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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 ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o

 

Preliminary Proxy Statement

o

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý

 

Definitive Proxy Statement

o

 

Definitive Additional Materials

o

 

Soliciting Material under §240.14a-12

 

Equinix, 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):

ý

 

No fee required.

o

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
    (1)   Title of each class of securities to which transaction applies:
        
 
    (2)   Aggregate number of securities to which transaction applies:
        
 
    (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
 
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o

 

Fee paid previously with preliminary materials.

o

 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

 

(1)

 

Amount Previously Paid:
        
 
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    (3)   Filing Party:
        
 
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Table of Contents

GRAPHIC


Table of Contents

GRAPHIC


Table of Contents

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

DEAR STOCKHOLDER:

You are cordially invited to attend the Annual Meeting of Stockholders (the "Annual Meeting") of Equinix, Inc., a Delaware corporation ("Equinix") on Thursday, June 18, 2020, at 10:30 a.m. PDT. Due to the COVID-19 pandemic, the meeting will be held virtually via live webcast this year. We believe in meaningfully engaging with our stockholders and hope this virtual meeting will maximize participation. You will be able to attend and participate in the virtual Annual Meeting, vote your shares electronically and submit your questions during the meeting by visiting:

www.meetingcenter.io/259814391
Password EQIX2020

Formal rules of conduct and technical support will be available during the online virtual Annual Meeting. We encourage you to access the meeting prior to the start time leaving ample time for the check in. Please follow the registration instructions as outlined in this proxy statement. We intend to conduct an in person meeting again in 2021.

At the Annual Meeting, the following proposals will be considered and voted on, in addition to such other business as may properly come before the meeting or any adjournments or postponements thereof:

ITEMS OF BUSINESS

 Proposal Board's
Recommendation

See
page

1


Election of directors to the board of directors (the "Board") to serve until the next Annual Meeting or until their successors have been duly elected and qualified


 


 


 

Tom Bartlett

Nanci Caldwell

Adaire Fox-Martin

Gary Hromadko

William Luby

Irving Lyons III

Charles Meyers

Christopher Paisley

Sandra Rivera

Peter Van Camp

GRAPHIC

FOR
each nominee

5

2 Approval, by a non-binding advisory vote, of the compensation of our named executive officers GRAPHIC FOR 23
3 Approval of the Equinix, Inc. 2020 Equity Incentive Plan GRAPHIC FOR 50
4 Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending Dec. 31, 2020 GRAPHIC FOR 59
5 A stockholder proposal, related to political contributions disclosure and oversight, if properly presented at the Annual Meeting GRAPHIC AGAINST 61

GRAPHIC     TO BE HELD

 

GRAPHIC     VIRTUAL MEETING

 

GRAPHIC     ATTENDANCE

Thursday, June 18, 2020
10:30 a.m. PDT

 

Visit: http://www.meetingcenter.io/259814391
The password for the meeting is: EQIX2020

 

Whether or not you plan to attend the Annual Meeting, please vote promptly, following the instructions contained in the materials you received.

Table of Contents

The foregoing items of business are more fully described in the attached proxy statement.

Only stockholders of record at the close of business on Apr. 20, 2020 are entitled to notice of, and to vote at, the Annual Meeting and at any adjournments or postponements thereof. A list of such stockholders will be available for inspection during the meeting by visiting www.meetingcenter.io/259814391. The password for the meeting is EQIX2020.

 


 

 

BY ORDER OF THE BOARD OF DIRECTORS,

 

 

GRAPHIC
    Peter Van Camp
Executive Chairman
Redwood City, California
May 1, 2020

GRAPHIC

WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL MEETING, PLEASE VOTE AS SOON AS POSSIBLE.

You may revoke your proxy at any time prior to the Annual Meeting. If you decide to attend the Annual Meeting and wish to change your proxy vote, you may do so by attending the Annual Meeting webcast. If you are a registered stockholder (i.e., you hold your shares through our transfer agent, Computershare), you do not need to register to attend the Annual Meeting virtually on the internet. Please follow the instructions on the notice or proxy card that you received.

If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting virtually on the internet.

To register to attend the Annual Meeting online by webcast you must submit proof of your proxy power (legal proxy) reflecting your Equinix, Inc. holdings along with your name and email address to Computershare. Requests for registration must be labeled as "Legal Proxy" and be received no later than 5:00 p.m., Eastern Time, on June 12, 2020. You will receive a confirmation of your registration

by email after we receive your registration materials. Requests for registration should be directed to us at the following:

By email:

Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com

By mail:

Computershare
Equinix Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001

GRAPHIC

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 18, 2020

The proxy statement and annual report to stockholders on Form 10-K are available at: investor.equinix.com/proxy.

GRAPHIC


Table of Contents

LOGO

PROXY STATEMENT

Table of contents

PROXY SUMMARY

  1    

General information

  1    

Governance

  2    

Performance and compensation highlights

  3    

Items to be voted on and our Board's recommendation

  4    

GOVERNANCE

 
5
   

PROPOSAL 1—Election of directors

  5    

Board composition

  10    

Board operations

  12    

Other governance policies and practices

  16    

2019 Director compensation

  17    

Equinix stock ownership

  20    

Related party transactions

  21    

Executive officers

  22    

COMPENSATION

 
23
   

PROPOSAL 2—Advisory non-binding vote on executive compensation

  23    

EXECUTIVE COMPENSATION AND RELATED INFORMATION

       

Compensation discussion and analysis

  24    

Executive compensation tables and related information

  38    

Compensation policies and practices risk assessment

  47    

Compensation committee interlocks and insider participation

  48    

Equity compensation plan information

  48    

CEO to median employee pay ratio

  49    

PROPOSAL 3—Approval of the Equinix, Inc. 2020 Equity Incentive Plan

  50    

AUDIT

 
59
   

PROPOSAL 4—Ratification of independent registered public accountants

  59    

STOCKHOLDER PROPOSAL

 
61
   

PROPOSAL 5—Stockholder proposal related to political contributions disclosure and oversight

  61    

ADDITIONAL INFORMATION

 
65
   

Voting information and attending the meeting

  65    

Delivery of documents to stockholders sharing an address

  69    

Stockholder proposals for 2021 annual meeting

  69    

Other matters

  70    

APPENDIX A

 
A-1
   

Table of Contents

PROXY SUMMARY

This summary highlights some of the topics discussed in this proxy statement. It does not cover all the information you should consider before voting, and you are encouraged to read the entire proxy statement before casting your vote.

General information


GRAPHIC     WHEN

 

GRAPHIC     VIRTUAL LOCATION

 

GRAPHIC     RECORD DATE

Thursday, June 18, 2020
10:30 a.m. PDT

 

Visit: http://www.meetingcenter.io/259814391
The password for the meeting is: EQIX2020

 

Apr. 20, 2020
         

GRAPHIC        CORPORATE INFORMATION

  GRAPHIC        EQUINIX WEBSITES

STOCK
SYMBOL

  EQIX   STATE OF INCORPORATION   Delaware   CORPORATE WEBSITE   Equinix.com

STOCK
EXCHANGE

  NASDAQ   YEAR OF INCORPORATION   1998   INVESTOR RELATIONS   investor.equinix.com

COMMON STOCK OUTSTANDING AS OF APR. 20, 2020

  85,927,044 shares   PUBLIC COMPANY SINCE   2000   2020 ANNUAL MEETING MATERIALS   investor.equinix.com/proxy

REGISTRAR & TRANSFER AGENT

  Computershare           PUBLIC POLICY ACTIVITIES   investor.equinix.com/corporate-governance/
public-policy-activities

VOTING

Have your proxy card or voting instruction form in hand when voting by telephone or internet. You will need to enter the unique voter control number imprinted on it when voting.

        Registered Holders   Beneficial Owners

 

 

(shares are registered in your own name)

 

(shares are held "in street name" in a stock brokerage account or by a bank, nominee or other holder of record)

GRAPHIC

 

BY MOBILE DEVICE

 

Scan the QR code         GRAPHIC

 

Scan the QR code if one is provided by your broker, bank or other nominee

GRAPHIC

 

BY INTERNET

 

Vote your shares online 24/7 at www.investorvote.com/EQIX

 

Vote your shares online 24/7 if a website is provided by your broker, bank or other nominee

GRAPHIC

 

BY TELEPHONE

 

Call toll-free 24/7 in the U.S., U.S. territories and Canada 1-800-652-VOTE (8683)

 

Call the toll-free number provided on your voting information form, 24/7

GRAPHIC

 

BY MAIL

 

Complete, date, sign and return your proxy card in the postage-paid envelope

 

Complete, date, sign and return your voting information form

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    PROXY SUMMARY

 

1

 

 


Table of Contents

Governance

DIRECTOR NOMINEES: 10

GRAPHIC   Thomas Bartlett
(Independent Director)
  GRAPHIC   Irving Lyons III
(Independent Director)

GRAPHIC

 

Nanci Caldwell
(Independent Director)

 

GRAPHIC

 

Charles Meyers
(Chief Executive
Officer and President)

GRAPHIC

 

Adaire Fox-Martin
(Independent Director)

 

GRAPHIC

 

Christopher Paisley
(Lead Independent
Director)

GRAPHIC

 

Gary Hromadko
(Independent Director)

 

GRAPHIC

 

Sandra Rivera
(Independent Director)

GRAPHIC

 

William Luby
(Independent Director)

 

GRAPHIC

 

Peter Van Camp
(Executive Chairman)

 

DIRECTOR TERM: One year

DIRECTOR ELECTION STANDARD: Majority votes cast

BOARD MEETINGS IN 2019: 10

STANDING BOARD COMMITTEES (MEETINGS IN
2019):
Audit (9), Compensation (4), Finance (7),
Governance (4), Nominating (1), Real Estate (9), Stock
Award (0)

SUPERMAJORITY VOTING REQUIREMENTS: No

  STOCKHOLDER RIGHTS PLAN: No

STOCKHOLDER RIGHT TO CALL SPECIAL
MEETINGS:
Yes

STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT: Yes

STOCKHOLDER PROXY ACCESS RIGHTS: Yes

CORPORATE GOVERNANCE MATERIALS: investor.equinix.com/corporate-governance/highlights

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    PROXY SUMMARY

 

2

 

 


Table of Contents

Performance and compensation highlights

2019 PERFORMANCE

GRAPHIC

(1)
Equinix uses Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO"), which are non-GAAP financial measures commonly used in the REIT industry. FFO is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts. FFO represents net income (loss), excluding gain (loss) from the disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint ventures' and non-controlling interests' share of these items. In presenting AFFO, Equinix excludes certain items that we believe are not good indicators of our current or future operating performance. AFFO represents FFO excluding depreciation and amortization expense on non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges, transaction costs, an installation revenue adjustment, a straight-line rent expense adjustment, a contract cost adjustment, amortization of deferred financing costs and debt discounts and premiums, gain (loss) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures, net income (loss) from discontinued operations, net of tax, and adjustments from FFO to AFFO for unconsolidated joint ventures' and noncontrolling interests' share of these items. For additional definitions of non-GAAP terms and a detailed reconciliation between non-GAAP financial results and the corresponding GAAP measures, please refer to pages 53-56 of Equinix's Annual Report on Form 10-K filed with the Securities and Exchange Commission on Feb. 21, 2020.


