 to November 2006, Mr. Donovan served as 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.

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 2004, where he focuses on cloud, mobile, and enterprise companies. Mr. Goetz currently serves on the board of directors of Intel Corporation and several privately held companies. Mr. Goetz has previously served on the boards of directors of Barracuda Networks, Inc., a data security and storage company from 2009 to 2017, Nimble Storage, Inc., a data storage company, from 2007 to 2017, Jive Software, Inc., a provider of social business software, from 2007 until 2015, and Ruckus Wireless, Inc., a manufacturer of wireless (Wi-Fi) networking equipment, from 2012 until 2015. Mr. Goetz holds an M.S. in Electrical Engineering with a concentration in Computer Networking from Stanford University and a B.S. in Electrical Engineering with a concentration in Computer Engineering from the University of Cincinnati. 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.

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

Mary Pat McCarthy has served as a member of our board of directors since October 2016. Ms. McCarthy, now retired, served as Vice Chair of KPMG LLP, the U.S. member firm of the global audit, tax and advisory services firm, until 2011 after attaining such position in 1998. She joined KPMG LLP in 1977 and became a partner in 1987. She held numerous senior leadership positions in the firm, including Executive Director of the KPMG Audit Committee Institute from 2008 to 2011, Leader of the KPMG Client Care Program from 2007 to 2008, U.S. Leader, Industries and Markets from 2005 to 2006, and Global Leader, Information, Communication and Entertainment Practice from 1998 to 2004. Ms. McCarthy also served on KPMG’s Management and Operations Committees. Ms. McCarthy earned a Bachelor of Science degree in Business Administration from Creighton University and completed the University of Pennsylvania Wharton School’s KPMG International Development Program. Ms. McCarthy serves as a director of Micron Technology, Inc., a producer of semiconductor devices and previously served on the board of directors of Mutual of Omaha, an insurance and banking company, from 2012 to 2018 and Andeavor Corporation (formerly Tesoro Corporation), a global energy corporation.corporation from 2012 to 2018. Ms. McCarthy was selected to serve on our board of directors due, in part, to her background as the former chairperson of the Audit Committee of each of Andeavor Corporation and Mutual of Omaha and her financial and accounting expertise from her prior extensive experience as the Vice Chair of KPMG LLP.

Lorraine TwohillMark 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 2019. Ms. Twohill2012 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 as Google LLC’s (formerly Google,on, and is the Chairman of, the board of directors of Qualcomm, Inc.) Chief Marketing Officer,, a position she has held since June 2009. From July 2003 until June 2009, Ms. Twohill served as Google’s Head of Marketing Europe, Middle Eastglobal semiconductor company that designs and Africa. Ms. Twohillmarkets wireless telecommunications products and services, and previously served on the board of directors of Williams-Sonoma, Inc., a consumer retail company that sells kitchenwares and home furnishings, from January 2012 until May 2017. Ms. Twohill holds joint honors degrees in International Marketing and Languages from Dublin City University. Ms. Twohill was selected to serve on our board of directors due to her extensive marketing knowledge, with over 25 years of experience, and her strong insight into brand management and 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,Opower, Inc., a provider of hybrid cloud data services and data management, and on their board of directors as Executive Chairmanbased software to the utility industry, from August 2009 through September 2014.2013 to 2016. Mr. Warmenhoven previously served on the board of directors of Aruba Networks, a vendor of data networking solutions. Mr. WarmenhovenMcLaughlin holds a B.S. degree in Electrical Engineering from Princeton University.the U.S. Military Academy at West Point and a J.D. from Seattle University School of Law. Mr. WarmenhovenMcLaughlin 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 experiencebackground in the technology industry and his public company management and board experience.industry.

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

of hybrid cloud data services and data management, and on their board of directors as Executive Chairman from August 2009 through September 2014. Mr. Warmenhoven is 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 boardsboard of Adobe Systems Incorporated, a global software company,Bechtel Group, Inc. and Anaplan,Cohesity, Inc., aweb-based enterprise platform for business planning and Mr. Warmenhoven previously served on the board of directors of Nimble Storage, Inc.,Aruba Networks, a vendor of data storage company.networking solutions from July 2006 to May 2015. Mr. CalderoniWarmenhoven holds a B.S. degree in Accounting and FinanceElectrical Engineering from Fordham University and an M.B.A. from PacePrinceton University. Mr. CalderoniWarmenhoven 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 backgroundindustry and his extensive cloudpublic company management and infrastructure expertise.board experience.

