☐☐☒☐☐(Name of Registrant as Specified In Its Charter)the appropriate box)all boxes that apply):☒☐belowin exhibit required by Item 25(b) per Exchange Act Rules
Notice of 2023 Annual Meeting of Stockholders |
March 24, 2023
To our stockholders:
I invite you to attend the 2023 annual meeting of stockholders of Prologis, Inc. at 1:30 p.m. on May 4, 2023. Our annual meeting will be held in a virtual format only. You will not be able to attend the annual meeting physically.
Items of business. The following items of business will be conducted at our 2023 annual meeting of stockholders:
| 1. | Elect eleven directors to our Board to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified. |
Advisory vote to |
Advisory vote on the frequency of |
Ratify the appointment of |
Consider any other matters that may properly come before the meeting and at any adjournments or postponements of |
| Record Date. If you were a holder of shares of our common stock at the close of business on March 7, 2023, you are entitled to receive this notice and to vote at the annual meeting and any adjournment(s) or postponement(s) of the annual meeting. | How to Vote. You can vote your shares by proxy through the Internet, by telephone or by mail using the instructions on the proxy card or you can vote during the virtual annual meeting. Any proxy may be revoked in the manner described in the accompanying proxy statement at any time prior to its exercise at the annual meeting. | Meeting Attendance. To be admitted to the annual meeting at www.virtualshareholdermeeting.com /PLD2023, you must enter the control number found on your proxy card or voting instruction form or notice you previously received. You may vote during the annual meeting by following the instructions available on the meeting website during the meeting. |
Proxy Materials. On or about March 24, 2023, we intend to distribute to our stockholders:
| (i) | Either in printed form by mail or electronically by email, a Notice of Annual Meeting and Internet Availability of Proxy Materials containing instructions on: (a) how to electronically access our 2023 Proxy Statement and 2022 Annual Report to Stockholders, which includes our 2022 Annual Report on Form 10-K; (b) how to vote; and (c) how to request printed proxy materials (if desired). |
If requested or required, printed proxy materials, which will include our 2023 Proxy Statement, our 2022 Annual Report on Form 10-K and a proxy card. |
Prologis Proxy Statement
Notice of Annual Meeting
of Stockholders
Wednesday, May 2, 2018
1:30 p.m., Pacific time
Pier 1, Bay 1
San Francisco, California 94111
The date of this proxy statement is
On behalf of the Board of Directors,
EDWARD S. NEKRITZ Chief Legal Officer, General Counsel and Secretary |  Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 4, 2023. This proxy statement and accompanying form of proxy are first being made available to you on or about March 24, 2023. Proxy materials are available at www.proxyvote.com. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
Table of Contents |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 2, 2018. This proxy statement and accompanying form of proxy are first being made available to you on or about March 23, 2018. Proxy materials are available at www.proxyvote.com. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meetingannual meeting of the Stockholders. Please read it carefully.
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OUR BUSINESS MODEL DELIVERS RESULTS
In 2017, we outperformed both operationally and in the equity markets for yet another successful year.
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For further detail, please see “Compensation Discussion and Analysis.”
108% 5-year TSR(1) Over 640 bps outperformance over MSCI REIT and Cohen & Steers REIT Indices in 5-year TSR(2) 378% increase in Net Earnings per share over the last 5 years 70% increase in Core FFO per share(3) over the last 5 years
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2017 Environmental Stewardship, Social Responsibility andGovernance (ESG) Highlights
WE TAKE ESG SERIOUSLY
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For further detail, please see “Board of Directors and Corporate Governance”, “Environmental Stewardship, Social Responsibility and Governance” and “Compensation Discussion and Analysis.”
Continuous Board Refreshment Ms. Cristina Bita is our new director nominee (third new director nominee in three years) 10 Green Stars awarded by GRESB(1) (North America and Asia Sector Leader) (their highest designation for outstanding performance in ESG)
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Proposals Submitted to Vote at the 2018 Annual Meeting
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Abstentions and brokernon-votes are counted for purposes of determining whether a quorum is reached.
References in this proxy statement to “we,” “us,” “our,” the “company,” and “Prologis” refer to Prologis, Inc. and its subsidiaries, unless the context otherwise requires.
This summary highlights information contained in this proxy statement. This summary does not contain all the information you should consider and you should read the entire proxy statement before voting. For more complete information regarding our 20172022 performance, please review our Annual Report on Form10-K for the year ended December 31, 2017.2022. All company operational information in this proxy statement is for the year ended or as of December 31, 2017,2022, unless otherwise noted. See Appendix A for definitions and discussion ofnon-GAAP measures and reconciliations to GAAP measures and for additional detail regarding definitions of terms as generally explained in the proxy statement. References in this proxy statement to “we,” “us,” “our,” the “company,” and “Prologis” refer to Prologis, Inc. and its subsidiaries, unless the context otherwise requires.
| PROXY SUMMARY |
2022 BUSINESS HIGHLIGHTS
Our Business Model Delivers Long-Term Growth Across Cycles
In 2022, we delivered strong operational performance in the face of volatile macroeconomic circumstances, which continued our industry outperformance and earned record Promote income from our Strategic Capital business.
Financial Performance | Strategic Capital is a Powerful Differentiator | |
23.4% net earnings per share(1) and 11.7% Core FFO per share ten-year CAGRs,(1) 15.7% and 4.28% higher than the Large-Cap REIT Group ten-year | In 2022 alone, we earned over $1 billion of fees and Promotes from vehicles, driven largely by a significant Promote from Prologis European Logistics Fund (PELF), one of our largest Strategic Capital vehicles. |
| (1) | Ten-year compound annual growth rate (CAGR). Core funds from operations (FFO) per share is a non-GAAP measure. Please see Appendix A for a discussion and reconciliation to the most directly comparable GAAP measure and for a calculation of the CAGR of our Core FFO per share. See footnote 3 on page 48 for further detail regarding our net earnings per share CAGR calculation. |
| (2) | The “Large-Cap REIT Group” is our historical REIT compensation comparison group (American Tower Corporation, AvalonBay Communities, Inc., Boston Properties, Inc., Crown Castle International Corp., Digital Realty Trust, Inc., Equinix, Inc., Equity Residential, Public Storage, Inc., Simon Property Group, Inc., Ventas, Inc. and Welltower Inc.) The average rates of the Large-Cap REIT Group are weighted by market capitalization. See footnotes to page 48 for further detail on the calculation of the Large-Cap REIT Group average. |
For further detail, please see “Compensation Discussion and Analysis.”
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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| PROXY SUMMARY |
2022 COMPENSATION HIGHLIGHTS
Compensation Program Improvements
In response to stockholder feedback, we adopted various improvements to our compensation program, including:
Board of Directors and Corporate Governance
| Prologis Promote Program (PPP) | NEO Succession Planning | |
Enhanced Disclosure and regarding future Promote earning opportunities. | Recalibration of Compensation Anticipated for NEO Successors to be commensurate with new executives’ tenure and experience. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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| PROXY SUMMARY |
2022 ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) HIGHLIGHTS
We Have a Long-Standing Record of ESG Leadership
Net Zero Emissions By 2040 | #1 in ESG The top REIT ESG program by Institutional Investor 2022. | |
Commitment, announced in 2022, | ||
20 Consecutive Years | Top 10% in World | |
| A leading REIT in corporate governance by Green Street. | Global sustainable companies |
For further detail, please see “Board of Directors and Corporate Governance”, “Environmental, Social and Governance Priorities” and “Compensation Discussion and Analysis.” |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 3 |
| PROXY SUMMARY |
Proposals Submitted to Vote at the 2023 Annual Meeting
We are asking our stockholders of record on March 7, 2023, to vote on the following matters at our 2023 annual meeting of stockholders to be held on May 4, 2023. Please see the section entitled “Additional Information” for details on how to vote and the vote required to approve these matters.
Proposal | Board Recommendation | |||
PROPOSAL 1: Election of Directors At the annual meeting you will be asked to elect to the board of directors (the “Board”) of Prologis, Inc. the eleven persons nominated by the Board. The directors will be elected to one-year terms and will hold office until the 2024 annual meeting and until their successors are duly elected and qualified. |
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PROPOSAL 2: Advisory Vote to Approve the Company’s Executive Compensation for 2022 At the annual meeting you will be asked to approve a resolution on the company’s executive compensation for 2022 as reported in this proxy statement. |
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PROPOSAL 3: Advisory Vote on the Frequency of Future Advisory Votes on the Company’s Executive Compensation At the annual meeting you will be asked to vote on whether future advisory votes on the company’s executive compensation should occur every year, every two years or every three years. The Board recommends voting “for” holding future advisory votes on the company’s executive compensation annually. |
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PROPOSAL 4: Ratification of the Appointment of our Independent Registered Public Accounting Firm At the annual meeting you will be asked to ratify the appointment of KPMG LLP by the Audit Committee (the “Audit Committee”) of the Board as the company’s independent registered public accounting firm (“independent public accountant”) for the year 2023. |
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PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 4 |
Board of Directors and Corporate Governance |
| Prologis Corporate Governance Tear Sheet | |
| 7 | Election of Directors (Proposal 1) | |
| 8 | Board Evaluations and Process for Selecting Directors | |
| 10 | Director Qualifications | |
| 13 | Director Nominees | |
Prologis Corporate Governance Tear Sheet
PROLOGIS PROXY STATEMENT | MARCH 24, 2023
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Prologis Corporate Governance Tear Sheet
DIRECTOR INDEPENDENCE | DIRECTOR COMPOSITION AND EVALUATION PROCESS | |||
· 91% of our Board
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three are ethnically diverse. | ||||
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· No stockholder rights plan. · Majority vote is the standard in uncontested director elections (adopted in 2007).
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ESG GOVERNANCE · Formal board oversight over ESG efforts through Board Governance and Nomination Committee charter and updates to the full Board and other committees. · Energy, Sustainability, Mobility and ESG group reporting directly to C-suite (COO). · Accountability structure and ESG bonus metrics to incentivize success of ESG. | RISK GOVERNANCE · Financial risk oversight: Evidenced by A3/A credit ratings.(4) · Operational risk oversight: Annual enterprise level risk analyses with board; climate risk assessment platform; rigorous investment committee processes; local team property-level management. · Reputational risk oversight: Extensive employee learning and development platform requiring ethics, cybersecurity, diversity and other training. | |||
| (1) | Mr. Connor, who was appointed to the Board in October 2022, attended all Board meetings subsequent to his appointment. |
| (2) | Our governance guidelines provide that directors will not be nominated or appointed to the Board if they are, or would be, |
| (3) | See “Additional Information” for further detail on proxy access. |
| (4) | Ratings by Moody’s/S&P. A securities rating is not a recommendation to buy, sell or hold securities and is subject to withdrawal at any time by the rating agency. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||
PROPOSAL 1
Election of Directors (Proposal 1)
· The Board has affirmatively determined that all of our director nominees, other than
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The Board unanimously recommends that the stockholders vote FOR the election of each nominee.
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Board Evaluations and Process For Selecting Directors
Rigorous Board evaluation and refreshment process
Our annual Board evaluation process involves assessments at the Board, Board committee and individual director levels. Through this process, the Board determines who should be nominated to stand for election based on current company and Board needs.
· Our director candidate search process actively identifies and assesses a pool of potential candidates through a variety of sources, primarily through internal references. Although the committee may retain third parties to assist in identifying potential nominees, it prefers internal references by directors who understand the needs and dynamics of the Board with a particular focus on inclusion and diversity of ideas and background.
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Director Qualifications, Skills and Experience
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2023 Board composition and refreshmentevaluation feedback
Key feedback from our Board evaluation process:
· Noted the high-functioning nature of the Board and strong leadership of our lead independent director and committee heads. · Focused on executive succession planning. · Also focused on director succession planning and an orderly transition of key leadership positions and directors with institutional knowledge (coordinated with executive succession planning). · Recognized the strength of our CEO and management. · Determined that there were no concerns about Board independence or longer tenured directors. |
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
| Regular Board refreshment The Board is committed to regular refreshment to maintain an optimal balance of different perspectives, skills and backgrounds. We have onboarded six new directors in the past eight years, increasing the ethnic, gender and geographical diversity of the Board as well as breadth of experience. As a priority, the Board continues to be particularly focused on ethnic and gender diverse candidates who meet the current needs of the company. The Board was completely refreshed and rebuilt at the time of the Merger(2) in 2011. The Merger essentially created a new company with a new operating and corporate platform. At that time, all directors underwent intensive review to determine which directors would best fit the newly created combined company. Each director selected in this rebuilding process was onboarded as a new director to the newly established company. These directors were required to perform in a new governance environment, with new structures, processes, committees, charters and guidelines. We have continued to refresh the Board since the Merger. David O’Connor onboarded as a new director in 2015, Olivier Piani in 2017, Cristina Bita and Philip Hawkins in 2018, Avid Modjtabai in 2020 and James Connor in 2022. (In 2020, Mr. Hawkins took a position as executive chairman of a U.S. industrial real estate portfolio company and, as a result, decided to step down from our Board). As a result of our regular board refreshment, the Board comprises an appropriate mix of tenures: four directors with up to six years of tenure, three directors with tenure between six and twelve years and four with over twelve years of tenure. This mix provides an even balance of experience and institutional knowledge with fresh perspectives. The Board is focused on director succession planning as a priority. As directors approach the maximum age and/or tenure limit set forth in our director age and tenure policy, the Board proactively formulates a plan to transition key leadership positions and maintain the appropriate balance of institutional knowledge on the Board. As discussed in “Board Qualifications,” the Board continually assesses the current needs of the Board based on the strategic priorities of the company and actively recruits candidates with a focus on the diversity and skill set needs of the Board. EVEN DISTRIBUTION OF DIRECTOR TENURE(1)(2)
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6 | new directors in last eight years.(3) | |
| (1) | Directors nominated for election at our 2023 annual meeting of shareholders. |
The entire |
Includes Philip Hawkins, who joined our Board |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||
BOARD QUALIFICATIONS
In addition to fundamental characteristics necessary for all directors, such as courage, wisdom
Director Qualifications
Director skills and good judgment, below are qualifications ofexperience support our Board identified as important in our Board evaluation process. These characteristics are critical to strong oversight.business strategy
We have deep experience in real estate on our Board covering all components of our business model. The Board believes a balance of perspectives from other industries is also critical to well-rounded oversight. Our Board’s wide range of experience across a spectrum of industries from banking to healthcare broadens perspectivesoversight and strengthens risk assessments by the Board. In addition to the qualifications listed below, Ms. Bita brings her experience in the technology industry to the Board providing valuable insight supportinginto our strategic initiatives driving innovation and data analytics.
BUSINESS STRATEGY | DIRECTOR EXPERIENCE | FINANCIAL RESULTS(1) | ||||||
Global presencein the heart | 82% of our directors have global | Strong long-term performance 23.4% earnings per share CAGR and 11.7% Core FFO per share CAGR,(2) 1,566 bps and 428 bps above the Large-Cap REIT Group average | ||||||
Scaledrives efficiency | 100% of our directors have large | Significant and durable growth 306% AUM growth while G&A(3) as a percentage of AUMdecreased | ||||||
Developmentenhances the bottom line | 55% of our directors have real | Building an irreplaceable portfolio $7.9B in value created by our development business(4) | ||||||
Strategic Capitalboosts | 100% of our directors have investment | A high return business $4.1B delivered in strategic capital fees and Promotes | ||||||
Essentials, our platform offering logistics solutions, services and products, provides new revenue streams and strengthens customer relationships | 36% of our directors have experience with customer products, services and solutions | Additional earnings opportunities Total Essentials contracted sales grew by 150% from 2021 to 2022 | ||||||
| (1) | Over ten-year period 2013-2022, unless noted otherwise. |
| (2) | Our global platform outperformed the average of the “Large-Cap REIT Group” in net earnings per share and Core FFO per share CAGR by 1,566 bps and 428 bps, respectively, over the last ten years. The average rates for the Large-Cap REIT Group are weighted by market capitalization. See footnotes to page 48 for further detail on the calculation of the Large-Cap REIT Group average. Core FFO per share is a non-GAAP measure. Please see Appendix A for a discussion and reconciliation to the most directly comparable GAAP measure and a calculation of the CAGR of our Core FFO per share. See footnote 3 on page 48 for further detail regarding our net earnings per share CAGR calculation. |
| (3) | “G&A” are our general and administrative expenses. |
| (4) | Value created over our total expected investment through development and leasing activities based on current projections. Please see Appendix A for further detail regarding how we calculate “Value creation.” Development value creation is calculated across our owned and managed portfolio. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 10 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Board composition and diversity
Our board diversity policy centers on our commitment to maintaining Board diversity in thought, background and experience—a mix of gender, ethnic background, geographic origin and professional experience that supports our business strategy and the current needs of the Board. As such, the Governance Committee focuses on identifying and nominating qualified and diverse director candidates with commensurate experience and background and each of our director nominees was chosen on this basis.
Our directors nominated for election at our 2023 annual meeting support this mix of diversity in gender, ethnicity and background (see the director demographics/skills matrix below). We are continually seeking new, diverse candidates to add to our Board—our current pipeline of potential candidates is comprised of mostly diverse individuals. Our board diversity policy (which is published on our website in our Governance Guidelines) requires that in any formal search for new directors, the Board will consider, and will instruct any third-party search firm to include, candidates from diverse backgrounds, including in its initial list both gender and racial/ethnic diverse director candidates.
In making its nominations, the Governance Committee also assesses each director nominee by key characteristics, including courage to voice opinions, integrity, experience, accountability, good judgment, supportiveness in working with others and willingness to commit the time needed to satisfy the requirements of Board and committee membership.
PROLOGIS BOARD DIVERSITY(1)
| (1) | Directors nominated for election at our 2023 annual meeting of shareholders. |
| (2) | One director has self-identified as African American and two directors have self-identified as West Asian/Middle Eastern/Asian American. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 11 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Director skills and experience support our business strategy
We have deep experience on our Board covering all components of our business model. The Board believes a balance of perspectives from other industries is critical to well-rounded oversight and insight into the perspectives of our customers covering a wide range of industries.
Along with the fundamental characteristics necessary for all directors, such as courage, wisdom and good judgment, below are qualifications of our Board identified in our Board evaluation process as important to support our current business strategy. These characteristics, coupled with diversity of thought and background, are critical to strong oversight and proven long-term results.
We also seek directors with skillsets that support our emerging areas of focus, including cybersecurity, data and energy. We consider whether candidates possess experience in such areas when evaluating potential directors.
| (1) | Includes development, operations, real estate investments and fund management. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 12 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Director Nominees
 | Hamid R. Moghadam
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Hamid R. Moghadam
| ·Chairman of the Board since January 2000; Director since November 1997 |
·Board Committees: Executive
·Other public directorships: None | |||
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Mr. Moghadam, 66, has been our chief executive officer since the end of December 2012 and was our co-chief executive officer from June 2011 to December 2012. He is the co-founder of AMB Property Corporation and was AMB’s chief executive officer from November 1997 (from the time of AMB’s initial public offering) to the Merger in June 2011.
Other relevant qualifications: Mr. Moghadam is on the board of the Stanford Management Company and formerly served as its chairman. He is a former trustee of Stanford University and previously served on the Executive Committee of the Board of Directors of the Urban Land Institute. Mr. Moghadam holds Bachelor’s and Master’s degrees in engineering from the Massachusetts Institute of Technology and a Master of Business Administration from the Graduate School of Business at Stanford University.
Skills related to company opportunities and risks: Mr. Moghadam co-founded our company 40 years ago. He brings unique value as a founder who has built an unparalleled platform that has consistently outperformed both the REIT industry and S&P 500. Mr. Moghadam has unmatched experience running the largest publicly traded industrial REIT in the world with real estate operations and development across 19 countries. Mr. Moghadam built our Strategic Capital business (including two public companies and seven private vehicles), which is unrivaled in the REIT industry. His vision has further positioned the company for growth by creating an ecosystem of products, services and solutions for our customers via our Essentials platform. See page 55 for more information regarding Mr. Moghadam’s exceptional contributions to Prologis over the past four decades.
Irving F. Lyons III
 | Irving F. Lyons III ·Lead |
·Board Committees: Executive
·Other public directorships: Equinix, Inc. and Essex Property Trust, Inc. |
Mr. Lyons, 73, has been a principal with Lyons Asset Management, a private equity firm, since January 2005. In 2004, Mr. Lyons retired from the Trust where he served as chief investment officer from 1997 until his retirement. He joined the Trust in 1993 and served as president from 1999 to 2001 and vice chairman from 2001 to 2004. Mr. Lyons is a member of the boards of Equinix, Inc., a global data center operator, and Essex Property Trust, Inc., a real estate investment trust that invests in apartment communities. Mr. Lyons previously served as chairman of the board of BRE Properties, Inc.
Other relevant qualifications: Mr. Lyons joined the Trust when King & Lyons, an industrial real estate management and development company, was acquired by the Trust in 1993. Mr. Lyons had been the managing general partner in that firm since its inception in 1979 and was one of its principals at the time of the acquisition. Mr. Lyons holds a Master in Business Administration from Stanford University and a Bachelor of Science in industrial engineering and operations research from the University of California at Berkeley.
Skills related to company opportunities and risks: Mr. Lyons’ service as an executive in the logistics real estate industry, including as chief investment officer and president of the Trust, as a principal of a private equity firm and in leadership roles on the boards of other publicly traded REITs guide his oversight as our Board’s lead independent director.
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
 | Cristina G. Bita
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| · Board Committees: Audit · Other public directorships: None | |
Ms. Bita, 44, is a vice president of finance at Google and serves as the business finance officer for Google’s Devices and Services and Global Marketing organizations. Ms. Bita leads global finance activities for consumer hardware, consumer paid services as well as for the company’s marketing investments globally. Ms. Bita has held several finance leadership roles over the course of her 15+ year career at Google that also included Sales and Business Development, Consumer Products, Platforms and Ecosystems, G&A, and Technical Infrastructure and Enterprise. She has also served as the chair of the Google Sustainability Board. Prior to Google, Ms. Bita held various positions at Siemens/Osram in the Business Unit Controllership and Corporate FP&A groups.
Other relevant qualifications: Ms. Bita holds a Master of Science in Finance from the Boston College Wallace E. Carroll School of Management and a Bachelor of Science in Business Administration (Accounting) from Salem State University. Ms. Bita is also a Certified Management Accountant (CMA).
Skills related to company opportunities and risks: Ms. Bita’s experience in innovation and technology gained from her tenure at Google supports our strategic initiatives to stay ahead of the evolution of the supply chain and our customers’ needs by integrating data systems and technology across both our core real estate and Essentials platforms. Ms. Bita also served as the chair of the Google Sustainability Board, which provides valuable insights in support of our ESG initiatives.
Cristina G. Bita
 | James B. Connor · Director since October 2022 · Board Committees: Executive · Other public directorships: EPR Properties and Healthpeak Properties, Inc. |
Mr. Connor, 64, was most recently chairman and chief executive officer of Duke Realty Corporation, a NYSE-listed company that specialized in modern, bulk warehouse and logistics facilities and was acquired by Prologis in October 2022. Mr. Connor joined Duke Realty in 1998 and served in several leadership positions before being named CEO in 2016. Before joining Duke Realty, Mr. Connor held numerous executive and brokerage positions with Cushman & Wakefield. Additionally, Mr. Connor is a member of the board of trustees of EPR Properties, a publicly traded REIT focused on real estate venues that facilitate out of home leisure and recreation experiences and the board of directors of Healthpeak Properties, Inc., a publicly traded REIT focused on real estate related to the healthcare industry.
Other relevant qualifications: Mr. Connor is a member of the Executive Board of Governors of the National Association of Real Estate Investment Trusts (Nareit). Mr. Connor holds a Bachelor of Business Administration degree with a minor in Real Estate Finance from Western Illinois University.
Skills related to company opportunities and risks: Mr. Connor brings over a quarter century of experience in the logistics REIT industry, including seven years as a public company CEO. His deep experience guides all aspects of our business related to the logistics real estate industry.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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Other public directorships:
None
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||
George L. Fotiades
 | George L. Fotiades ·Director since June 2011 (prior to the Merger served as a trustee of the Trust from December 2001 to June 2011) · Board Committees: Compensation (Chair) · Other public directorships: AptarGroup, Inc. |
Mr. Fotiades, 69, served as president and chief executive officer of Cantel Medical Corp., a provider of infection prevention and control products, from 2019 until his retirement in 2021. Mr. Fotiades was an operating partner at Five Arrows Capital Partners (Rothschild Merchant Banking) from April 2017 until March 2019. From April 2007 to April 2017, Mr. Fotiades was a partner, healthcare investments at Diamond Castle Holdings LLP, a private equity firm. Mr. Fotiades was chairman of Catalent Pharma Solutions, Inc., a provider of advanced technologies for pharmaceutical, biotechnology and consumer health companies, from June 2007 to February 2010. Mr. Fotiades is chairman of the board of AptarGroup, Inc., a global dispensing systems company. He previously served on the boards of Cantel Medical Corp. and Alberto-Culver Company, a consumer products company specializing in hair and skincare products.
Other relevant qualifications: Mr. Fotiades was previously the president and chief operating officer of Cardinal Health, Inc. and also served as president and chief executive officer of Cardinal’s Pharmaceutical Technologies and Services segment. Mr. Fotiades also served as president of Warner-Lambert’s consumer healthcare business, as well as in other senior positions at Bristol-Myers Squibb, Wyeth, and Procter & Gamble. Mr. Fotiades holds a Master of Management from The Kellogg School of Management at Northwestern University and a Bachelor of Arts from Amherst College.
