Indian American Tech CEO Forfeits $1 Million Salary to Avoid COVID-19 Layoffs
A CEO of a tech company in Santa Clara, California has decided to forfeit his own salary to save his employees and company during the COVID-19 pandemic.
Nikesh Arora, 52, CEO of Palo Alto Networks Inc., told CNBC’s “Mad Money with Jim Cramer” he will maintain his staff as part of the “network security provider’s coronavirus response plan.”
“We have committed to no COVID-19 layoffs in our company because people are very insecure, people are concerned about whether they’ll have a job once this economic thing comes back around,” Arora said.
Arora echoed the same sentiment in his tweet on April 1, announcing a COVID Relief Fund, Indica News reported.
“We plan to support our employees in need, our hourly wage workers and our community,” Arora said in another tweet. “In these times, the health, safety and peace of our workforce is most important. Balancing people vs profit.”
Palo Alto Networks Inc. and its board will donate $4 million as a way to support wage earners such as cafeteria and security staff. It also asked employees to donate whatever they can for their goal of raising $1 million to the pot.
“We’re hoping to have $5 million-plus raised very quickly, and the intent is to help our employees in need, first and foremost, to help our hourly wage workers and, three, support the community that we’re all in,” the CEO told Cramer. “We’ve basically chosen to balance employees and people over profit in the short-term time frame because people are very concerned about what’s going on around them.”
Arora, who had a base salary of $1 million last year, earned more than $125 million in the 2018 fiscal year, which includes stocks, options, and other forms of compensation. It made him one of Silicon Valley’s highest-paid public company CEOs.
Born in India, Arora earned his bachelor’s degree in electrical engineering from the Indian Institute of Technology (BHU) Varanasi and worked for Wipro before pursuing a degree in management from Northeastern University.
Arora began his career with Fidelity Investments as an analyst while simultaneously working towards his CFA (Chartered Financial Analyst) designation. Then, in the 2000s, he joined Google. He held multiple senior operating leadership roles at the company and later became the senior vice president and chief business officer before quitting in 2014. That same year, he joined SoftBank as president and CEO and resigned in 2016.
Palo Alto Networks Inc. is one of the few companies that has committed to not laying off staff amid the COVID-19 pandemic. It employs more than 7,000 people in offices in California, Isreal and India.
During the coronavirus pandemic, the Palo Alto Networks Inc. stocks plummeted. Its closing stock price on Tuesday was $163.96, meaning it was down more than 29% from the start of the quarter and 32% from the past year.
“Our customers and partners expect us to provide them with great products, support and services regardless of the conditions or environment,” the company said in a statement posted on their website.
“Our business continuity plans have allowed us to continue with our operations and remain available to them. These plans are consistent with industry best practices and include workarounds for possible disruptions to our people, facilities, applications, dependencies, and vendors, and are based on an all-hazards and multi-scenario approach.”
Hackers have become active in taking advantage of people’s heightened sensibility to the pandemic as many people work remotely and students study at home. Arora said coronavirus-related online scams have ticked up as home computers are usually less secure than enterprise ones.
“Supporting customers to enable their own secure remote workforce, we are fully leveraging Prisma Access to securely connect all employees to the applications they need, both in the cloud and in our data centers or offices,” the company’s statement reads. “The majority of apps and infrastructure we use are SaaS or hosted in public cloud infrastructures like GCP, AWS, and Azure providing resiliency and scalability as needed.”
As school districts, universities and businesses try to increase their remote access applications, Arora said this will translate to more business for the company.
“I think the execution is back … and I’m hoping this will translate into a good outcome for the company in the future from an economic standpoint,” he said.
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