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.

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

beginning of our last fiscal year through October 15, 2019,2020, we have purchased an aggregate of approximately $0.1 million, $0.9$0.6 million and $28.2$119.1 million of AT&T, Anaplan and Google, 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 was an executive officer of AT&T until October 1, 2019, (2) Mr. Calderoni is an executive officer at Anaplan, (3) Ms. Twohill is an executive at Google, (4) Mr. Ramaswamy was previously an executive at Google until October 2018, and (5)(3) Mr. Eschenbach is a partner and Mr. Goetz is a member at Sequoia. In reviewing these relationships, our board of directors determined these current or former relationships in the case of Mr. Donovan, respectively, do not impede the ability of Messrs. Donovan, Calderoni, Ramaswamy, Eschenbach or Goetz or Ms. Twohill to act independently on our behalf and on behalf of our stockholders.

Additionally, none of Ms. Twohill or Messrs. Donovan, Calderoni, Ramaswamy, Eschenbach or Goetz take or took part in the discussiondiscussions of transactions with AT&T, Anaplan, Google, or Sequoia, as applicable, when such transactions arewere reviewed by our audit committee or board of directors. Additionally, AT&T expects its calendar year 2018 net capital expenditures to be in the $23 billion range. AT&T’s purchases of our products and services, both directly and through our channel partners, which totaled $88.1$55.9 million since the beginning of our last fiscal year through October 15, 2019,2020, are not material to either us or AT&T. All transactions with AT&T, Anaplan, Google and Sequoia 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”“Chair”) based on the board of directors’ view of what is in the best interest of Palo Alto Networks and its stockholders. The ChairmanChair and Chief Executive may, but need not be, the same person. Mr. McLaughlin served as our Chairman ofChair and Chief Executive Officer until June 2018 when he resigned as Chief Executive Officer

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 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, 2019,2020, the board of directors held elevenseven 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, except Ms. Twohill,Mr. Eschenbach, who attended one of two meetings67% of the board of directors since her appointment.meetings.

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. EightTen of our eleven directors at the time attended our 20182019 Annual Meeting of Stockholders, either telephonically or in person.

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/.investors.paloaltonetworks.com. During our fiscal year ended July 31, 2019,2020, our audit committee held eightseven meetings.

Compensation Committee

Our compensation committee consists of Ms. Twohill, Messrs. Chandna,Donovan and Eschenbach, Goetz and Warmenhoven,the Rt Hon Sir John Key, with Mr. Chandnathe Rt Hon Sir John Key serving as 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-“non- employee director,” as

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Ms. Twohill and Messrs. Chandna, Eschenbach, Goetz, RamaswamyDonovan, and Warmenhoven, with Mr. WarmenhovenDonovan serving as 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/.investors.paloaltonetworks.com. During our fiscal year ended July 31, 2019,2020, our nominating and corporate governance committee held sixfour 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

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,

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., 3000 Tannery Way, Santa Clara, California 95054. Our 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 our company

Succession Planning

Our 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 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, our 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 exemplifiesIn addition, in July 2020, Mr. Visoso became our Chief Financial Officer, upon the resignation of Ms. Bonanno. These transitions exemplify 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 our company in order to further align their interests with those of our stockholders and therefore adopted stock ownership guidelines 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 “Discussion of our Fiscal 20192020 Executive Compensation Program—Other Compensation Policies—Stock Ownership Policy” for additional details on our executive ownership guidelines.

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.

Corporate Governance, Stockholder Engagement and Environmental and Social Initiatives

We believe that good corporate governance promotes the long-term interests of our stockholders, strengthens our Board and leads to better business performance. For these reasons, we are committed to maintaining strong corporate governance practices.

Our governance practices include the following highlights:

Key information regarding our corporate governance initiatives can be found on our website at investors.paloaltonetworks.com, including our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and the charter for each committee of the Board of Directors.

Overview of Corporate Governance Initiatives

Over the past several years, in response to stockholder feedback, and as part of our ongoing evaluation of best practices, the Board has incorporated enhancements to our executive compensation program and corporate governance practices, as shown in the timeline below. These discussions have helped ensure that our Board’s decisions are informed by stockholder objectives. For additional information, see section entitled “Executive Compensation—Compensation Discussion and Analysis—Stockholder Engagement and Our 2019 Say-on-Pay Vote” below.