Skills related to company opportunities and risks: Mr. Fotiades brings experience as a public company CEO who ran large scale global operations as well as years of experience in the private equity industry.Mr. Fotiades’ experience at various consumer products and services companies adds valuable insights as we continue to grow our Essentials business.
 | Lydia H. Kennard · Director since August 2004 · Board Committees: Governance · Other public directorships: Freeport-McMoRan Copper & Gold Inc., AECOM and Vulcan Materials Company |
Ms. Kennard, 68, is the founder and chief executive officer of KDG Construction Consulting, a provider of project and construction management services, a principal of KDG Aviation, an aviation focused real estate operating and development company, the owner of KDG Holdings, Inc., parent of Quality Engineering Solutions, Inc., a pavement management analytics and construction inspection company, and a principal with 1031 N. Brand Boulevard, Glendale, LLC, and 690 N. 2nd Street, Reno, LLC, both single-purpose real estate entities. Ms. Kennard is a member of the boards of Freeport-McMoRan Copper & Gold Inc., a natural resource company, AECOM, an infrastructure consulting firm, and Vulcan Materials Company, a leading producer of construction aggregates. Ms. Kennard was previously a member of the boards of URS Corporation, a provider of engineering, construction and technical services, and Intermec, Inc., an automated identification and data collection company.
Other relevant qualifications: Ms. Kennard served as chief executive officer of Los Angeles World Airports, a system of airports comprising Los Angeles International, Ontario International Airport, Palmdale Regional and Van Nuys General Aviation Airports from 1999 to 2003 and again from 2005 to 2007. From 1994 to 1999, she served as the system’s deputy executive for design and construction. Ms. Kennard holds a Juris Doctor degree from Harvard University, a Master’s degree in city planning from the Massachusetts Institute of Technology, and a Bachelor of Science in urban planning and management from Stanford University.
Skills related to company opportunities and risks: Ms. Kennard’s deep experience in the construction industry and urban planning supports our robust development platform. Ms. Kennard’s background as CEO of Los Angeles World Airports guides our efforts to grow our global logistics real estate business. As the owner of a construction analytics and solutions company, Ms. Kennard also provides experience in customer services and solutions.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Other public directorships:
AptarGroup, Inc. and Cantel Medical Corp.
Mr. Fotiades, 64, has been an operating partner at Five Arrows Capital Partners (Rothschild Merchant Banking) since April 2017. From April 2007 to April 2017, Mr. Fotiades was a partner, healthcare investments at Diamond Castle Holdings, LLP. Mr. Fotiades was chairman of Catalent Pharma Solutions, Inc., a provider of advanced technologies for pharmaceutical, biotechnology, and consumer health companies, from June 2007 to February 2010. Mr. Fotiades is a member of the board of AptarGroup, Inc., a global dispensing systems company, and is vice chairman of the board of Cantel Medical Corp., a provider of infection prevention and control products. He previously served on the board of Alberto-Culver Company, a consumer products company specializing in hair and skin care products.
Other relevant qualifications. Mr. Fotiades was previously the president and chief operating officer of Cardinal Health, Inc. and also served as president and chief executive officer of Cardinal’s Pharmaceutical Technologies and Services segment. Mr. Fotiades also served as president of Warner- Lambert’s consumer healthcare business, as well as in other senior positions at Bristol-Myers Squibb, Wyeth, and Procter & Gamble. Mr. Fotiades holds a Master of Management from The Kellogg School of Management at Northwestern University and a Bachelor of Arts from Amherst College.
 | Avid Modjtabai
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| · Board Committees: Audit · Other public directorships: Avnet, Inc. | |
Ms. Modjtabai, 61, served as the senior executive vice president and head of the Payments, Virtual Solutions and Innovation Group at Wells Fargo from 2016 to her retirement in March 2020. Prior to that, she served in various leadership roles at Wells Fargo, including group head for Wells Fargo Consumer Lending from 2011 to 2016, chief information officer and head of Technology and Operations Group from 2008 to 2011, chief information officer and head of technology from 2007 to 2008, and director of human resources from 2005 to 2007. Ms. Modjtabai is a member of the board of Avnet, Inc., a global technology solutions provider.
Other relevant qualifications: Ms. Modjtabai holds a Master in Business Administration in finance from Columbia University and a Bachelor of Science in industrial engineering from Stanford University.
Skills related to company opportunities and risks: As the former chief information officer and head of technology of Wells Fargo, Ms. Modjtabai brings her experience overseeing core technology functions to our board. Ms. Modjtabai’s knowledge and skill in these areas supports the company’s own data and technology initiatives as well as our cybersecurity program. Ms. Modjtabai’s tenure as head of Payments, Virtual Solutions and Innovation at Wells Fargo brings additional customer solutions experience to our board.
Lydia H. Kennard
 | David P. O’Connor ·Director since · Board Committees: Compensation · Other public directorships: Regency Centers Corporation |
Mr. O’Connor, 58, is a private investor, managing partner of High Rise Capital Partners, LLC, a private real estate investment firm, and a non-executive co-chairman of HighBrook Investors LLC. He was the co-founder and senior managing partner of High Rise Capital Management LP, a real estate securities hedge fund manager that operated from 2001 to 2011. Mr. O’Connor is a member of the board of Regency Centers Corporation, a publicly traded real estate investment trust specializing in shopping centers. He previously served on the boards of Songbird Estates plc, the former majority owner of Canary Wharf in London, UK and Paramount Group, Inc., a publicly traded real estate investment and management company specializing in office buildings.
Other relevant qualifications: Mr. O’Connor was previously a principal, co-portfolio manager and investment committee member of European Investors, Inc., a large dedicated real estate investment trust investor, from 1994 to 2000. Mr. O’Connor received a Master of Science in real estate from New York University and holds a Bachelor of Science degree from the Boston College Wallace E. Carroll School of Management.
Skills related to company opportunities and risks: Mr. O’Connor brings extensive knowledge in real estate investment to our Board, which supports all aspects of our global real estate operations, Strategic Capital business and capital markets activity.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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Board Committees:
Governance
Other public directorships:
Freeport-McMoRan Copper & Gold Inc.
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||
J. Michael Losh
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 | Olivier Piani
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| · Board Committees: Audit · Other public directorships: None | |
Mr. Piani, 69, is the chief executive officer and founder of OP Conseils, a consulting company in real estate and finance that Mr. Piani started in January 2016. Mr. Piani is also a senior consultant with Ardian, a major European private equity group. From September 2008 to December 2015, Mr. Piani was chief executive officer of Allianz Real Estate, the real estate and asset management investment platform for the Allianz Group.
Other relevant qualifications: From 1998 to 2008, Mr. Piani built the pan-European platform for GE Capital Real Estate spanning seven different countries. Prior to joining GE in 1998, Mr. Piani was chief executive officer of UIC-Sofal, a real estate bank. From 1982 to 1995, Mr. Piani held various leadership positions in the Paribas Group in Paris, New York and London. Mr. Piani is a graduate of Paris Ecole Superieure de Commerce de Paris and received a Master of Business Administration from Stanford University.
Skills related to company opportunities and risks: Mr. Piani’s experience in real estate and finance gained through his career in private equity, asset management and banking supports our long-term investment strategy and our Strategic Capital business. Mr. Piani’s financial expertise and deep knowledge of the European real estate market guides our operations and growth in that region as well as our expansion into new markets.
David P. O’Connor
 | Jeffrey L. Skelton ·Director since · Board Committees: Governance (Chair), Executive (Chair) · Other public directorships: None |
Mr. Skelton, 73, retired in 2009 as president and chief executive officer of Symphony Asset Management, a subsidiary of Nuveen Investments, Inc., an investment management firm. After his retirement in 2009 and until 2013, Mr. Skelton co-founded and served as managing partner of Resultant Capital Partners, an investment management firm.
Other relevant qualifications: Prior to founding Symphony Asset Management in 1994, Mr. Skelton was with Wells Fargo Nikko Investment Advisors from 1984 to 1993, where he served in a variety of capacities, including chief research officer, vice chairman, co-chief investment officer and chief executive officer of Wells Fargo Nikko Investment Advisors Limited in London. Previously, Mr. Skelton was also an assistant professor of finance at the University of California at Berkeley, Walter A. Haas School of Business. Mr. Skelton holds a Ph.D. in mathematical economics and finance and a Master of Business Administration from the University of Chicago.
Skills related to company opportunities and risks: Mr. Skelton’s significant leadership experience in the asset management industry supports our Strategic Capital business and forms a strong foundation for his oversight responsibilities as chair of our Governance and Executive Committees.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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Board Committees:
Compensation
Other public directorships:
Regency Centers, Inc. and Paramount Group, Inc.
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Olivier Piani
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Carl B. Webb
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·Board Committees: Audit (Chair)
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Mr. Webb, 73, is currently a co-managing member of Ford Financial Fund II, L.P. and Ford Financial Fund III, L.P., private equity firms focusing on equity investments in financial services, a position he has held since February 2012 and March 2019, respectively. Mr. Webb has served as chairman of the Mechanics Bank board since April 2015. From June 2008 until December 2012, Mr. Webb was a senior partner of Ford Management, L.P. Mr. Webb was also the chief executive officer and a board member of Pacific Capital Bancorp and chairman of Santa Barbara Bank and Trust from August 2010 until December 2012. Mr. Webb has also served as a consultant to Hunter’s Glen/Ford, Ltd., a private investment partnership, since November 2002. Additionally, Mr. Webb is a member of the board of Hilltop Holdings Inc., a publicly traded financial services holding company.
Other relevant qualifications: Mr. Webb previously served on the boards of Plum Creek Timber Company, M & F Worldwide Corp. and Triad Financial SM LLC, where he was co-chairman from July 2007 to October 2009 and served as interim president and chief executive officer from August 2005 to June 2007. Since 1983, Mr. Webb held executive positions at banking institutions, including Golden State Bancorp, Inc. and its subsidiary, California Federal Bank, FSB, First Madison Bank, FSB, First Gibraltar Bank, FSB and First National Bank at Lubbock. Mr. Webb holds a Bachelor of Business Administration from West Texas A&M University and a graduate banking degree from Southwestern Graduate School of Banking at Southern Methodist University.
Skills related to company opportunities and risks: Mr. Webb’s extensive finance experience gained over his career in private equity and banking supports our Strategic Capital business and his financial oversight role as chair of our Audit Committee.
Mr. Webb, 68, is currently aco-managing member of Ford Financial Fund II, L.P. a private equity firm focusing on equity investments in financial services, a position he has held since February 2012. Mr. Webb has served as chairman of the Mechanics Bank board since April 2015. From June 2008 until December 2012, Mr. Webb was a senior partner of Ford Management, L.P. Mr. Webb was also the chief executive officer and a board member of Pacific Capital Bancorp and chairman of Santa Barbara Bank and Trust from August 2010 until December 2012. Mr. Webb has also served as a consultant to Hunter’s Glen/Ford, Ltd., a private investment partnership, since November 2002. Additionally, Mr. Webb is a member of the board of Hilltop Holdings Inc., a publicly traded financial services holding company.
Other relevant qualifications. Mr. Webb previously served on the boards of Plum Creek Timber Company, M & F Worldwide Corp., and Triad Financial SM LLC, where he wasco-chairman from July 2007 to October 2009 and served as interim president and chief executive officer from August 2005 to June 2007. Since 1983, Mr. Webb held executive positions at banking institutions, including Golden State Bancorp, Inc. and its subsidiary, California Federal Bank, FSB, First Madison Bank, FSB, First Gibraltar Bank, FSB, and First National Bank at Lubbock. Mr. Webb holds a Bachelor of Business Administration from West Texas A&M University and a graduate banking degree from Southwestern Graduate School of Banking at Southern Methodist University.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||
William D. Zollars
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We require that a majority of the Board be independent in accordance with NYSE rules. To determine whether a director is independent, the Board must affirmatively determine that there is no direct or indirect material relationship between the company and the director.
90%91% of the Board is independent.(1)
The Board has determined that all our directors, with the exception of our chairman, Mr. Moghadam, are independent.
The Board reached this determination after considering all relevant facts and circumstances, reviewing director questionnaires and considering transactions and relationships, if any, between us, our affiliates, our executive officers and their affiliates, and each of the directors, and prospective director, members of each of their immediate families and their affiliates.
Audit, CompensationGovernance and GovernanceTalent and Compensation Committees are 100% independent.
The Board has also determined that all members of the Audit, CompensationGovernance and GovernanceTalent and Compensation Committees of the Board are independent in accordance with NYSE and Securities and Exchange Commission (“SEC”) rules.
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Our governance guidelines do not specify a leadership structure for the Board, allowing the Board the flexibility to choose the best option for the company as circumstances warrant. The Board believes that strong independent leadership ensures effective oversight over the company. Such independent oversight is maintained through:
our lead independent director; |
our independent directors; |
the Audit, Governance and Talent and Compensation Committees, which are all comprised entirely of independent directors; |
annual review of the Board leadership structure and effectiveness of oversight through the Board evaluation process; and |
strong adherence to our governance guidelines. |
All of our independent directors have the ability to provide input for meeting agendas and are encouraged to raise topics for discussion by the Board. In addition, the Board and each Board committee has complete and open access to any member of management.
Each committee has the authority to retain independent legal, financial and other advisors as they deem appropriate without consulting or obtaining the approval of any member of management. The Board also holds regularly scheduled executive sessions of only independent directors in order to promote free and open discussion among the independent directors.
Chairman and CEO assessment
Our chairman and CEO and our lead independent director act together in a system of checks and balances, providing both strong oversight and operational insight.
Our CEO, Mr. Moghadam, serves as chairman of the Board. The lead independent director role is focused on ensuring independent oversight of the company. Mr. Moghadam’s roles as both CEO and chairman enable him to act as a bridge between management and the Board, ensuring that the Board understands our business when making its decisions.
| (1) | Directors nominated for election at our 2023 annual meeting of shareholders. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 19 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Mr. Moghadam has the breadth of experience to execute our unique business plan and to provide special insightinsights to the Board.
Very few have experience running a public company with extensive global real estate operations and substantial strategic capitalStrategic Capital and development businesses. Mr. Moghadamco-founded the company and has served on the Board since the company’s initial public offering in November 1997. As one of our founders, Mr. Moghadam has extensive knowledge and expertise in the real estate and REIT industries, as well as history and knowledge of our company.
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Considering all of these factors, the Board believes that a structure that combines the roles of CEO and chairman, along with an independent lead director, independent chairs for each of the Board committees and independentnon-employee directors, provides the best leadership for the company at this time and places the company in a competitive position to provide long-term value to our stockholders. Through its annual board evaluation process (led by an independent third-party evaluator every other year), the board regularly assesses this structure and determines whether it continues to be in the best interests of the company and its stockholders.
Lead independent director
If the offices of chairman and CEO are held by the same person or if the chairman is otherwise not independent, the independent members of the Board will annually elect an independent director to serve in a lead capacity. The lead independent director is generally expected to serve for more than one year. Mr. Lyons has been selected as the lead independent director by our Governance Committee and the independent members of our Board and has served in that capacity for nearly seven years.Board.
The lead independent director coordinates the activities of the other independent directors and performs such other duties and responsibilities as determined by the Board may determine.Board.
The specific responsibilities of the lead independent director are currently as follows:
Executive Sessions/ Committee Meetings |
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| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | ||
Pursuant to the Maryland General Corporation Law and our bylaws, our business, property and affairs are managed under the direction of the Board. Members of the Board are kept informed of our business through our executive management team.
The four standing committees of the Board are: Audit, Governance, Talent and Compensation and Executive Committee (the “Executive Committee”). The Board has determined that each member of the Audit, Governance and Talent and Compensation Committees is an independent director in accordance with NYSE and SEC rules.
The current membership information for our Board committees is presented below.
Each committee has a charter which generally states the purpose of the committee and outlines the committee’s structure and responsibilities. The committees, other than the Executive Committee, must review the adequacy of their charter on an annual basis.
PROLOGIS BOARD COMMITTEES
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| Audit Committee |
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Members:
Cristina Bita Avid Modjtabai Olivier Piani
| Meetings in 2022: 9 | Independence: The Board has determined that all members of the Audit Committee are independent in accordance with NYSE and SEC rules. | ||||||
Role and Responsibilities:
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| Talent and Compensation Committee |
Members:
David O’Connor William Zollars | Meetings in 2022: 5 | Independence:
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| Board Governance and Nomination Committee |
Members:
Lydia Kennard William Zollars | Meetings in 2022: 3 | Independence:
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PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 22
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| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
| Executive Committee |
Members:
James Connor Irving Lyons III Hamid Moghadam | Meetings in 2022: None | Independence: The Board has determined that James Connor, Jeffrey Skelton and Irving Lyons III are independent in accordance with NYSE and | ||||||
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Board’s role in risk oversight
Risk awareness is embedded throughout our operations, underpinned by an integrated framework for identifying, assessing and managing risk.
The Board has the primary responsibility for overseeing risk management of the company. Oversight for certain specific risks falls under the responsibilities of our Board committees.
The Audit Committee focuses on financial and cybersecurity risks relating to the |
The Talent and Compensation Committee focuses on risks relating to human capital management, talent retention and remuneration of our officers and |
The Governance Committee focuses on reputational, |
These committees regularly advise the full Board of their risk oversight activities.
Critical components of our risk oversight framework include regular communication among the Board, our management executive committee and our risk management infrastructure to identify, assess and manage risk.
Identifying, managing and assessing risks
Identifying, Managing and Assessing Risks
Our risk oversight framework includes:
Board engagement with executive and risk management teams including multi-dimensional risk reviews, risk assessment mapping andone-on-one interviews between each director and our risk management team |
Executive management committee meetings focused on strategic risks |
A structured approach to capital deployment vetted through weekly investment committee meetings, including assessments of ESG, resilience and natural disaster/weather/climate change risks |
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| Management of one of the strongest balance sheets in the REIT industry achieved by lowering our financial risk and foreign currency exposure |
Rigorous internal and third-party audits assessing the company’s controls and procedures |
Centralized team dedicated to managing risk globally and staying closely engaged with Prologis’ teams at |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 23 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Climate risk
We assess natural hazard and climate risk across our portfolio. Our risk management team works to ensure we have sufficient insurance coverage and protection for our buildings. We also partner with a global reinsurance company to evaluate future climate scenarios and determine which actions we should take. This evaluation is based on underwriting data, a significant improvement over the traditional catastrophe modeling and flood zone data used by many other organizations. Based on this evaluation, we take a range of actions which can include improving the physical resilience of our buildings, reviewing and improving disaster response plans, and other measures. Because of our long-term planning, resilience measures and diverse portfolio footprint, we believe our climate risk is well-managed.
Cybersecurity
Our chief technology officer and our vice president of IT governance oversee our information security program. They report to the audit committee/board at least annually and also conduct annual information security compliance training. The Prologis Information Security Policy is governed by the NIST Cybersecurity Framework (CSF) and includes mandatory annual training for all employees. Prologis’ cybersecurity posture is reviewed and benchmarked against its peers through regular participation in a third-party security benchmarking survey. Our IT infrastructure is externally audited as part of our Sarbanes Oxley audit process and our controls include information security standards. Also, we maintain standalone cybersecurity insurance. To our knowledge, we have not experienced a material breach in information security.
CEO and management succession planning
The Board is responsible for ensuring that we have a high-performing management team in place. The Board, with the assistance of the Talent and Compensation Committee, regularly conducts a detailed review of management development and succession planning activities to ensure that top management positions, including the CEO position, can be filled without undue interruption.
Our succession planning process is two-tiered to ensure orderly succession. One tier contemplates succession planning in the case of an emergency during which one or more members of our current management are unable to perform their duties. The second tier involves long-term planning to identify and develop talent with potential to step in as our future management team. As part of our longer-term succession planning, we made changes to our organizational architecture to prepare the company for the next chapter in its evolution. Executive roles were reorganized to drive our platform initiatives focusing on customer centricity and extracting value beyond our real estate while allowing for growth opportunities for the next generation of potential leaders. As an example, Mr. Olinger was instrumental in positioning his successor, Mr. Arndt, with key global leadership responsibilities to prepare Mr. Arndt for the role of CFO after Mr. Olinger’s retirement. Mr. Arndt assumed the position of CFO on April 1, 2022. Likewise, Mr. Reilly helped to prepare Mr. Letter for the role of president, which Mr. Letter assumed on January 1, 2023, through a variety of leadership roles at the company related to capital deployment and global operations. Also see “Compensation Committee Rationale: NEO Succession Planning” for a discussion of the committee’s approach regarding successor NEO compensation.
Communications with directors
We appreciate your input. Our lead independent director (or any of our other directors) are accessible to our stockholders and other interested parties for engagement as appropriate. You can communicate with any of the directors, individually or as a group, by writing to them in care of Edward S. Nekritz, Secretary, Prologis, Inc., Pier 1, Bay 1, San Francisco, California 94111. Such communications will be reviewed and forwarded to the appropriate director. Each communication intended for the Board and received by the secretary that is related to the operation of the company and is not otherwise commercial in nature will be forwarded to the specified party following its clearance through normal security procedures. The directors will be advised of any communications that were excluded through normal security procedures as appropriate and they will be made available to any director who wishes to review them.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 24 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
Director attendance
The Board held foureight meetings in 2017,2022, including telephonic meetings, and all of the directors attended 75% or more of the aggregate number of Board and applicable committee meetings on which he or she served during 20172022 (held during the periods they served). Each director standing for election in 20182023 is expected to attend the annual meeting of stockholders, either in personvirtually or telephonically, absent cause. All of our directors attended the annual meeting last year, in personvirtually or telephonically.telephonically, other than Mr. Connor who was appointed to the Board after the 2022 annual meeting.
Director compensation
Please see “Director Compensation” and the table titled “Directors“Director Compensation for Fiscal Year 2017.2022.”
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Stock ownership guidelines and prohibition on hedging/pledging
Our directors must comply with our stock ownership guidelines which require the director to maintain an ownership level in our common stock equal to five times the annual cash retainer (a total of $550,000$600,000 as of December 31, 2017)2022). Shares included as owned by directors for purposes of the guidelines include common stock owned, vested or unvested equity awards (restricted stock, restricted stock units, shares and share units deferred under the terms of the Director Deferred Fee Plan or the applicablenon-qualified deferred compensation plan, deferred share units and dividend equivalent units) and operating partnership or other partnership units exchangeable or redeemable for common stock. Until such time as the ownership thresholds are met, we will require directors to retain and hold 50% of any net shares of our common stock issued to our directors under our equity compensation plans.
Additionally, our insider trading policy prohibits our directors and employees from hedging the economic risk of ownership of our common stock and from pledging shares of our common stock.
All of our directors and executive officers are currently in compliance with the stock ownership guidelines and the prohibition on hedging and pledging our common stock.
Independent compensation consultant
The Talent and Compensation Committee directly engagesengaged an outside compensation consulting firm, Frederic W. Cook & Co., Inc. (“FW Cook”)Pay Governance, to assist the committee in assessing our compensation programs for our Board, our CEO and other members of executive management. FW Cook
Pay Governance reports directly to the Talent and Compensation Committee. FW CookPay Governance receives no compensation from the company other than for its work in advising the Talent and Compensation Committee and maintains no other economic relationships with the company. FW CookPay Governance interacts directly with members of our management only on matters under the Talent and Compensation Committee’s oversight.
FW CookPay Governance conducted a comprehensive competitive review of the compensation program for our non-employee directors in May 2022 and executive officers and ournon-employee directors in 2017,December 2022, which was used by the Talent and Compensation Committee to assist it in making compensation recommendations to the Board. Our CEO makes separate recommendations to the Talent and Compensation Committee concerning the form and amount of the compensation of our executive officers (excluding his own compensation). FW Cook has also assisted the
The Talent and Compensation Committee in evaluating the design of certain outperformance compensation plans implemented in 2012.
Annually, the Compensation Committee considersconsidered the independence of FW CookPay Governance in light of the rules regarding compensation committee advisor independence mandated under the Dodd-Frank Wall Street ReformAct. The Talent and Consumer Protection Act (“Dodd-Frank Act”). The Compensation Committee reviewed factors, facts and circumstances regarding compensation consultant independence, including a letter from FW CookPay Governance addressing FW Cook’sPay Governance and their consulting team’s
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independent status with respect to the following factors: (i) other services provided to us by FW Cook;Pay Governance; (ii) fees we pay to FW CookPay Governance as a percentage of their total revenues; (iii) FW Cook’sPay Governance’s policies and procedures that are designed to prevent conflicts of interest;
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 25 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
(iv) any business or personal relationship between FW CookPay Governance or members of their consulting team that serves the Talent and Compensation Committee and a member of the Talent and Compensation Committee; (v) any shares of our stock owned by FW CookPay Governance or members of their consulting team that serves the Talent and Compensation Committee; and (vi) any business or personal relationships between our executive officers and FW CookPay Governance or members of their consulting team that serves the Talent and Compensation Committee. After discussing these factors, facts and circumstances, the Talent Compensation Committee affirmed the independent status of FW CookPay Governance and concluded that there are no conflicts of interest with respect to FW Cook.Pay Governance.
