- Compensation includes restricted stock valued at $112 million
- Fiscal 2015 pay places him at No. 5 on Bloomberg Pay Index
Palo Alto Networks Inc. Chief Executive Officer Mark McLaughlin was awarded $113 million in 2015 compensation, placing him among the highest-paid U.S. executives.
McLaughlin received a $487,500 salary, $692,750 bonus and 600,000 restricted shares that will vest in increments through 2018, according to a filing Tuesday. The stock award was valued at about $112 million as of July 31, and his awarded pay package put him at No. 5 on the Bloomberg Pay Index, a ranking of the highest-paid U.S. executives that values compensation as of a company’s fiscal year-end.
Palo Alto, a provider of network security products, gave McLaughlin the stock award because his unvested equity holdings were “significantly lower” than those of CEOs in the company’s peer group, which includes Workday Inc., SolarWinds Inc. and Aruba Networks Inc., according to the filing. McLaughlin’s equity was worth $65.4 million when it was granted in November 2014. The company’s shares rose more than 70 percent from that time through its fiscal year-end.
Spokesmen for the company didn’t respond to calls and e-mails seeking comment.
McLaughlin’s unvested equity, which includes previous awards and options, was valued at $128.7 million on July 31. That’s the highest among peer group CEOs, according to data compiled by Bloomberg from the companies’ most-recent proxies. It’s almost double that of Workday CEO and co-founder Aneel Bhusri, who had the second-largest value of unvested awards.
Symantec Corp. CEO Michael Brown, whose company is six times bigger than Palo Alto by annual revenue, had $11.5 million in unvested awards at the end of its fiscal 2015, according to a filing.
“Our compensation committee considered our chief executive officer’s leadership role in the achievement of our goals and his expected future contributions in developing and executing strategies to create sustainable long-term value,” Santa Clara, California-based Palo Alto said in its proxy statement.
The Bloomberg Pay Index ranks executives by awarded compensation as of their company’s most-recent fiscal year, and many businesses haven’t released data for 2015. McLaughlin’s pay tops that of Oracle Corp. co-CEOs Mark Hurd and Safra Catz, who were awarded $56.9 million each for fiscal 2015, the index shows.
Awarded pay tracks what a compensation committee intended to pay an executive, not what was reported in a company’s summary compensation table. It also accounts for changes in the value of pensions, and includes perks such as club dues and personal use of corporate jets.