FY2020

FY2019

FY2018

FY2017

FY2016

FY2013

FY2012

Stockholder Engagement

During fiscal 2020, we launched a formal stockholder engagement outreach cycle, adding two waves of stockholder outreach in the spring and summer outside our annual meeting cycle, in addition to our traditional stockholder outreach in late fall, in response to our fiscal 2019 Say-on-Pay vote results and requests by our stockholders for additional engagement opportunities. Our Lead Independent Director, General Counsel and Vice President of Investor Relations attended these meetings.

The formal stockholder engagement during March and July of 2020 was both targeted and extensive, and in greater scope and depth compared to our practice in prior years. In total, in fiscal 2020, we held 13 engagements with stockholders representing approximately 32% of our outstanding shares of common stock.

In the course of these discussions, we received valuable feedback from stockholders and have made changes to our practices in response to such feedback. In our December 2019 outreach, stockholders provided feedback on our executive compensation program, our environmental, social and corporate governance programs, policies and practices, including favorable comments from our stockholders concerning changes in Board committee composition. Stockholders also provided positive feedback regarding our performance-based compensation and the introduction of performance-based stock options (“PSOs”) to our executive compensation program starting in 2018. In our March and July 2020 stockholder outreach meetings, stockholder feedback included appreciation of (i) the performance aspects of our equity compensation practices, (ii) the strong leadership of our CEO who is generously donating his annual salary to our COVID-19 fund, (iii) how our broader management team and our board of directors followed suit by contributing in the aggregate over $1 million to support distressed families, and (iv) the recent changes to our compensation committee membership in response to stockholder feedback. The feedback has been summarized below:

Fiscal 2020 ESG Focus Areas and Our Response

This stockholder feedback received in our regular ongoing outreach, in addition to the feedback received from the launch of our new expanded outreach efforts, was presented to our nominating and corporate governance committee, compensation committee and board of directors.

		Environmental and Social Initiatives

Environmental Initiatives

As we build our global cybersecurity business, we’re committed to doing so in a way that respects our planet and aims to reduce our impact on the environment. With the choices we make about our product, subscription and support offerings, our office spaces, and our community engagement, we seek to be sustainable and regularly evaluate where we can do better. During fiscal 2020, we enhanced our environmental initiatives by:

In addition, as part of our commitment to social and environmental compliance, we seek to both monitor and comply with social and environmental requirements across our supply chain. To that end, our Code of Business Conduct and Ethics and Global Supplier Code of Conduct contain specific guidelines regarding labor, ethics, health and safety, and environmental protection and apply to us and our suppliers.

COVID-19

The COVID-19 pandemic is being felt by every global citizen, country, community, and company. During these difficult times, our priority is the health and safety of our employees, end-customers, partners and community as they adapt to the changing business environment. We summarize some of the actions we have taken in response to the outbreak below:

Taking care of our Employees and Community

Taking care of our End-Customers

		Social Impact Initiatives

By mobilizing employee volunteers and making charitable investments, we’re committed to working with local nonprofits, schools and organizations to uplift our communities. During fiscal 2020, we engaged in a number of social impact activities including:

Workforce Diversity and Inclusion

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.

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.

As part of our stockholder engagement efforts, prior to our 2017 Annual Meeting of Stockholders, members of our management team and our then Lead Independent Director reached out to our top institutional and other stockholders representing an aggregate of approximately 25% of our outstanding shares of common stock to better understand their perspectives on workforce diversity and the type of information that these stockholders believed would be most appropriate for us to disclose. In general, stockholders agreed on the importance of a diverse workforce. They expressed varying perspectives on the type and nature of disclosure that they preferred us to provide. In addition, stockholders were supportive of making this disclosure in a measured fashion.

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, 2020.2021. EY has served as our independent registered public accounting 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, 2020.2021. 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. 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, 20182019 and 2019.2020.

Auditor Independence

In our fiscal year ended July 31, 2019,2020, 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.

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, before our independent registered public accounting firm is 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, 2019,2020, werepre-approved by our audit committee.

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

OF THE APPOINTMENT OF ERNST & YOUNG LLP.