Talent and Compensation Committee interlocks and insider participation
No member of the Talent and Compensation Committee:Committee (i) was, during the year ended December 31, 2017,2022, or had previously been, an officer or employee of the company or (ii) had any material interest in a transaction with the company or a business relationship with, or any indebtedness to, the company. No interlocking relationships existed during the year ended December 31, 2017,2022, between any member of the Board or the Talent and Compensation Committee and an executive officer of the company.
Code of Ethics and Business Conduct and Governance Guidelines
The Board has adopted a code of ethics and business conduct that applies to all employees and directors. The Board has formalized policies, procedures and standards of corporate governance that are reflected in our Governance Guidelines.
Our Code of Ethics and Business Conduct outlines in great detail the key principles of ethical conduct expected of our employees, officers and directors, including matters related to conflicts of interest, use of company resources, fair dealing, and financial reporting and disclosure. The code establishes formal procedures for reporting illegal or unethical behavior to the company’s internal ethics committee. These procedures permit employees to report any concerns, including concerns about the company’s accounting, internal accounting controls or auditing matters, on a confidential or anonymous basis if desired. Employees may contact the ethics committee bye-mail, email, in writing, byweb-based report or by calling a toll-free telephone number. Any significant concerns are reported to the Audit Committee in accordance with the code.
Simultaneous Board service
Our director overboarding policy in our governance guidelines requirerequires that, if a director serves on three or more public company boards simultaneously, including our Board, a determination is
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made by our Board as to whether such simultaneous service impairs the ability of such member to effectively serve the company. Messrs. Fotiades, Losh,Mr. Lyons O’Connor and ZollarsMs. Kennard currently serve on at least three public company boards, including our Board. In each case, our Board has determined that such simultaneous board service does not impair the Board member’s ability to be an effective member of our Board. None of our directors currently serve on more than four public company boards (including our Board).
Certain relationships and related party transactions
We do not have any related party transactions to report under relevant SEC rules and regulations. According to our Articles of Incorporation, the Board may authorize any agreement or other transaction with any party even though one or more of our directors or officers may be a party to such an agreement or is an officer, director, stockholder, member or partner of the other party if: (i) the existence of the relationship is disclosed or known to the Board, and the contract or transaction is authorized, approved or ratified by the affirmative vote of not less than a majority of the disinterested directors, even if they constitute less than a quorum of the Board; (ii) the existence is disclosed to the stockholders entitled to vote, and the contract or transaction is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote (excluding shares owned by any interested director or officer or the organization in which such person is a director or has a material financial interest); or (iii) the contract or transaction is fair and reasonable to the company.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 26 |
| BOARD OF DIRECTORS AND CORPORATE GOVERNANCE |
We recognize that transactions between us and related parties can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations other than the company’s best interests and the best interests of our stockholders. Related parties may include our directors, executives, significant stockholders and immediate family members and affiliates of such persons.
Accordingly, several provisions of our code of ethics and business conduct are intended to help us avoid the conflicts and other issues that may arise in transactions between us and related parties, prescribing that:
employees will not engage in conduct or activity that may raise questions as to the company’s honesty, impartiality or |
employees shall not hold financial interests that conflict with, or leave the appearance of conflicting with, the performance of their assigned duties; |
employees shall act impartially and not give undue preferential treatment to any private organization or individual; and |
employees should avoid actual conflicts or the appearance of conflicts of interest. |
These provisions of our code of ethics and business conduct may be amended, modified or waived by the Board or the Governance Committee, subject to the disclosure requirements and other provisions of the rules and regulations of the SEC and the NYSE.
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No waivers of our code of ethics and business conduct were granted in 2017.2022.
Although we do not have detailed written procedures concerning the waiver of the application of our code of ethics and business conduct or the review and approval of transactions with directors or their affiliates, our directors would consider all relevant facts and circumstances in considering any such waiver or review and approval.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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Executive Officers
Biographies of our executive officers as of December 31, 2017,March 2023, other than Mr. Moghadam, are presented below. Information for Mr. Moghadam is included above under “Board of Directors and Corporate Governance.” All ofMessrs. Moghadam, Arndt, Reilly, Anderson and Nekritz, along with Thomas S. Olinger, our executive officersformer CFO, are treated as named executive officers (each an “NEO”). for purposes of this proxy statement.
Thomas S. Olinger:Timothy D. Arndt
Chief Financial Officer
Years at Prologis: 18
Mr. Olinger, 51,Arndt, 50, has been our chief financial officer since May 2012April 2022 and was our chief integration officertreasurer from June 2011December 2013 to May 2012.April 2022. Prior thereto, Mr. Olinger wasArndt held various positions with the chief financial officercompany since joining AMB Property Corporation (“AMB”), Prologis’ predecessor company, in 2004, including as head of AMB from March 2007 to June 2011.corporate planning and as a part of the Company’s global deployment team. Prior to joining AMB, he worked in February 2007,real estate strategy at Gap Inc. and in debt capital markets at Forest City Enterprises. Mr. OlingerArndt received his BBA from the University of Toledo and an MBA from Cleveland State University. In addition, he completed the Stanford Executive Program at the Stanford Graduate School of Business.
Gary E. Anderson
Chief Operating Officer
Years at Prologis: 28
Mr. Anderson, 57, has been our chief operating officer since March 2019. Mr. Anderson was our CEO, Europe and Asia, from June 2011 until March 2019. Mr. Anderson held various positions with the viceTrust from August 1994 to June 2011, including head of the Trust’s global fund business from March 2009 to June 2011 and president and corporate controller at Oracle Corporation, an enterprise software company and provider of computer hardware products and services.the Trust’s European operations from November 2006 to March 2009. Prior to his employmentjoining the Trust, Mr. Anderson held various positions with Oracle, Mr. Olinger was an accountant and partner at Arthur Andersen LLP, where he served as the lead partner on our account from 1999 to 2002. Since January 2011, Mr. Olinger has served asSecurity Capital Group Incorporated, a director of American Assets Trust, adiversified real estate investment trust investingcompany. Mr. Anderson holds a Master of Business Administration in retail, office,finance and residential properties. Mr. Olinger holdsreal estate from the Anderson Graduate School of Management at the University of California at Los Angeles and a Bachelor of Science degreeArts in financemarketing from the Kelley School of Business at IndianaWashington State University.
Eugene F. Reilly: CEO, The AmericasReilly
Vice Chairman
Years at Prologis: 19
Mr. Reilly, 57,62, has been our vice chairman since January 2023. Mr. Reilly was our chief investment officer from March 2019 to December 2022. He was our CEO, the Americas, since the Merger infrom June 2011 until March 2019, and he served as president, the Americas, as well as a number of other executive positions, at AMB from October 2003 until the Merger in June 2011. Mr. Reilly serves on the technical committee of FIBRA Prologis, a publicly traded Mexican REIT that is sponsored and managed by the company. Prior to joining AMB in October 2003, Mr. Reilly was chief investment officer of Cabot Properties, Inc., a private equity industrial real estate firm of which he was also a founding partner. From August 2009 until December 2015, Mr. Reilly served as a director of Strategic Hotels and Resorts, an owner and asset manager ofhigh-end hotels and resorts. Mr. Reilly holds an A.B. degree in economics from Harvard College.
Daniel S. Letter
President
Years at Prologis: 18
Mr. Letter, 46, has been our president since January 2023. Mr. Letter served as global head of capital deployment from January 2021 until January 2023, where he was responsible for the company’s Investment Committee, deployment forecasting, deployment pipeline management and multi-market portfolio acquisitions and dispositions. Prior thereto, Mr. Letter held various positions with the company since joining in 2004, including as president, central region. Mr. Letter holds a Bachelor of Science in civil engineering from Marquette University.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 28 |
| EXECUTIVE OFFICERS |
Edward S. Nekritz:Nekritz
Chief Legal Officer, General Counsel and Secretary
Years at Prologis: 27
Mr. Nekritz, 52,57, has been our Chief Legal Officer,chief legal officer, general counsel and secretary since the Merger in June 2011. Mr. Nekritz was general counsel of the Trust from December 1998 to June 2011 and secretary of the Trust from March 1999 to June 2011. Mr. Nekritz serves on the technical committee of FIBRA Prologis. Prior to joining the Trust in September 1995, Mr. Nekritz was an attorney with Mayer, Brown & Platt (now Mayer Brown LLP). Mr. Nekritz holds a Juris Doctor degree from the University of Chicago Law School and an A.B. degree in government from Harvard College.
Gary E. Anderson: CEO, Europe and Asia
Mr. Anderson, 52, has been our CEO, Europe and Asia, since the Merger in June 2011. Mr. Anderson held various positions with the Trust from August 1994 to June 2011, including head of the Trust’s global fund business from March 2009 to June 2011 and president of the Trust’s European operations from November
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2006 to March 2009. Prior to joining the Trust, Mr. Anderson held various positions with Security Capital Group Incorporated, a diversified real estate investment company. Mr. Anderson holds a Master of Business Administration in finance and real estate from the Anderson Graduate School of Management at the University of California at Los Angeles and a Bachelor of Arts in marketing from Washington State University.
Michael S. Curless:Curless
Chief InvestmentCustomer Officer
Years at Prologis: 17
Mr. Curless, 54,59, has been our chief customer officer since March 2019. Mr. Curless was our chief investment officer since the merger infrom June 2011.2011 until March 2019. Mr. Curless was chief investment officer of the Trust from September 2010 to June 2011, and he was with the Trust in various capacities from August 1995 through February 2000. Mr. Curless was president and a principal at Lauth, a privately-heldprivately held national construction and development firm, from March 2000 until rejoining the Trust in September 2010. Prior thereto, he was a marketing director with the Trammell Crow Company. Mr. Curless holds a Master of Business Administration in finance and marketing and a Bachelor of Science in finance from the Kelley School of Business at Indiana University.
Mr. Curless will retire as our chief customer officer on April 1, 2023, and will remain with the company until the end of 2023 as part of the transition plan. Scott Marshall will become our chief customer officer on April 1, 2023.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 29 |
Environmental, Social and Governance Priorities |
Approach to ESG Priorities
At Prologis, our environmental, social and governance (ESG) priorities influence the implementation of our business strategy. We support innovation and inclusion; minimize our environmental impact, including our emissions; and strengthen our relationships with customers, employees and communities.
This integrated approach impacts every aspect of our company. Prologis’ nearly 2,500 employees work to create the conditions and set the standards for the future of logistics real estate. Our ESG priorities include four key areas of focus: We stay ahead of what’s next; deliver sustainable logistics solutions to our customers; inspire our people; and build resilient communities.
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| AHEAD OF WHAT’S NEXT | SUSTAINABLE LOGISTICS | INSPIRED PEOPLE | RESILIENT COMMUNITIES | |||||||||||
A key Prologis attribute is our intense drive to stay ahead of what’s next. We leverage the scale of our global real estate portfolio and our key position in the supply chain to advance innovation and ESG integration in our industry and beyond. | Our approach to sustainable logistics is customer centric. This includes reducing energy use and emissions and providing energy generation, energy storage and mobility solutions for our customers. | Our employees are the foundation of our business. They implement our strategy and create value for our customers and shareholders. Our culture is key: Our people work towards an inclusive workplace; they are encouraged to listen, question and commit; and they innovate to create the future. | We create economic opportunity to help build resilient communities. We work in partnership with local leaders and organizations to build job training programs; promote health and safety; and enhance park and transit infrastructure. | |||||||||||
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Prologis’ Approach to Environmental Stewardship, Social Responsibility and Governance (ESG)
Our Investment in the Future
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| ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRIORITIES |
We Stay Ahead of What’s Next
Prologis has a significant presence in the world’s most vibrant centers of commerce. We provide comprehensive real estate services including leasing; property and asset management; development; acquisitions; dispositions; and a suite of services through our Essentials platform.
Our work across ESG is driven by our customers. As we look to the future, we expect to see continuing growth in consumption. This means our customers will continue to prioritize speed to market, inventory and flexibility. These factors create increasing demand for warehouse space and logistics services—and position us for sustained long-term success. Our culture of innovation helps us achieve strong business outcomes that benefit our employees, customers, partners and shareholders. This focus helps us future-proof our assets and stay ahead of what’s next: · Our Global Insights and Research group works to understand and describe worldwide market dynamics and key demand drivers for logistics real estate. As an example, their 2022 report on
· Since 2016, Prologis Ventures has invested approximately $180 million in approximately 40 companies that specialize in one or more of the “Four Pillars” of logistics essentials: operations, energy and sustainability, mobility and workforce. By exploring the cutting edge of logistics technology, Prologis can better anticipate—and meet—customer needs. |
SMART BUILDINGS INITIATIVE—FEATURE-RICH, FUTURE-READY
Our smart building initiative helps our customers optimize productivity, reduce move-in time and lower capital expenses.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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ENVIRONMENTAL, | PRIORITIES | |
We Deliver Sustainable Logistics
Our environmental goals and objectivescustomers are linked with our strategic business goals and objectivesinterested in reducing the impact of their logistics operations. This includes reducing their use of energy, which is typically responsible for about 15% of a warehouse’s total operating budget. They are also looking for ways to achieve their own emissions-reduction goals. We offer a range of solutions, including:
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PROLOGIS ENVIRONMENTAL STEWARDSHIP
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Prologis Ports Jersey City
Spotlighting the interconnection of Prologis development acumen with ESG
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Building customer, investor and community relationships and investing in our talent serves a critical business purpose
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| ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRIORITIES |
We Inspire Our People
We recruit talented employees with varied experiences and viewpoints. Then we work to retain them by providing opportunities to learn and develop.
Our most recent employee engagement pulse survey, completed by 92% of our employees in November 2022, indicates that 87% of employees are engaged based on their responses to the five questions that comprise our engagement driver index, including “I am proud to work for this company.” This compares favorably with the financial services sector industry average of 75%.
As of January 2023, according to Glassdoor, our CEO approval rating was 99%, and 88% of our employees said they would recommend Prologis to a friend.
Our diversity, equity, inclusion and belonging (DEIB) vision is to leverage a diverse workforce and inclusive business practices to drive innovation and excellence by focusing on people, procurement, and philanthropy. We acknowledge we have work to do, particularly with respect to representation at our senior leadership level, and are implementing programs to help address this.
EMPLOYEE ENGAGEMENT
‘‘ | Different perspectives are strengths. The biggest danger for companies—particularly successful companies—is when they engage in group think. And group think comes from people who all have the same background, who’ve all gone to the same schools. After all, our customers are pretty diverse, our communities are pretty diverse, why shouldn’t our people be diverse? | |
Hamid R. Moghadam, Co-Founder, CEO and Chairman | ||
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| ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRIORITIES |
We Build Resilient Communities
Prologis builds resilient communities by improving the efficiency of the supply chain. We build, own and operate logistics facilities close to urban centers. This shortens delivery routes, reduces delivery times and reduces related emissions. Prologis’ customers and our customers’ customers (both business and residential) can benefit from next-day or even same-day delivery of the goods and services they need. Additional benefits can include plentiful logistics jobs, shorter commute times for logistics workers, reclamation and remediation of abandoned or brownfield sites and even enhancement of local parks and transportation infrastructure.
· A study by the independent advisory firm Oxford Economics and commissioned by Prologis found that in 2022, $2.7 trillion in goods flowed through a Prologis logistics property. This represents 2.8% of all goods produced and sold globally. Nearly 1.1 million people work under a Prologis roof, most of whom are employees of our
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ECONOMIC IMPACT(1)
| (1) | According to a study by the independent advisory firm Oxford Economics and commissioned by Prologis. | ||
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Employee health and wellness
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Strong governanceOur ESG Goals and oversight ensures the resilience ofProgress
Our goals demonstrate our ambition, create accountability and drive alignment with our business creating a culture of uncompromising integrity
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PROLOGIS ESG TEAR SHEET
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strategy. They are influenced by our stakeholders and by third-party frameworks such as the UN Sustainable Development Goals.
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| Goal | Target year | 2022 Progress/Performance | |||
Environmental Performance | |||||
Net zero for scope 1, 2 and 3 emissions, | 2040 | Please see progress on interim goals, below | |||
Install 1GW of solar capacity (achieved prior goal of 400MW by 2025 three years early) | 2025 | Installed approximately 405MW(1) | |||
Achieve sustainable building certifications | Annually | Achieved, or in progress of achieving, sustainable building certifications for 100% of eligible(2) projects | |||
Install LED lighting across 100% of our | 2025 | Installed LED lighting across 71% of portfolio(3) | |||
Social Performance | |||||
Train 25,000 participants through our | 2025 | Trained approximately 21,000 participants | |||
Achieve 75,000 hours of volunteer time to | 2025 | Achieved approximately 38,000hours | |||
Governance Performance | |||||
Ensure 100% of employees complete ethics training | Annually | Trained100% | |||
| (1) | Within our owned and managed portfolio. Does not include properties from the Urban Spaces acquisition. |
| (2) | Due to customer requirements and/or the limitations of certain co-development agreements, a small number of projects are ineligible to receive a sustainable certification. |
| (3) | Within our owned and managed operating properties. Does not include properties from the Duke and Urban Spaces acquisitions. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 35 |
| ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRIORITIES |
Recent Awards and Honors
| (1) | Rating as of April 4, 2022. Source: ISS Corporate ESG Rating. |
| (2) | Rating as of December 7, 2022. Source: MSCI. |
| (3) | Rating as of September 16, 2022. Source: Sustainalytics. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 36 |
| ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRIORITIES |
Creating Value through ESG
Customer Demand Fuels Opportunity
Whether they are multinational corporations or small businesses, many of our customers are interested in driving value through ESG performance. When we minimize the impact of construction, maximize building operating efficiency and provide value-added services such as electric vehicle (EV) charging and workforce development, we can help boost our customers’ bottom lines and help them achieve their ESG goals. When we engage proactively with the communities we serve, incorporate their ideas and minimize their concerns, we can build trust and create the conditions where both the business and community can flourish.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 37 |
| ENVIRONMENTAL, SOCIAL AND GOVERNANCE PRIORITIES |
Further Information on our ESG Performance and Approach
At Prologis, our ESG priorities influence our long-term success. We stay ahead of what’s next, deliver sustainable logistics, inspire our people and build resilient communities.
We welcome your feedback and ideas on how to improve the value of this disclosure: esg@prologis.com.
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ESG report and Executive Summary | Corporate website | |
| Our next ESG report and Executive Summary, to be published later in 2023, will provide more detail on our priorities, opportunities and achievements in ESG. | In addition, our corporate website provides ESG related information, updates and data.(1) This website is also where we publish our responses to ESG frameworks such as GRI, SASB, TCFD, CDP, PRI mapping and more. | |
| (1) | Information contained on or accessible through our website is not a part of this Proxy Statement. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 38 |
Executive Compensation
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Compensation Discussion and& Analysis
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In 2017, we outperformed both operationally and in the equity markets, while managing our business responsibly
All company operational information in CD&Athis Compensation Discussion and Analysis is for the year ended or as of December 31, 2017,2022, unless otherwise noted. See Appendix A for definitions and discussion ofnon-GAAP measurements measures and reconciliations to the most directly comparable GAAP measures and for additional detail regarding definitions of terms as generally explained in CD&A.this Compensation Discussion and Analysis. The Compensation Committee reviews management’s performance against key company performance measures, such as Core FFO per share, discussed below. See “2017
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 39 |
| COMPENSATION DISCUSSION AND ANALYSIS |
CD&A Highlights
Continuous stockholder outreach enhances our compensation program
We responded to stockholder feedback by providing greater insight into the Compensation Decisions: Annual Base SalaryCommittee’s NEO succession strategy, including the transition of future NEOs’ pay to reflect their tenure and Bonus Opportunity” experience. We also incorporated data metrics into NEO bonuses, which reflects the importance of data to our stockholders. Refer to page 43for further discussion of recent improvements we adopted based on stockholder input.
Prologis Promote Plan (PPP) supports Strategic Capital, a key driver of our growth
Our NEO compensation reflects the performance of our entire global business that generates value for our stockholders. This includes our Strategic Capital business, which accounts for nearly half of our real estate portfolio.
· | PPP awards paid in 2022 were driven by a record-breaking “Promote” incentive fee received from Prologis European Logistics Fund (PELF), one of our largest Strategic Capital vehicles. Refer to page 77for detail on the PELF Promote, its performance hurdle and its value creation. |
· | Refer to page 78for the Committee’s long-term perspective on the variability of PPP awards and the significant value Strategic Capital has created for our stockholders. |
Prologis Outperformance Plan (POP) is a critical supplement to our long-term incentive (LTI) equity program from a talent retention and NEO succession perspective
Our lean talent base of only approximately 2,500 employees operates almost $200 billion in AUM with the specialized skills required to run our global real estate platform, Strategic Capital, Essentials and more. Refer to page 74for the Compensation Committee’s rationale about why POP is crucial to retain the best talent and develop an internal pipeline of future leaders.
Compensation expected to be recalibrated to lower levels for successor NEOs. Current CEO pay reflects the unique value delivered by our founder
Hamid Moghadam co-founded our company 40 years ago. He has attracted and led experienced NEO teams and built vital relationships across all aspects of our business. Such continuity of leadership enabled our annualized TSR to outperform the S&P 500 by 368 bps per year since our IPO in 1997. Since then, most of Mr. Moghadam’s compensation has been paid in equity, the majority of which he still owns. Refer to pages 54 and 55 to understand the Committee’s approach to successor NEO compensation and its rationale for the current design in the context of Mr. Moghadam’s unique position as a founder who has delivered decades-long outperformance.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 40 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Letter from the Talent and Compensation Committee
To Our Stockholders:
Prologis’ continued operational strength in 2022—even in the face of volatile macroeconomic factors—was possible because our management team’s leadership positioned the company to thrive across cycles. We drove same store NOI(1) growth for the year to 7% on a net effective basis and ending occupancy to 98% globally. The strength of our balance sheet, low leverage and available liquidity, coupled with the added investment capacity provided by our Strategic Capital vehicles, positioned us to capitalize on strategic investment opportunities, such as the $1.7 billion “Urban Spaces” portfolio acquisition by our PELF vehicle. We also closed the $23 billion acquisition of another public REIT, Duke Realty Corporation, which was immediately accretive from a Core FFO(1) perspective and added 144 million square feet to our operating portfolio and $3.5 billion of potential development.
Continuity of experienced leadership has been critical to our long-term operational success. Our long-tenured NEOs developed our platform, built deep customer and partner relationships and formed our Strategic Capital vehicles over their multiple decades of service, which has ultimately resulted in our industry outperformance. Our ten-year annualized TSR outperformed the Cohen & Steers REIT Index by 830 basis points per year, with a cumulative TSR more information aboutthan double the index’s cumulative TSR over this period. Our compensation program underpins these long-term returns. It includes substantial performance and vesting periods (such as POP’s three-year earning, seven-year cliff vesting construct) with significant pay potential for outperformance. This design also supports our succession strategy and helps provides a smooth transition to our next NEO team. Effective succession planning requires an adequate runway to train the next generation of NEOs across the breadth of responsibilities we expect our executives to handle.
During stockholder outreach over the past year, we discussed our approach to successor NEO compensation. As we transition to new leadership, the Committee will not default to executive pay levels based solely on compensation benchmarking. Rather, the Committee intends to assess the tenure and experience of each new NEO individually and, therefore, expects the target compensation of new NEOs will start at levels lower than the targets of their predecessors as well as the median pay of our compensation benchmarking peer group. In the past year, we successfully promoted two new executives from within—our CFO and president—as part of a planned transition with target pay levels tailored to their tenure and experience, which are lower than their predecessors’ targets.
Discussions with stockholders also focused on Strategic Capital and the related Prologis Promote Plan (PPP). In 2022, our Strategic Capital business reinforced its importance as a critical driver of our growth. The record $505 million of Promotes earned from Strategic Capital vehicles in 2022 more than doubled our previous annual record. Prologis also earned $535 million of recurring and transactional fees in 2022 from our Strategic Capital business. For comparison, the total amount of fees and Promotes earned from our Strategic Capital business in 2022 was over three times greater than the company’s total G&A expenses for the year. Strategic Capital enables us to grow our global platform efficiently and, with such scale, provide an ecosystem of Essentials customer products, services and solutions, which extracts extra value for our stockholders.
Recognizing that Strategic Capital is a key differentiator, we established PPP to drive the outperformance of our Strategic Capital vehicles. PPP awards can only be paid out of Promotes the company earns when the returns of the applicable Strategic Capital vehicle exceed an outperformance hurdle that is negotiated in advance at arm’s length with our third-party Strategic Capital investors, who have a strong interest in setting high-reach hurdles to drive significant returns. Given this structure, our record Promotes in 2022 resulted in large PPP awards to our NEOs. In light of the size of these awards, we continue to assess PPP and its outcomes carefully, including the context of overall quantum of NEO pay. The Committee continues to consider Mr. Moghadam’s long-standing record as an extremely high performing founder in assessing PPP award potential. Award opportunity reflects the outperformance potential of the Strategic Capital business he and his NEO team built that has delivered tremendous value to our stockholders over the decades of his tenure. Given the recalibration of compensation for new NEOs described above, we expect outperformance award allocations will be less for successor NEOs.
