5 Companies That Had A Rough Week

For the week ending Dec. 13, CRN looks at IT companies that were unfortunate, unsuccessful or just didn't make good decisions.


The Week Ending Dec. 13

Topping this week's roundup of those having a rough week is Palo Alto Networks, whose top managers faced a shareholder revolt over executive compensation.

Also making the list this week are WordPress plugin developer Brainstorm Force for having to fix a critical software vulnerability, Facebook for a reported Federal Trade Commission plan to block consolidation of its applications, Google for facing an investigation over its bid to acquire Fitbit, and the CEO of chip startup Nuvia for being sued by his former employer Apple.

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Not everyone in the IT industry was having a rough go of it this week. For a rundown of companies that made smart decisions, executed savvy strategic moves – or just had good luck – check out this week's Five Companies That Came To Win roundup.

Palo Alto Networks Stockholders Again Oppose Executive Pay Packages

It was a tough week for the top five executives at Palo Alto Networks. Shareholders at the company’s annual meeting on Monday pushed back against a plan to award more than $170 million in total compensation to the five executives for fiscal 2019.

The compensation included nearly $105 million in total option awards, including eight-figure option awards to the company’s president, CFO, CTO and chief product officer.

At the meeting only 14.6 percent of voted shares were in favor of the executive compensation plan while 67.3 percent of voted shares opposed the compensation plan.

Last year shareholders vociferously opposed a pay plan that provided incoming CEO Nikesh Arora with more than $125 million in total compensation.

Wordpress Plugin Developer Scrambles To Fix Critical Vulnerability

Developers at Brainstorm Force, which markets plugin software for the WordPress content management system, had to scramble this week to develop and issue patches for two plugin applications with a major vulnerability that hackers could use to gain control of a website, according to a Threatpost story.

Brainstorm Force issued the patches Thursday for Ultimate Addons for Beaver Builder and Ultimate Addons for Elementor, plugins that publishers use to add advanced designs and user functions to websites.

The flaw, called an authentication bypass bug, according to Threatpost, was discovered by security firm Malcare and is reportedly already being exploited. The bug could allow hackers to gain administrative access to any website using WordPress with the plugins installed.

Facebook Facing FTC Injunction Over How Its Applications Interact

Federal regulators are considering blocking social media giant Facebook from combining WhatsApp, Instagram and other applications, according to a Wall Street Journal report.

The Federal Trade Commission is considering whether to file for an injunction against Facebook that could block it from integrating or combining the WhatsApp messaging service with the chat features of Instagram and the main Facebook application, the story said. The injunction could also block Facebook from enforcing rules that govern how third-party applications work with Facebook.

The story said the FTC is considering moving ahead with the plan, which would require a court to impose the injunction, as soon as January.

An injunction could be a first step in possible antitrust actions against Facebook or even toward breaking up the company.

Google’s Fitbit Acquisition Reportedly Facing Justice Department Acquisition

Sticking with the topic of regulatory agency investigations, Google’s planned $2.1 billion acquisition of fitness tracker device maker Fitbit is reportedly under scrutiny by the U.S. Department of Justice amid data privacy fears.

This week the New York Post reported that the DOJ is scrutinizing the deal over concerns that owning Fitbit will provide Google with another way to collect people’s personal data, including sensitive health information.

The Post said the DOJ and the Federal Trade Commission wrestled over which agency would investigate the proposed acquisition, which Google and Fitbit announced Nov. 1.

Nuvia CEO, A Former Apple Exec, Is Sued By Apple

Earlier this year Gerard Williams, the chief architect who oversaw Apple’s development of the processors for the iPad and iPhone, left to become CEO of Nuvia, a startup he co-founded to design data center processors.

Williams now faces a breach of contract lawsuit from his former employer, according to a Bloomberg story, accusing him of planning or engaging in business activities that are competitive with or directly related to Apple’s business or products in violation with the terms of his Apple employment agreement.

The suit also charges that Williams poached employees from Apple to join Nuvia. Williams, who has denied Apple’s claims, co-founded Nuvia with former Apple engineers John Bruno and Manu Gulati.