REPORT OF THE AUDIT COMMITTEE

The audit committee consists of Ms. McCarthy, Messrs. Donovan, Goetz and Messrs. Calderoni and Donovan.the Rt Hon Sir John Key. Each member of the committee is an independent director 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, 2019,2020, for filing with the Securities and Exchange Commission.

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

Mary Pat McCarthy (Chair)

Frank Calderoni

John M. Donovan

James J. Goetz

Rt Hon Sir John Key

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” section of this proxy statement. This proposal, commonly known as a“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 20202021 annual meeting of stockholders.

We believe that the information we have provided in the section titled “Executive Compensation,” and in particular the information discussed in the section titled “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 20192020 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.

EXECUTIVE OFFICERS

The following table identifies certain information about our executive officers as of October 22, 2019.13, 2020. Officers are electedappointed by our board of directors to hold office until their successors are elected and qualified.

Nikesh 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 BonannoLuis Felipe Visoso 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.July 2020. Prior to joining us,the Company, from 2009January 2020 until June 2020, Mr. Visoso served as the chief financial officer of Amazon Web Services, a subsidiary of Amazon that provides on demand cloud computing platforms and APIs. From December 2018 until January 2020, Mr. Visoso served as the chief financial officer of Amazon’s Worldwide Consumer organization. From February 2016 to 2014 Ms. Bonanno held variousDecember 2018, Mr. Visoso served as the senior vice president, business, technology and operations finance rolesfor Cisco Systems, Inc. (“Cisco”), a multinational technology conglomerate. Prior to Cisco, Mr. Visoso worked at Symantec Corporation,Procter & Gamble Company, an American multinational consumer goods corporation, for over 23 years, most recently serving as Vice President, FPvice president, F&A global business units from JulySeptember 2012 to March 2014. Ms. BonannoFebruary 2016. Mr. Visoso holds an M.B.A.a bachelor’s degree from Texas Christian UniversityTecnológico de Monterrey in Industrial Engineering and a B.S.minor degree from Tecnológico de Monterrey in Finance from Arizona State University.International Business.

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 Product Officer since August 2017. Prior to this appointment, Mr. Klarich served as our Executive Vice President of Product Management, a role he held since

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our Named Executive Officers, or NEOs, for fiscal 20192020 were:

Management Changes in fiscal 2019Fiscal 2020

Our board of directors appointed Mr. SinghVisoso as our President,new CFO, effective as of NovemberJuly 1, 2018,2020, following the resignation of Mark F. Anderson,Ms. Bonanno, our former President,CFO, effective October 31, 2018.June 30, 2020.

Executive Summary

Our goal is to align our executive pay with the success of our business, and our compensation program is designed to attract, motivate and retain the key executives who drive our continued success. We do this by providing short-term cash incentive compensation opportunities tied to successful achievement of our annual operating goals and by granting long-term incentive compensation opportunities in the form of equity awards that are intended to deliver increasing value as our stock price increases, including performance-based equity awards tied to our financial and operational performance as well as stock price appreciation.

Our executive compensation program continues to evolve as we mature, gain market share and grow revenue, at scale, faster than the competition and the rate of the market. Beginning in fiscal 2017, our compensation committee made significant changes to our executive compensation program by structuring the program to include performance-based equity awards tied to our financial performance, which was intended to enhance the link between executive pay and our financial and operational performance, create value for our stockholders, increase market alignment and mitigate risk, as well as respond to stockholder feedback on our compensation practices.

In fiscal 2018, our compensation committee continued this evolution by structuring our executive compensation program to include long-term performance-based compensation that is aligned with achievement of our business strategy and creates value for our stockholders. Similarly, in late fiscal 2018, when designing a competitive total compensation package for our new CEO, the goal of our compensation committee was to provide a compensation package that had a significant portion that would deliver value to him only if other stockholders realize significant value as well.

We continued this practice in fiscal 2019, by granting to our NEOs (other than our CEO) performance-based stock options (“PSOs”) tied to the achievement of certain stock price targets (the “Stock Price Achievements”). The PSOs are designed:

Although net cash provided by operating activities, deferred revenue, billings and number of customers are not measures that were used to determine awards under our incentive compensation plans, we believe that these results are important to provide context of our financial performance because these measures are useful indicators of our ability to grow our business consistent with our annual operating plan as itour compensation committee considers the compensation of our executive officers. Billings is a key financial measure and the calculation of billings from revenue is set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section on page 40 and 41 of our Annual Report on Form10-K filed with the SEC on September 9, 2019.4, 2020.