The Committee’s priority is the future of Prologis: being proactive in our approach to NEO succession planning and incentivizing performance measuresin areas of emerging company focus while reinforcing current strengths vital to continued success, including our real estate operations and targets.Strategic Capital business. In 2023, we continue to welcome your feedback and look forward to another year of enhancing our compensation program to stay future-ready.
| George L. Fotiades (Chair) | David P. O’Connor | William Zollars | ||
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| (1) | Core FFO per share and SSNOI are non-GAAP measures. Please see Appendix A for a discussion and reconciliation to the most directly comparable GAAP measures. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 41 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Stockholder Outreach and Compensation Program Improvements
Since our 2022 annual meeting, we connected with 71% of our top 100 stockholders.(1) The Chair of our Talent and Compensation Committee (“Compensation Committee” or “the Committee”) participated directly in all such meetings in which executive compensation and corporate governance was the primary focus.
| · | We solicit input from our investors regarding our performance, governance, executive compensation, human capital management, ESG and other matters. Our dialogue with investors deepens our Board’s understanding of stockholder areas of focus and provides investors with insight into our Board’s decision-making and processes. |
The feedback we heard from stockholders following our 2022 annual meeting and our responsive improvements to our compensation program and other company initiatives are detailed on the following page.
Based on stockholder feedback and in line with the Committee’s continuous efforts to increase the rigor of our compensation targets to maximize company performance, we adopted a broad set of improvements to our compensation program that were detailed in our last proxy statement:
| · | Beginning with the 2022-2024 performance period, we increased the rigor of our LTI equity award scale: |
| – | We adopted a more demanding LTI payout target. Target pay (100% of award) is achieved only when we outperform the benchmark index by at least 100 bps (rather than target pay for at-index performance). |
| – | No payout will occur if performance is less than 500 bps below index TSR. This eliminated discretion to provide LTI equity awards in the event of below index performance. |
| · | Beginning with annual bonuses paid in 2023 for 2022 performance, quantitative ESG metrics aligned with our business strategy accounted for 10% of the corporate score used to calculate NEO bonuses. |
We received 84%(2) stockholder support for our say-on-pay proposal at our 2022 annual meeting. The Committee considers the voting results and feedback from our investors as important factors in our continual assessments of our compensation programs, decisions and policies.
| (1) | Calculated by outstanding shares of common stock of our top 100 stockholders. Our top 100 stockholders hold 80% of our outstanding shares. Engagement covered 43% of total shares outstanding and included outreach from after our 2022 annual meeting to March 2023. |
| (2) | Per Bylaws, calculated using a denominator adding the total number of votes cast for our Say-on-Pay proposal and votes cast against it. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 42 |
| COMPENSATION DISCUSSION AND ANALYSIS |
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2022 STOCKHOLDER FEEDBACK |
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Visibility into our PPP compensation decisions: Stockholders requested more visibility into our compensation determinations, especially with respect to Promote fee-earning opportunities. They also asked for further discussion of the Committee’s rationale for the structure of POP and PPP (our Outperformance Compensation). |
| Enhanced disclosure on Promote timing, 2022 PELF Promote and its performance hurdle and Committee rationale for Outperformance Compensation: In this proxy statement, we enhanced our disclosures on the timing of Promote-earning opportunities that generate PPP awards and provided additional detail about the Promote paid by PELF in 2022, including its performance hurdle. We also expanded on the Committee’s rationale behind both POP and PPP. | |||
Thoughtful NEO transition planning: Investors recognize that we are positioning the company for sustained long-term success with proactive NEO succession planning. They acknowledge that compensation opportunities support these efforts. Stockholders requested more disclosure on successor compensation planning. |
| Continued to implement our NEO succession strategy: Proactive NEO succession planning is a priority of the Committee and the Board. Long-term planning and training of potential successor NEOs (enabled by appropriate compensation to support retention) is being implemented. We also enhanced our discussion of the Committee’s succession strategy in this proxy statement. | |||
Approach for new NEO compensation: Stockholders appreciate that NEO compensation is not institutionalized by position, meaning that the Committee does not set compensation based only on title without regard to the individual executive who occupies the role. Rather, the Committee intends to make individualized compensation determinations for successor NEOs. |
| Recalibrated compensation of incoming executives: We set the compensation of two newly promoted executives (CFO and president) at levels that reflect their overall tenure at Prologis and professional experience, resulting in meaningfully lower total target compensation than their predecessors. The Committee intends to take this approach for future leadership transitions. | |||
Value of data: Stockholders voiced the importance of data to their analyses and to our continued growth and competitiveness. Our portfolio size, global reach, diversity of business ventures and volume of interactions with customers, suppliers and other key players provide a data pool that is unparalleled in the logistics real estate industry. |
| Added data metric to bonus determinations: We made 25% of 2022 NEO bonuses dependent on achieving a company-wide data collection target. Our continuing NEOs contributed 10% of their target bonuses voluntarily to an incentive pool for other employees to drive our data collection efforts. We added a data metric to our 2023 bonus scorecard to support a data infrastructure that will provide insights to help us grow and improve efficiency. | |||
ESG leadership: Stockholders noted their appreciation for our longstanding commitment to ESG. They encouraged us to maintain our ESG leadership in logistics real estate by continuing to raise the bar, enhance transparency and incorporate quantitative ESG metrics that tie into our business strategy. |
| Continued to increase the rigor of our sustainability goals: In 2022, we continued to be an industry leader in ESG by committing to reach net zero emissions across our value chain by 2040. This goal supports our business strategy to provide renewable energy and decarbonization solutions to our customers. We also enhanced our gender pay equity reporting in our ESG report and adopted a political spending policy. | |||
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| COMPENSATION DISCUSSION AND ANALYSIS |
Long track record of stockholder engagement and responsiveness
Prologis has a deep commitment to maintaining robust stockholder engagement. For many years, we have continuously enhanced our executive compensation and corporate governance in response to stockholder feedback. The timeline below lists some of our notable enhancements that were formulated with stockholder input.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 44 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Prologis Business Overview
Prologis is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. We own, manage, lease and develop high-quality logistics facilities in 19 countries across four continents. Our portfolio is focused on the world’s most vibrant centers of commerce and our scale across these locations allows us to better serve our customers’ logistics requirements.
Our compensation programs are designed to drive the outperformance of our global logistics real estate business, including in our Strategic Capital vehicles. The Committee continually assesses our programs to find ways to use compensation to support areas of company expansion and diversification, such as in our Essentials platform and sustainability initiatives.
Calculated based on square feet of our owned and managed operating portfolio. See definition of “Large-Cap REIT Group” on page 48. AUMs of Large-Cap REIT Group companies are derived from publicly available data as of December 31, 2022. Prologis AUM includes estimated investment capacity. |
| (2) | Customers occupying space in our owned and managed (O&M) portfolio. |
| (3) | Total expected investment. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 45 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Multiple differentiators define our industry-leading company
Customer-centric business model: We begin with our customers, who need well-located logistics space in the world’s highest consumption markets. We offer logistics facilities globally where our customers need to be, demonstrated by the fact that 76% of our top 25 customers lease space from us across multiple continents.
Comprehensive logistics ecosystem: We leveraged our size to create an unrivaled package of prime logistics real estate and complementary scale-enabled solutions that we designed to meet our customers’ evolving logistics requirements. These differentiators provide additional growth opportunities and further strengthen our customer relationships.
Strategic Capital: This segment of our business, in which we jointly own logistics properties with institutional investors, provides a |
| · | Essentials platform: We offer an array of next-gen solutions, services and products to address our customers’ most pressing logistics needs in operations, energy and sustainability, mobility and workforce. |
| · | Ahead of what’s next: Prologis Ventures provides venture capital funding for high-impact, logistics-focused startups bringing new solutions to market for our customers. |
| · | Procurement advantage: Our global scale allows us to secure preferred pricing on key building materials and logistics equipment such as steel, forklifts and solar panels. |
| · | Tech-enabled, data informed: Early investments in technology and our vast, worldwide data pool provide actionable insights that drive optimization and competitive advantage for Prologis and our customers. |
OUR SCALE FUELS THE FUTURE
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 46 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Our business model is designed for resilience and responsible growth
Our forward-thinking strategy delivers results: We focus on vibrant consumption markets with large, dense populations, growing consumer affluence and high barriers to entry. With more than 1.2 billion square feet of well-located, high-quality logistics space, we have a unique ability to help our customers meet end-consumer delivery expectations across four continents and navigate the novel challenges of the modern supply chain. Our ability to execute on our forward-looking strategy has resulted in sustained long-term returns for our stockholders: our TSR CAGR over the past ten years was 7.3% higher than the Large-Cap REIT Group average.(1) Over that time, our TSR CAGR also outperformed the S&P 500 by 4.8%.(1)
Our industry-leading balance sheet positions us for strength in all operating environments: Our executive team’s prudent management of our balance sheet has prepared us to navigate potential headwinds and act decisively when favorable opportunities arise. With Moody’s and S&P credit ratings(2) of A3 and A (each stable outlook), respectively, we are the top credit-rated REIT. As a result, in 2022 we were able to access financial markets globally at significantly low costs of capital, issuing $12 billion of debt at a weighted average interest rate of 3.0% and a weighted average term of approximately seven years. As of December 31, 2022, we had over $4 billion of liquidity and our investment capacity across Prologis and our Strategic Capital vehicles totaled $20 billion.
We believe we are well-positioned to capitalize on growth opportunities: Our business model and financial health position us to take advantage of embedded growth potential and seize investment opportunities.
| · | Our global land bank includes approximately 7,588 acres focused on major urban centers and can support an estimated $39 billion of future development. Since 2016, our development business has deployed $15.6 billion with an IRR of 38%. We believe the strategic locations of our sites, coupled with our development expertise and ability to integrate sustainable design features, sets us up to capitalize on this portfolio. |
| · | Our M&A volume is |
| · | Due to strong market rent growth over the last several years, our in-place leases have considerable upside potential to drive organic growth. Our lease mark-to-market (which estimates how much higher market rents are compared to our in-place rents) was approximately 67% as of December 31, 2022. As such, we expect lease renewals to translate into significant increases in future rental income. |
STRONG, INTERCONNECTED ENTERPRISE GENERATED SIGNIFICANT VALUE IN 2022
| Rental Operations | Strategic Capital | Development | ||||||
| $4.9B |
| Over $1B |
| $1.6B | ||||
in 2022 Rental Revenues. | of Strategic Capital Revenues in 2022. | in value creation from stabilizations in 2022. | ||||||
| (1) | See definition of “Large-Cap REIT Group” on page 48. Based on weighted average market capitalization over the |
| (2) | A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. |
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A Unique Business Model Thinking Ahead
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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COMPENSATION DISCUSSION AND ANALYSIS | ||
Our Operations Demonstrate Continued Strength
OUR MODEL DELIVERS STRONG LONG-TERM GROWTH RELATIVE TO OTHER REITS (1)
Total Stockholder Return CAGR (Ten-Year) | ||||
 | 730bps
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greater ten-year TSR | ||||
110bps
greater ten-year TSR
CAGR than Other
Logistics REITs
Stock Price CAGR
(Ten-Year) | Dividend CAGR(2) (Ten-Year) | |||
 |  | |||
Net Earnings Per Share CAGR(3) (Ten-Year) | Core FFO Per Share CAGR(4) (Ten-Year) | |||
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Our Development Business Creates Significant Value
Based on the |
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Our Steady Strategic Capital Business Adds Recurring Fee Streams to Our Bottom Line
Prologis’ net earnings per share CAGR is impacted by non-cash depreciation expense generated as a result of |
| (4) |
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Smart Management of Risk Protects Long-term Stockholder Value
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Our Business Model Delivers Long-term Growth on Both a Relative and Absolute Basis
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| Core FFO per share is anon-GAAP measure. Please see Appendix A for a discussion and reconciliation to the most directly comparable GAAP measure. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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COMPENSATION DISCUSSION AND ANALYSIS | ||
Strategic Capital is a powerful differentiator
In responseaddition to investor feedback,owning assets directly, we implementedpartner with institutional investors to jointly own other properties through co-investment vehicles in our Strategic Capital business. At present, we operate nine total vehicles, including seven private vehicles and two that are publicly traded. Prologis manages the following changesassets owned by the vehicles, using our industry expertise to deliver substantial returns to our Strategic Capital partners and ultimately to our stockholders. Our Strategic Capital business is akin to the private equity businesses of companies such as Blackstone Inc. and KKR & Co., yet these companies paid significantly greater compensation to their chief executive officers over the last three years than the total compensation (including POP and PPP) paid to Prologis’ CEO over the same period.
Accelerates our growth: As of the end of 2022, our Strategic Capital vehicles provided an additional $1.5 billion in 2017:investment capacity that we can use to grow our business.Strategic Capital allows us to self-fund capital development without the cost and delay of having to access public equity markets for annual deployment needs, unlike competitors who issue new equity to raise capital. Prologis develops and contributes properties to Strategic Capital vehicles in return for contribution proceeds, which we recycle back into our development platform and deploy to build additional facilities, resulting in a powerful cycle of value creation and reinvestment.
Highly profitable complementary business: Prologis receives fees for managing the assets owned by vehicles and earns Promotes when we meet financial hurdles that are pre-negotiated with third-party Strategic Capital investors. Prologis was paid over $1 billion in recurring and transactional fees and Promotes in 2022, which was over three times more than the company’s total G&A expenses for 2022. Due to this additional income generated from fees, the return on assets held in our Strategic Capital business was greater than the return on assets held on our balance sheet by 581 bps.
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| · | Stockholders are positioned to benefit doubly because Prologis owns a substantial portion of each vehicle (generally 15 to 55%). When the value of assets held in a vehicle increases, the value of Prologis’ ownership stake in that vehicle also increases. |
Mitigates foreign currency risk: Our properties located outside the U.S. are held primarily in Strategic Capital vehicles that Prologis jointly owns with Strategic Capital investors. This structure allows us to reduce our exposure to foreign currency movements for investments outside the U.S.
STRATEGIC CAPITAL PLAYS A VITAL ROLE IN OUR OVERALL ENTERPRISE
| 47% of Our Total AUM | Consistent
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| Fuels Our Outperformance | ||||
| Over the past ten years, Prologis earned $1.4B in Promotes and $2.7B in management and other fees. | Our Strategic Capital income has more than doubled over the last ten years and contributed over $735M to Core FFO in 2022.(1) | ||
Discussion and Analysis of CEO Compensation
CEO compensation is a small fraction of significant value created for stockholders
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| expenses. Core FFO per share is anon-GAAP measure. Please see Appendix A for a discussion and reconciliation to the most directly comparable GAAP measure. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 49 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Essentials provides additional growth opportunities
Our scale allows us to go beyond the capabilities of a typical real estate company. Our Essentials platform offers solutions, services and products to address some of our customers’ most critical logistics needs in four key areas, underpinned by venture capital and technology to stay on the cutting-edge. We view Essentials as a win-win customer proposition: we strive to forge stronger customer relationships by delivering cost-savings and operational efficiencies while simultaneously developing additional income streams.
UNLOCKING ADVANTAGES OF SCALE FOR OUR CUSTOMERS
 |  | PROLOGIS VENTURES Our venture capital group provides funding and incubation for tech-focused startups seeking to bring new logistics solutions to market. Since 2016, Prologis Ventures has invested approximately $180 million in companies driving logistics innovation. SUSTAINABILITY AMBITION In 2022, we pledged to achieve net zero emissions across our value chain—including Scope 3 emissions—by 2040. This reflects our long-term goal to deliver sustainable energy solutions to support our customers’ decarbonization efforts. DATA, DIGITAL AND TECHNOLOGY We integrate data innovations, digital enhancements and state-of-the-art technologies to optimize productivity for our customers and in our own business. | ||||||
Reduced operating costs As one of the world’s largest LED lighting buyers, we procure LED cost-effectively for our customers to significantly reduce their energy costs. At year-end 2022, 71% of our portfolio (by area) used LED lighting,(1) which is equivalent in size to 10,687 soccer fields. | Sustainable power sources We’ve installed approximately 405 megawatts of solar generation, enough to power over 70,000 average U.S. households, making us the #2 overall company in the U.S. for corporate onsite solar capacity.(2) Our sustainable energy programs support our customers’ transition to clean energy. | |||||||
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Labor pain point solutions The digital training platform of our Community Workforce Initiative focuses on building a skilled and ready labor pipeline for our customers and creating economic opportunities in our communities. At year-end 2022, we had trained approximately 21,000 individuals through our CWI program. | Powering EV fleets We’re assisting our customers’ transition to electric fleets by installing charging stations at sites around the world. We provide a unique charging-as-a-service solution, which means we operate the charging infrastructure with no upfront capex from our customers. |
| (1 | Within our owned and managed operating properties. Does not include properties from the Duke and Urban Spaces acquisitions. |
| (2) | Within our owned and managed portfolio. Does not include properties from the Urban Spaces acquisition. Ranking by SEIA in the 2022 Solar Means Business report. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 50 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Benchmarking Peer Group
Our Peer Group methodology accounts for our total size and revenues, the diversification of our global business and our need to tap talent markets beyond real estate
The Committee recognizes that Prologis’ peer group should reflect the differentiated elements of our global business. With guidance from Pay Governance, the Committee’s consultant for 2022, and input from stockholders, the Committee built our peer group (our “Peer Group”) to include peers of appropriate size and scale and to align with the following considerations about our continued growth and ongoing business transformation:
CONTINUED BUSINESS EXPANSION | + | COMPETITION FOR TALENT ACROSS INDUSTRIES | = | PEER GROUP REFLECTING PROLOGIS’ BUSINESS AND TALENT MARKETS | ||||
| We have transformed beyond a traditional REIT, evidenced by the growth in our worldwide operations, development platform, assets under management, Strategic Capital business and our enterprises beyond real estate, such as our Essentials platform and Prologis Ventures. As a result, there is no comparable REIT or other peer in the market. | We compete for talent with companies outside the REIT industry, including private equity firms and technology companies. We need employees with the finance skills to conduct complex transactions. We also require the expertise to manage global logistics operations and drive cutting-edge innovation in our Essentials business. | Our Peer Group should reflect our global scope and scale, and align with our key business and talent markets, which we consider to be (1) real estate, (2) business-to-business technology and (3) complex financial services and private equity. | ||||||
| · | Our Peer Group includes 19 companies of appropriate size and complexity, with revenues generally 0.6x to 3.0x our FY2021 revenues and market capitalizations from 0.25x to 3.0x our market cap(1). Our Peer Group also gives equal weight to the three industry sectors we identified as our business and talent markets. |
| · | Among these peers, Prologis was in the 86th percentile of market capitalization as of the end of October 2022, which was the most recent data available when the Committee performed its last competitive analysis of 2022 in December. As of October 31, 2022, our market capitalization was $102 billion versus a peer group average of $52 billion. Four of our selected peers had a market capitalization that was less than 10% of Prologis’ market cap. (1) Prologis was in the 28th percentile of this group for FY2021 revenue. |
| · | We include five REITs of appropriate size in our Peer Group. With $196 billion in assets under management (AUM), however, Prologis’ AUM is 311% larger than the Large-Cap REIT Group(2) average AUM of $62.9 billion.Moreover, Prologis is differentiated from most other REITs in terms of our scope and diversity of business ventures, including our Strategic Capital business and Essentials platform, as well as our unique global presence across 19 countries. Therefore, a peer benchmarking group comprised solely of REITs would be insufficient to represent the scale and nature of our business and the talent pool we target for recruiting. |
| · | Some of the REITs in our refined peer group similarly include technology companies in their own peer groups. |
| · | Accordingly, we selected peers that include a mix of large-cap REITs, business-to-business technology and financial services/private equity that better reflect the full scope and complexity of our business. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 51 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Notes to prior page:
| (1) | Market capitalization of Prologis and peers as of October 31, 2022. |
| (2) | See definition of “Large-Cap REIT Group” on page 48. AUMs of Large-Cap REIT Group companies are derived from publicly available data as of December 31, 2022. Prologis AUM includes estimated investment capacity. |
Our total revenue—including unconsolidated revenues from our Strategic Capital business—should be factored into peer group selection
Our consolidated revenues do not fully capture our Strategic Capital business: Our NEOs manage a business that is significantly larger than our consolidated revenues alone indicate. Of the $92 billion total AUM in our Strategic Capital business, $62 billion of those assets are held in our unconsolidated Strategic Capital vehicles. The assets held in our unconsolidated vehicles are not included in our consolidated balance sheet and, therefore, revenue associated with these assets is not reflected in our consolidated revenues.
Selecting peers based solely on consolidated revenues (and thereby comparing the total compensation of our NEOs to that of executives at other companies with significantly smaller AUM) disregards a large portion of our NEOs’ responsibilities related to the performance and operation of the real estate in our Strategic Capital vehicles. These duties include leasing, development, acquisition, disposition and maintenance of real estate; capital sourcing; financial, legal and tax planning; structuring and operating our nine Strategic Capital vehicles, including two public vehicles; and management of customer and investor relationships across numerous countries.
Peer Group for 2022:
REITS | FINANCIAL SERVICES & PRIVATE EQUITY | TECHNOLOGY | ||||||
· American Tower Corporation · Crown Castle Inc. · Equinix, Inc. · Ventas, Inc. · Welltower Inc. | · The Carlyle Group Inc. · Evercore Inc. · Jefferies Financial Group Inc. · Lazard Ltd · Northern Trust Corporation · S&P Global Inc. · State Street Corporation | · Adobe, Inc. · Automatic Data Processing, Inc. · Global Payments Inc. · Intuit Inc. · Paychex, Inc. · ServiceNow, Inc. · Workday, Inc. | ||||||
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 52 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Our Compensation Philosophy
The Committee’s compensation philosophy emphasizes pay-for-performance alignment across all elements of our value-creating business
Paying for performance is our central compensation tenet: Annual bonuses, LTI equity, POP and PPP are each 100% based on performance in support of company operations and financial performance.
We customize our compensation elements: The components of our compensation program are specifically designed to support each driver of our business. We have compensation elements supporting progress toward annual strategic priorities, strong relative long-term stockholder return and outperformance in our Strategic Capital business.
We position Core Compensation around our Peer Group median; Outperformance Compensation is paid only for significant above-market performance
The Committee aims target Core Compensation for current, long-tenured NEOs around the median of our Peer Group (see next page regarding compensation of newly promoted executives). The Committee’s 2022 competitive analysis confirmed that our current NEO Core Compensation is within a reasonable band of median Peer Group pay.
Outperformance Compensation is paid only when stockholders receive significant returns as measured by objective, formulaic hurdles. POP and PPP awards are only a small fraction of the total stockholder value created.
| · | POP and PPP allow us to attract and retain top talent from competitive, high incentive labor markets. Significant vesting periods (for example, seven years on the bulk of POP awards) encourage our top talent to stay with the company long term. This supports our investment in talent specifically trained to run our unique business. |
| · | Refer to pages 74 and 78 for more about the Committee’s rationale behind POP and PPP, respectively. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 53 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Committee Rationale: NEO Succession Planning
The Committee uses pay to support leadership succession and sets new NEO compensation based on tenure, experience and performance
Our long-tenured NEO team is key to long-term performance and succession plan: In 2022, the Committee reaffirmed its belief that our long-tenured NEOs who have an average tenure of over 25 years at Prologis and collectively over 175 years of experience, have been critical to Prologis’ operational and financial results. Importantly, each of our long-tenured NEOs has been in office for over 11 years since the AMB Merger in 2011, providing stable continuity of leadership that has helped build our business over the years. Furthermore, retention of our long-tenured NEOs has been essential to properly train potential successors.
Compensation of new NEOs expected to be recalibrated to lower levels: The Committee will assess any new NEO’s experience, performance and tenure when making compensation decisions. The Committee will not set new NEO compensation based solely on peer benchmarking. As such, we expect that new NEO compensation will not be at the same level as that of our long-tenured NEOs.
| · | Our current CFO’s Core Compensation targets for 2023 and Outperformance Compensation pool allocations are lower than the CFO targets and allocations of his longer tenured predecessor. Mr. Arndt’s LTI equity target for 2023 is about 17% lower than his predecessor’s final CFO target. His POP and PPP allocations for the relevant periods are only 2% and 3%, respectively, as compared to 4% or 6% for his predecessor in his final year as CFO. Note that Mr. Olinger’s POP and PPP allocations were reduced from 6% to 4% in connection with the planned CFO transition. |
| · | Similarly, when our current president was appointed effective January 1, 2023, his Core Compensation targets and POP pool allocation were set at lower levels than the targets of his predecessor in 2022. Mr. Letter’s base salary and LTI equity target for 2023 are 14% and 13% lower than his predecessors’ targets in 2022, respectively. His POP allocation is half that of Mr. Reilly’s for the relevant performance periods. |
| · | When new executives are appointed, the Committee intends to set their total target compensation (including Core Compensation, POP and PPP) below the median compensation of our Peer Group. The Committee expects that new executives’ total target compensation will move gradually toward the median of our Peer Group as they gain experience, conditioned on their successful performance in the role. |
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| Former CFO (Tom Olinger) | Current CFO (Tim Arndt) | Former CIO (Eugene Reilly) | Current President (Dan Letter) | ||||
Compensation Element | Target Core 2021 performance year(1) | Target Core year(1) | Target Core year(1) | Target Core year(1) | ||||
Base Salary | $600,000 | $600,000 | $700,000 | $600,000 | ||||
Bonus | Target: $750,000 (125% of Base Salary) | Target: $720,000 (120% of Base Salary) | Target: $1,050,000 (150% of Base Salary) | Target: $780,000 (130% of Base Salary) | ||||
LTI Equity | Target: $2,100,000 | Target: $1,750,000 | Target: $2,600,000 | Target: $2,250,000 | ||||
POP and PPP Pool Allocations | ||||||||
POP | Performance periods starting between 2019 and 2022: 4% or 6% | 2023-2025 performance period: 2.5% | Performance periods starting between 2019 and 2022: 6% | 2023-2025 performance period: 3.5% | ||||
PPP | PPP pools funded between 2019 and 2021: 4% or 6% | 2022 PPP pool allocation: 3% | PPP pools funded between 2020 and 2022: 6% | Mr. Letter has not yet received a PPP award while president | ||||
| (1) | 2021 was Mr. Olinger’s final full year as our CFO. 2022 was Mr. Reilly’s final full year as our chief investment officer (CIO). Mr. Arndt was appointed CFO effective April 1, 2022. Mr. Letter was appointed president effective January 1, 2023. Our president fulfills the same duties previously assigned to the CIO. Based on current projections, we expect that Mr. Letter will be an NEO in our next annual proxy statement. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 54 |
| COMPENSATION DISCUSSION AND ANALYSIS |
2022 Chief Executive Officer Compensation
The Committee assesses our CEO as a founder delivering long-term stockholder value
As part of its 2022 compensation review, the Committee considered whether our largely formulaic pay-for-performance program is working as designed to generate long-term returns for our stockholders. During that review, the Committee concluded that our CEO’s compensation is consistent with the tremendous long-term value he has delivered since co-founding our company four decades ago. The average tenure of an S&P 500 CEO in 2022 was 6.4 years. Mr. Moghadam has been an extremely high performing CEO for over 25 years, spanning our entire life as a public company. This is a unique intervening factor in the Committee’s compensation decisions.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 55 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Notes to prior page:
| (1) | Outperformance over the ten-year annualized TSR of the MSCI REIT Index, the Cohen & Steers REIT Index and the S&P 500. |
| (2) | A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. |
2022 CEO Core Compensation
100% of our CEO’s compensation is paid in equity
At our CEO’s request, his base salary was reduced to $1 in 2019. The rest of our CEO’s previous base salary ($999,999) was shifted to at-risk pay in the form of equity compensation contingent on performance and subject to four-year vesting. The Committee determines the actual amount of equity paid in lieu of salary using the operational performance criteria from our annual bonus program.(1)
As requested by our CEO to further demonstrate his commitment to our company, this change offers no additional upside to him. The amount he can earn as equity paid in lieu of |
Mr. Moghadam has elected to take 100% of his bonus in equity every year in which he has received a bonus since our IPO in 1997(2), demonstrating his deep commitment to our stockholders.