2019 EXECUTIVE COMPENSATION MIX(1)

LOGO

(1)
Reflects the market value of the RSU awards on the grant date of Feb. 22, 2019. Assumes the target award is earned under the 2019 annual incentive plan and the target number of shares is earned under the performance-based RSU awards. Excludes one-time, special time-based awards granted to Ms. Baack, Ms. Morandi, and Mr. Strohmeyer in connection with their appointments to new roles in Feb. 2019 for Ms. Morandi and Apr. 2019 for Ms. Baack and Mr. Strohmeyer.

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    PROXY SUMMARY

 

3

 

 

Table of Contents

COMPENSATION BEST PRACTICES AND HIGHLIGHTS

GRAPHIC

Items to be voted on and our Board's recommendation

 Proposal


Board's
Recommendation


See
page

1

  DIRECTORS: Election of directors   GRAPHIC   FOR
each nominee
  5

2

  COMPENSATION: Advisory vote to approve named executive officer compensation   GRAPHIC   FOR   23

3

  COMPENSATION: 2020 Equity Incentive Plan   GRAPHIC   FOR   50

4

  AUDIT: Ratification of independent registered public accountants   GRAPHIC   FOR   59

5

  STOCKHOLDER PROPOSAL: Stockholder proposal related to political contributions disclosure and oversight   GRAPHIC   AGAINST   61

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    PROXY SUMMARY

 

4

 

 


Table of Contents

GOVERNANCE

Proposal 1—Election of directors

All directors will be elected at the Annual Meeting to serve for a term expiring at the next annual meeting of stockholders and until his or her successor is elected, or until the director's death, resignation or removal. If you sign your proxy card but do not give instructions with respect to the voting of directors, your shares will be voted for the 10 persons recommended by the Board. If you wish to give specific instructions with respect to the voting of directors, you must do so with respect to the individual nominee. If any nominee becomes unavailable for election because of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed by the Board. Each person nominated for election has agreed to serve if elected, and our Board has no reason to believe that any nominee will be unable to serve.

The 10 directors who are being nominated for election by the holders of common stock to the Board; their ages as of Apr. 1, 2020; their positions and offices held with Equinix; and certain biographical information, including directorships held with other public companies during the past five years, are set forth below. In addition, we have provided information concerning the particular experience, qualifications, attributes and/or skills that led the Nominating Committee and the Board to determine that each nominee should serve as a director of Equinix.

NOMINEES

    THOMAS BARTLETT
  
  LOGO

INDEPENDENT DIRECTOR SINCE: Apr. 2013

Age 61

  COMMITTEES:

·

Audit   GRAPHIC

·

Finance   GRAPHIC

CURRENT ROLE

·

President and chief executive officer, American Tower Corporation

PRIOR BUSINESS EXPERIENCE

·

Executive vice president and chief financial officer, American Tower (2009-2020)

·

Treasurer, American Tower (July 2017—Nov. 2018, 2012-2013)

·

Various operations and business development roles with predecessor companies and affiliates, including most recently senior vice president and corporate controller, Verizon Communications (1983-2009)

·

Began career at Deloitte, Haskins & Sells

QUALIFICATIONS

·

Experience at American Tower with its conversion to and operation as a REIT

·

Experience in telecommunications and wireless infrastructure fields

·

Accounting and financial expertise, including as a public company chief financial officer

       

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    GOVERNANCE

 

5

 

 


Table of Contents

    NANCI CALDWELL
  
  LOGO

INDEPENDENT DIRECTOR SINCE: Dec. 2015

Age 62

  COMMITTEE:

·

Governance   GRAPHIC

CURRENT ROLE

·

Corporate director (since 2005)

PRIOR BUSINESS EXPERIENCE

·

Executive vice president and chief marketing officer, PeopleSoft (2001-2004)

·

Various senior and executive sales and marketing roles in Canada and the U.S., Hewlett-Packard (1982-2001)

CURRENT PUBLIC COMPANY BOARDS (in addition to Equinix)

·

CIBC

·

Citrix Systems

·

Donnelley Financial Solutions

PAST PUBLIC COMPANY BOARDS

·

Talend

·

Tibco Software

·

Deltek

QUALIFICATIONS

·

Expertise in enterprise sales, marketing and technology, which brings a valuable perspective to our Board to support our current sales and marketing strategy

·

Experience as an operating executive at major public companies

·

Experience with public company M&A

·

Experience on multiple Governance Committees

       

 

    ADAIRE FOX-MARTIN
  
  LOGO

INDEPENDENT DIRECTOR SINCE: Jan. 2020

Age 55

  COMMITTEE:

·

Nominating

CURRENT ROLE

·

Executive board member, SAP SE, global customer operations (since 2017)

PRIOR BUSINESS EXPERIENCE

·

Various roles, SAP (2008-2017), including president, chief operating officer, SVP industry business solutions, and vice president public sector

·

Various management roles, Oracle Corporation (1989-2007), the most recent being vice president government education and healthcare

QUALIFICATIONS

·

Extensive experience in the information technology sector bringing technology expertise to the Board as we evolve our platform

·

Global experience as an executive at multinational corporations

·

Experience in serving the enterprise customer, a key segment of our current strategy, as an experienced sales leader

·

Advocacy of social entrepreneurship and workplace inclusivity and fulfilment as founder of SAP One Billion Lives Ventures, relevant to our own environmental, social and governance ("ESG") initiatives

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    GOVERNANCE

 

6

 

 


Table of Contents

    GARY HROMADKO
  
  LOGO

INDEPENDENT DIRECTOR SINCE: June 2003

Age 67

  COMMITTEES:

·

Audit

·

Finance

·

Nominating

·

Real Estate   GRAPHIC

CURRENT ROLE

·

Private investor

PRIOR BUSINESS EXPERIENCE

·

Venture partner, Crosslink Capital, a venture capital firm (2002-2017)

PAST PUBLIC COMPANY BOARDS

·

Carbonite

QUALIFICATIONS

·

Active private investor since 1993

·

Experience as an investor in the networking, cloud and infrastructure service sectors, important customer segments to Equinix, and sectors where trends are closely watched as important to our future strategy and positioning

·

Experience with financial and capital markets

·

Experience with Equinix since 2003

       
    WILLIAM LUBY
  
  LOGO

INDEPENDENT DIRECTOR SINCE: Apr. 2010

Age 60

  COMMITTEES:

·

Compensation

·

Nominating   GRAPHIC (as of 6/18/20)

CURRENT ROLE

·

Managing partner, Seaport Capital, a private equity firm, and its predecessor companies (since 1996)

PRIOR BUSINESS EXPERIENCE

·

Managing director, Chase Capital, the private equity affiliate of Chase Manhattan

PAST PUBLIC COMPANY BOARDS

·

Switch & Data Facilities Company, prior to its acquisition by Equinix in 2010

QUALIFICATIONS

·

Active investor in the telecommunications industry for over 25 years

·

Experience as a director at Switch & Data

·

Familiarity with data center industry

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    GOVERNANCE

 

7

 

 


Table of Contents

    IRVING LYONS
  
  LOGO

INDEPENDENT DIRECTOR SINCE: Feb. 2007

Age 70

  COMMITTEES:

·

Compensation   GRAPHIC

·

Finance

·

Real Estate

·

Stock Award

CURRENT ROLE

·

Principal, Lyons Asset Management, a California-based private investment firm (since 2005)

PRIOR BUSINESS EXPERIENCE

·

Chief investment officer, Prologis, a global provider of distribution facilities and services (1997-2004)

CURRENT PUBLIC COMPANY BOARDS (IN ADDITION TO EQUINIX)

·

ESSEX Property Trust

·

Prologis

QUALIFICATIONS

·

Experience with global real estate, including as a chief investment officer at a real estate concern, which provides valuable insight to discussions of site selection and negotiations as Equinix conducts expansion planning and management of its real estate portfolio

·

Experience with REITs, as well as knowledge of capital markets and executive leadership and management experience


    CHARLES MEYERS
  
  LOGO

CHIEF EXECUTIVE OFFICER AND PRESIDENT, EQUINIX SINCE: Sept. 2018

Age 54

  COMMITTEE:

·

Stock Award

CURRENT ROLE

·

Chief executive officer and president, Equinix (since 2018)

PRIOR BUSINESS EXPERIENCE

·

President, strategy, services and innovation, Equinix (2017–Sept. 2018)

·

Chief operating officer, Equinix (2013–2017)

·

President, Equinix Americas (2010–2013)

·

Various positions, including group president of messaging and mobile media, and product group executive for the security and communications portfolio, VeriSign, an Internet security company now part of Symantec (2006–2010)

QUALIFICATIONS

·

Perspective and experience as Equinix's chief executive officer

·

Long history with Equinix dating back to 2010 in various leadership roles

·

Extensive executive leadership experience at technology companies prior to joining Equinix

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    GOVERNANCE

 

8

 

 


Table of Contents

    CHRISTOPHER PAISLEY
  
  LOGO

INDEPENDENT DIRECTOR SINCE: July 2007 (and lead independent director since Feb. 2012)

Age 67

  COMMITTEES:

·

Audit   GRAPHIC

·

Finance

·

Governance

·

Real Estate

CURRENT ROLE

·

Dean's executive professor of accounting, Leavey School of Business at Santa Clara University (since 2001)

PRIOR BUSINESS EXPERIENCE

·

Senior vice president of finance and chief financial officer, 3Com (1985–2000)

CURRENT PUBLIC COMPANY BOARDS (in addition to Equinix)

·

Ambarella

·

Fastly

·

Fitbit (through May 2020 only)*

·

Fortinet

PAST PUBLIC COMPANY BOARDS

·

Bridge Capital

·

Control4

·

YuMe

QUALIFICATIONS

·

Expertise in accounting and finance

·

Experience as a chief financial officer at a technology company

·

Extensive public company board and audit committee experience


 


 


*  Mr. Paisley has decided not to stand for re-election to the board of Fitbit, Inc., at the end of the current term in May 2020, and so his service on that Board will end at that time.

 

    SANDRA RIVERA
  
  LOGO

INDEPENDENT DIRECTOR SINCE: Oct. 2019

Age 55

  COMMITTEE:

·

Compensation

CURRENT ROLE

·

Executive vice president and chief people officer, Intel Corporation (since June 2019)

PRIOR BUSINESS EXPERIENCE

·

Various roles, Intel Corporation (2000–2019), including marketing director and more recently led the network platforms group

·

General manager of CTI division, Catalyst Telecom (1998–2000)

·

Co-founder and president, The CTI Authority (1996–1998)

QUALIFICATIONS

·

Extensive technical leadership experience in the technology sector bringing technology expertise to the Board as we evolve our platform

·

Expertise in network infrastructure

·

HR experience as executive vice president and chief people officer at Intel Corporation, brings insight to executive compensation decision making on the Compensation Committee and also to our own diversity and inclusion initiatives

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    GOVERNANCE

 

9

 

 


Table of Contents

    PETER VAN CAMP
  
  LOGO

EXECUTIVE CHAIRMAN, EQUINIX SINCE: May 2000

Age 64

  COMMITTEE:

·

Governance

CURRENT ROLE

·

Executive chairman, Equinix (since 2007)

PRIOR BUSINESS EXPERIENCE

·

Interim chief executive officer and president, Equinix (Jan. 2018–Sept. 2018)

·

Chief executive officer, Equinix (2000–2007)

·

President, Equinix (2006–2007)

·

President, UUNET, the internet division of MCI (formerly known as WorldCom) (1997–2000)

PAST PUBLIC COMPANY BOARDS

·

Silver Spring Networks

QUALIFICATIONS

·

Long history with Equinix dating back to 2000

·

Experience acquired as Equinix's former chief executive officer and president bring valuable perspective to the Board

·

Extensive career history at technology services, communication services, and critical infrastructure companies

GRAPHIC

Board composition

BOARD SIZE

Equinix's Board currently consists of 11 directors. However, Mr. Kriens has decided not to stand for reelection to the Board. Equinix's bylaws provide that the number of directors will be determined by the Board, and the number of directors is currently

set at 11. Thus, there will be one vacant seat on Equinix's Board following the Annual Meeting. Equinix does not intend to fill the vacant seat at the Annual Meeting.