The formal stockholder engagement during fiscal 2019March and July of 2020 was both targeted and extensive, similarand in greater scope and depth compared to our practice in prior years. In total, in fiscal 2020, we held 13 engagements with stockholders representing approximately 32% of our outstanding shares of common stock.

In the course of these discussions, we received valuable feedback from stockholders. In our December 2019 outreach, stockholders provided feedback on our executive compensation program, policies and practices, including favorable comments from our stockholders concerning changes in board committee composition. Stockholders also provided positive feedback regarding our performance-based compensation and the introduction of PSOsperformance-based stock options (“PSOs”) to our executive compensation program. program starting in 2018. Various stockholders indicated that they would like to see management’s performance-based equity awards represent a majority of their equity awards, so that their interests will be aligned with stockholders’ interests.

As our compensation program already provided our NEOs with a majority of their outstanding equity awards in the form of performance-based awards, we felt it was necessary to make sure that this Compensation Discussion and Analysis adequately conveys our compensation program’s emphasis on performance-based awards. Consequently, we have added disclosure (in the section below entitled “Projected Value of Outstanding NEO Equity Awards Potentially Vesting Over the Next Four Fiscal Years”) showing, for our NEOs who remain with us, their mix of outstanding performance-based equity awards and non-performance-based equity awards as of the end of fiscal 2020. In addition, in response to the stockholder feedback referenced above, for fiscal 2021, we granted our executive officers equity compensation awards entirely (100%) in performance-based restricted stock units (the awards will have their performance measured based on billings and operating margin metrics) and such awards will be described robustly in our 2021 proxy statement.

In our March and July 2020 stockholder outreach meetings, stockholder feedback included appreciation of (i) the performance aspects of our equity compensation practices, (ii) the strong leadership of our CEO who generously donated his salary to our COVID-19 fund, (iii) how our broader management team and our board of directors followed suit by contributing in the aggregate over $1 million to support distressed families, and (iv) the recent changes to our compensation committee membership in response to stockholder feedback.

This stockholder feedback received in our regular ongoing outreach, in addition to the feedback received from the launch of our new outreach efforts, 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 fiscalIn August 2019, theour compensation committee reviewed and approved the key elements of our fiscal 2019 executive compensation programbase salaries and target annual cash incentive opportunities for our executive officers, excludingNEOs employed by us at that time. In October 2019, our CEO who joined uscompensation committee approved grants of time-based RSUs only to Ms. Bonanno and Mr. Singh, in Junerecognition of 2018.their valuable contributions to our financial performance and leadership of their respective organizations. No other NEOs received equity grants in fiscal 2020. While these decisions were made prior to receiving our 20182019 Say-on-Pay voting results, where we received less than majority support for our20182019 Say-on-Pay proposal, the decisions accounted for the feedback gathered from our stockholder engagement from previous periods. periods to tie compensation to company and individual performance.

Summary of Feedback from Investors and Our Response

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 part 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 our stockholders’ long-term interests. 2020.

The highlights of our fiscal 20192020 executive compensation program are described in the section entitled “Fiscal 20192020 Executive Compensation Program Overview” below. We value the opinions of our stockholders, and 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 20192020 Executive Compensation Program Overview

In October 2018,August 2019, our compensation committee approved the structure of our fiscal 2019 executive compensation programbase salaries and target annual cash incentive opportunities for our NEOs.NEOs employed by us at that time. The base salary of these NEOs did not increase in fiscal 2020 from their base salaries that were in effect at the end of fiscal 2019.

In October 2019, our compensation committee did not make any long-term equity incentive grants to our NEOs, except for grants of time-based RSUs to Ms. Bonanno and Mr. Singh. In making thesethe decisions to grant RSUs to Ms. Bonanno and Mr. Singh, our compensation committee considered, among other factors, company performance, internal parity considerations, pay levels of these NEOs relative to the executives in comparable positions at the companies in our updated compensation peer group and the overall competitive market, the experience and responsibilities of each of these NEOs, the amount of outstanding performance-based equity held by each of these NEOs, the individual performance of each of these NEOs, the continued competition for experienced leadership in our industry and the feedback from our stockholders as discussed above.