As a result, essentially 100% of Mr. Moghadam’s total compensation is paid in equity (including Core Compensation as well as Outperformance Compensation). Since our IPO in 1997, most of Mr. Moghadam’s compensation has been paid in equity, the majority of which he still owns.
OUR CEO VOLUNTEERED TO DEEPLY ALIGN HIS OWN FINANCIAL INTERESTS WITH OUR STOCKHOLDERS’ INTERESTS
Our CEO’s total equity at the end of 2022 was over 50x greater than the minimum he is required to retain.(3)
For the |
| (2) | AMB Property Corporation, which merged with ProLogis in 2011 to create the |
| (3) | Includes equity that counts toward the minimum stock ownership requirement applicable to our CEO. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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COMPENSATION DISCUSSION AND ANALYSIS | ||
COMPANY PERFORMANCE DURING CEO TENURE IN THE LAST FIVE YEARS
During Mr. Moghadam’s tenure as CEO in the last five years, the company has created tremendous value for our stockholders under his leadership.
The chart below illustrates the link between (i) CEO Core Compensation (consisting of base salary, annual bonus and annual LTI equity awards), (ii) the company’s three-year TSR relative to the LTI Equity benchmark and (iii) Core FFO per share, (1) demonstrating that Core Compensation aligns with our relative TSR and operational performance.
Although we had strong operational performance in 2015, our three-year annualized TSR at the end of 2015 underperformed the |
| · | Since 2015, we have outperformed in relative TSR, resulting in higher Core Compensation. Our CEO’s Core Compensation, however, has remained relatively flat since 2017. Our three-year TSR declined in 2022 from all-time highs, but outperformed the LTI equity benchmark by 593 bps, resulting in awards comparable to those since 2017. |
| · | Our greatest annual Core FFO per share growth occurred from 2021 to 2022. |
CORRELATION OF CEO CORE COMPENSATION WITH RELATIVE THREE-YEAR TSR
| (1) | Core FFO per share is anon-GAAP measure. Please see Appendix A for a discussion and reconciliation to the most directly comparable GAAP measure. |
Represents the difference between PLD’s three-year annualized TSR and the three-year annualized weighted TSR index of logistics and large cap REITs of our equity award formula used to determine our annual LTI awards (for the 2015 through 2022 performance years). For the 2014 performance year, the benchmarks of logistics and large cap REITs that were used in our equity award decisions were not aggregated into one weighted benchmark. We instituted our equity award formula starting with the 2015 performance year. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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COMPENSATION DISCUSSION AND ANALYSIS | ||
2022 CEO CorePOP Compensation
$22.4 billion in value created for 2017 Performance Yearstockholders when POP compensation was awarded
By exceeding the MSCI REIT Index three-year compound annualized TSR for the 2020-2022 performance period by more than 100 bps, we created $22.4 billion of value for our stockholders above the measurement index. Out of that amount, our CEO earned a $15.0 million POP award. Together with the $3.4 million holdback award earned from the 2017-2019 performance pool, the total POP awards paid to our CEO were only 0.08% of the $22.4 billion in outperformance value generated for our stockholders.
CEO POP AWARDS(1) WERE ONLY 0.08% OF THE TOTAL VALUE GENERATED FOR STOCKHOLDERS(2)
CEO POP award for the |
SUMMARY OF CEO CORE COMPENSATION FOR 2017 PERFORMANCE YEAR
Annual Base Salary
| Annual Bonus
| Annual LTI Equity Award
| Aggregate Core
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No salary increase in 2017 | For 2017 performance paid in 2018 Minimum-Target-Maximum 0%-150%-300% of salary
| For 2017 performance year granted in 2018 | ||||
$1,000,000 | Paid at 137.5% of target ($2,062,500)
| Paid at $12,375,000
| $15,437,500 | |||
spatially proportionate.
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Strong correlation between CEO core compensation and relative three-year TSR and operational performance
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CEO POP award is a small fraction of the $11.8 billion in value created in exceeding the POP hurdle
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| We calculate our outperformance by comparing the aggregate dollar value of our actual TSR versus the aggregate value of our TSR had it tracked the TSR of the MSCI US REIT Index (the MSCI REIT Index) over the same |
POP hurdle.
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CEO PPP awards are a small fraction of the $1.2 billion in value created in achieving PPP hurdles
The |
2017-2019 performance period.
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COMPENSATION DISCUSSION AND ANALYSIS | ||
2022 CEO PPP Compensation
$1.8 billion in value created when PPP compensation was paid
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For additional detail regarding the 2022 Promote from Prologis European Logistics Fund (PELF) that gave rise to PPP awards
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CEO PPP AWARD WAS ONLY 1.6% OF THE TOTAL VALUE CREATED WHEN WE ACHIEVED PPP HURDLES(1)
| (1) | The “total value created |
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2017Say-on-Pay Vote and Stockholder Outreach
94% vote in favor of oursay-on-pay proposal
Lead director and Compensation Committee chair met with 70% of our stockholders
spatially proportionate.
Common themes from 2017 outreach roadshow
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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| COMPENSATION DISCUSSION AND ANALYSIS |
Core Compensation: Annual Bonus Opportunity
| HOW IT WORKS |
Bonus Calculation Process
Corporate Score Determination:
| · | We determine a corporate score based on performance measured by operational metrics supporting our strategic priorities. |
| · | Metrics are divided into four categories and weighted according to their significance (see scorecard below). |
| · | Each metric is assessed based on company performance, which generates a score for each of the four bonus categories. |
| · | The category scores are multiplied by the weight assigned to the category and added together to determine the overall corporate score (which translates into a percentage of the target bonus pool). |
| · | The corporate score is set in a range between 50 and 200% of target (50% if threshold performance is achieved; 200% maximum if stretch performance hurdle is achieved). |
NEO Bonus Calculation: · The corporate score determines 80% of our NEOs’ bonuses, with the remaining 20% based on individual performance supporting company strategic priorities. Key NEO Bonus Features: · All bonuses are 100% based on performance in support of our business plan. · There is no minimum guaranteed bonus. ·Bonus payments are capped at 200% of target bonus. · Demonstrating their commitment to the company, all NEOs opted to receive their 2022 bonuses in LTIP units, which have a minimum two-year holding period. |
2022 BONUS SCORECARD FOR CORPORATE SCORE
| METRICS | CATEGORY WEIGHTING |
Portfolio Operations:
· Same Store NOI Growth - Net Effective · Net Promoter Score · Essentials Contracted Sales · Essentials Contribution | 60% | |||
Deployment and Development Stabilizations: · Development Stabilizations · Development Stabilizations - Margin · “Build to Suit” Percentage of Total Development Starts · Contributions to Strategic Capital Vehicles | 20% | |||
Strategic Capital: · Equity Investments from Third Parties in | ||||
Strategic Capital Vehicles
| 10% |
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ESG:
Environmental · Solar Megawatts Installed · Percentage of LED Lighting Installed Across O&M Portfolio (by area) · Percentage of New Developments Certified Sustainable (LEED or equivalent) Social · Number of New Community Workforce Initiative Engaged Learners · Culture & Talent Composite Score · IMPACT Volunteer Hours Governance · Composite corporate governance score across three third-party assessments | 10% | |||
PROLOGIS PROXY STATEMENT | MARCH 24, 2023
| 60 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Discussion of Compensation Comparison GroupBonus structure supports our top strategic priorities
No REITs represent a true comparisonHow we select our bonus metrics and set our targets:
Our bonus metrics are set annually to Prologisreflect the company’s business imperatives for that performance year and to tie to our three-year strategic plan:
We set targets to incentivize progress on our current financial and strategic priorities, which may change from year to year as goals are achieved and strategy evolves. For example, given the significance of our Strategic Capital business, we added a |
We set our bonus metrics to drive strong operational performance over the long-term. Demonstrating the effectiveness of this approach, our performance over the |
OUR BONUS TARGETS ARE RIGOROUS
2022 target Core FFO per share(1) required 9% greater performance than
Core FFO per share achieved in 2021.
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Other industrial REITs are too small in size to be used in our comparison group
AUM is most the appropriate measure to gauge size and scope
Portfolio Operations metrics are the most heavily weighted:
Our 2022 bonuses were largely determined by our performance on operational metrics in the Portfolio Operations category (weighted at 60% of our total corporate score). These operational metrics for 2022 were (i) Core FFO per share, (ii) Same Store NOI Growth – Net Effective, (iii) Net Promoter Score, (iv) Essentials Contracted Sales and (v) Essentials Contribution. We believe these metrics have considerable impact on our success and are important to our stockholders in assessing the health and performance of our business.
Our 2022 Core FFO per share(1) target was set at a rigorous level, requiring significantly better performance than in 2021. Our 2022 Core FFO per share target (excluding Strategic Capital Promotes) was set about 9% higher than our 2021 Core FFO per share performance (also adjusted to exclude Promotes).
Certain targets might not show a year-over-year increase because of the underlying nature of the metric. For instance, Our Same Store NOI Growth – Net Effective target for 2022 was set at a rigorous level based on a lease-by-lease and property-level analysis conducted to determine targets based on market indicators. Because the composition of the pool of properties changes from year-to-year, SSNOI metrics year-over-year may not be comparable. Therefore, although set at rigorous levels for the current set of properties, SSNOI targets may not necessarily show an increase over the prior year’s performance.
Similarly, the metrics in the Deployment and Development Stabilizations category are a function of our development pipeline projections at the time bonus targets are set. Our target Contributions for 2022, which measures the value of stabilized properties contributed to our Strategic Capital vehicles, was $2.65 billion. We set this metric based on our then-current assessment of the properties that will be available to stabilize and contribute to Strategic Capital vehicles in the applicable year, which fluctuates. Likewise, our Development Stabilizations—Margin target for 2022 was set at 32.5%, which reflected our projected development pipeline for the coming year when bonus targets were set using our then-current estimates of labor, material and other costs.
In the same way that targets are set based on year-to-year projections, some metrics that appear in prior bonus scorecards might not appear in subsequent scorecards given our then-current operational priorities and evaluation of the most pressing factors impacting our business. When 2022 bonus metrics were set, we recognized that our Rent Change on Rollover and Average Occupancy (which were both included in the 2021 bonus scorecard) were already strong, so it was not necessary to drive their performance by including them in the 2022 scorecard. Likewise, we have
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
COMPENSATION DISCUSSION AND ANALYSIS | ||
Compensation Elements: Target Core Compensationalready reduced our general and administrative (G&A) expenses as a percentage of AUM from 85bps to 31bps since 2011, so we chose to focus on other operational priorities by replacing this metric in our 2022 scorecard. Our Procurement Savings performance in 2021 far exceeded its 2021 target and is Gearedalso a company strength given our scale-enabled purchasing power, so we determined it did not need to Medianbe included again in the 2022 scorecard.
We include rigorous, quantifiable ESG goals in our bonus program to support the various components of Comparison Groupour industry leading ESG program and provide a measure of accountability for our progress. Environmental metrics—including solar, LED and certified sustainable development targets—advance our sustainability initiatives that also strengthen customer relationships and provide ancillary revenue. Social metrics—including related to our Community Workforce Initiative, Culture & Talent Composite Score and IMPACT Volunteer Hours—help foster an inclusive culture that we believe attracts and retains diverse talent. For governance metrics, we utilize third-party assessments to measure our corporate governance performance and strive to have strong, independently verified policies in place that provide for responsible governance in furtherance of our stockholders’ best interests.
Outperformance plans make upAs with other metrics in our bonus scorecard, ESG metrics are determined on a year-to-year basis using then-current assessments and projections of the coming year. For this reason, targets set for ESG metrics, such as our Culture & Talent Composite Score, might not reflect an increase from prior years’ performance.
NEOS VOLUNTARILY REALLOCATED PART OF THEIR BONUSES TO SUPPORT OUR 2022 DATA INITIATIVE
Our continuing NEOs voluntarily contributed 10% of their target bonuses to an incentive pool used to reward the sizebroader company’s data collection efforts in 2022.
2022 bonus assessment results
Based on strong performance against the quantitative metrics of our bonus scorecard, the Committee concluded that our NEOs earned an above-target corporate score. Together with meaningful individual contributions in 2022, this resulted in NEOs earning bonuses of 131.50% of target.
Data centricity: Each of our continuing NEOs voluntarily contributed 10% of their target bonus amounts to an incentive pool allocated to other employees who were directly involved with data collection and scope discrepancy but only kickverification to incentivize our company-wide data collection initiative. As such, the bonus amount paid to each continuing NEO for 2022 performance was reduced by 10% of their respective target bonus amount, resulting in with exceptional performanceNEO bonus payouts at 121.50% of target.
In addition, the company emphasized improving the completeness and quality of our data in 2022, which we view as essential to our ongoing growth. This included data on property characteristics, our Essentials business, leasing and customer contacts, construction and facilities management. In 2022, the company made 25% of NEO bonuses dependent upon 95% completion of our data initiatives. The company achieved 97% completion of this critical effort.
See the tables and discussion on the pages that follow for more detail about how our corporate score and bonus amounts were calculated.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 62 |
| COMPENSATION DISCUSSION AND ANALYSIS |
CATEGORY-BY-CATEGORY METRIC RESULTS
| PORTFOLIO OPERATIONS | WEIGHTED AT 60% | ABOVE TARGET OVERALL | ||||||||||||||||||
| Key Performance Metric | Metric Weighting | Threshold Performance 50% of Target Bonus | Target Performance 100% of Target Bonus | Stretch Performance 200% of Target Bonus | Scored 2022 Performance(5) | |||||||||||||||
Core FFO Per Share (excluding Promotes)(1) | 35% | $4.40 | $4.45 | $4.50 | $4.61 | |||||||||||||||
Same Store NOI Growth – Net Effective(2) | 5% | 3.75% | 4.25% | 4.75% | 7.0% | |||||||||||||||
NPS Score(3) | 10% | 55 | 65 | 70 | 63 | |||||||||||||||
Essentials Contracted Sales | 7.5% | $55M | $65M | $75M | $52.10M | |||||||||||||||
Essentials Contribution(4) | 2.5% | $65M | $70M | $75M | $68.82M | |||||||||||||||
Total Category Score |
| 150% of target | ||||||||||||||||||
Core FFO per share and Same Store NOI Growth – Net Effective non-GAAP measures. Please see Appendix A for a discussion and reconciliation to |
HOW COMPENSATION PROGRAM COMPONENTS FIT TOGETHER
| (2) |
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2017 Compensation Decisions: Annual Base Salary and Bonus Opportunity
No increases were made to annual base salaries for 2017 performance year
Annual 2017 bonusSame Store NOI Growth is based on operational performance against our strategic priorities
Net Promoter Score (NPS) is a metric administered by Qualtrics. NPS measures the loyalty of customers to a company. NPS scores |
Essentials Contribution includes the |
For comparison, actual 2021 performance for metrics that were included in the 2021 bonus scorecard: Core FFO per share ($4.09); Same Store NOI Growth – Net Effective (5.2%); NPS Score (65). |
DEPLOYMENT AND
DEVELOPMENT STABILIZATIONS | WEIGHTED AT 20% | ABOVE TARGET OVERALL | ||||||||||||||||||
| Key Performance Metric | Metric Weighting | Threshold Performance 50% of Target Bonus | Target Performance 100% of Target Bonus | Stretch Performance 200% of Target Bonus | Scored 2022 Performance(2)(3) | |||||||||||||||
Development Stabilizations | 5% | $3.325B | $3.625B | $3.925B | $3.615B | |||||||||||||||
Development Stabilizations - Margin | 5% | 28.5% | 32.5% | 36.5% | 48.7% | |||||||||||||||
Build to Suit % of Total Development Starts(1) | 5% | 35% | 37.5% | 40% | 40.0% | |||||||||||||||
Contributions to Strategic Capital Vehicles | 5% | $2.40B | $2.650B | $2.9B | $1.533B | |||||||||||||||
Total Category Score |
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| (1) | “Build to Suit” refers to the process by which Prologis builds a customized facility to meet the specifications of |
For comparison, actual 2021 performance for metrics that were included in the 2021 bonus |
Performance targets and scored 2022 performance for Deployment and Development Stabilizations metrics utilize a constant foreign currency rate and are calculated on an owned and managed ownership basis inclusive of our |
joint ventures.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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| COMPENSATION DISCUSSION AND ANALYSIS |
| STRATEGIC CAPITAL | WEIGHTED AT 10% | BELOW TARGET OVERALL | ||||||||||||||||||
| Key Performance Metric | Metric Weighting | Threshold Performance 50% of Target Bonus | Target Performance 100% of Target Bonus | Stretch Performance 200% of Target Bonus | Scored 2022 Performance | |||||||||||||||
Third-Party Equity Raise(1) | 10% | $1.6B | $2.0B | $2.4B | $778M | |||||||||||||||
Total Category Score | ||||||||||||||||||||
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Includes contracted equity commitments from third parties to Strategic Capital vehicles. Performance targets and scored 2022 performance for the Third-Party Equity Raise metric utilize a |
Our bonus metrics are rigorous and difficult to achieve
| ESG | WEIGHTED AT 10% | ABOVE TARGET OVERALL | ||||||||||||||||||
| Key Performance Metric | Metric Weighting | Threshold Performance 50% of Target Bonus | Target Performance 100% of Target Bonus | Stretch Performance 200% of Target Bonus | Scored 2022 Performance(5)(6) | |||||||||||||||
Environmental | ||||||||||||||||||||
Solar Megawatts (MW) Installed | 2% | 325MW | 350MW | 375MW | 379MW | |||||||||||||||
% LED Across O&M Portfolio (by area) | 1% | 62% | 67% | 72% | 76% | |||||||||||||||
% of New Eligible Developments Certified Sustainable (LEED or equivalent)(1) | 1% | 90% | 95% | 100% | 100% | |||||||||||||||
Social | ||||||||||||||||||||
Number of New CWI Engaged Learners(2) | 1% | 4,000 | 5,000 | 6,000 | 5,609 | |||||||||||||||
Culture & Talent Composite Score(3) | 2% | 60% | 70% | 80% | 77.9% | |||||||||||||||
IMPACT Volunteer Hours | 1% | 8,000 | 10,000 | 12,000 | 10,882 | |||||||||||||||
Governance(4) | ||||||||||||||||||||
Sustainalytics | .666% | 38 | 45 | 52 | 43.7 | |||||||||||||||
MSCI | .666% | -6.5 | -4.5 | -2.5 | -3.2 | |||||||||||||||
GRESB | .666% | 20 | 24 | 28 | 27.78 | |||||||||||||||
Total Category Score |
| 166.50% of target | ||||||||||||||||||
Due to customer requirements and/or the limitations of |
An “engaged learner” is an individual enrollee in our |
Culture & Talent Composite Score is made up of three components: overall employee engagement survey score (1/3 weight); percentage of regrettable turnover at or below 25% of all turnover (1/3 weight) (we define turnover as “regrettable” if we would choose to re-hire the individual); and percentage of diverse hires in U.S. real estate roles (1/3 weight). |
KEY ANNUAL BONUS METRICS
2017
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Portfolio operations
| 50% of
| Target performance 100% of Target Bonus
| 200% of
| Actual 2017
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Core FFO per share(1)(2) | $2.58 | $2.63 | $2.68 | $2.81 | ||||
Average Occupancy | 95% | 96% | 97% | 96.3% | ||||
SSNOI Growth(1)(2) | 2.9% | 3.4% | 3.9% | 3.7% | ||||
Rent Change on Rollovers(1)(3) | 12.5% | 14.5% | 16.5% | 15.4% | ||||
| (4) | Composite of corporate governance scores from each of the three listed third-party ESG assessments. Note that methodologies underlying the governance assessments are subject to change at the decision of the applicable third-party and are not controlled by Prologis. |
| (5) | For comparison, actual 2021 performance for metrics that were included in the 2021 bonus scorecard: Culture & Talent Composite Score (79%). |
| (6) | The scored 2022 performance for ESG metrics were based on projections at the time of calculation. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 64 |
| COMPENSATION DISCUSSION AND ANALYSIS |
| OVERALL CORPORATE SCORE | 131.50% OF TARGET | ABOVE TARGET OVERALL | ||||||||
Determination of our corporate score: The weightings of the scores for the four categories yielded an overall corporate score of 131.50% of target. | ||||||||||
| INDIVIDUAL PERFORMANCE | EACH AT 131.50% OF TARGET | ABOVE TARGET OVERALL | ||||||||
The Committee’s assessment of Mr. Moghadam’s individual contributions: Under Mr. Moghadam’s leadership, the executive team led the company in another year of significant accomplishments. We closed the $23.2 billion Duke Realty Corporation merger and integrated the portfolio. Mr. Moghadam’s unrelenting focus on meeting our customers’ needs in all aspects of our business differentiates and positions us for strong long-term growth and continued market leadership. Under Mr. Moghadam’s guidance, Prologis’ annualized three- and ten-year TSR outperformed the Cohen & Steers REIT Index by 1,011 bps and 830 bps, respectively. Mr. Moghadam’s ongoing support for our diversity and inclusion initiatives in 2022 continued to foster an inclusive environment supporting the retention and development of an employee base with diversity of thought, experience and background, which we view as critical to driving innovation and performance. Mr. Moghadam also continued to leverage our unique vantage point in the heart of global logistics by bringing industry innovators from around the world together at our second GROUNDBREAKERS thought leadership forum, which provides a venue for in-depth examinations of emerging technologies and trends that are critical to our customers’ businesses and are transforming the supply chain.