MAJORITY VOTE STANDARD

Our bylaws provide that a director nominee must receive a majority of the votes cast with respect to such nominee in uncontested director elections (i.e., the number of shares voted "for" a director nominee must exceed the number of shares voted "against" such nominee). If an incumbent director nominee fails to receive a majority of the votes cast in an uncontested election, the director shall immediately tender his or her resignation to the Board. The Governance Committee of the Board, or such other committee designated by the Board, shall make a recommendation to the Board as to

whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board shall act on the resignation, taking into account the committee's recommendation, and publicly disclose its decision regarding the resignation within 90 days following certification of the election results. If the Board accepts a director's resignation, or if a nominee for director is not elected and the nominee is not an incumbent director, the remaining members of the Board may fill the resulting vacancy or may decrease the size of the Board.

 

 

GRAPHIC

 

Equinix 2020 PROXY STATEMENT    •    GOVERNANCE

 

10

 

 

Table of Contents

DIRECTOR INDEPENDENCE

The Board is currently composed of 11 directors. Nine of the members are independent as such term is defined under the rules of the Securities and Exchange Commission and the listing standards of

The NASDAQ Stock Market ("NASDAQ"). The Board has determined that all the Equinix director nominees are independent under such standards.

NOMINATION OF DIRECTORS

The Nominating Committee of the Board operates pursuant to a written charter and has the exclusive right to recommend candidates for election as directors to the Board. The Nominating Committee believes that candidates for director should have certain minimum qualifications, including being able to read and understand basic financial statements, having high moral character, having business experience, and being over 21 years of age. The Nominating Committee's process for identifying and evaluating nominees is as follows. In the case of incumbent directors whose annual terms of office are set to expire, the Nominating Committee reviews such directors' overall service to Equinix during their term, including the number of meetings attended, level of participation, quality of performance, and any transactions of such directors with Equinix during their term. In the case of new director candidates, the Nominating Committee first determines whether the nominee must be independent for NASDAQ purposes, which determination is based upon the Equinix, Inc. Board of Directors Guidelines on Significant Corporate Governance Issues (the "Guidelines"), the rules and regulations of the Securities and Exchange Commission, the rules of NASDAQ, and the advice of counsel, if necessary. The Nominating Committee may then use its network of contacts to compile a list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating Committee will then meet to discuss and consider such candidates' qualifications and choose candidate(s) for recommendation to the Board.

There is no fixed set of qualifications that must be satisfied before a candidate will be considered. Rather, the Nominating Committee has the flexibility to consider such factors as it deems appropriate. In evaluating potential nominees for Board membership, the Nominating Committee considers qualification criteria, such as independence, character, ability to exercise sound judgment, demonstrated leadership ability, skills, including financial literacy, educational background, diversity and experience, in the context of the current and

anticipated needs of the Board and of Equinix as a whole. In practice, the Nominating Committee has sought members with experience relevant to our industry and current strategy. For example, in 2019 and 2020 the additions of Ms. Rivera and Ms. Fox-Martin, respectively, were designed to add technology experience to the Board as Equinix continues to add new services and virtual capabilities to its platform and, in the case of Ms. Fox-Martin, global experience as an executive at a multinational corporation based in Europe. The Nominating Committee understands the importance and value of diversity on the Board. Both the Guidelines and the Nominating Committee Charter require the Nominating Committee to ensure qualified women and individuals from minority groups are included in the pool from which the Board nominees are chosen.

The Nominating Committee will consider candidates recommended by stockholders. Stockholders wishing to recommend candidates for consideration by the Nominating Committee may do so in writing to the corporate secretary of Equinix and by providing the candidate's name, biographical data and qualifications. The Nominating Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, based on whether the candidate was recommended by a stockholder.

Our bylaws provide for proxy access for director nominations by stockholders (the "Proxy Access Bylaw"). Under the Proxy Access Bylaw, any eligible stockholder, or eligible group of up to 20 stockholders, owning 3% or more of Equinix's outstanding common shares continuously for at least three years, may nominate and include in Equinix's annual meeting proxy materials for director nominees, up to a total number not to exceed the greater of 20% of the directors then serving on the Board or two directors, provided that the eligible stockholder or eligible group of stockholders and the director nominee(s) satisfy the requirements in the Proxy Access Bylaw. The Proxy Access Bylaw

 

 

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was first available to stockholders for Equinix's 2017 Annual Meeting of Stockholders.

A more detailed description of the functions of the Nominating Committee can be found in the

Nominating Committee Charter, published on the corporate governance section of Equinix's website at Equinix.com.

Board operations

BOARD LEADERSHIP STRUCTURE

From 2000 to 2007, Mr. Van Camp served as both our chief executive officer and as chairman of the Board. In Apr. 2007, Mr. Van Camp stepped down as Equinix's chief executive officer but retained the chairmanship of the Board as executive chairman. In Jan. 2018, Mr. Van Camp was appointed our interim chief executive officer and president. In Sept. 2018, Mr. Meyers was unanimously elected chief executive officer and president by the Board and Mr. Van Camp resigned from these interim roles. Mr. Van Camp continues to serve as our executive chairman. Our chief executive officer is responsible for the day-to-day leadership of Equinix and its performance, and for setting the strategic direction of Equinix. Mr. Van Camp, with his depth of experience and history with Equinix dating back to 2000, provides support and guidance to management and to Mr. Meyers as executive chairman. He also provides leadership to the Board and works with the Board to define its structure and activities needed to fulfill its responsibilities, facilitates communication among directors and between directors and senior management, provides input to the agenda for Board meetings, works to provide an appropriate information flow to the Board, and presides over meetings of the full Board. Thus, while our chief executive officer is positioned as the leader of Equinix and is free to focus on day-to-day challenges, our Board also has a strong leader with deep knowledge of Equinix in Mr. Van Camp. We believe this structure is best for both Equinix and our stockholders.

In Feb. 2012, Mr. Paisley was designated by the Board as its lead independent director. In this role, Mr. Paisley's duties may include presiding at all meetings of the Board at which the executive chairman is not present; calling and chairing all sessions of the independent directors; preparing the agenda and approving materials for meetings of the independent directors; briefing management directors about the results of deliberations among independent directors; consulting with the executive chairman regarding agendas, pre-read materials and proposed meeting calendars and schedules; collaborating with the executive chairman and acting as liaison between the executive chairman and the independent directors; and serving as the Board's liaison for consultation and communication with stockholders as appropriate, including on request of major stockholders. In addition, the number of independent directors on our Board and our committee structure provide additional independent oversight of Equinix. For example, the Audit, Compensation, Finance and Nominating Committees of the Board, and the Real Estate Committee of the Board, where decisions regarding our expansion and capital deployment are vetted, consist entirely of independent directors. Our independent directors regularly hold private sessions and have direct access to management. A self-assessment of the Board is also conducted annually, at which time each member is free to evaluate and comment as to whether they feel this leadership structure continues to be appropriate.

DIRECTOR ATTENDANCE

During the fiscal year ended Dec. 31, 2019, the Board held 10 meetings. For the fiscal year, each of the incumbent directors attended or participated in at least 87% and on average 95% of the aggregate of (i) the total number of meetings of the Board and (ii) the total number of

meetings held by all committees of the Board on which each such director served. In the event any director missed a meeting, that individual would separately discuss material items with Mr. Van Camp or Mr. Meyers.

 

 

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BOARD COMMITTEES

The Board has seven standing committees: the Audit Committee, the Compensation Committee, the Finance Committee, the Governance Committee, the Nominating Committee, the Real Estate Committee and the Stock Award Committee, in addition to special committees that may be formed from time to time. The following table provides membership information for the incumbent directors for fiscal 2019 for such standing committees of the Board:

    Committees
Director
Independent
Audit
Compensation
Finance
Governance
Nominating
Real
Estate


Stock
Award
Thomas Bartlett GRAPHIC GRAPHIC   GRAPHIC   GRAPHIC        
Nanci Caldwell GRAPHIC       GRAPHIC      
Adaire Fox-Martin GRAPHIC         GRAPHIC (2)    
Gary Hromadko GRAPHIC GRAPHIC   GRAPHIC (3)   GRAPHIC GRAPHIC  
Scott Kriens(4) GRAPHIC   GRAPHIC     GRAPHIC    
William Luby GRAPHIC   GRAPHIC     GRAPHIC    
Irving Lyons III GRAPHIC   GRAPHIC GRAPHIC     GRAPHIC GRAPHIC
Charles Meyers               GRAPHIC
Christopher Paisley GRAPHIC GRAPHIC GRAPHIC   GRAPHIC   GRAPHIC GRAPHIC   GRAPHIC  
Sandra Rivera GRAPHIC   GRAPHIC (1)          
Peter Van Camp GRAPHIC         GRAPHIC      
Meetings in 2019 Board: 10 9 4 7 4 1 9 0

 

GRAPHIC   Committee Chair  

GRAPHIC

  Committee Member  

GRAPHIC

  Executive Chairman  

GRAPHIC

  Lead Independent Director  

GRAPHIC

  Audit Committee Financial Expert
(1)
Ms. Rivera joined the Compensation Committee in Oct. 2019.

(2)
Ms. Fox-Martin joined the Nominating Committee in Jan. 2020.

(3)
Mr. Hromadko joined the Finance Committee in June 2019.

(4)
Mr. Kriens has decided he will not stand for reelection to the Board at the 2020 Annual Meeting.

A detailed description of the Audit Committee can be found in the section entitled, "Report of the Audit Committee of the Board of Directors," elsewhere in this proxy statement. The members of the Audit Committee in 2019 were Mr. Bartlett, Mr. Hromadko and Mr. Paisley. Mr. Paisley is chairperson of the Audit Committee and both Mr. Bartlett and Mr. Paisley are considered financial experts. During the fiscal year ended Dec. 31, 2019, the Audit Committee held nine meetings.

The Compensation Committee oversees, reviews and administers all of Equinix's compensation, equity and employee benefit plans and programs relating to executive officers, including the named executive officers; approves the global guidelines for the compensation program for Equinix's non-executive employees; and approves Equinix's projected global equity usage. The Compensation Committee also acts periodically to evaluate the effectiveness of the compensation programs at

Equinix and considers recommendations from its consultant, Compensia, Inc. ("Compensia"), and from management regarding new compensation programs and changes to those already in existence. In addition, the Compensation Committee is consulted to approve the compensation package of a newly hired executive or of an executive whose scope of responsibility has changed significantly. A more detailed description of the functions of the Compensation Committee can be found in the Compensation Committee Charter, published on the corporate governance section of Equinix's website at Equinix.com and in the "Compensation Discussion and Analysis" section below. The members of the Compensation Committee are Mr. Kriens, Mr. Luby, Mr. Lyons, and Ms. Rivera. Mr. Lyons is chairperson of the Compensation Committee. During the fiscal year ended Dec. 31, 2019, the Compensation Committee held four meetings.