Our executive compensation program continues to evolve as we mature, gain market share and grow revenue, at scale, faster than the competition and the rate of the market. Our performance-based equity awards, which were first introduced in fiscal 2017, as further discussed below, were designed to enhance the link between executive pay and our financial and operational performance, increase market alignment and mitigate risk, as well as respond to stockholder feedback that our compensation practices should include more performance-based elements. The feedback from our stockholders, the evolution of our fiscal planning process as we mature as a public company, and our compensation committee’s ongoing discussion about the appropriate time in our growth and evolution to implement performance-based equity awards were factors in implementing performance-based equity awards tied to billings performance in fiscal 2017 and PSOs tied to stock price achievements in fiscal 2018.industry.

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 (i) decided not to make any cash payments to our NEOs under the fiscal 2019sub-plan to our omnibus Employee Incentive Compensation Plan (the “Fiscal 2019 Incentive Compensation Plan”) for the second half of fiscal 2019, (ii) approved the grant of time-based RSUs (the “July 2019 RSUs”) to our NEOs in recognition of our strong billings performance, and (iii) advanced the timing of the grant of fiscal 2020 equity awards to our NEOs (other than Ms. Bonanno), in the form of time-based RSUs (the “Fiscal 2020 RSUs”) and performance-based RSUs (the “Fiscal 2020 PSUs”), as discussed in further detail below.

As we, and the compensation program, continue to evolve and as we evaluate, including through stockholder discussions, the effectiveness of PSOs in attaining our compensation objectives, our compensation committee intends to review and reconsider the mix of components in our long-term equity compensation, the appropriateness of PSOs in future years, the performance metrics applicable to PSOs and the length of performance period for PSOs.

The overall components of our fiscal 20192020 executive compensation program for our NEOs (other than Mr. Singh)Visoso, who was newly hired in fiscal 2020) are summarized in the chart below.

In addition, in connectionMr. Visoso received (i) a one-time payment of $2 million, which our compensation committee determined to be necessary to successfully recruit an executive with his hiring Mr. Singh received the following equity awards:

Similar The RSU award was an important factor in making a competitive offer to Mr. Visoso and incentivizing and motivating him, while still promoting our long-term goals of stock ownership, executive retention, and stockholder alignment by requiring his continued service for a period of four years in order to fully vest in the other NEOs thatRSUs.

Mr. Visoso’s initial annual base salary, his target annual cash incentive compensation opportunity, and the intended grant value of his time-based RSU award were granted PSOsdetermined through arm’s-length negotiation, considering such factors as his qualifications and proven experience as a finance leader, who has previously demonstrated leadership and ability to grow businesses in fiscal 2019, a primary considerationfinancially disciplined manner, the prevailing market conditions, a review of the structuremarket data for base salaries, target annual cash incentive compensation opportunities, and equity compensation 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.executives holding similar positions at comparable companies, and his anticipated role and responsibilities.

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

DISCUSSION OF OUR FISCAL 20192020 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 NEOs for fiscal 2019.2020.

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. ToWe are also in the midst of a significant strategic shift in our business. Security that was traditionally delivered in hardware form must now be designed and delivered through the cloud. Our business has been historically focused on the firewall. However, we are now transforming our business to include multiple products which protect our customers’ enterprise, cloud, endpoints, Security Operation Centers and more. Security companies that have tried to launch and maintain multiple products have not historically been successful. Consequently, to achieve these transformative objectives, we need a highly talented and seasoned team of technical, sales, marketing, operations, and other business professionals.professionals to ensure that we will succeed and that will lead our company through its next phase of growth.

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 retainrecruit qualified executive candidates, our compensation committee recognizes that it needs to develop competitive compensation packages to meet this challenge.address these challenges. Accordingly, we have embraced a compensation philosophy of offering our NEOs a competitive total compensation program, each of the components of which recognizes and rewards individual performance and contributions to our success. 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 20192020 reflected our stage of development as a growing publicly-traded company which is gaining market share and growing revenue at scale, faster than the competitionwhile broadening and the rate of the market.deepening our leading cybersecurity technology. Accordingly, we design our executive compensation program to provide market-competitive compensation in the form of base salary, an annual cash incentive compensation opportunity,

a long-term incentive compensation opportunity in the form of equity awards, including time-based RSUs, PSUs,performance-based restricted stock units (“PSUs”), and PSOs, as applicable, 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.