The Committee’s assessment of other NEO contributions:
| · | Portfolio Operations: Our NEO team delivered Core FFO(1) of $4.61 per share (excluding Strategic Capital Promotes), representing 12.7% year-over-year growth. Mr. Reilly delivered exceptional operating results, with Same Store NOI Growth significantly exceeding its rigorous target. Given strong market demand we continued to push rents while increasing occupancy. Essentials Contribution was below target due to variances in energy costs. Similarly, Essentials Contracted Sales were below target due to lower forklift and smart building sales. Nevertheless, Mr. Anderson continued to successfully lead our efforts to scale our Essentials platform and our energy business, resulting in 2022 Essentials Contracted Sales exceeding 2021 results by more than 150% as we continue to gain traction in this line of business. |
| · | Deployment and Development Stabilizations: Notwithstanding continued material shortages and rising costs, the profitability of our overall development program continued to be excellent in 2022. Mr. Reilly oversaw the stabilization of over $3.6 billion of developments with margins that significantly exceeded our stretch goal. Our built-to-suit percentage was also above plan. The volume of contributions at $1.5 billion was short of our goal, driven in large part by our decision to pause contributions until there is further clarity on property valuations. |
| · | Strategic Capital: The overall macro environment made fundraising in the second half of 2022 extremely difficult as investors were looking to reduce their exposure to real estate and generate liquidity. Our teams raised $778 million across all vehicles, which was short of our target. PELF, however, was extremely active and raised 85% of their fundraising goal, which allowed teams under the leadership of Mr. Reilly and Mr. Nekritz to close the acquisition of the $1.7 billion Urban Spaces portfolio in the third quarter. Moreover, the $505 million Prologis received in Promote fees from vehicles in 2022, an all-time company record for annual Promote revenue, showed the durability of this revenue stream even in a turbulent economy. |
| · | ESG: Mr. Anderson and Mr. Nekritz continued to elevate our ESG leadership, with our ESG results reflecting the priority, resources and talent we have dedicated to this important area. We believe that our ESG commitment creates value (as in our Essentials energy solutions), maintains our reputation in the logistics real estate industry and strengthens relationships with customers by helping them reduce operating costs while also making progress toward their own sustainability goals. In 2022, Mr. Anderson led the hiring and onboarding of significant personnel supporting our ESG initiatives, including our first chief energy and sustainability officer. Having a strong ESG leadership team in place allowed us to raise our level of ESG ambition by adopting a goal of net zero emissions by 2040 with interim targets to support progress. With Mr. Anderson’s guidance, we became the #2 overall company in U.S. corporate onsite solar capacity.(2) Diverse hires in 2022 in our real estate roles were 59% globally. 48% of all real |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 65 |
| COMPENSATION DISCUSSION AND ANALYSIS |
estate roles globally are held by female employees. We exceeded our regrettable turnover goal, with less than 13% of all turnover being regrettable. These efforts help to build and maintain a culture that attracts and retains the best talent. |
| · | Duke Realty Corporation acquisition: Messrs. Arndt, Nekritz and Reilly led our negotiation, structuring, diligence, closing and integration efforts related to the Duke Realty Corporation acquisition. |
| · | Balance sheet considerations: Our balance sheet and credit metrics remain very strong with one of the top balance sheets in our industry. We have significant liquidity as well as debt capacity to self-fund our growth for the foreseeable future. Under Mr. Arndt’s leadership, we maintained our A3 rating from Moody’s and improved our S&P rating from A- to A.(3) In 2022, Mr. Arndt and his team completed over $12 billion in debt transactions with a weighted average rate of 3% and a weighted average term of seven years. Mr. Olinger was instrumental in positioning his successor, Mr. Arndt, with key global leadership responsibilities to prepare him for the CFO role. |
| (1) | Core FFO per share and |
| (2) |
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Ranking by SEIA in the 2022 Solar Means Business report. | ||
CORPORATE SCORE AND NEO BONUS ASSESSMENTS
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| A securities rating is not a recommendation to buy, sell or hold securities and is subject to revision or withdrawal at any time by the rating organization. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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COMPENSATION DISCUSSION AND ANALYSIS | ||
2017
2022 ANNUAL BONUS DECISIONSPAYMENTS
At our NEOs’ election, all bonuses were settled in equity with a two-year holding period and not paid in cash, resulting in further alignment with stockholder interests.
2022 Bonus(1)
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2017 Target
| 2017 Bonus*
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NEO
| % Target**
| Amount
| 2022 Target Bonus Value | % of Target(2) | % of Max | Amount Paid(4) | ||||||||||||||||||||||
Hamid Moghadam | $ | 1,500,000 | 137.5% | $ | 2,062,500 | $1,500,000 | 121.50% | 61% | $1,822,500 | |||||||||||||||||||
Thomas Olinger | $ | 750,000 | 132.5% | $ | 993,750 | |||||||||||||||||||||||
Timothy Arndt(3) | $523,870 | 121.50% | 61% | $636,500 | ||||||||||||||||||||||||
Thomas Olinger(3) | $0 | N/A | N/A | $0 | ||||||||||||||||||||||||
Eugene Reilly | $ | 750,000 | 139.5% | $ | 1,046,250 | $1,050,000 | 121.50% | 61% | $1,275,800 | |||||||||||||||||||
Gary Anderson | $877,500 | 121.50% | 61% | $1,066,200 | ||||||||||||||||||||||||
Edward Nekritz | $ | 750,000 | 138.5% | $ | 1,038,750 | $845,000 | 121.50% | 61% | $1,026,700 | |||||||||||||||||||
Gary Anderson | $ | 750,000 | 139.5% | $ | 1,046,250 | |||||||||||||||||||||||
Michael Curless | $ | 750,000 | 134.5% | $ | 1,008,750 | |||||||||||||||||||||||
| (1) | Target bonus levels are based on salary for the |
| (2) | Our corporate score equals |
Bonus exchange aligns NEO and stockholder interests
Effective April 1, 2022, Thomas Olinger stepped down as our chief financial officer and Timothy Arndt became our chief financial officer. Mr. Olinger did not receive an annual bonus |
Amounts paid were rounded to the |
nearest hundred.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
COMPENSATION DISCUSSION AND ANALYSIS | ||
2017 Compensation Decisions: Core Compensation: Annual LTI Equity Awards
Annual LTI equity awards are formulaic, 100% based on performance and not guaranteed
Total annual LTI equity award |
ANNUAL LTI EQUITY AWARD FORMULA
Equity amounts above 50% of target are based onour 3-year TSR vs. the weighted 3-year TSR index:
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PLD 3-Year TSR Basis
| Total Annual LTI
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| >500 bps and above | 150% | |
| +400 bps | 140% | |
| +300 bps | 130% | |
| +200 bps | 120% | |
| +100 bps | 110% | |
| 0 | 100% | |
| -100 bps | 90% | |
| -200 bps | 80% | |
| -300 bps | 70% | |
| -400 bps | 60% | |
| <=-500 bps | Qualitative component up to 50% | |
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Annual LTI equity award benchmarks are a balance of industrial andlarge-cap REITs
LTI EQUITY AWARD INDICEStarget value.
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| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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COMPENSATION DISCUSSION AND ANALYSIS | ||
LTI equity benchmark index to be refined beginning with 2022-2024 performance period
Current LTI Benchmark Index: For performance periods up to the 2021-2023 period, we utilized an LTI equity award benchmark index comprised 50% of the Cohen & Steers REIT Index and 50% of a logistics REITs, which included 40% domestic (U.S.) logistics REITs and 10% global logistics REITs.
Future LTI Benchmark Index: Beginning with the 2024 performance year (LTI equity awards granted in respect of the 2022-2024 performance period), the LTI equity award benchmark index will be comprised 100% of the Cohen & Steers REIT Index. The Cohen & Steers REIT Index is a performance benchmark that includes approximately 30 large-cap REITs and is important to our stockholders to evaluate our performance against other large-cap REITs. The Committee made this change effective with the 2022-2024 performance period to align with the changes to the LTI scale that the Committee made in the last proxy cycle.
Very few logistics REITs and even fewer global logistics REITs exist. The logistics REITs that do exist are much smaller than Prologis. As of year-end 2022, Prologis’ total |
In 2022, we acquired Duke Realty Corporation, a logistics REIT that was previously included in the |
| · | Transitioning to the Cohen & Steers REIT Index exclusively also mitigates the volatility of the smaller logistics REITs and prevents any one smaller logistics REIT’s performance from having overriding influence on our LTI awards. |
| · | During the course of investor outreach, we discussed this change with a number of our stockholders. None expressed any concern over implementing this new benchmark index. We also tested this change to the formula and determined that the change would not result in a higher payout based on 2022 performance. |
| (1) | AUMs derived from publicly available data as of December 31, 2022. Prologis AUM includes estimated investment capacity. |
| (2) | For awards granted in 2023. |
| (3) | Three-year annualized weighted TSR index of U.S. and global logistics and large cap REITs. The weighted annualized three-year TSR for the Cohen & Steers Realty Majors Portfolio Index (RMP) (the Cohen & Steers REIT Index) and the global and U.S. logistics REIT comparison groups were 0.6%, 4.2% and 10.1%, respectively. |
| (4) | We acquired Duke Realty Corporation in 2022. Duke Realty Corporation was included for performance calculations through May 9, 2022, the trading day prior to the date on which Prologis made public its desire to acquire Duke Realty Corporation. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 69 |
| COMPENSATION DISCUSSION AND ANALYSIS |
LTI EQUITY AWARDSAWARD PAYOUTS FOR THE 20172022 PERFORMANCE YEAR (GRANTED IN 2018)2023)(1)
2022 Actual Award Value
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2017 Target Award Value
| 2017 Actual Award Value (Granted in 2018)
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| 2022 Target Award Value | % Target | $ | |||||||||||||
Hamid Moghadam
| $8,250,000
| 150%
| $12,375,000
| $8,250,000 | 150% | $12,375,000 | ||||||||||||
Thomas Olinger
| $2,100,000
| 150%
| $ 3,150,000
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Timothy Arndt(2) | $1,350,000 | 150% | $2,025,000 | |||||||||||||||
Thomas Olinger(2) | $0 | N/A | $0 | |||||||||||||||
Eugene Reilly
| $2,600,000
| 150%
| $ 3,900,000
| $2,600,000 | 150% | $3,900,000 | ||||||||||||
Edward Nekritz
| $2,100,000
| 150%
| $ 3,150,000
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Gary Anderson
| $2,100,000
| 150%
| $ 3,150,000
| $2,300,000 | 150% | $3,450,000 | ||||||||||||
Michael Curless
| $1,900,000
| 150%
| $ 2,850,000
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Edward Nekritz | $2,100,000 | 150% | $3,150,000 | |||||||||||||||
| (1) | The |
Annual LTI equity awards for the 2016 performance year (granted in 2017)2023.
Effective April 1, 2022, Thomas Olinger stepped down as our chief financial officer and Timothy Arndt became our chief financial officer. Mr. Olinger was not granted an LTI equity award in 2023 for the 2022 performance year. |
Prior year: annual LTI equity awards for the 2021 performance year (granted in 2022)
Although the Summary Compensation Table presentation requires disclosure of LTI equity awards granted in 2022 to be included in aggregate compensation for 2022, the Committee considers these awards to be compensation for the 2021 performance year. As such, LTI equity awards granted in 2022 are part of the Committee’s assessment of compensation for the 2021 performance year, not the 2022 performance year.
2019-2021 company performance resulted in 1,610 bps outperformance relative to the index of the logistics REIT comparison groups and the Cohen & Steers REIT Index. In accordance with our equity formula, equity awards for the 2021 performance year were paid to all NEOs at 150% of target. See our 2022 annual proxy statement for further detail.
For the 2021 performance year, all NEOs received the same LTI equity award values as their awards for the 2022 performance year (aside from Tim Arndt, who became our chief financial officer effective April 1, 2022, and Mr. Olinger, who stepped down as our chief financial officer effective April 1, 2022).
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 70 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Outperformance Compensation
POP and PPP awards require significant outperformance: Our programs allow outperformance earning opportunities only if high-reach hurdles are met, which creates significant value for our stockholders. POP and PPP awards are each only a small fraction of the total associated value created for our stockholders:
| · | We created $22.4 billion of value over the performance of MSCI REIT Index, the measurement index that we use to determine whether POP awards |
By exceeding Strategic Capital Promote hurdles for the |
The corresponding POP and PPP awards paid to our CEO were only 0.08% and 1.6% of the |
|
| |||
| ||
2017 Compensation Decisions: Outperformance Plans
See footnotes to |
CEO Total Compensation for a performance year includes Core Compensation (base salary, bonus, annual LTI equity awards and equity paid in lieu of salary) plus PPP awards paid in the |
POP now includes an absolute maximum cap and7-year cliff vesting on earned awards
|
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
| COMPENSATION DISCUSSION AND ANALYSIS |
Outperformance Compensation: POP Rewards significant relative TSR outperformance and enables NEO transition strategy Optimizes stockholder return: POP extends to about 100 employees, supporting a teamwork mentality deep into our organization that motivates POP participants across the company to drive long-term outperformance. |
| 72 | |
| COMPENSATION DISCUSSION AND ANALYSIS |
No POP payment when absolute three-year TSR is negative: POP awards cannot be paid when our absolute three-year TSR is negative. If a pool funds because our relative three-year TSR exceeds the POP performance hurdle, but our absolute three-year TSR is negative, then the awards will not be paid unless and until absolute three-year TSR becomes positive. The award will expire seven years after the end of the performance period if the absolute TSR requirement is not met.
POP program enhancements based on stockholder feedback: In response to past stockholder feedback, we:
| · |
|
Adopted extended vesting: We imposed seven-year cliff vesting on the |
Although the new vesting construct |
Stockholders received 99.6% of the $22.4B in value created above the POP measurement hurdle for the 2020-2022 performance period.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 73 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Committee Rationale: Why POP Is a Necessary Complement to LTI Equity.
We utilize POP to retain our current NEO team, which supports the continuity necessary to complete the development of our next group of NEOs and positions the company responsibly for a smooth transition.
| · | Continuity of senior leadership, particularly at the NEO level, has been critical to running our unique business and positioning the company to evolve while growing our core real estate operations. Our long-tenured NEOs have been together as a C-suite for more than ten years, during which time we’ve had remarkable operational success. |
The Committee designed POP with succession planning in mind. Retention of |
Achieving formulaic PPP hurdles creates value for our stockholders
Similarly, POP helps us retain our next generation of leaders. We expect future NEOs to come from our current POP participant pool. Prologis prefers to promote from within, given the multifaceted nature of our |
We run our business leanly and efficiently, with only about 2,500 total employees covering $196 billion in real estate AUM. POP’s ten-year construct (three years to earn awards plus seven-year vesting on 80% of each award) is a powerful long-term retention mechanism for our senior leaders who are key to maintaining such efficiency. |
POP and LTI Equity extend to different employee bands, so they are structured differently.
| · | We view both LTI equity and POP as part of our long-term incentive structure that aligns stockholder and employee interests. In peer benchmarking, the |
POP targets about 100 of our |
|
| · | POP is all or nothing. POP only pays out when high-reach performance hurdles are hit and no amount is paid if the performance hurdle is not met. Employees who are eligible for POP have greater pay opportunities, but with higher risk given the all-or-nothing payout as well as the seven-year vesting period on the bulk of awards. |
| – | To illustrate, if the 2022-2024 performance period had ended on December 31, 2022, we |
| · | In contrast, LTI awards are built on a sliding scale because annual LTI awards extend to a broader employee population than POP. Our LTI equity program ensures a more stable compensation level for this band of employees while still incorporating the |
| · | In the |
| · | LTI equity awards are |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 74 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Outperformance Compensation: PPP Rewards significant operating outperformance of our Strategic Capital vehicles PPP Incentivizes Strategic Capital outperformance, a key driver of our competitive advantage: Strategic Capital is a high-margin business that we can use to accelerate our growth responsibly. The assets held in our Strategic Capital business yield higher returns than the assets we own directly because Strategic Capital generates additional income from management fees as well as “Promote” incentive fees when applicable vehicles perform exceptionally well. Strategic Capital partners support PPP: Our Strategic Capital partners who invest in our vehicles want a compensation program tied directly to the success of those vehicles to incentivize outperformance. PPP is a critical recruitment tool: We need a compensation component tied specifically to our Strategic Capital business to attract the best talent from the finance industry, private real estate companies and other similar business sectors. PPP resembles the profit-sharing structures typically seen in private equity firms, which aligns our compensation with the expectations of the talent we recruit to Strategic Capital from the private equity industry. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 75 |
| COMPENSATION DISCUSSION AND ANALYSIS |
| HOW IT WORKS continued |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 76 |
| COMPENSATION DISCUSSION AND ANALYSIS |
| HOW IT WORKS continued |
| 2022 PPP awards were driven by one significant Promote from Prologis European Logistics Fund (PELF) |
PELF Promote was conditioned on the achievement of a rigorous performance hurdle:
| · | The performance hurdle was measured over a three-year period commencing in the fourth quarter of 2019. |
| · | Hurdle required significant value creation: To earn the Promote that funded PPP awards, we were required to generate growth. |
| – | PELF PPP hurdle: PELF’s Net Asset Value (NAV) was required to grow by at least $593 million. PELF’s NAV grew by $4.1 billion over the three-year performance period. |
| · | Hurdle was formulaic: PELF was required to achieve IRR hurdles in several unit classes, which required an IRR between 6-11% depending on the class. |
| · | Hurdle was set with a third-party: The PELF hurdle was negotiated in advance with PELF’s third-party investors, who have a keen interest in setting a high-reach target. |
| · | This Promote payment resets the PELF Promote high-water mark, requiring significant additional outperformance to earn another Promote. The next PELF Promote earning opportunity is not until 2025. |
PELF is a critical Strategic Capital vehicle:
| · | PELF alone is larger than any public domestic logistics REIT: PELF is our largest European vehicle and one of our largest Strategic Capital vehicles overall. With over $21 billion AUM at the end of 2022, PELF by itself is larger than any other publicly traded U.S. logistics REIT. |
| · | PELF owns 746 facilities across 12 countries, comprising 160.9 million square feet. |
| · | PELF is a perpetual, open-ended vehicle, meaning that there is no cap on the amount of new investment capital it can bring in and no set date on which capital must be returned to investors. Therefore, Promote earning opportunities and other value creation accrue from an uncapped pool of investments over successive performance periods. |
| · | Facilities owned by PELF are leased to 56% of our top 25 customers. |
| · | PELF outperformed benchmark index: Over the three-year performance period, PELF’s total return outperformed the MSCI Europe Quarterly Industrial Distribution Centers Property Index by 49bps. |
PELF generated significant returns for Prologis over the three-year performance period: |
| ||||
Prologis earned $453 million in net Promote revenue from PELF. | ||||
Prologis also earned $283 million in management and other fees from PELF. | ||||
The value of Prologis’ ownership share in PELF increased by $1.1 billion representing a 38% increase. | ||||
Prologis received $270 million for contributing newly developed facilities to PELF — capital which we can recycle to build additional facilities. | ||||
| 77 | |
| COMPENSATION DISCUSSION AND ANALYSIS |
Compensation Committee Rationale: Strategic Capital Creates Long-Term Value. PPP Should Be Analyzed Over the Long-Term.
PPP awards are highly variable: PPP awards are paid only when Strategic Capital outperformance results in Promotes paid to the company. As a result, PPP award timing and amounts are highly variable depending on Promote calculation timing and the size of the applicable vehicle. The value of Promotes earned by Prologis in any given year, and thus the amount of PPP awards, depends on the availability of Promote earning opportunities and the cadence of performance periods across our Strategic Capital vehicles (as well as whether we achieve the performance hurdle).
Averaging PPP awards over a trailing three-year period accounts for this variability and provides a long-term view of not only the actual size of PPP, but also the value Strategic Capital Promotes bring to our stockholders over time. Our largest vehicles are open-ended, meaning they accept an uncapped flow of new investment capital. These vehicles therefore have the potential to create significant long-term value for our stockholders in the form of substantial Promote earnings from an open-ended pool.
The chart below also illustrates the growth in our Strategic Capital AUM, a testament to how PPP has successfully underpinned the growth of our Strategic Capital business over time.
The Committee’s view on future Promote potential: Looking forward, Promote revenue (and associated PPP awards) could potentially be substantial again in 2023 given that one of our largest Strategic Capital vehicles, Prologis Targeted U.S. Logistics Fund (USLF), has a Promote earning opportunity in 2023.
However, the Committee anticipates a significant decline in Promote earnings (and PPP awards) in 2024 and over the following several years. There are no major Promote calculation opportunities scheduled in 2024. Also, a number of vehicles have high-water marks built into their Promote hurdles, which require higher levels of outperformance than previously achieved for Promotes to be paid. The Committee expects it will be challenging for certain Strategic Capital vehicles, particularly those that have significantly outperformed in recent years, to achieve Promote return hurdles beyond applicable high-water marks within the next performance period.
The company has taken actions to reduce the variability of future Promote earning opportunities: We have restructured Promotes for PELF, USLF and Prologis China Core Logistics Fund (our three largest private, open-ended vehicles) such that for all new third-party investments in these vehicles made after specified times, the three-year Promote measurement period will commence on the date on which the new investment in the vehicle is made. In the past, all investments in the vehicle were tied to the same Promote measurement periods. Going forward, new investments in these ventures will have their own Promote measurement periods. The Committee expects this will result in less variability in Promotes (to the extent the company earns them going forward), which will in the long-term reduce dramatic variability in PPP awards.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 78 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Other Compensation Elements and Considerations
LTIP Units
LTIP Units are profits interests in Prologis, L.P., our operating partnership. Certain executives, including NEOs, may elect to receive LTIP Units in lieu of restricted stock units (RSUs). Our NEOs elected to receive all their equity awards granted in 2022 in LTIP Units, further aligning NEO and stockholder interests.
LTIP Units were structured to be generally economically equivalent to RSUs and generally have the same vesting terms as RSUs. All LTIP Units have a two-year mandatory holding period from the date of issuance, in addition to any applicable vesting periods.
NEO waivers of retirement eligibility benefits
Mr. Moghadam voluntarily waived any equity award vesting benefits related to meeting retirement-eligibility thresholds under our incentive plan. Vesting of such awards will continue after he terminates employment as long as he continues in a substantial role with the company or its affiliates, or if he performs approved community work after termination. Our other NEOs executed a similar waiver applicable to equity awards granted after September 2018 for Messrs. Reilly, Anderson, Nekritz and Olinger, or after April 2022 for Mr. Arndt.
Had the NEOs not waived such provisions, they would be entitled to certain benefits such as the acceleration of vesting of their equity awards upon termination of employment after they meet the retirement-eligibility thresholds under our compensation plans.
STRONG COMPENSATION GOVERNANCE
| What We Do | What We Don’t Do | |
CEO: $10 million Other NEOs: 3x salary Other Senior Officers: 1x salary (~120 individuals) Directors: 5x annual cash retainer
|
| |
100% of CEO pay is at-risk and not guaranteed
No guaranteed salary / bonus increasesPROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 79 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Senior-level benefits
In addition to benefits provided to all other U.S. employees, such as our 401(k) plan, health care and welfare coverage, paid time off, life and accident insurance and short and long-term disability programs, we offer our NEOs the following senior-level benefits:
| · |
|
| · |
| ||
| ||
Other Compensation Elements and Considerations
LTIP Units
CEO waiver of retirement eligibility benefits
Senior-level benefits
| Retiree medical benefits—upon retirement and having served as a member of the management executive committee (our CEO and certain direct reports) for five consecutive years, executives may continue health coverage under our plans at their own |
Personal use of leased corporate aircraft interest if the company is reimbursed. |
Previously, the company paid for financial planning services and parking for all NEOs. We eliminated both benefits beginning in 2021, further reducing already minimal NEO perquisites.
Change-in-control benefits
Our NEOs’ benefits include competitive severance in connection with a change in control to serve the best interests of stockholders during a threatened or actual change in control by:
| · | Providing for continuity of our management team’s services. |
| · |
| ||
| ||
Change-in-control benefits
| Increasing objectivity of our management team in analyzing a proposed change in control and advising the Board if such proposal is in the best interests of |
Such benefits apply on a double-trigger basis (change in control has occurred and the NEO’s employment status is impacted) and consist of:
Cash severance payments that are a multiple of salary and/or cash bonus opportunity levels |
Accelerated vesting of unvested equity awards, available throughchange-in-control agreements or long-term equity incentive |
Other considerationsRisk mitigation
COMPENSATION GOVERNANCE POLICIESAnnual risk assessments of our compensation program: The Committee monitors the risk profile with respect to compensation policies and practices. No material risks were found.
Quarterly reports to Board on company performance against business plan and strategic objectives: The Board provides oversight to ensure that our compensation structure is not driving the company to take excessive operational risks.
Internal management controls: Controls and procedures ensure operations are completed in line with governance standards to ensure that excessive risks are not taken, including a series of checks and balances with respect to the commitment of capital.
Real estate risk management: Real estate risk management processes monitor key risks associated with our real estate assets, such as levels of occupancy, non-income-producing assets, leverage, foreign currency exposure and other factors.
Recoupment policy: This policy is a mechanism to claw back compensation in the event of a financial restatement.
Stock ownership guidelines: These guidelines align management interests with stockholders.
| |||
In 2019, the Committee amended and restated our CEO’s change-in-control agreement to | |||
| |||
are intended to approximate the same benefits in the original agreement. | |||
| ||
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
COMPENSATION DISCUSSION AND ANALYSIS | ||
Risk mitigation
Stock ownership guidelines
All NEOs and directors are in compliance. The guidelines require stock ownership of at least $10 million for our CEO or a multiple of annual base salary for other officers (3x base salary for other NEOs; 1x base salary for senior vice presidents, managing directors and regional presidents). The guidelines require share ownership for our directors of 5x the annual Board retainer.
Stock eligible under the guidelines includes common stock, vested, unvested (provided that any unvested equity awards counted must be full value awards subject only to time-based vesting and must in no way be contingent upon the achievement of any performance requirement) and deferred equity awards (except stock options), associated dividend equivalents, earned LTIP Units and partnership units exchangeable into our common stock. The guidelines require retention of 50% of net shares received under our equity plans upon certain events until ownership thresholds are met.
Hedging and pledging policies
All hedging and pledging of common stock isare prohibited: Our insider trading policy prohibits all NEOs, employees and directors from hedging or pledging shares of our common stock. All of our NEOs and directors are currently in compliance with this prohibition.
|
| |||
| ||
Compensation recoupment (“Clawback”)(clawback) policy
The Board has adopted a compensation clawback policy, which provides that in the event of a substantial restatement of our previously issued financial statements, a review will be undertaken by the Board of performance-based compensation awarded to certain officers that was attributable to our financial performance during the time periods restated. If the Board determines that an officer was improperly compensated and that it is in our best interests to recover or cancel such compensation, the Board will pursue all reasonable legal remedies to recover or cancel such performance-based compensation. The policy further provides that if the Board learns of any misconduct by certain officers that caused the restatement, the Board shall take such action as it deems necessary to remedy the misconduct, prevent its recurrence and, if appropriate, based on all relevant facts and circumstances, punish the wrongdoer. Such punishment by the Board could include dismissal, legal action for breach of fiduciary duty or such other action to enforce the officer’s obligations to us as may fit the facts surrounding the particular case. In determining the appropriate punishment, the Board may take into account punishments imposed by third parties. The Board’s power to determine the appropriate punishment for the wrongdoer is in addition to, and not in replacement of, remedies imposed by such third parties.