 

 

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The Finance Committee was established to assist the Board in fulfilling its responsibilities across the principal areas of corporate finance for Equinix. The Finance Committee provides oversight and assistance to management in considering such matters as Equinix's balance sheet, capital planning, cash flow, financing needs, use of hedges and Equinix's credit ratings agency strategy and discussions with such agencies. The Board also periodically delegates to the Finance Committee oversight of specific financing transactions. A more detailed description of the functions of the Finance Committee can be found in the Finance Committee Charter, published on the corporate governance section of Equinix's website at Equinix.com. The members of the Finance Committee are Mr. Bartlett, Mr. Hromadko, Mr. Lyons and Mr. Paisley. Mr. Bartlett is chairperson of the Finance Committee. During the fiscal year ended Dec. 31, 2019, the Finance Committee held seven meetings.

The Governance Committee was established to (i) oversee the evaluation of the Board; (ii) review and consider developments in corporate governance practices and to recommend to the Board a set of effective corporate governance policies and procedures applicable to Equinix; and (iii) review and consider developments related to the Equinix Governance Risk and Compliance ("GRC") Program and to report out to the Board on GRC Program activities and recommendations. A more detailed description on the functions of the Governance Committee can be found in the Governance Committee Charter, published in the corporate governance section of Equinix's website at Equinix.com. The members of the Governance Committee are Ms. Caldwell, Mr. Paisley, and Mr. Van Camp. Ms. Caldwell is chairperson of the Governance Committee. During the fiscal year ended Dec. 31, 2019, the Governance Committee held four meetings.

The Nominating Committee's functions are described above in the section entitled "Nomination

of Directors." The members of the Nominating Committee are Ms. Fox-Martin (since Jan. 2020), Mr. Hromadko, Mr. Kriens and Mr. Luby. Although not standing for reelection, Mr. Kriens is chairperson of the Nominating Committee until the Annual Meeting at which time Mr. Luby shall become chairperson. During the fiscal year ended Dec. 31, 2019, the Nominating Committee held one meeting.

The Real Estate Committee approves capital expenditures in connection with real estate development, expansion or acquisition within parameters set by the full Board. All decisions are made considering a projected 10-year internal rate of return and within the context of a multi-year capital expenditure development pipeline and cash flow analysis provided by management to the Real Estate Committee. In approving real estate capital expenditures, the Real Estate Committee also considers an overview of the project and the market, including the competition, strategy, current capacity and sales pipeline. In addition, the Real Estate Committee has the authority to analyze, negotiate and approve the purchase, sale, lease or sublease of real property, approve guarantees related to real property transactions and, subject to any limitations or terms imposed by the full Board, if any, analyze, negotiate and approve real estate-related financing transactions. The members of the Real Estate Committee are Mr. Hromadko, Mr. Lyons and Mr. Paisley. Mr. Hromadko serves as chairperson of the Real Estate Committee. During the fiscal year ended Dec. 31, 2019, the Real Estate Committee held nine meetings.

The Stock Award Committee has the authority to approve the grant of stock awards to non-Section 16 officer employees and other individuals. The members of the Stock Award Committee are Mr. Lyons and Mr. Meyers. The Stock Award Committee typically does not hold meetings but acts by written consent.

BOARD RISK OVERSIGHT

Our Board's oversight of risk management is designed to support the achievement of organizational objectives, including strategic objectives, to improve Equinix's long-term organizational performance and to enhance stockholder value. The involvement of the full Board in setting Equinix's business strategy is a key part of its assessment of what risks Equinix faces, what steps management is taking to manage those risks,

and what constitutes an appropriate level of risk for Equinix. Our senior management attends the quarterly Board meetings, presents to the Board on strategic and other matters, and is available to address any questions or concerns raised about risk-management-related issues, or any other matters. Board members also have ongoing and direct access to senior management between regularly scheduled board meetings for any

 

 

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information requests or issues they would like to discuss. In addition, in Sept. 2019 the Board held a strategy meeting with senior management to discuss strategies, key challenges, and risks and opportunities for Equinix. The Board typically holds a meeting focused solely on strategy annually, to set the stage for the planning and development of Equinix's operating plan for the coming year.

Equinix has completed a global risk assessment to identify key strategic, operational, financial and regulatory compliance risks and will continue to evaluate such risks. These risks have been communicated to and assessed by Equinix's executive management, the Governance Committee and the full Board. The Board received an enterprise risk briefing in Sept. 2019 in connection with its strategy meeting and is scheduled to receive its next enterprise risk briefing in Sept. 2020. Additionally, in 2019 the full Board received a briefing on cybersecurity. Briefings on cybersecurity, as well as other enterprise risks, will also be provided in 2020.

Equinix's business continuity plans and crisis management team were activated early in 2020 in response to the COVID-19 pandemic. The Board has been receiving regular updates on the impact of the COVID-19 pandemic on various aspects of our business at each subsequently scheduled Board or committee meeting.

While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibility for risk management. In particular, the Governance Committee oversees Equinix's GRC Program, formally launched in 2013. In connection with this oversight, the Governance Committee receives quarterly updates on key issues, such as enterprise risk management, business continuity and disaster recovery planning, cybersecurity, and regulatory compliance. The Governance Committee also oversees our public policy activities and our corporate social responsibility program. The

Governance Committee evaluates the effectiveness of risk mitigation capabilities identified in these areas and monitors for emerging risks. Equinix's chief compliance officer, as leader of the GRC Program, reports on the program to the Governance Committee.

In addition, the Audit Committee's charter mandates that it discuss guidelines and policies governing the process by which management and other persons responsible for risk management assess and manage Equinix's exposure to risk, including Equinix's major financial risk exposures and the steps management has taken to monitor and control such exposures, based on consultation with management and the independent auditors. The Audit Committee also receives an annual assessment of the adequacy of the controls over financial reporting, including an assessment of the risks associated with the controls over the financial reporting process.

In setting compensation, the Compensation Committee strives to manage risks arising from our compensation policies and programs by setting compensation at levels that maximize stockholder long-term value without encouraging excessive risk-taking. For more information, please read "Compensation policies and practices risk assessment."

The Finance Committee manages risk by overseeing our capital management and capital structure. Additionally, the Finance Committee manages risk by oversight of our currency, interest rate and counterparty exposure.

Finally, the Real Estate Committee manages risk by evaluating real estate expansion opportunities and the deployment of capital within the context of Equinix's overall business and financial strategy and financial picture.

The Board believes that the risk management processes in place for Equinix are appropriate.

BOARD ONBOARDING PROGRAM

Equinix has an onboarding program, overseen by the Governance Committee, to introduce new Board members to Equinix and the Board. The program

includes orientation sessions on the Board's structure and processes, Equinix's compliance environment, and the business.

 

 

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INVESTOR ENGAGEMENT

Equinix pursues engagement with stockholders throughout the year to best understand and address the issues that matter to our stockholders. During 2019, Equinix's investor relations team met with numerous investors around the world by attending or hosting over 35 investor conferences, non-deal roadshows, and investor group events. Certain investors also requested engagement meetings to discuss topics related to ESG issues or our executive compensation program.

Additionally, Equinix's investor relations team proactively reached out for meetings with our 25 largest stockholders in the fall of 2019 to discuss our corporate governance model and other ESG topics and solicit feedback. All meetings that resulted were attended by Mr. Van Camp. We plan to conduct a similar outreach in 2020.

For information about how to contact our Board please see the section below entitled "Stockholder communications with the Board of Directors."

Other governance policies and practices

CORPORATE GOVERNANCE GUIDELINES

The Board follows its Guidelines published on the corporate governance section of Equinix's website at Equinix.com. The Guidelines reflect the Board's dedication to monitoring the effectiveness of policy and decision-making at the Board level. In conjunction with the Governance Committee, the Board will continue to monitor the effectiveness of the Guidelines.

CODE OF ETHICS AND BUSINESS CONDUCT

The Board has adopted (1) a Code of Business Conduct which applies to all directors, officers and employees and (2) an additional Code of Ethics for Chief Executive Officer and Senior Financial Officers. These documents can be found on the corporate governance section of Equinix's website at Equinix.com. In addition, anonymous reporting hotlines have been established to facilitate reporting of violations of financial and non-financial policies. Should the Board ever choose to amend or waive a provision of the Code of Ethics for Chief Executive Officer and Senior Financial Officers, we may disclose such amendment or waiver on the corporate governance section of Equinix's website at Equinix.com.

STOCK OWNERSHIP GUIDELINES

In its Guidelines, the Board has established a stock ownership requirement for Equinix's non-employee directors to encourage them to have a significant financial stake in Equinix. The Guidelines state that each non-employee director should own not less than six times their cash annual retainer for general service on the Board in shares of Equinix's common stock, including exercised stock options, vested restricted stock units ("RSUs") and deferred RSUs. New non-employee directors have five years from the date of their election to the Board to comply. Compliance with this requirement is measured annually at the end of each fiscal year. All directors subject to the Guidelines were in compliance as of Dec. 31, 2019.

Stock ownership guidelines for our chief executive officer and his direct reports have also been established and require that these executives achieve target ownership levels, expressed as a multiple of salary. The target ownership level for our chief executive officer is three times his annual salary; for all others, the target ownership level is one time their annual salary. Newly hired or promoted executives have up to five years to obtain compliance. Compliance with this requirement is measured annually at the end of each fiscal year. All executives subject to the guidelines were in compliance as of Dec. 31, 2019.

 

 

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POLICY PROHIBITING HEDGING

Equinix's Securities Trading Policy ("The Securities Policy") prohibits our Board members, officers, employees and consultants from engaging in certain transactions related to Equinix's common stock, such as transactions involving options on Equinix's securities, such as puts, calls and other derivative securities, whether on an exchange or in any other market. It also prohibits engaging in hedging transactions, such as collars and forward sale contracts.

RECOUPMENT POLICY

Our recoupment of incentive compensation policy applies to our executive officers (as defined by applicable securities laws). The policy states that the Board may require the return, repayment or forfeiture of any cash or equity-based incentive compensation payment or award received by any current or former executive officer during the three

completed fiscal years immediately preceding the date on which we are required to prepare a restatement of our financial statements due to material noncompliance with any financial reporting requirements under the securities laws and if certain other conditions are met.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Interested parties may contact the Board by sending correspondence to the attention of Equinix's corporate secretary, c/o Equinix, Inc., One Lagoon Drive, Redwood City, CA, 94065. Any mail received by the corporate secretary, except improper commercial solicitations, will be forwarded to the members of Equinix's Audit Committee for further action, if necessary. Equinix does not have a policy requiring attendance by members of the Board at Equinix's annual stockholder meetings. At Equinix's 2019 Annual Meeting, Mr. Van Camp and Mr. Paisley were in attendance and available for questions.

2019 Director compensation

Equinix uses a combination of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on the Board.

In setting director compensation, Equinix considers the competitive compensation market for directors in the high-technology market, the demands of the various roles that directors hold, and the time required to fulfill their duties to Equinix. Compensia conducts a detailed review of Equinix's director compensation program every two years, with an abbreviated review in the off years, and presents its findings to the Compensation Committee. The most recent detailed review occurred in Dec. 2018 and covered the design of the current program as compared to peer practices, using the same peers used for executive compensation decisions, and the alignment of total compensation and individual pay elements to this market.