In fiscal 2019,2020, 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 2019.2020.

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,

Fiscal 20192020 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 2019.2020.

Base Salary

Base salary is the primary fixed component of our executive compensation program. We use base salary to compensate our executive officers for services rendered during the fiscal year and to ensure that we remain competitive in attracting and retaining executive talent. Generally, we establish the initial base salaries of our executive officers througharm’s-length negotiation at the time 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 executive officers.

Thereafter, 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 competitive market positioning, as appropriate.

In October 2018,August 2019, in connection with its review of our executive compensation program, our compensation committee approved the base salaries for our incumbent NEOs, including an adjustment to theeffective as of November 1, 2019. Our compensation committee did not approve any increases in base salary for any of Ms. Bonanno to be effective November 1, 2018.these NEOs. 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 incumbent NEO for fiscal 2019, except Mr. Singh,2020, is set forth in the table below.

As previously described, Mr. Singh’sVisoso’s annual base salary for fiscal 20192020 was set at $750,000$600,000 in connection with his hire.

The total base salaries paid to our NEOs for fiscal 20192020 are set forth in the “Fiscal 20192020 Summary Compensation Table” below.

Short-TermAnnual Cash Incentive Compensation

We use short-termannual cash incentive compensation to motivate our NEOs to achieve our annual financial and operational objectives, while making progress towards our longer-term strategic and growth goals. Typically, near the beginning of each fiscal year, our compensation committee adopts an incentive compensation plan for that fiscal year, which identifies the plan participants and establishes the target annual cash incentive

compensation opportunity for each participant, the performance measures to be used to determine whether to make payouts for the fiscal year and the associated target levels for each measure (which are generally based on our annual operating plan for that fiscal year), and the potential payouts based on actual performance for the fiscal year. Typically, annual cash incentive compensation payouts have been determined after the end of the applicable performance period based on our performance against one or more financial and/or operational performance objectives for the performance period as set forth in our annual operating plan.performance.

In order to receive a payout under the Fiscal 20192020 Incentive Compensation Plan both corporate performance measures needed to meet or exceed minimumpre-established achievement levels for the relevant performance period. For purposes of the Fiscal 20192020 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; and (y) “earnings per share” was defined asnon-GAAP net income per share as reflected in our quarterly earnings press releases furnished to the SEC, further adjusted to exclude the effects of incentives paid out under our Fiscal 20192020 Incentive Compensation Plan.Plan, the impact of acquisitions, and the impact of shipping backlog in excess of the targeted amount.

Performance Requirements.Under the Fiscal 20192020 Incentive Compensation Plan, funding would be made with respect to any particular quarter only if both 97% of the applicable fiscal quarter’s revenue target and 92.5%91% of the applicable fiscal quarter’s earnings per share target are achieved, each as set forth in the Fiscal 20192020 Incentive Compensation Plan. Achievement of 100% of both performance targets (on an annual aggregated basis) would have paid out at 100% of the target annual cash incentive compensation opportunity, and achievement of 104% of the revenue target and 110% of the earnings per share target would have paid out at 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 required for each fiscal quarter would resultincrease funding on a non-linear basis, with achievement of 100% of both performance targets resulting in apro-ratednon-linear payout basedfunding at 100% of the target cash incentive compensation opportunity for such quarter. Payouts of up to 100% of the target cash incentive compensation opportunities are made on a semi-annual basis, and any payouts for performance exceeding 100% of both of the payout percentages specifiedquarterly targets (referred to as accelerator payments) are paid out as described in the Fiscal 2019 Incentive Compensation Plan. With respect tofollowing paragraph.

For achievement in excess of 100%, funding would increase on a non-linear basis, with achievement of 104% of the revenue target and 112% of the earnings per share target resulting in funding at 130% of the target cash incentive compensation opportunity for such performancequarter. In addition, such over-performance could be further rewarded at the end of the fiscal year using athrough discretionary “over-performance” poolpayments that would be funded atequal to 200% of each NEO’s applicable target annual cash incentive compensation opportunity less any accelerator.accelerator payments. Any accelerator payments and such discretionary payments are made after the end of the fiscal year.