In addition, if the Committee determines that a present or former employee has used for profit or disclosed to unauthorized persons confidential or trade secrets of us or any of our affiliates, breached any contract with or violated any fiduciary obligation to us or any of our affiliates, or engaged in any conduct that the committee determines is injurious to us or any of our affiliates, the committee may cause that employee to forfeit his or her outstanding awards under the 2020 Long-Term Incentive Plan (“2020 LTIP”). In addition, in exercise of its powers and authorities under the 2020 LTIP, it is the committee’s policy to determine that a participant is in good standing in the course of administering the 2020 LTIP. If a participant is not in good standing, the committee (or its delegate) may cause the participant’s awards, whether vested or unvested, to be forfeited.
In October 2022, the SEC adopted a final version of a new clawback rule. The company intends to take action to comply with this rule consistent with the timing of its implementation.
Equity grant policy and program administration
Awards are administered by our human resources and stock plan administration departments. Grants are made generally in the first quarter of the year, after promotion, at the time of new hire or in accordance with PPP. Equity grant dates are not scheduled based on the timing of the release of materialnon-public information.
We discontinued the issuance of stock option awards after February 2011.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 81 |
| COMPENSATION DISCUSSION AND ANALYSIS |
Impact of accounting and tax treatment
To the extent reasonable alland allowable, executive compensation will be deductible by the company for federal income tax purposes. However, the Compensation Committee may design compensation program components that are not deductible. In addition, in December 2020, the Internal Revenue Service released final regulations under 162(m), which may limit the future deductibility of certain executive compensation amounts. Because we intend to qualify as a REIT under the Internal Revenue Code, we generally distribute 100% of our net taxable income each year, and therefore,as a result do not pay U.S. federal income tax. As a result,such, we do not expect the possible loss of a federal tax deduction would not be expectedexecutive compensation deductions to have a material impact on us. We intend that executive compensation comply with 409A of the Internal Revenue Code, which may impose additional taxes on our NEOs for arrangements that provide for the payment of deferred compensation that is not exempt or in compliance with Section 409A. In addition, we expense base salaries paid in the year they are earned and annual bonusbonuses awarded in cash in the year they are earned. In accordance with ASC Topic 718, we expense the value of equity awards granted including those granted as part of annual bonus exchange, over the vesting period of such grants.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
COMPENSATION | DISCUSSION AND ANALYSIS | |
Talent and Compensation Committee Report
We, the members of the Talent and Compensation Committee, have reviewed and discussed CD&Athe Compensation Discussion and Analysis set forth above with the management of the company and, based on such review and discussion, have recommended to the Board that this CD&ACompensation Discussion and Analysis be included in this proxy statement and, through incorporation by reference of this proxy statement, the company’s Annual Report onForm 10-K for the year ended December 31, 2017.2022.
Talent and Compensation Committee:
George L. Fotiades (Chair)
David P. O’Connor
William D. Zollars
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
SUMMARY COMPENSATION TABLE | ||
Summary Compensation Table for Fiscal Year 2017*2022*
Name and Principal Position (a)
| Year (b)
| Salary(1) ($) (c)
| Bonus(1)(2)(3) ($) (d)
| Stock Awards(3)(4)(5) ($) (e)
| Non-Equity Incentive Plan Compensation(5) ($) (g)
| All Other Compensation(6) ($) (i)
| Total ($) (j)
| Year
(b) | Salary(1) (c) | Bonus(1)(2)(3) (d) | Stock (e) | Non-Equity (g) | All Other (i) | Total ($) (j) | ||||||||||||||||||||||||||||||||||||||||||
Hamid Moghadam
|
| 2017
|
| $
| 1,000,000
|
| $
| 2,062,500
|
| $
| 16,203,727
|
| $
| —
|
| $
| 85,900
|
| $
| 19,352,127
|
| 2022 | $ | 1 | $ | 1,822,500 | $ | 46,317,755 | — | $ | 12,500 | $ | 48,152,756 | |||||||||||||||||||||||
Chief Executive Officer
|
| 2016
|
| $
| 1,000,000
|
| $
| 2,310,000
|
| $
| 12,126,019
|
| $
| —
|
| $
| 106,818
|
| $
| 15,542,837
|
| 2021 | $ | 1 | $ | 2,625,000 | $ | 22,263,989 | — | $ | 12,500 | $ | 24,901,490 | |||||||||||||||||||||||
| 2020 | $ | 1 | $ | 1,500,000 | $ | 32,851,741 | — | $ | 80,935 | $ | 34,432,677 | |||||||||||||||||||||||||||||||||||||||||||||
|
| 2015
|
| $
| 950,000
|
| $
| 2,315,625
|
| $
| 11,618,871
|
| $
| —
|
| $
| 101,289
|
| $
| 14,985,785
|
| ||||||||||||||||||||||||||||||||||||
Thomas Olinger
|
| 2017
|
| $
| 600,000
|
| $
| 993,750
|
| $
| 4,710,651
|
| $
| 612,949
|
| $
| 43,940
|
| $
| 6,961,290
|
| |||||||||||||||||||||||||||||||||||
Timothy Arndt | 2022 | $ | 489,423 | $ | 636,500 | $ | 4,230,557 | $ | 1,755,311 | $ | 13,500 | $ | 7,125,291 | |||||||||||||||||||||||||||||||||||||||||||
Chief Financial Officer
|
| 2016
|
| $
| 600,000
|
| $
| 1,110,000
|
| $
| 3,816,211
|
| $
| 480,700
|
| $
| 43,307
|
| $
| 6,050,218
|
| 2021 | — | — | — | — | — | — | ||||||||||||||||||||||||||||
| 2020 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2015
|
| $
| 575,000
|
| $
| 1,133,000
|
| $
| 3,448,224
|
| $
| —
|
| $
| 42,037
|
| $
| 5,198,261
|
| ||||||||||||||||||||||||||||||||||||
Thomas Olinger** | 2022 | $ | 436,443 | — | $ | 9,285,539 | $ | 2,649,077 | $ | 29,258 | $ | 12,400,317 | ||||||||||||||||||||||||||||||||||||||||||||
Former Chief Financial Officer | 2021 | $ | 600,000 | $ | 1,312,500 | $ | 5,491,318 | $ | 608,204 | $ | 25,500 | $ | 8,037,522 | |||||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 600,000 | $ | 750,000 | $ | 7,942,733 | $ | 2,121,982 | $ | 48,985 | $ | 11,463,700 | ||||||||||||||||||||||||||||||||||||||||||||
Eugene Reilly
|
| 2017
|
| $
| 600,000
|
| $
| 1,046,250
|
| $
| 5,223,773
|
| $
| 612,949
|
| $
| 34,633
|
| $
| 7,517,605
|
| 2022 | $ | 700,000 | $ | 1,275,800 | $ | 13,103,428 | $ | 3,973,615 | $ | 26,000 | $ | 19,078,843 | ||||||||||||||||||||||
CEO, The Americas
|
| 2016
|
| $
| 600,000
|
| $
| 1,147,500
|
| $
| 4,075,571
|
| $
| 480,700
|
| $
| 26,087
|
| $
| 6,329,858
|
| |||||||||||||||||||||||||||||||||||
Chief Investment Officer | 2021 | $ | 696,539 | $ | 1,837,500 | $ | 6,847,295 | $ | 608,204 | $ | 25,500 | $ | 10,015,038 | |||||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 600,000 | $ | 750,000 | $ | 9,668,732 | $ | 2,121,982 | $ | 48,050 | $ | 13,188,764 | ||||||||||||||||||||||||||||||||||||||||||||
|
| 2015
|
| $
| 575,000
|
| $
| 1,240,000
|
| $
| 3,924,986
|
| $
| —
|
| $
| 36,757
|
| $
| 5,776,743
|
| ||||||||||||||||||||||||||||||||||||
Gary Anderson | 2022 | $ | 650,000 | $ | 1,066,200 | $ | 11,128,311 | $ | 3,152,401 | $ | 26,000 | $ | 16,022,912 | |||||||||||||||||||||||||||||||||||||||||||
Chief Operating Officer | 2021 | $ | 648,269 | $ | 1,535,625 | $ | 6,397,331 | $ | 608,204 | $ | 25,500 | $ | 9,214,929 | |||||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 600,000 | $ | 750,000 | $ | 8,818,700 | $ | 2,121,982 | $ | 48,445 | $ | 12,339,127 | ||||||||||||||||||||||||||||||||||||||||||||
Edward Nekritz
|
| 2017
|
| $
| 600,000
|
| $
| 1,038,750
|
| $
| 4,721,901
|
| $
| 612,949
|
| $
| 37,718
|
| $
| 7,011,318
|
| 2022 | $ | 650,000 | $ | 1,026,700 | $ | 10,397,896 | $ | 2,920,607 | $ | 26,000 | $ | 15,021,203 | ||||||||||||||||||||||
Chief Legal Officer and
|
| 2016
|
| $
| 600,000
|
| $
| 1,147,500
|
| $
| 3,825,586
|
| $
| 480,700
|
| $
| 38,087
|
| $
| 6,091,873
|
| 2021 | $ | 648,269 | $ | 1,478,750 | $ | 6,097,318 | $ | 608,204 | $ | 25,500 | $ | 8,858,041 | ||||||||||||||||||||||
General Counsel
|
| 2015
|
| $
| 575,000
|
| $
| 1,168,000
|
| $
| 3,456,974
|
| $
| —
|
| $
| 40,166
|
| $
| 5,240,140
|
| 2020 | $ | 600,000 | $ | 750,000 | $ | 8,818,700 | $ | 2,121,982 | $ | 48,445 | $ | 12,339,127 | ||||||||||||||||||||||
Gary Anderson
|
| 2017
|
| $
| 600,000
|
| $
| 1,046,250
|
| $
| 4,723,776
|
| $
| 612,949
|
| $
| 37,718
|
| $
| 7,020,693
|
| |||||||||||||||||||||||||||||||||||
CEO, Europe and Asia
|
| 2016
|
| $
| 600,000
|
| $
| 1,147,500
|
| $
| 3,825,586
|
| $
| 480,700
|
| $
| 38,087
|
| $
| 6,091,873
|
| |||||||||||||||||||||||||||||||||||
|
| 2015
|
| $
| 575,000
|
| $
| 1,118,000
|
| $
| 3,444,474
|
| $
| —
|
| $
| 27,158
|
| $
| 5,164,632
|
| ||||||||||||||||||||||||||||||||||||
Michael Curless
|
| 2017
|
| $
| 600,000
|
| $
| 1,008,750
|
| $
| 4,514,412
|
| $
| 612,949
|
| $
| 41,925
|
| $
| 6,778,036
|
| |||||||||||||||||||||||||||||||||||
Chief Investment Officer
|
| 2016
|
| $
| 600,000
|
| $
| 1,147,500
|
| $
| 3,653,866
|
| $
| 480,700
|
| $
| 39,407
|
| $
| 5,921,473
|
| |||||||||||||||||||||||||||||||||||
|
| 2015
|
| $
| 575,000
|
| $
| 1,168,000
|
| $
| 3,276,960
|
| $
| —
|
| $
| 41,787
|
| $
| 5,061,747
|
| ||||||||||||||||||||||||||||||||||||
| * | Columns (f) and (h) have been omitted from this table because they are not applicable. |
| ** | Mr. Olinger stepped down as our CFO effective April 1, 2022, and served as an advisor until December 16, 2022. |
| (1) | No salary or bonus amounts were deferred under our nonqualified deferred compensation (“NQDC”) plans in any year for Mr. Moghadam, Mr. Olinger, Mr. Reilly, Mr. Anderson, and Mr. Nekritz. Mr. Arndt elected to defer 80% of his 2022 salary under the 2012 NQDC Plan (see the narrative discussion that follows the Nonqualified Deferred Compensation in Fiscal Year |
Mr. |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 84 |
| SUMMARY COMPENSATION TABLE |
Bonuses earned for a fiscal year are paid in the subsequent fiscal year (e.g., the bonuses in column (d) earned for performance in |
|
| |||
| ||
The value of equity awards received is equal to |
Name
| Year(i)
| Annual Cash Bonus Award(ii)
| Amount Exchanged(iii)
| 25% Premium on Exchange(iv)
| Exchanged Equity Value(v)
| # of Shares or Units(vi)
| Year(i) | Annual Cash Bonus Award(ii) | Amount Exchanged(iii) | Exchanged Equity Value(iv) | # of Shares or Units(v) | |||||||||||||||||||||||||||||||||
Mr. Moghadam
|
| 2017
|
| $
| 2,062,500
|
| $
| 2,062,500
|
| $
| 515,625
|
| $
| 2,578,125
|
|
| 42,740
|
| 2022 | $ | 1,822,500 | $ | 1,822,500 | $ | 1,822,500 | 15,009 | ||||||||||||||||||
| 2021 | $ | 2,625,000 | $ | 2,625,000 | $ | 2,625,000 | 17,108 | |||||||||||||||||||||||||||||||||||||
| 2020 | $ | 1,500,000 | $ | 1,500,000 | $ | 1,500,000 | 14,034 | |||||||||||||||||||||||||||||||||||||
Mr. Arndt | 2022 | $ | 636,500 | $ | 636,500 | $ | 636,500 | 5,242 | ||||||||||||||||||||||||||||||||||||
|
| 2016
|
| $
| 2,310,000
|
| $
| 2,310,000
|
| $
| 577,500
|
| $
| 2,887,500
|
|
| 57,623
|
| 2021 | — | — | — | — | ||||||||||||||||||||||
|
| 2015
|
| $
| 2,315,625
|
| $
| 2,315,625
|
| $
| 578,906
|
| $
| 2,894,531
|
|
| 77,601
|
| 2020 | — | — | — | — | ||||||||||||||||||||||
Mr. Olinger
|
| 2017
|
| $
| 993,750
|
| $
| 993,750
|
| $
| 248,438
|
| $
| 1,242,188
|
|
| 20,593
|
| 2022 | — | — | — | — | |||||||||||||||||||||
|
| 2016
|
| $
| 1,110,000
|
| $
| 1,110,000
|
| $
| 277,500
|
| $
| 1,387,500
|
|
| 27,689
|
| 2021 | $ | 1,312,500 | $ | 1,312,500 | $ | 1,312,500 | 8,554 | |||||||||||||||||||
|
| 2015
|
| $
| 1,133,000
|
| $
| 1,133,000
|
| $
| 283,250
|
| $
| 1,416,250
|
|
| 37,969
|
| 2020 | $ | 750,000 | $ | 750,000 | $ | 750,000 | 7,017 | |||||||||||||||||||
Mr. Reilly
|
| 2017
|
| $
| 1,046,250
|
| $
| 1,046,250
|
| $
| 261,563
|
| $
| 1,307,813
|
|
| 21,681
|
| 2022 | $ | 1,275,800 | $ | 1,275,800 | $ | 1,275,800 | 10,507 | ||||||||||||||||||
|
| 2016
|
| $
| 1,147,500
|
| $
| 1,147,500
|
| $
| 286,875
|
| $
| 1,434,375
|
|
| 28,624
|
| 2021 | $ | 1,837,500 | $ | 1,837,500 | $ | 1,837,500 | 11,976 | |||||||||||||||||||
|
| 2015
|
| $
| 1,240,000
|
| $
| 1,240,000
|
| $
| 310,000
|
| $
| 1,550,000
|
|
| 41,554
|
| 2020 | $ | 750,000 | $ | 750,000 | $ | 750,000 | 7,017 | |||||||||||||||||||
Mr. Nekritz
|
| 2017
|
| $
| 1,038,750
|
| $
| 1,038,750
|
| $
| 259,688
|
| $
| 1,298,438
|
|
| 21,525
|
| ||||||||||||||||||||||||||
|
| 2016
|
| $
| 1,147,500
|
| $
| 1,147,500
|
| $
| 286,875
|
| $
| 1,434,375
|
|
| 28,624
|
| |||||||||||||||||||||||||||
|
| 2015
|
| $
| 1,168,000
|
| $
| 1,168,000
|
| $
| 292,000
|
| $
| 1,460,000
|
|
| 39,142
|
| |||||||||||||||||||||||||||
Mr. Anderson
|
| 2017
|
| $
| 1,046,250
|
| $
| 1,046,250
|
| $
| 261,563
|
| $
| 1,307,813
|
|
| 21,681
|
| 2022 | $ | 1,066,200 | $ | 1,066,200 | $ | 1,066,200 | 8,781 | ||||||||||||||||||
|
| 2016
|
| $
| 1,147,500
|
| $
| 1,147,500
|
| $
| 286,875
|
| $
| 1,434,375
|
|
| 28,624
|
| 2021 | $ | 1,535,625 | $ | 1,535,625 | $ | 1,535,625 | 10,008 | |||||||||||||||||||
|
| 2015
|
| $
| 1,118,000
|
| $
| 1,118,000
|
| $
| 279,500
|
| $
| 1,397,500
|
|
| 37,466
|
| 2020 | $ | 750,000 | $ | 750,000 | $ | 750,000 | 7,017 | |||||||||||||||||||
Mr. Curless
|
| 2017
|
| $
| 1,008,750
|
| $
| 1,008,750
|
| $
| 252,188
|
| $
| 1,260,938
|
|
| 20,904
|
| ||||||||||||||||||||||||||
Mr. Nekritz | 2022 | $ | 1,026,700 | $ | 1,026,700 | $ | 1,026,700 | 8,455 | ||||||||||||||||||||||||||||||||||||
|
| 2016
|
| $
| 1,147,500
|
| $
| 860,625
|
| $
| 215,156
|
| $
| 1,075,781
|
|
| 21,468
|
| 2021 | $ | 1,478,750 | $ | 1,478,750 | $ | 1,478,750 | 9,637 | |||||||||||||||||||
|
| 2015
|
| $
| 1,168,000
|
| $
| 1,168,000
|
| $
| 292,000
|
| $
| 1,460,000
|
|
| 39,142
|
| 2020 | $ | 750,000 | $ | 750,000 | $ | 750,000 | 7,017 | |||||||||||||||||||
| (i) | This is the year that the bonus is presented in the Summary Compensation Table. Bonuses for each year were awarded in the first quarter of the following year. |
| (ii) | Represents the bonus awarded to the NEO before the bonus exchange election. |
| (iii) | This column reflects the value of the bonus award that the NEO has elected to exchange. |
| (iv) |
Represents the total equity award granted to the NEO under the bonus exchange calculated based on the closing price of our common stock on the date the bonus is awarded. For all years presented, each NEO elected to receive the equity award in the form of LTIP Units. |
Information on how we value equity awards is included in the narrative discussion that follows the Grants of Plan-Based Awards in Fiscal Year 2017 table below.
| (v) | Information on how we value equity awards is included in the narrative discussion that follows the Grants of Plan-Based Awards in Fiscal Year 2022 table below. |
| (4) | Includes equity compensation contingent on performance paid in lieu of salary. The Compensation Committee determined that the maximum value ($999,999) of Mr. Moghadam’s equity compensation contingent on 2021 performance in lieu of 2021 salary would be paid as company performance was greater than target using our corporate score assessed against our annual bonus plan metrics. 2022 LTIP Units issued on February 25, 2022 (approved by the Compensation Committee on January 18, 2022), were 6,517 LTIP Units valued at $999,903. |
| (5) | Amounts represent the value of equity awards granted in each year including awards granted under our annual LTI equity award program, awards granted under PPP, |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
SUMMARY COMPENSATION TABLE | ||
Annual LTI Equity Incentive Awards:
Under our annual LTI equity award program, we generally grant equity awards in the first quarter for the performance period ended in the previous year. For example, the annual awards in column (e) for 2017 were granted in February 2017 but were based on a performance period that ended in 2016. The amount of each NEO’s annual award is based on performance criteria and the award is also subject to continued employment.
Annual LTI Equity Incentive Awards: |
Under our annual LTI equity award program, we generally grant equity awards in the first quarter for the performance period ended in the previous year. For example, the annual awards in column (e) for 2022 were granted in February 2022 but were based on a performance period that ended in 2021. The amount of each NEO’s annual award is based on performance criteria and the award is also subject to continued employment. |
| · | 2022 LTIP Units issued on February 25, 2022 (approved by the Compensation Committee on January 18, 2022), were: |
Mr. Moghadam—80,655 LTIP Units valued at $12,374,897
Mr. Arndt—4,073 LTIP Units valued at $624,920
Mr. Olinger—20,530 LTIP Units valued at $3,149,918
Mr. Reilly—25,418 LTIP Units valued at $3,899,884
Mr. Anderson—22,485 LTIP Units valued at $3,449,874
Mr. Nekritz—20,530 LTIP Units valued at $3,149,918
The number of LTIP Units was determined using the closing price of our common stock on the award grant date of January 18, 2022 ($153.43). This is the value used for accounting purposes to expense the grant.
| · | 2021 LTIP Units issued on March |
Mr. Moghadam—164,637115,784 LTIP Units valued at $8,249,960$12,374,994
Mr. Olinger—41,90729,472 LTIP Units valued at $2,099,960$3,149,967
Mr. Reilly—51,88536,489 LTIP Units valued at $2,599,957$3,899,944
Mr. Nekritz—41,907Anderson—32,279 LTIP Units valued at $2,099,960$3,449,980
Mr. Anderson—41,907Nekritz—29,472 LTIP Units valued at $2,099,960$3,149,967
Mr. Curless—37,916 LTIP Units valued at $1,899,971
The number of LTIP Units werewas determined using the closing price of our common stock on the award grant date of February 10, 20172, 2021 ($50.11)106.88). This is the value used for accounting purposes to expense the grant.
2020 LTIP Units issued on March |
Mr. Moghadam—110,589131,271 LTIP Units valued at $4,124,970$12,374,917
Mr. Olinger—28,15030,232 LTIP Units valued at $1,049,995$2,849,971
Mr. Reilly—34,85242,431 LTIP Units valued at $1,299,980$3,999,970
Mr. Nekritz—28,150Anderson—33,414 LTIP Units valued at $1,049,995$3,149,938
Mr. Anderson—28,150Nekritz—33,414 LTIP Units valued at $1,049,995$3,149,938
Mr. Curless—25,469 LTIP Units valued at $949,994
The number of LTIP Units werewas determined using the closing price of our common stock on the award grant date of February 10, 2016January 17, 2020 ($37.30)94.27). This is the value used for accounting purposes to expense the grant.
Mr. Moghadam—157,419 LTIP Units valued at $7,064,965
Mr. Olinger—35,093 LTIP Units valued at $1,574,974
Mr. Reilly—45,120 LTIP Units valued at $2,024,986
Mr. Nekritz—35,093 LTIP Units valued at $1,574,974
Mr. Anderson—35,093 LTIP Units valued at $1,574,974
Mr. Curless—31,082 LTIP Units valued at $1,394,960
The number of LTIP Units were determined using the closing price of our common stock on the award grant date of February 10, 2015 ($44.88). This is the value used for accounting purposes to expense the grant.
Information on how we value equity awards is included in the narrative discussion that follows the Grants of Plan-Based Awards in Fiscal Year 20172022 table below. Also see “Compensation Discussion and Analysis.”
POP:
The values in column (e) include the NEO’s allocation of the estimated compensation pool value (or participation point value) awarded under POP. This value is included in the NEO’s compensation even though there is no assurance that the value of the participation points will ever be realized by the NEO.
POP: |
The values in column (e) include the NEO’s allocation of the estimated compensation pool value awarded under POP. This value is included in the NEO’s compensation even though there is no assurance that the value of the allocation will ever be realized by the NEO. |
| · | 2022 (2022-2024 Performance Period): Values of |
2021 (2021-2023 Performance Period): Values of |
2020 (2020-2022 Performance Period): Values of |
POP and the exchange of participation points for POP LTIP Units are discussed below in the narrative that follows the “Grants of Plan-Based Awards in Fiscal Year 2017” table.