Compensia's detailed review resulted in changes to the program which were recommended by the Compensation Committee to the full Board and

approved by the full Board in Dec. 2018. The changes were effective as of Jan. 1, 2019 and are reflected in 2019 director compensation. The changes were as follows:

·
An increase in the annual retainer from $60,000 to $70,000;

·
An increase in the lead independent director annual retainer from $25,000 to $30,000;

·
An increase in the Governance Committee annual retainers to $20,000 (chairperson) and $10,000 (member);

·
An increase in the Real Estate Committee annual retainers to $25,000 (chairperson) and $12,500 (member);

·
An increase in the Real Estate Committee threshold number of meetings from 6 to 8; and

·
An increase in the Finance Committee threshold number of meetings from 4 to 6.

 

 

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Non-employee directors receive a retainer in connection with their service on the Board. For fiscal 2019, the annual retainer was $70,000. In addition, in lieu of regular meeting fees, committee chairs (if any) and members received the following annual retainers for fiscal 2019, payable quarterly in arrears:

Committee

 
Chairperson
Member  

Audit

 
$

30,000
 
$

15,000
 

Compensation

  $ 25,000   $ 12,500  

Finance

  $ 12,500   $ 5,000  

Governance

  $ 20,000   $ 10,000  

Nominating

  $ 12,500   $ 5,000  

Real Estate

  $ 25,000   $ 12,500  

Currently, non-employee directors only receive meeting fees for attendance at committee meetings in excess of a specified number of meetings in a calendar year. For 2019, the committee meeting fees and the threshold number of meetings that must be attended before any meeting fees are paid were:

Committee

 
Chairperson

Member


Threshold
Number of
Meetings
 

Audit

 
$

5,000
 
$

3,000
   
12
 

Compensation

  $ 5,000   $ 3,000     8  

Finance

  $ 5,000   $ 3,000     6  

Governance

  $ 5,000   $ 3,000     5  

Nominating

  $ 5,000   $ 3,000     5  

Real Estate

  $ 5,000   $ 3,000     8  

Other

  $ 5,000   $ 3,000     6  

 

The Board has also designated a lead independent director who earned a $30,000 annual retainer in 2019.

Non-employee directors receive automatic grants of RSUs. At our annual meeting of stockholders, each non-employee director who will continue to be a director after that meeting is automatically granted an award of RSUs. For fiscal 2019, the grant date fair value of these annual awards was $250,000. The automatic RSU awards become fully vested on the earlier of (i) the first anniversary of Equinix's immediately preceding annual meeting of stockholders or (ii) in the case of a non-employee director not standing for reelection, the date of the first annual meeting of stockholders held subsequent to the date of grant. In addition, each non-employee director receives a prorated award of RSUs upon joining the Board with a grant date fair value of $250,000. The proration is based upon a

fraction equal to (x) the number of days from the start date of the non-employee director until the first anniversary of the date of Equinix's immediately preceding annual meeting of stockholders divided by (y) 365. The number of shares subject to each RSU award is determined by dividing the specified dollar value of the award by the closing price of Equinix's common stock on the date of grant. The RSUs granted to our directors will become fully vested if Equinix is subject to a change-in-control; in the event of the non-employee director's death, the portion of the RSUs that would have become vested on the next scheduled vesting date will become fully vested. Directors accrue dividend equivalent units on their RSUs. We allow our non-employee directors to elect to defer settlement of their RSUs. Directors are also eligible to receive discretionary awards under Equinix's 2000 Equity Incentive Plan. Our stock ownership guidelines for non-employee directors are described above.

 

 

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The following table sets forth all of the compensation awarded to, earned by or paid to each non-employee director who served during fiscal year 2019.

Name

 



Fees Earned
or Paid in
Cash(1)
($)







Stock
Awards(2)(3)(4)
($)




Total
($)
 

Thomas Bartlett

   
97,500
   
249,990
   
347,490
 

Nanci Caldwell

    90,000     249,990     339,990  

Gary Hromadko

    108,278     249,990     358,268  

Scott Kriens

    95,000     249,990     344,990  

William Luby

    87,500     249,990     337,490  

Irving Lyons III

    112,500     249,990     362,490  

Christopher Paisley

    163,500     249,990     413,490  

Sandra Rivera

    19,265     167,997     187,262  
(1)
Amounts listed in this column include the annual retainers for Board and committee service. Board and committee retainers are prorated based on the number of days the director served during the year. The amount in this column for Mr. Paisley also includes a $30,000 retainer for service as lead independent director.

(2)
Reflects RSUs covering 513 shares granted to each non-employee director on the date of our annual stockholders' meeting in May 2019. The amount for Ms. Rivera reflects 291 RSUs prorated from Oct. 2019.

(3)
Reflects the aggregate grant date fair value of the RSU awards granted to the director in 2019 computed in accordance with FASB ASC Topic 718. See Note 12 of the notes to our consolidated financial statements in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on Feb. 21, 2020 for a discussion of the assumptions made by Equinix in determining the values of our equity awards.

(4)
As of Dec. 31, 2019, Mr. Bartlett, Ms. Caldwell, Mr. Hromadko, Mr. Kriens, Mr. Luby, Mr. Lyons and Mr. Paisley each held 513 unvested RSUs, and Ms. Rivera held 291 unvested RSUs (including accrued dividend equivalent units).

Mr. Van Camp is our executive chairman, but not a named executive officer, and does not receive any additional compensation for services provided as a director. For the year ended Dec. 31, 2019, Mr. Van Camp earned $406,731 in salary and 75% of his salary in annual incentive compensation (paid in fully vested RSUs), and was granted 4,465 RSUs,

with the same service and performance vesting requirements as those granted to our named executive officers, for his service as Equinix's executive chairman. Mr. Meyers, our chief executive officer and president, did not receive any additional compensation for services provided as a director.

 

 

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Equinix stock ownership

The following table sets forth, as of Apr. 1, 2020, certain information with respect to shares beneficially owned by (i) each person who is known by Equinix to be the beneficial owner of more than 5% of Equinix's outstanding shares of common stock, (ii) each of Equinix's directors and nominees, (iii) each of the executive officers named in Executive Compensation and Related Information, and (iv) all current directors and executive officers (as defined by applicable securities laws) as a group. Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person's actual voting power at any particular date. Unless otherwise indicated, the address for each listed stockholder is c/o Equinix, Inc., One Lagoon Drive, Redwood City, CA 94065.

Name of Beneficial Owner

 
Number of Shares
Percentage of Total

Sara Baack

   
11,429
 

*

Thomas Bartlett

    5,742   *

Nanci Caldwell(1)

    2,267   *

Adaire Fox-Martin

      *

Gary Hromadko

    169,822   *

Scott Kriens(2)

    86,778   *

William Luby(3)

    41,264   *

Irving Lyons III(4)

    23,640   *

Charles Meyers

    10,935   *

Brandi Galvin Morandi

    20,989   *

Christopher Paisley(5)

    18,912   *

Sandra Rivera

      *

Karl Strohmeyer

    5,161   *

Keith Taylor

    32,325   *

Peter Van Camp

    5,858   *

The Vanguard Group(6)
100 Vanguard Blvd, Malvern, PA 19355

    11,183,560   13.02%

BlackRock Fund Advisors(7)
Park Avenue Plaza, 55 East 52nd Street, New York, NY 10055

    6,543,964   7.62%

All current directors and executive officers as a group (16 persons)(8)

    440,928   *
*
Less than 1%.

(1)
Includes 1,195 vested shares pursuant to RSUs as to which Ms. Caldwell has deferred the settlement until a later date.

(2)
Includes 6,868 vested shares pursuant to RSUs as to which Mr. Kriens has deferred the settlement until a later date.

(3)
Includes 2,837 vested shares pursuant to RSUs as to which Mr. Luby has deferred the settlement until a later date. Mr. Luby disclaims beneficial ownership of 5,358 shares held in the Luby Family Trust except to the extent of his pecuniary interest therein.

(4)
Includes 2,837 vested shares pursuant to RSUs as to which Mr. Lyons has deferred the settlement of until a later date.

(5)
Includes an aggregate of 845 shares held in trusts for Mr. Paisley's children and a brother.

(6)
Based on a Schedule 13D filed with the Securities and Exchange Commission as of Dec. 31, 2019. Includes 11,183,560 shares that are owned directly, 131,586 shares with sole voting power and 11,036,862 shares with dispositive power by The Vanguard Group Inc., an investment advisor. The total amount beneficially owned by The Vanguard Group is 11,183,560 shares.

(7)
Based on a Schedule 13D filed with the Securities and Exchange Commission as of Dec. 31, 2019. Includes 6,543,964 shares that are owned directly, 5,830,288 shares with sole voting power and 6,543,964 shares with dispositive power by BlackRock Inc., an investment advisor. The total amount beneficially owned by BlackRock Fund Advisors is 6,543,964 shares.

(8)
Includes 13,737 vested shares pursuant to RSUs as to which settlement has been deferred until a later date.

 

 

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Related party transactions

APPROVAL OF RELATED PARTY TRANSACTIONS

Per its written charter, Equinix's Audit Committee is responsible for reviewing all related party transactions in accordance with the rules of NASDAQ. Related parties include any of our directors or executive officers, our greater than 5% stockholders, and their immediate family members.

We review related party transactions due to the potential for a conflict of interest. A conflict of interest occurs when an individual's private interest interferes, or appears to interfere, with Equinix's interests. To identify related party transactions, each year we require our directors and executive officers to complete a questionnaire identifying any transactions with us in which the executive officer or director or their family members have an interest. We seek updates to this information from our directors and executive officers on a quarterly basis. We also ask our directors and executive officers to update their list of companies they are affiliated with

on a quarterly basis to help us identify related party transactions.

Finally, our Code of Business Conduct establishes corporate standards of behavior for all our employees, officers and directors and sets our expectations of contractors and agents. Our Code of Business Conduct seeks to deter wrongdoing and to promote honest and ethical conduct and encourages the reporting of illegal or unethical behavior. Waivers of the Code of Business Conduct may be granted by Equinix's chief executive officer, chief legal officer or chief compliance officer, provided that waivers for executive officers or directors may only be granted by the Board or by one of its committees.

The Audit Committee Charter and the Code of Business Conduct are available on the corporate governance section of Equinix's website at Equinix.com.

RELATED PARTY TRANSACTIONS FOR 2019

The Vanguard Group, Inc. was a holder of greater than 5% of our outstanding common stock during the 2019 fiscal year. In 2019, revenues from entities affiliated with The Vanguard Group, Inc. totaled approximately $3,139,000.

BlackRock Inc. was a holder of greater than 5% of our outstanding common stock during the 2019 fiscal year. In 2019, revenues from entities affiliated with BlackRock Inc. totaled approximately $1,708,000.

A son of our independent director, Mr. Paisley, is employed by Equinix. In 2019, Mr. Paisley's son received total compensation of approximately $150,000, including salary, incentive plan compensation and RSU vesting income. This amount is consistent with the compensation and benefits provided to other employees with equivalent qualifications, experience and responsibilities.

 

 

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Executive officers

The following are our executive officers (as defined by applicable securities laws), their ages as of Apr. 1, 2020, their positions and offices held

with Equinix, and certain biographical information. All serve at the discretion of the Board.