Our compensation committee couldmay use its discretion to increase or reduce the actual cash incentive compensation payout. To inform its decision whether to exercise discretion under the Fiscal 20192020 Incentive Compensation Plan, our compensation committee couldcan 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 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 20192020 Incentive Compensation Plan (which includes any accelerator and/or discretionary payments) were capped at 300% of the target amounts.

For fiscal 2019,2020, our revenue increased by $626$509 million to $2.9$3.4 billion compared to fiscal 20182019 and ournon-GAAP earnings per share increaseddecreased by $1.25$0.57 per share compared to fiscal 2018.2019. In light of our strong revenue and earnings per share performance in the first halfquarter of fiscal 2019,2020, we achieved on an aggregated basis, approximately 103%98.2% of our revenue targetstarget and approximately 117%99.6% of our earnings per share targets.target. During the second quarter of fiscal 2020, we did not achieve either our minimum revenue or earnings per share targets under the Fiscal 2020 Incentive Compensation Plan. Our compensation committee accordingly decided to pay our NEOs 100%the following percentage of their target on an aggregated basiscash incentive compensation opportunities 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 exercised its negative discretion2020: (i) 34.5% for Messrs. Arora, Singh, and determined that our NEOs would not receive any cash incentive award payouts under our Fiscal 2019 Incentive Compensation PlanKlarich and (ii) 29.5% for Ms. Bonanno and Mr. Zuk.

During the third and fourth quarters of fiscal 2019.2020, we did not achieve either of the minimum revenue or earnings per share targets. However, as noted above, our compensation committee had the discretion to adjust the actual cash incentive compensation payout based on metrics other than revenue or earnings per share or any other factors or considerations that it deemed relevant. Accordingly, based on the achievement of other metrics and excellent performance by management during the COVID-19 pandemic, our compensation committee exercised its discretion to increase the second half payouts for our NEOs so that the total amount of their payouts for all of fiscal 2020 equaled 92.5% of their target annual incentive compensation opportunities.

The annual cash incentive award payouts made to our NEOs for fiscal 20192020 under the Fiscal 20192020 Incentive Compensation Plan are set forth in the “Fiscal 20192020 Summary Compensation Table” below.

revenue growth rate target for the fiscal 2020 performance period was achieved, resulting in 86.6% of each NEO’s target PSUs for the fiscal 2020 performance period becoming earned PSUs that are eligible for vesting based on the time-based vesting schedule.

Projected Value of Outstanding NEO Equity Awards Potentially Vesting Over the Next Four Fiscal Years

In response to our stockholders’ feedback requesting additional clarity on the design of our long-term incentive awards, we have added additional information to provide further transparency on the way our compensation committee has designed the long-term incentive compensation awards for our executive officers. The following tables, which summarize the outstanding equity awards that vested in fiscal 2020 and that are projected to vest through fiscal 2024 (as long as our NEOs remain with us through each vesting period), are intended to illustrate the total projected value of the outstanding unvested equity awards (as of July 31, 2020) that could vest for each of our NEOs who remain with us through fiscal 2024. The following tables are included for illustration purposes only to show the projected value of outstanding awards that may vest in the future subject to continued service by the NEOs and achievement of the applicable performance goals, except for the values included in the column entitled “Value of Equity Awards Vested During FY2020” which contain the actual values of equity awards that vested during fiscal 2020. The amounts disclosed in the tables are based on certain assumptions described in the applicable footnotes and do not include any potential future grants. Further, the PSOs granted to our NEOs’ are tied to the achievement of certain stock price targets (the “Stock Price Achievements”), and because the stock price targets have not been achieved as of July 31, 2020, no value has been ascribed to the PSOs.

Similarly, we have included pie charts below to illustrate the portions of such awards to our NEOs (excluding Ms. Bonanno) outstanding at July 31, 2020 that required performance-based vesting versus those that required time-based vesting only. These pie charts include the grant date fair value of the PSOs and the assumed values (based on the closing price of our common stock on the NYSE on July 31, 2020, which was $255.92 per share) for any outstanding RSUs and PSUs, assuming performance criteria will be met and vesting at 100% of potential value. These pie charts illustrate our commitment to performance-based equity awards for our NEOs and demonstrate that for each NEO (except for Mr. Visoso), more than 50% of their total equity compensation is performance-based.

Nikesh Arora

Projected Value of Outstanding Equity Awards Potentially Vesting by Fiscal Year for FY20 – FY24