Palo Alto Networks CEO Nikesh Arora said Tuesday on CNBC that he will forfeit his salary and maintain 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,” he said in a “Mad Money” interview.
To take it a step further, Arora said he, the company and the company’s board would contribute a total of $4 million to a fund to support wage earners, such as cafeteria and security staff, and has asked employees to donate up to $1 million to the pot.
In 2019, Arora’s base salary was $1 million, according to Factset.
“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,” Arora told Jim 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.”
Palo Alto has also committed to maintaining head count of CloudGenix, the privately held software-defined wide-area network company it announced Tuesday that it would acquire for $420 million. The deal is expected to close in Palo Alto’s July quarter and to boost its Prisma secure access service edge, or SASE, platform.
Palo Alto employs more than 7,000 people, which includes offices in California, Tel Aviv and India. It is not clear how many CloudGenix employs.
“They’re a part of the family,” Arora said.
Cramer noted that companies often make job cuts after executing a merger, to which Arora responded confidently, “No.”
“I think we will come out of this strong both as an economy and as a company,” he said. “We are in position to continue to be the largest cybersecurity company in the world. In times like this it shakes out the winners and the losers.”
Palo Alto shares have plummeted with the broader economy during the coronavirus pandemic. The stock closed Tuesday’s session at $163.96, down more than 29% from the start of the quarter and more than 32% the past year.
With more people working remotely and students studying from home, hackers have become active in attempting to take advantage of people’s heightened sensibility to the coronavirus. Home networks are usually less secure than enterprise ones, and coronavirus-related online scams have ticked up, Arora said.
He said he expects that will translate to more business for Palo Alto as school districts, universities and businesses alike look to beef up their remote access applications. Recent execution misses in the company could also be a thing of the past.
“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.