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Sara Baack
Chief Product Officer (since 2019)
Age 48

PRIOR BUSINESS EXPERIENCE

·

Chief marketing officer, Equinix (2012-2019)

·

Various management roles, most recently as senior vice president of voice services, Level 3 Communications, a communications services company (2000-2012)

·

Various positions, including vice president, principal transactions, PainWebber, Inc. (now UBS Financial Services) (1993-1998)

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Mike Campbell
Chief Sales Officer (since 2016)
Age 54

PRIOR BUSINESS EXPERIENCE

·

Senior vice president of sales, Equinix Americas (2015 - 2016)

·

Various sales management positions, most recently as senior vice president of sales, Symantec (2010 - 2015)

·

Vice president, sales, Verisign Americas, Verisign, prior to its merger into Symantec (2004 - 2010)

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Brandi Galvin Morandi
Chief Legal and Human Resources Officer and Corporate Secretary (since 2019)
Age 47

PRIOR BUSINESS EXPERIENCE

·

Chief legal officer, general counsel and secretary, Equinix (2003-2019)

·

Corporate attorney, Gunderson Dettmer (1997-2003)

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Karl Strohmeyer
Chief Customer and Revenue Officer (since 2019)
Age 48
PRIOR BUSINESS EXPERIENCE

·

President, Equinix Americas (2013-2019)

·

Various roles, including group vice president, Level 3 North American enterprise group, Level 3, a communications services company (2001-2013)

·

Various executive positions, NetRail, an internet services company (1998-2001)

 

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Keith Taylor
Chief Financial Officer (since 2005)
Age 58

PRIOR BUSINESS EXPERIENCE

·

Various roles, including vice president, finance and chief accounting officer, Equinix (2001-2005)

·

Director of finance and administration, Equinix (1999-2001)

·

Vice president finance and interim chief financial officer, International Wireless Communications, an operator, owner and developer of wireless communications networks (1996-1999)

 

 

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COMPENSATION

Proposal 2—Advisory non-binding vote on executive compensation

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") contains a provision that is commonly known as "Say-on-Pay." Say-on-Pay gives our stockholders an opportunity to vote on an advisory, non-binding basis to approve the 2019 compensation of our named executive officers as disclosed in this proxy statement. We are asking our stockholders to indicate their support for the compensation of our named executive officers as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation program and practices described in this proxy statement. Our executive compensation program is tied directly to the performance of the business to ensure strong growth and value creation for stockholders using metrics we believe best indicate the success of our business. Please read "Compensation discussion and analysis" and the executive compensation tables and narrative disclosure for a detailed explanation of our executive compensation program and practices.

Accordingly, we ask that you vote "FOR" the following resolution:

    "RESOLVED, that the stockholders of Equinix, Inc., hereby approve, on an advisory basis, the compensation of the named executive officers as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission in Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and any related material disclosed in this proxy statement for the annual meeting."

This advisory vote on executive compensation is not binding on us. However, the Board and the Compensation Committee highly value the opinions of our stockholders. To the extent there is a significant vote against this proposal, we will seek to determine the reasons for our stockholders' concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns when making future executive compensation decisions.

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Compensation roadmap

GRAPHIC   I.   How did we perform and what are our practices?    
    COMPENSATION DISCUSSION AND ANALYSIS   24
    Introduction   24
    Executive Summary   25
    2019 Executive Compensation Program   28
    Principal Elements of Executive Compensation   31
    Tax and Accounting Considerations   37

 

 

COMPENSATION COMMITTEE REPORT

 

37

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II.

 

How were our CEO and NEOs compensated?

 

 
    EXECUTIVE COMPENSATION TABLES AND RELATED INFORMATION   38
    Summary Compensation Table   38

    2019 Grants of Plan-Based Awards   39
    Outstanding Equity Awards at 2019 Fiscal Year-End   41
    2019 Option Exercises and Stock Vested   43
    Potential Payments Upon Termination or Change-in-Control   43
    Severance Agreements   43
    Equity Vesting Acceleration   45

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III.

 

What are our policies and compliance?

 

 
    Compensation Policies and Practices Risk Assessment   47
    Compensation Committee Interlocks and Insider Participation   48
    Equity Compensation Plan Information   48
    CEO to Median Employee Pay Ratio   49

Compensation discussion and analysis

INTRODUCTION

This Compensation Discussion and Analysis ("CD&A") describes Equinix's executive compensation policies and decisions for the individuals who served as our chief executive officer

and chief financial officer during 2019, as well as the other individuals included in the 2019 Summary Compensation Table in this proxy statement, who are collectively referred to as the named executive officers.

Those individuals are:

Name


Position

Charles Meyers

  Chief Executive Officer and President

Keith Taylor

  Chief Financial Officer

Sara Baack

  Chief Product Officer

Brandi Galvin Morandi

  Chief Legal and Human Resources Officer and Corporate Secretary

Karl Strohmeyer

  Chief Customer and Revenue Officer

 

In connection with the evolving needs of our customers and our business, and under the direction of Mr. Meyers, Equinix undertook a review

of its organizational architecture and made, and will continue to make, changes as a result of that review. In connection with these changes,

 

 

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Ms. Baack, Ms. Morandi and Mr. Strohmeyer all transitioned into new or different roles in 2019.

Effective Apr. 12, 2019, Ms. Baack was appointed chief product officer of Equinix, responsible for defining, developing and delivering Equinix's portfolio of products and services. Ms. Baack had previously held the role of chief marketing officer.

Ms. Morandi served as Equinix's general counsel and corporate secretary from 2003 until 2018. In 2018, Ms. Morandi's role was expanded to take on the role of interim chief human resources officer. Ms. Morandi was formally appointed chief legal and human resources officer and corporate secretary on Feb. 8, 2019. Ms. Morandi now oversees both the

global legal organization and the global human resources organization at Equinix.

Mr. Strohmeyer, who was previously Equinix's president, Americas, was appointed to the newly created role of chief customer and revenue officer, overseeing Equinix's overall go-to-market strategy. Reporting to Mr. Strohmeyer are sales, marketing, customer care and experience, commercial solutions, and Equinix's regional management across the Americas, EMEA and Asia-Pacific. These changes were effective Apr. 12, 2019.

Compensation changes associated with these role changes are described in further detail below.

EXECUTIVE SUMMARY

Overview

Our executive compensation program strives to align business performance and executive rewards to drive strong business growth and value creation for our stockholders using performance metrics we believe best indicate the success of our business strategy.

In 2019, our compensation program for the named executive officers consisted primarily of base salary,

annual incentive compensation, and long-term incentive compensation in the form of time-based and performance-based restricted stock units ("RSUs"), for target total direct compensation approved in Feb. 2019 as illustrated in the graphics below.(1)

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(1)
Reflects the market value of the RSU awards on the grant date of Feb. 22, 2019. Assumes the target award is earned under the 2019 annual incentive plan and the target number of shares is earned under the performance-based RSU awards. Excludes one-time, special time-based awards granted to Ms. Baack, Ms. Morandi, and Mr. Strohmeyer in connection with their appointments to new roles in Feb. 2019 for Ms. Morandi and Apr. 2019 for Ms. Baack and Mr. Strohmeyer.

 

 

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For 2019, excluding the time-based awards granted to Mses. Baack and Morandi and Mr. Strohmeyer in connection with their appointment to new roles in 2019, 100% of our short-term and 60% of our long-term incentives (assuming the target award amounts were earned) for our named executive officers were performance-based, dependent on annual revenue and adjusted funds from operations

per share of Equinix's common stock ("AFFO/Share") growth, along with relative total stockholder return ("TSR") achievement against the IWB Russell 1000 Index Fund (the "Russell 1000"). This emphasis on annual revenue and AFFO/Share is mitigated by the use of TSR as a metric for our long-term incentives.

The performance periods and vesting periods of our 2019 incentive compensation are illustrated as follows:

Incentive Compensation
Element

 

Weighting
Form of
Payment


Performance
Metrics


Performance
Period


Vesting

Annual Incentive

 

 

n/a

 

RSUs

 

Revenue & AFFO/Share

 

1 year

 

Shares vest upon certification of financial results at end of one-year performance period
Long Term Incentive     40 % RSUs   Revenue & AFFO/Share   1 year   3 years—earned shares vest in three equal annual increments from grant date (subject to continued service)
Long Term Incentive     40 % RSUs   n/a   n/a   3 years—shares vest in three equal annual increments (subject to continued service)
Long Term Incentive     20 % RSUs   TSR   3 years   Shares vest upon certification of financial results after end of three year performance period

2019 Program Changes

In a change for 2019, the metric of AFFO/Share was used instead of AFFO as a performance metric under our 2019 annual incentive plan, applying to all eligible employees, and for 40% of the long-term incentives granted to our executives. This change was made to further align executive and employee incentives with the interests of our stockholders by focusing management on non-dilutive growth to AFFO.

For 2019, we also changed the form of payout under our annual incentive plan for executives and certain other U.S. senior staff to fully vested RSUs, in lieu of cash, to retain more cash in the business to fund our investments and further align the short-term incentive awards of the executives with our stockholders' interests.

Finally, in 2019 we made the following changes to our executive severance benefits:

·
We modified the terms of the RSU awards granted to our named executive officers to provide that 100% (previously 50%) of the outstanding unvested portion of the RSU awards, including any dividend equivalents, will

    automatically vest if (i) a change-in-control of Equinix occurs and (ii) the executive incurs either an involuntary termination of employment at any time within 12 months following the change-in-control or a voluntary resignation for good reason at any time between the date that is four months following the change-in-control and the date that is 12 months following the change-in-control. The change to increase the accelerated vesting percentage was intended to better align our long-term incentive program to market and encourage our executive officers to continue to devote their attention to their duties and to facilitate an acquisition with minimized distraction.

·
We entered into new severance agreements with each of our named executive officers to provide for greater benefits in the event of a qualifying termination of employment that occurs after a change-in-control of Equinix. Under the new severance agreements, a named executive officer who incurs either an involuntary termination of employment at any time within 12 months following a change-in-control or a voluntary resignation for good reason at any

 

 

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    time between the date that is four months following the change-in-control and the date that is 12 months following the change-in-control is eligible to receive a severance payment equal to 200% of his or her annual base salary and target bonus, as well as continued health insurance coverage under COBRA at Equinix's expense for up to 24 months. Prior to these new

    severance agreements, the corresponding severance payment amount was based on 100% of the named executive officer's annual base salary and target bonus and the health insurance coverage period was up to 12 months. These enhanced benefits were intended to better align our severance benefits to market.

2019 Business Results

The 4th quarter of 2019 was our 68th consecutive quarter of revenue growth. For the full year of 2019, we delivered revenue growth of 10% and AFFO growth of 16%, on an as-reported basis, over strong 2018 results. Our revenue growth was 9% and our AFFO growth was 13% on a normalized and constant currency basis. Our AFFO/Share was

$22.81 per share, a 10% increase over the previous year or 8% on a normalized and constant currency basis. These results fully funded annual incentive compensation and resulted in 114% achievement under the performance RSUs based on revenue and AFFO/achievement for the named executive officers.

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Governance Policies and Practices

Our executive compensation philosophy is complemented by the following governance best practices:

·
We have a policy on recoupment of incentive compensation which applies to those persons who are designated by the Board as "officers" for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder. The policy states that the Board may require the return, repayment or forfeiture of any cash or equity-based incentive compensation payment or award received by any such current or former officer during the three completed fiscal years immediately preceding the date on which we are required to prepare a restatement of our financial statements due to material

    noncompliance with any financial reporting requirements under the securities laws and if certain other conditions are met

·
Our chief executive officer and his direct reports (including the named executive officers) are subject to stock ownership guidelines, at a level of three times and one-time base salary, respectively

·
We have a policy prohibiting all employees, including the named executive officers and members of the Board, from engaging in transactions involving options on Equinix's securities, such as puts, calls and other derivative securities, whether on an exchange or in any other market, or in hedging transactions, such as collars and forward sale contracts. No categories of hedging transactions are specifically permitted

 

 

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·
Our executives (including the named executive officers) and members of the Board are prohibited from holding Equinix securities in a margin account or pledging Equinix securities as collateral for a loan, absent an exception granted by the Compensation Committee on a case-by-case basis

·
Our named executive officers are not offered single trigger vesting on a change-in-control

·
Named executive officers at Equinix are not offered any significant perquisites or tax gross-ups, other than in connection with a relocation or international assignment, defined benefit pension plans, non-qualified deferred compensation plans or any executive retirement benefits

·
The Compensation Committee is comprised solely of independent members

·
An independent compensation consultant, Compensia, is retained directly by the Compensation Committee and performs no other work for Equinix

·
The Compensation Committee reviews tally sheets when making executive compensation decisions

·
In Mar. 2020, we conducted a risk assessment of our compensation programs and presented the results to the Compensation Committee. The Compensation Committee considered the findings of the assessment and agreed with our conclusion that our compensation programs are not reasonably likely to have a material adverse effect on Equinix

Results of 2019 Say on Pay Vote

In 2019, we held our annual stockholder advisory vote on the compensation of the named executive officers. The proposal received significant stockholder support, with more than 90% voting in favor of our program (based on shares represented in person or by proxy at the meeting and entitled to vote on the matter). Based on these voting results, the Compensation Committee did not believe any material changes to our executive compensation program design were required for 2020.

2019 EXECUTIVE COMPENSATION PROGRAM

2019 Program Philosophy and Objectives

Our executive compensation philosophy for 2019 was to provide competitive total rewards programs globally to attract and retain top talent, utilizing a pay-for-performance strategy at both the company and the individual level. Consistent with our compensation philosophy, a significant percentage of each named executive officer's target total direct compensation was tied to performance, as illustrated by the potential pay mix described above. We believe our strong performance in recent years, and the fact that a significant percentage of each named executive officer's total compensation is either tied to performance or is "at risk," supports our compensation philosophy.

2019 Pay Positioning

While we review the market data in determining compensation, we do not specifically target a certain percentile of the market for overall compensation or for any particular element of compensation. We consider the overall range of the market data, as well as the alignment of the position in the overall market to the executive's actual role and responsibilities, when setting compensation for an executive role. Based on this information, we seek to provide a competitive base salary and target bonus, and to concentrate the executive's overall compensation in their equity awards, to better align the executive's interests with those of our stockholders and focused on our overall long-term performance.

In addition to looking at the market data and its comparability, we consider the following additional factors when determining compensation, with no single factor being determinative:

·
Our performance both over the past year and long term

·
The executive's performance over the year and throughout their career with us

·
The executive's level of experience in the position

·
The executive's marketability in the marketplace based on their skill set

 

 

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·
The executive's criticality to our operations and the difficulty we would have in replacing them

·
Internal parity between executives based on their contributions

The Compensation Committee uses peer group survey data, proxy statement data and technology industry survey data to define our competitive market. Our peer group is reviewed annually to ensure it reflects changes in our market and competitors for business and talent. With the assistance of Compensia, a preliminary list of peer group companies was selected to establish the competitive market for the 2019 compensation of our named executive officers in May 2018. In developing the peer group, the Compensation

Committee decided to retain its prior approach to peer group selection, and oriented the peer group primarily towards technology companies with similar financial characteristics (to reflect Equinix's competitive market), but included some REITs to provide a more balanced market perspective. Technology companies and REITs with revenue of approximately 0.5-2.0x Equinix's last four quarters of revenue and market capitalization of approximately 0.33-3.0x Equinix's then-current market capitalization were considered in developing the peer group. For purposes of the Compensation Committee's 2019 compensation review and decisions, our peer group consisted of the following 16 companies (which remained the same as the peer group selected for 2018):

·

Adobe Systems

 

·

Cerner

 

·

Electronic Arts

 

·

Juniper Networks

·

Akamai Technologies

 

·

Citrix Systems

 

·

F5 Networks

 

·

Prologis

·

American Tower

 

·

Crown Castle Intl.

 

·

Intuit

 

·

Red Hat

·

Autodesk

 

·

Digital Realty Trust

 

·

Iron Mountain

 

·

Synopsys

In addition, recognizing the importance of considering REIT industry pay practices, with the assistance of Compensia, a REIT-only peer list was developed to review REIT-specific practices regarding compensation plan design for 2019, consisting of the five REITs in the peer group plus 16 additional REITs of comparable size (which remained the same as the REIT peer group selected for 2018):

·

American Tower

 

·

General Growth Properties

 

·

Simon Property Group

·

AvalonBay Communities

 

·

HCP

 

·

SL Green Realty

·

Boston Properties

 

·

Host Hotels & Resorts

 

·

The GEO Group

·

CoreCivic

 

·

Iron Mountain

 

·

Ventas

·

Crown Castle

 

·

Prologis

 

·

Vornado Realty Trust

·

Digital Realty Trust

 

·

Public Storage

 

·

Welltower

·

Equity Residential

 

·

SBA Communications

 

·

Weyerhaeuser

 

In 2018, we participated in the AON/Radford High Technology compensation survey and used peer market data from a subset of the survey to benchmark our executive positions for 2019 compensation decisions.

2019 Compensation-Setting Process

The Compensation Committee reviews the executive compensation levels of our named executive officers at least annually to determine positioning to the competitive market. The chief executive officer, as the manager of the executive team, assesses the named executive officers' contributions to Equinix's performance and makes a

recommendation to the Compensation Committee with respect to any merit increase in base salary, target annual incentive compensation opportunity and equity awards for each named executive officer, other than himself. The chief executive officer, or the executive chairman in the case of the chief executive officer, recommends any adjustments to each element of compensation in light of their assessment of the competitiveness of the executive's compensation and the additional factors noted above, with the goal of paying each executive competitively based on an assessment of their overall performance and situation.

In addition to reviewing the recommendations of the chief executive officer for the compensation of his executive officer direct reports, and the

 

 

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recommendation of the executive chair with respect to the chief executive officer's compensation, the Compensation Committee also considers the factors noted above as well as the experience of its members in making a final determination on each executive officer's compensation. The Compensation Committee meets to evaluate, discuss and modify or approve these recommendations based on their own judgment. For 2019, based on the recommendations of the executive chair, the Compensation Committee conducted a similar evaluation for Mr. Meyers as the chief executive officer, and approved his compensation elements for 2019.

Members of management support the Compensation Committee in its work by preparing periodic analysis and modeling related to the compensation programs and providing frequent updates on programs that fall under the Compensation Committee's responsibility. In addition, the Compensation Committee has the exclusive authority under its charter to engage the services of independent outside counsel, consultants, accountants and other advisers to assist it in carrying out its duties. Since 2006, the Compensation Committee has engaged the services of Compensia as its independent consultant to advise it on matters related to compensation for executive officers and other key employees, and on best practices to follow as they review and make decisions on Equinix's compensation programs. Equinix's chief executive officer attends most Compensation Committee meetings and reviews and provides input on agendas and compensation proposals and recommendations brought before the Compensation Committee for review and approval but is not present during any discussion of his own compensation.

In connection with the 2019 compensation decisions, in Oct. 2018 Compensia presented to the Compensation Committee a detailed executive compensation analysis, assessing Equinix's current executive pay and financial performance as compared to our peer group. For our executive officers, including the named executive officers, Compensia identified any gaps between the current and target pay positioning and presented market competitive data for each position for base salary, target annual incentive compensation opportunity, long-term incentive compensation and target total direct compensation, to provide a framework and guide for making individual compensation decisions. Compensia also presented to the Compensation

Committee an equity compensation market review, comparing the practices of our peer group in terms of equity usage and equity program design.

In Dec. 2018, Compensia provided the Compensation Committee with "tally sheets" outlining the total dollar compensation paid to each named executive officer in 2015-2018, including base salary, annual incentive compensation, long-term equity compensation and other compensation. The Compensation Committee used the tally sheet information as a basis for understanding the potential impact of recommended changes to the elements of our executive compensation program and to evaluate the degree to which unvested shares of our common stock held by a named executive officer encouraged retention.

2019 Compensation Decisions

In Feb. 2019, the Compensation Committee considered executive compensation program design considerations and recommendations and approved compensation for the named executive officers for their roles at that time, including the compensation elements for Mr. Meyers.

In Feb. 2019, Ms. Morandi was appointed to chief human resources officer in addition to her then current positions as chief legal officer and corporate secretary. In Apr. 2019, the Board appointed Ms. Baack to chief product officer, and Mr. Strohmeyer to chief customer and revenue officer. The Compensation Committee received detailed market data and recommendations from Compensia and also consulted with Mr. Meyers before approving enhanced compensation for these executives as described below.

Ms. Morandi's compensation was revised effective Mar. 29, 2019, to consist of the following: (a) a new base salary of $540,000 and (b) a one-time grant of 2,308 time-based RSUs.

Mr. Strohmeyer's compensation was revised effective Mar. 29, 2019, to consist of the following: (a) a new base salary of $600,000, (b) a target bonus opportunity under our 2019 annual incentive plan of up to 100% of his new base salary, pro-rated to reflect his new role for 2019, and (c) a one-time grant of 6,923 time-based RSUs.

In Oct. 2019, Ms. Baack received a one-time grant of 2,629 time-based RSUs.

 

 

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Compensia continues to advise the Compensation Committee on an ongoing basis, and a representative from the firm attends most Compensation Committee meetings. In 2019, Compensia performed its annual market review of executive pay practices, perquisites and benefits, as discussed above, and director compensation. Compensia also provides routine updates to the Compensation Committee regarding legal and

regulatory trends. In 2019, Compensia also provided the Compensation Committee with modeling and recommendations for Equinix's equity program. The Compensation Committee has assessed the independence of Compensia pursuant to Securities and Exchange Commission rules and concluded that Compensia's work for the Compensation Committee does not raise a conflict of interest.

PRINCIPAL ELEMENTS OF EXECUTIVE COMPENSATION

Base Salary

Base salary for the named executive officers is established based on the underlying scope of their respective responsibilities, taking into account competitive market compensation data and individual performance. In Feb. 2019, based on the executive compensation assessment from Oct. 2018 and the recommendations of Mr. Meyers as chief executive officer, the Compensation Committee determined not to change the base salary of any of for our named executive officers. Effective Mar. 29, 2019, the base salaries of Ms. Morandi and Mr. Strohmeyer were increased to the levels shown in the table below in connection with their appointment to new roles based on the increase in their responsibilities as described above under "2019 Compensation Decisions."

Name

 
2018 Salary

2019 Salary
Increase

Charles Meyers

 
$

1,000,000
 
$

1,000,000
 

0%

Keith Taylor

  $ 680,000   $ 680,000   0%

Sara Baack

  $ 465,000   $ 465,000   0%

Brandi Galvin Morandi

  $ 520,000   $ 540,0001   3.8%

Karl Strohmeyer

  $ 510,000   $ 600,0002   17.6%
(1)
Note that the salary of Ms. Morandi increased from $520,000 to $540,000, effective Mar. 29, 2019, in connection with her appointment as chief legal and human resources officer and corporate secretary. Her total salary for 2019, prorated to reflect her new role, can be found in the 2019 Summary Compensation Table in this proxy statement.

(2)
Note that the salary of Mr. Strohmeyer increased from $510,000 to $600,000, effective Mar. 29, 2019, in connection with his appointment as chief customer and revenue officer. His total salary for 2019, prorated to reflect his new role, can be found in the 2019 Summary Compensation Table in this proxy statement.

Annual Incentive Compensation

Annual incentive compensation for the named executive officers is linked to the attainment of Equinix's corporate growth goals and is not tied to individual performance (although the Compensation Committee retains discretion to adjust payouts based on its assessment of such additional factors, including qualitative factors, if any, that the Compensation Committee deems relevant to the assessment of individual or corporate performance). This focus on team performance at the executive level is designed to align senior leaders towards common goals. Accordingly, in Feb. 2019, the Compensation Committee adopted the 2019 annual incentive plan, pursuant to which the named

executive officers were eligible to earn an annual incentive bonus to be paid in the form of fully vested RSUs. This shift from payment in cash to fully vested RSUs was designed to allow Equinix to retain more cash in the business to fund our investments and to further align the executives' incentives with our stockholders' interests. Under the 2019 annual incentive plan, the Compensation Committee assigned each named executive officer an annual target bonus opportunity based on the achievement of specific goals related to revenue and AFFO/Share that tied to the 2019 annual operating plan approved by the Board. In a change for 2019, the metric AFFO/Share was used instead

 

 

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of AFFO as a performance metric under our 2019 annual incentive plan. This change was made to further align executive and employee incentives with the interests of our stockholders by focusing management on non-dilutive growth to AFFO. The revenue goal that was set under the 2019 operating plan reflected anticipated continued growth across the global platform based on past experience, the addressable market and our available inventory. The AFFO/Share goal set under the 2019 operating plan contemplated delivery of services to customers, asset maintenance, operating leverage, investments in the business, expansions in key markets, capital markets activity and distributions to our stockholders. Because there would be no incentive plan pool if revenue and AFFO/Share were 95% or less than the operating plan target, annual incentive compensation was 100% at risk. Additionally, the payout for each named executive officer under the 2019 annual incentive plan was capped at 100% of his or her annual target bonus opportunity.

Achievement of the revenue and AFFO/Share goals at a level between 95% and 100% of the operating plan target was subject to interpolation on a straight-line basis.

Achievement of performance goals under the 2019 annual incentive plan was adjusted for fluctuations in foreign currencies against the foreign currency rates used in the 2019 budget plan and hedging activity. Other adjustments included accounting adjustments, financing adjustments, adjustments for certain acquisitions and special projects and other normalizing items not contemplated by Equinix at the time the performance goals were established. All adjustments were authorized under the 2019 annual incentive plan. Based on the comparison of the targets to the adjusted results below, Equinix funded the 2019 annual incentive plan at 114% for all employees, while capping the named executive officers and members of the executive team at 100% of their target opportunity.

Metric

 
Weighting

Target


Reported
Results


Adjusted
Results*

Revenue

   
50

%

$

5,527 million
 
$

5,562 million
 

$5,564 million

AFFO/Share

    50 % $ 22.23/Share   $ 22.81/Share   $22.69/Share
*
Adjusted as described above. For a reconciliation of GAAP to non-GAAP financial measures, please refer to pages 53-56 of our Annual Report on Form 10-K filed with the Securities Exchange Commission on Feb. 21, 2020.

The annual target bonus opportunity set for each named executive officer was stated in terms of a percentage of the named executive officer's base salary. In Feb. 2019, the Compensation Committee retained the same target bonus opportunities as for 2018 for each of the named executive officers. Effective Apr. 2019, Mr. Strohmeyer's target bonus

opportunity was increased to 100% in connection with his appointment to chief customer and revenue officer. Under the 2019 annual incentive plan, target bonus opportunities, as a percentage of base salary, and bonus awards (calculated based on the base salary in effect at year-end) were as follows:

Name

 


2018 Bonus
Opportunity
(% Base Salary)






2019 Bonus
Opportunity
(% Base Salary)






2019 Bonus
Award Paid
(100% of Target)(2)



Number of
RSUs
Awarded(2)

Charles Meyers

   
130

%
 
130

%

$

1,300,000
 

2,093

Keith Taylor

    110 %   110 % $ 748,000   1,204

Sara Baack

    90 %   90 % $ 418,500   673

Brandi Galvin Morandi

    90 %   90 % $ 486,000   782

Karl Strohmeyer

    90 %   100 %(1) $ 600,000   966
(1)
Mr. Strohmeyer's bonus opportunity was increased from 90% to 100% following his appointment to chief customer and revenue officer in Apr. 2019.

(2)
This value of the bonus award was paid in the form of fully vested RSUs with the number of RSUs calculated using the closing price of Equinix's common stock on Mar. 13, 2020 ($621.09), the date the RSUs were issued. Cash was paid in lieu of any fractional shares.

 

 

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On Feb. 26, 2020, the Compensation Committee approved that the bonus targets were met under the 2019 annual incentive plan. On Mar. 13, 2020, the day the bonuses were deemed earned and paid, we converted the cash bonus of each of the named executive officers into a fully vested RSU award by dividing the bonus amount by the Equinix closing stock price on Mar. 13, 2020, which was $621.09. On the subsequent trading day, Mar. 16, 2020, depending on each named executive officer's election, the shares were sold, either in whole or in part, according to planned selling and/or to cover the related tax withholding obligation. Due to the unprecedented volatility in the stock market resulting from the COVID-19 pandemic, the Equinix share

price on Mar. 16, 2020 ranged from $530 to $586.28 resulting in an immediate loss to the named executive officers to a degree not foreseen when the Compensation Committee adopted the 2019 annual incentive plan and determined to pay incentives in RSUs, rather than cash. In recognition of the uniquely challenging time, the Compensation Committee approved one-time cash payments equal to the price differential between the stock price on Mar. 13, 2020 ($621.09), and the price at which shares were sold on Mar. 16, 2020, for each of the shares sold on behalf of the named executive officers and other employees who received RSUs in lieu of cash under the 2019 annual incentive plan. These one-time payments were as follows:

Name

 

2020
One-Time
Cash Payments
 

Charles Meyers

 
$

113,907
 

Keith Taylor

  $ 65,237  

Sara Baack

  $ 37,794  

Brandi Galvin Morandi

  $ 39,064  

Karl Strohmeyer

  $ 54,081  

 

Such payments will be reflected in the 2020 Summary Compensation Table in next year's proxy statement.

Long-Term Equity Compensation

The Compensation Committee believes that stock awards with performance-based vesting encourage executive performance by focusing on long-term growth and profitability, which it believes are the primary drivers of stockholder value creation. Generally, a market competitive equity award is made in the year that an executive officer commences employment with Equinix. Thereafter, additional "refresh" awards are generally made during the first quarter of each year. The size of each award is based upon consideration of a number of factors, including consideration of the individual's position with Equinix, their potential for future responsibility and promotion, their individual performance in the recent period, Equinix's performance in the recent period, the competitive marketplace trends, internal equity and the retention value of unvested shares held by the individual at the time of the new grant. Our equity awards also accrue dividend equivalents, which vest on the same schedule as the underlying award and are settled in cash, and therefore no dividend equivalents are paid on awards unless and until the underlying award becomes earned and vested.

In Feb. 2019, the Compensation Committee discussed long-term incentive compensation awards in the form of RSUs for the named executive officers as follows:

·
An award based on revenue and AFFO/Share performance (the "Revenue-AFFO/Share Performance-Based Award") to focus management on revenue growth and on non-dilutive growth to AFFO

·
An award based on relative TSR (the "TSR Performance-Based Award") as a means of further aligning management incentives and stockholder interests

·
A time-based award (the "Time-Based Award") as appropriate retention balance with our performance-based awards, while still tying executives' interests to our stock price performance over the vesting schedule

The Compensation Committee determined that for 2019 the allocation of the long-term incentive compensation between the three types of awards

 

 

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would be based on the target opportunity versus the maximum opportunity, as illustrated in the table below. We believe this shift to allocation at target

aligns our program with market practices and is more consistent with the market data, allowing for better comparisons with our peers.


 
2018 Weighting

2019 Weighting
       

Equity Award



Target

Maximum

Target
Maximum

Revenue-AFFO/Share

   
52.6

%
 
50

%
 
40

%

37.5%

TSR-Performance

    15.8 %   25 %   20 % 31.3%

Time-Based

    31.6 %   25 %   40 % 31.3%

 

In Feb. 2019, the Compensation Committee considered the equity award design for 2019, including proposed award sizes, and granted a Revenue-AFFO/Share Performance-Based Award, a TSR Performance-Based Award and a Time-Based Award to each of the named executive officers. The following table presents the target number of shares that could/can be earned under each equity award, as follows:

Name

 


Revenue-AFFO/Share
Performance-Based
Award (#)






TSR Performance-
Based Award
(#)





Time-Based
Award
(#)
 

Charles Meyers

   
11,734
   
5,867
   
11,734
 

Keith Taylor

    5,102     2,551     5,102  

Sara Baack

    3,061     1,530     3,061  

Brandi Galvin Morandi

    3,571     1,786     3,571  

Karl Strohmeyer

    3,826     1,913     3,826  

 

Revenue-AFFO/Share Performance-Based Awards

As explained above, AFFO/Share was used as a performance metric for these Performance-Based awards instead of AFFO, which had been used in previous years. This change was made to further align executive and employee incentives with the interests of our stockholders by focusing management on non-dilutive growth to AFFO. The Revenue-AFFO/Share Performance-Based Awards were 100% at risk and could be earned only if Equinix achieved revenues greater than $5,251 million and AFFO/Share greater than $22.12 in 2019. The number of RSUs earned is determined upon certification by the Compensation Committee that Equinix had achieved at least the minimum revenue and AFFO/Share goals for 2019, subject to linear interpolation based on the degree of achievement of the revenue and AFFO/Share targets, from 0% of the award at or below the foregoing thresholds to 100% of the award (upon achievement of both revenue and AFFO/Share goals of at least $5,527 million and $22.23, respectively, tied to the annual operating plan). The maximum amount that can be earned under these awards is 120% of target. Fifty percent of any earned RSUs would vest upon the date of

certification; 25% of the earned RSUs would vest on Feb. 15, 2021; and the remaining 25% of the earned RSUs would vest on Feb. 15, 2022, in each case, subject to the recipient's continued service on each vesting date. The Compensation Committee deemed the one-year performance period, followed by time-based vesting over the following two years, appropriate given the high growth orientation of the business and the practices of peer companies with whom we compete for talent.

The revenue and AFFO/Share goals were set as described above under "Annual Incentive Compensation" and performance against the goals was similarly adjusted.

In Feb. 2020, the Compensation Committee certified that we achieved adjusted revenues of approximately $5,564 million and adjusted AFFO/Share of approximately $22.69 for 2019. The certification of this performance resulted in the Revenue-AFFO/Share Performance-Based Awards being earned at 114% of the target award. Consequently, 50% of the earned shares awarded vested immediately, with the remaining shares vesting in equal 25% increments on Feb. 15, 2021 and Feb. 15, 2022, respectively.

 

 

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TSR Performance-Based Awards

The number of shares to be earned under the TSR Performance-Based Awards will be determined based on the TSR of Equinix's common stock ("EQIX") as measured against the TSR of the Russell 1000 over a three-year performance period, calculated