POP and the exchange of the compensation pool allocation for POP LTIP Units are discussed below in the narrative that follows the “Grants of Plan-Based Awards in Fiscal Year 2022” table. |
| (6) | Awards in the form of cash and/or equity awards |
PPP awards paid in |
|
| |||
| ||
PPP awards paid in |
Additional information on the participation points allocated under PPP and how they are valued is included in the narrative that follows the “Grants of Plan-Based Awards in Fiscal Year 2017” table.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 86 |
| SUMMARY COMPENSATION TABLE |
| · | PPP awards paid in 2020: All of Mr. Moghadam’s 2020 PPP awards were paid in the form of equity (in aggregate, 151,213 LTIP Units or $15,156,902). For each of the other NEOs, 35% of the 2020 PPP awards were in the form of cash (in aggregate $2,121,982). Mr. Olinger, Mr. Reilly, Mr. Anderson and Mr. Nekritz received 65% of their 2020 PPP awards in the form of equity (in aggregate, 39,315 LTIP Units or $3,940,762). The LTIP Units were valued at $88.27 and $101.74 per share, the closing price of our common stock on the grant date (March 2, 2020, and August 19, 2020, respectively). |
Additional information on the allocations of PPP compensation pools and how they are valued is included in the narrative that follows the “Grants of Plan-Based Awards in Fiscal Year 2022” table. |
| (7) | The amounts in column (i) represent the other compensation amounts paid to each of the NEOs in |
|
| 401(k) Plan Match | Financial Planning Services(a) | Parking(a) | Other(b) | Totals(c) | |||||||||||||||||||||||||||||||||||||||||||
401(k) Plan Match | Financial Planning Services(a) | Parking(a) | Other(b) | Totals(c) | ||||||||||||||||||||||||||||||||||||||||||||
Mr. Moghadam | 2017 | $ | 8,100 | $ | 60,000 | $ | 7,800 | $ | 10,000 | $ | 85,900 | 2022 | — | — | — | $ | 12,500 | $ | 12,500 | |||||||||||||||||||||||||||||
| 2016 | $ | 7,950 | $ | 81,458 | $ | 7,410 | $ | 10,000 | $ | 106,818 | ||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 7,950 | $ | 74,479 | $ | 8,860 | $ | 10,000 | $ | 101,289 | 2021 | — | — | — | $ | 12,500 | $ | 12,500 | ||||||||||||||||||||||||||||||
| 2020 | — | $ | 66,500 | $ | 1,935 | $ | 12,500 | $ | 80,935 | |||||||||||||||||||||||||||||||||||||||
Mr. Arndt | 2022 | $ | 13,500 | — | — | — | $ | 13,500 | ||||||||||||||||||||||||||||||||||||||||
| 2021 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| 2020 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Mr. Olinger | 2017 | $ | 8,100 | $ | 16,765 | $ | 5,220 | $ | 13,855 | $ | 43,940 | 2022 | $ | 13,500 | — | — | $ | 15,758 | $ | 29,258 | ||||||||||||||||||||||||||||
| 2021 | $ | 13,000 | — | — | $ | 12,500 | $ | 25,500 | ||||||||||||||||||||||||||||||||||||||||
| 2016 | $ | 7,950 | $ | 17,637 | $ | 5,220 | $ | 12,500 | $ | 43,307 | 2020 | $ | 17,100 | $ | 18,095 | $ | 1,290 | $ | 12,500 | $ | 48,985 | |||||||||||||||||||||||||||
| 2015 | $ | 7,950 | $ | 16,307 | $ | 5,280 | $ | 12,500 | $ | 42,037 | ||||||||||||||||||||||||||||||||||||||
Mr. Reilly | 2017 | $ | 8,100 | $ | 16,765 | $ | 518 | $ | 9,250 | $ | 34,633 | 2022 | $ | 13,500 | — | — | $ | 12,500 | $ | 26,000 | ||||||||||||||||||||||||||||
| 2016 | $ | 7,950 | $ | 17,637 | $ | — | $ | 500 | $ | 26,087 | ||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 7,950 | $ | 16,307 | $ | — | $ | 12,500 | $ | 36,757 | 2021 | $ | 13,000 | — | — | $ | 12,500 | $ | 25,500 | |||||||||||||||||||||||||||||
Mr. Nekritz | 2017 | $ | 8,100 | $ | 16,765 | $ | 353 | $ | 12,500 | $ | 37,718 | |||||||||||||||||||||||||||||||||||||
| 2016 | $ | 7,950 | $ | 17,637 | $ | — | $ | 12,500 | $ | 38,087 | 2020 | $ | 17,100 | $ | 18,095 | $ | 355 | $ | 12,500 | $ | 48,050 | |||||||||||||||||||||||||||
| 2015 | $ | 7,950 | $ | 19,716 | $ | — | $ | 12,500 | $ | 40,166 | ||||||||||||||||||||||||||||||||||||||
Mr. Anderson | 2017 | $ | 8,100 | $ | 16,765 | $ | 353 | $ | 12,500 | $ | 37,718 | 2022 | $ | 13,500 | — | — | $ | 12,500 | $ | 26,000 | ||||||||||||||||||||||||||||
| 2016 | $ | 7,950 | $ | 17,637 | $ | — | $ | 12,500 | $ | 38,087 | ||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 7,950 | $ | 19,208 | $ | — | $ | — | $ | 27,158 | 2021 | $ | 13,000 | — | — | $ | 12,500 | $ | 25,500 | |||||||||||||||||||||||||||||
Mr. Curless | 2017 | $ | 8,100 | $ | 16,765 | $ | 5,220 | $ | 11,840 | $ | 41,925 | |||||||||||||||||||||||||||||||||||||
| 2016 | $ | 7,950 | $ | 17,637 | $ | 5,220 | $ | 8,600 | $ | 39,407 | ||||||||||||||||||||||||||||||||||||||
| 2015 | $ | 7,950 | $ | 16,307 | $ | 5,280 | $ | 12,250 | $ | 41,787 | 2020 | $ | 17,100 | $ | 18,095 | $ | 750 | $ | 12,500 | $ | 48,445 | |||||||||||||||||||||||||||
Mr. Nekritz | 2022 | $ | 13,500 | — | — | $ | 12,500 | $ | 26,000 | |||||||||||||||||||||||||||||||||||||||
| 2021 | $ | 13,000 | — | — | $ | 12,500 | $ | 25,500 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 17,100 | $ | 18,095 | $ | 750 | $ | 12,500 | $ | 48,445 | ||||||||||||||||||||||||||||||||||||||
| (a) | In 2020, we provided financial planning services and parking, if applicable, to certain |
| (b) | For |
For 2016 includes: matching charitable contributions by the company’s charitable foundation.
For 2015 includes: matching charitable contributions by the company’s charitable foundation.
Our charitable foundation will match the amount of charitable contributions to qualifying organizations made by our directors and all of our employees. The annual maximum amount of matching contributions in one year applicable to our NEOs is $12,500, not including amounts matched under special matching initiatives related to specific events, such as natural disasters. Matching contributions available in a particular year that are not used may be carried over to the subsequent year. Amounts reported represent charitable contributions of our charitable foundation that were paid directly to outside organizations during the calendar year to match qualifying contributions made by the NEOs during that year and can also include amounts carried over from previous years.
For 2021 includes: matching charitable contributions by the company’s charitable foundation. |
For 2020 includes: matching charitable contributions by the company’s charitable foundation. |
Our charitable foundation will match the amount of charitable contributions to qualifying organizations made by our directors and all of our employees. The annual maximum amount of matching contributions in one year applicable to our NEOs is $12,500, not including amounts matched under special matching initiatives related to specific events, such as natural disasters. Matching contributions available in a particular year that are not used may be carried over to the subsequent year. Amounts reported represent charitable contributions of our charitable foundation that were paid directly to outside organizations during the calendar year to match qualifying contributions made by the NEOs during that year and can also include amounts carried over from previous years. |
| (c) | No perquisite amounts are reported in any year for any of the NEOs as the aggregate amount of the incremental costs of any perquisites for an individual NEO does not exceed $10,000 in any year. In |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
GRANTS OF PLAN-BASED AWARDS | ||
Grants of Plan-Based Awards in Fiscal Year 2017*2022*
Estimated Future Payouts Under Equity Incentive Plan Awards
| All Other Stock Awards: Number of Shares of Stock or Units (#) (i)
| Grant Date Fair Value of Stock Awards ($) (l)
| ||||||||||||||
Name (a)
| Grant Date (b)
| Maximum ($) (h)
| ||||||||||||||
Annual and PPP Grants and POP Points: | ||||||||||||||||
Hamid Moghadam | 01/03/17 | (1) | $ | 21,345,000 | — | $ | 3,060,000 | |||||||||
| 03/07/17 | (2) | — | 164,637 | $ | 8,249,960 | |||||||||||
| 05/18/17 | (3) | — | 75,736 | $ | 4,135,186 | |||||||||||
| 10/12/17 | (3) | — | 3,795 | $ | 242,956 | |||||||||||
Thomas Olinger | 01/03/17 | (1) | $ | 8,538,000 | $ | 1,224,000 | ||||||||||
| 03/07/17 | (2) | — | 41,907 | $ | 2,099,960 | |||||||||||
| 05/18/17 | (3) | — | 19,691 | $ | 1,075,129 | |||||||||||
| 10/12/17 | (3) | — | 986 | $ | 63,124 | |||||||||||
Eugene Reilly | 01/03/17 | (1) | $ | 8,538,000 | $ | 1,224,000 | ||||||||||
| 03/07/17 | (2) | — | 51,885 | $ | 2,599,957 | |||||||||||
| 05/18/17 | (3) | — | 19,691 | $ | 1,075,129 | |||||||||||
| 10/12/17 | (3) | — | 986 | $ | 63,124 | |||||||||||
Edward Nekritz | 01/03/17 | (1) | $ | 8,538,000 | $ | 1,224,000 | ||||||||||
| 03/07/17 | (2) | — | 41,907 | $ | 2,099,960 | |||||||||||
| 05/18/17 | (3) | — | 19,691 | $ | 1,075,129 | |||||||||||
| 10/12/17 | (3) | — | 986 | $ | 63,124 | |||||||||||
Gary Anderson | 01/03/17 | (1) | $ | 8,538,000 | $ | 1,224,000 | ||||||||||
| 03/07/17 | (2) | — | 41,907 | $ | 2,099,960 | |||||||||||
| 05/18/17 | (3) | — | 19,691 | $ | 1,075,129 | |||||||||||
| 10/12/17 | (3) | — | 986 | $ | 63,124 | |||||||||||
Michael Curless | 01/03/17 | (1) | $ | 8,538,000 | $ | 1,224,000 | ||||||||||
| 03/07/17 | (2) | — | 37,916 | $ | 1,899,971 | |||||||||||
| 05/18/17 | (3) | — | 19,691 | $ | 1,075,129 | |||||||||||
| 10/12/17 | (3) | — | 986 | $ | 63,124 | |||||||||||
Bonus Exchange Awards: | ||||||||||||||||
Hamid Moghadam | 03/7/18 | (4) | — | 8,548 | $ | 515,625 | ||||||||||
Thomas Olinger | 03/7/18 | (4) | — | 4,119 | $ | 248,438 | ||||||||||
Eugene Reilly | 03/7/18 | (4) | — | 4,336 | $ | 261,563 | ||||||||||
Edward Nekritz | 03/7/18 | (4) | — | 4,305 | $ | 259,688 | ||||||||||
Gary Anderson | 03/7/18 | (4) | — | 4,336 | $ | 261,563 | ||||||||||
Michael Curless | 03/7/18 | (4) | — | 4,181 | $ | 252,188 | ||||||||||
Estimated Future Payouts Under Equity Incentive Plan Awards | ||||||||||||||||||||
Name (a) | Grant Date
(b) | Target
(g) | Maximum ($) (h) | All Other Stock Awards: Number of (i) | Grant Date Fair Value of Stock ($) (l) | |||||||||||||||
Annual and PPP Grants: |
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Hamid Moghadam | 01/03/22 | (1) | $ | 4,560,000 | $ | 15,000,000 | — | $ 4,560,000 | ||||||||||||
| 02/25/22 | (2) | — | — | 80,655 | $12,374,897 | |||||||||||||||
| 02/25/22 | (3) | — | — | 6,517 | $ 999,903 | |||||||||||||||
| 12/16/22 | (4) | — | — | 254,647 | $28,382,955 | |||||||||||||||
Timothy Arndt | 01/03/22 | (1) | $ | 456,000 | $ | 1,500,000 | — | $ 456,000 | ||||||||||||
| 02/25/22 | (2) | — | — | 4,073 | $ 624,920 | |||||||||||||||
| 12/16/22 | (4) | — | — | 28,258 | $ 3,149,637 | |||||||||||||||
Thomas Olinger** | 01/03/22 | (1) | $ | 1,216,000 | $ | 4,000,000 | — | $ 1,216,000 | ||||||||||||
| 02/25/22 | (2) | — | — | 20,530 | $ 3,149,918 | |||||||||||||||
| 12/16/22 | (4) | — | — | 44,138 | $ 4,919,621 | |||||||||||||||
Eugene Reilly | 01/03/22 | (1) | $ | 1,824,000 | $ | 6,000,000 | — | $ 1,824,000 | ||||||||||||
| 02/25/22 | (2) | — | — | 25,418 | $ 3,899,884 | |||||||||||||||
| 12/16/22 | (4) | — | — | 66,208 | $ 7,379,544 | |||||||||||||||
Gary Anderson | 01/03/22 | (1) | $ | 1,824,000 | $ | 6,000,000 | — | $ 1,824,000 | ||||||||||||
| 02/25/22 | (2) | — | — | 22,485 | $ 3,449,874 | |||||||||||||||
| 12/16/22 | (4) | — | — | 52,525 | $ 5,854,437 | |||||||||||||||
Edward Nekritz | 01/03/22 | (1) | $ | 1,824,000 | $ | 6,000,000 | — | $ 1,824,000 | ||||||||||||
| 02/25/22 | (2) | — | — | 20,530 | $ 3,149,918 | |||||||||||||||
| 12/16/22 | (4) | — | — | 48,663 | $ 5,423,978 | |||||||||||||||
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| Columns (c) through |
| ** | Mr. Olinger stepped down as our CFO effective April 1, 2022, and served as an advisor until December 16, 2022. |
| (1) | Represents the allocation of |
| (2) | Represents the annual long-term equity incentive awards for the performance year ended in |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 88 |
| GRANTS OF PLAN-BASED AWARDS |
| (3) | Represents equity compensation contingent on 2021 performance in lieu of 2021 salary and granted in 2022. The Compensation Committee determined that the maximum value of this award ($999,999) would be paid as company performance was greater than target using our corporate score assessed against our annual bonus plan metrics. The LTIP Units were issued on February 25, 2022, and vest ratably over a four-year period. The value in column (l) represents the award in column (i) valued at $153.43 per share, which was the closing price of our common stock on January 18, 2022, the date the Compensation Committee approved the award. This value is used for accounting purposes to expense the grant. |
| (4) | The NEO was awarded a compensation opportunity through participation in PPP. PPP compensation pools were determined in |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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DISCUSSION OF SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS |
Narrative Discussion to the Summary Compensation Table for Fiscal Year 20172022 and the Grants of Plan-Based Awards in Fiscal Year 20172022 Table
Equity compensation plans
At our annual meeting on May 3, 2012,April 29, 2020, our stockholders approved and adopted the Prologis, Inc. 20122020 Long-Term Incentive Plan (the “2012“2020 LTIP”). The 20122020 LTIP enables our executive officers, employees, directors and consultants to participate in the ownership of the company and allows us to attract and retain our executive officers, other employees and directors, as well as provide incentives to such persons to maximize our company performance.
In addition, we have other equity compensation plans under which equity awards were outstanding as of December 31, 2017:2022:
the Amended and Restated 2002 Stock Option and Incentive Plan and the Third Amended and Restated 1997 Stock Option and Incentive Plan, collectively, the “AMB Plans,” which were both approved by our stockholders; |
the Prologis 2012 Long-Term Incentive Plan (the “2012 LTIP”), which was approved by our stockholders; and |
| · | the ProLogis 2006 Long-Term Incentive Plan, the ProLogis 2000 Share Option Plan for Outside Trustees and the ProLogis 1997 Long-Term Incentive Plan, collectively, the “Trust Plans,” which were assumed by us under the Merger agreement with all outstanding awards converted based on the Merger exchange ratio. The Trust Plans were approved by shareholders of the Trust. |
All future equity awards will be granted from the 20122020 LTIP (or its successor plan) and we will no longer grant any awards from the 2012 LTIP, the AMB Plans or the Trust Plans. The available shares of common stock reserved for issuance under the 2012 LTIP, AMB Plans and the Trust Plans as of May 3, 2012April 29, 2020, were added to the share reserve of the 20122020 LTIP. All outstanding awards under the 2012 LTIP, AMB Plans and the Trust Plans will remain outstanding until they vest, expire or are forfeited by the participant. As ofAt December 31, 2017,2022, we had 8.333.3 million shares reserved or available for issuance under our plans, including 5.7 million shares of common stock to be issued upon vesting of awards previously granted and 21.0 million shares of common stock remaining available for future issuance under our plans and 8.8 million shares of common stock subject to outstanding unvested awards.plans.
The 20122020 LTIP does not expire but no further awards can be granted under the plan after the tenth anniversary date of the plan’s approval (May 3, 2022).approval. The 20122020 LTIP does not permitre-pricing of stock options without stockholder approval. Participants, includingnon-employee directors, in the 20122020 LTIP may receive stock options, stock appreciation rights and full value awards, including dividend equivalents. Only employees may receive incentive stock options under the 2012 LTIP,2020 LTIP; however, we have not granted incentive stock options in the past and currently do not intend to grant any stock options of any kind.
For further detail, please see “Equity Compensation Plans” below.
Equity award terms
Under our annual LTI equity program and PPP, weWe currently intend to grant LTIP Units and RSUs.RSUs for annual LTI equity and PPP awards. Restricted stock awards were last granted in 2012, and stock options were last granted in 2011. In addition, we provided certain executives with opportunities to earn awards under POP. Beginning in 2014, we offered to certain executives the option to elect to receive LTIP Units in lieu of RSUs that may be granted to them under our compensation program. The general terms of our equity awards outstanding at December 31, 20172022, are as follows:
RSUs
Each RSU is convertible into one share of common stock upon vesting. The RSUs granted prior tosince the 2018 annual grant cycle generally vest ratably over a continued service period of three years, such that the awards vest 34% after the first year, 33% after the second year and 33% after the third year. RSUs granted in the 2018 annual grant cycle vest
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ratably over a period of four years, such that 25% of the award vests each year of the four-year period. Going forward, we intend to grant RSUs for annual LTI equity awards and PPP awards withfour-year vesting periods. RSUs granted in accordance with the 2018 POP amendment will have aseven-year cliff vesting period (i.e., the entire award vests on a specified future date) after the end of the initial three-year performance period. RSUs have no voting rights. Certain
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| DISCUSSION OF SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS |
awards, such as special grants due to hiring or retention considerations, may have different vesting terms, including cliff vesting terms. RSUs granted toEquity received by the NEOs as a part of thein exchange for their bonus exchange generally have a three-year vesting period, such that the bonus exchange awards vest 40% after the first year, 40% after the second year and 20% after the third year.are fully vested upon issuance. Generally, RSUs earn dividend equivalents (either cash or equity) over the vesting period under the same payment terms as dividends paid on our common stock. RSUs are valued based on the closing price of our common stock on the grant date.
LTIP Units
Certain participants in the 20122020 LTIP can elect to receive LTIP Units instead of RSUs. LTIP Units have similar terms to RSUs with respect to vesting provisions, voting rights and dividends. LTIP Units are different from POP LTIP Units granted under POP (as discussed below). LTIP Units are structured with the intent that the units will generally be economically equivalent to the RSUs that would be issued for the applicable awards and generally have the same vesting terms as the RSUs that are granted. Under certain conditions, an LTIP Unit is convertible into a common unit and then redeemable for one share of our common stock, or at our option, cash. Among other conditions, LTIP Units cannot be converted until they are vested and a waiting period of two years from the date of issuance is complete. Like RSUs, LTIP Units earn cash distributions equal to the dividend paid on our common stock. After vesting and other conditions are met, LTIP Units remain outstanding until such time as the holder of the LTIP Units elects to convert.
In December 2014, certain executives, including the NEOs, were given the election to exchange outstanding, unvested RSUs or restricted stock awards (“RSAs”) into LTIP Units with the same vesting terms as the RSUs or RSAs that were exchanged. The RSUs and RSAs subject to this exchange were cancelled and LTIP Units were issued pursuant to these exchanges in January 2015.
The exchange of the LTIP Units for unvested RSUs and RSAs in January 2015 did not result in incremental fair value for accounting purposes and does not change the total compensation of the NEO. As such, the issuance of the LTIP Units in this exchange (and subsequent cancellation of outstanding RSUs and RSAs) does not change the value of the equity awards as presented in the Summary Compensation Table or in the Grants of Plan-Based Awards Table.
For any equity awards granted starting in 2017, including issuances of LTIP Units, Mr. Moghadam has waived any vesting benefits related to meeting retirement-eligibility thresholds under our incentive plan. VestingMessrs. Reilly, Anderson, Nekritz and Olinger executed a similar waiver applicable to equity awards granted after September 2018. In accordance with a 2020 amendment to such waivers, vesting under such awards will continue after he terminatesthese NEOs terminate employment as long as he continues inthe NEO performs approved community work or services for the company. The 2020 amendment did not impact these NEOs’ waiver of their retirement-eligibility benefits. Mr. Arndt executed a substantial role withsimilar waiver (reflecting the company or its affiliates.2020 amendment) applicable to equity awards granted after April 2022.
Participation Points—POP
Please see “Compensation Discussion and Analysis” for a discussion of the general structure of POP and how it fits into our overall compensation program.
Under POP, certain employeesNEOs are awardedallocated a portionpercentage of a potential compensation pool to be determined based on the number of participation points allocated to them for each performance period.period (the “POP Allocations”). We made allocations of participation points under POP Allocations to the NEOs in 20172022 for the 2017-20192022-2024 performance period, in 20162021 for the 2016-20182021-2023 performance period and in 20152020 for the 2015-20172020-2022 performance period.
The participation pointsPOP Allocations are valued using a Monte Carlo simulation as of the grant date. Participation points under POP Allocations were structured with the intent that the pointsallocations have no economic value to the participants unless and until performance criteria are met and an award is paid for the applicable performance period.
For the 2022–2024 performance period, the Compensation Committee made POP Allocations to the NEOs such that 15% of the compensation pool will be paid to Mr. Moghadam, 6% of the compensation pool will be paid to each of Mr. Reilly, Mr. Anderson and Mr. Nekritz, 4% of the compensation pool will be paid to Mr. Olinger and approximately 1.5% of the compensation pool will be paid to Mr. Arndt (subject to the end-of-period valuation of Mr. Arndt’s allocation) if such awards are earned. For the 2021-2023 performance period, the Compensation Committee made POP Allocations to the NEOs such that 15% of the compensation pool will be paid to Mr. Moghadam, 6% of the compensation pool will be paid to each of Mr. Reilly, Mr. Anderson and Mr. Nekritz, 4% of the compensation pool will be paid to Mr. Olinger and approximately 1.2% of the compensation pool will be paid to Mr. Arndt (subject to the end-of-period valuation of Mr. Arndt’s allocation) if such awards are earned. For the 2020-2022 performance period, the Compensation Committee made POP Allocations to the NEOs such that 15% of the compensation pool will be paid to Mr. Moghadam, 6% of the compensation pool will be paid to each of Mr. Reilly, Mr. Anderson and Mr. Nekritz, 4% of the compensation pool will be paid to Mr. Olinger and approximately 0.9% of the compensation pool will be paid to Mr. Arndt (subject to the end-of-period valuation of Mr. Arndt’s allocation) if such awards are earned. For the 2019–2021 performance period, the Compensation Committee made POP Allocations to the NEOs such that 15% of the compensation pool will be paid to Mr. Moghadam and 6% of the compensation pool will be paid to each of Mr. Olinger, Mr. Reilly, Mr. Anderson and Mr. Nekritz and approximately 0.9% of the compensation pool will be paid to Mr. Arndt (subject to the end-of-period valuation of Mr. Arndt’s allocation) if such awards are earned. In allocating the percentage of the compensation pools to the NEOs, the Compensation Committee took into consideration external market data concerning the typical ratio of CEO compensation to that of other NEOs and employees. The Compensation Committee generally allocated a smaller
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
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DISCUSSION OF SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS |
The total compensation pool applicable to about 100 participants in aggregate was initially represented by approximately 10,000 participation points. The actual awards for the performance period, if any, will be determined by multiplying
portion of the total compensation pool by a fraction,to the numeratorNEOs relative to the other participants than is typical in the outperformance plans of which isother companies the number of participation points held by a participant andcommittee reviewed at the denominator of which is the total number of participation points held by all participants on the last dayinception of the plan. The compensation pool for each performance period covered approximately 100 participants at the beginning of each performance period. Awards
Earned POP awards can be paid in either cash or equity after the end of the three-year performance period.equity. The Compensation Committee has determined that the awards will be paid, if at all, in equity. Earned POP awards cannot be paid unless and until absolute TSR becomes positive. Any earned POP award will expire seven years after the end of the performance period if absolute TSR does not become positive within that period.
For each performance period, the Compensation Committee allocated participation points to the NEOs such that 15% of the compensation pool will be paid to Mr. Moghadam and 6% of the compensation pool will be paid to each of the other NEOs if such awards are earned. This percentage allocation of the compensation pool will be fixed regardless of the total number of participation points outstanding at the end of the performance period, so that the NEOs will not receive any greater percentage of the compensation pool if participants forfeit their points. In allocating the percentage of the compensation pools to the NEOs, the Compensation Committee took into consideration external market data concerning the typical ratio of CEO compensation to that of other NEOs and employees. The Compensation Committee generally allocated a smaller portion of the total compensation pool to the NEOs relative to the other participants than is typical in the outperformance plans of other companies the committee reviewed at the inception of the plan.
POP LTIP Units. Certain members of the executive management team, including the NEOs, elected to exchange their POP participation pointsAllocations for special LTIP Units (the “POP LTIP Units”) as defined under the operating partnership agreement of Prologis, L.P., as amended and/or restated from time to time.
The POP LTIP Units are structured with the intent that the units will be comparable economically to the awards under POP. A participant electing to receive the POP LTIP Units will receive the same percentage of the pool as if the participant had not participated in the exchange. Like other forms of awards under the plan, the POP LTIP Units will have no economic value to the participants until and unless the performance criteria are achieved at the end of a performance period and other conditions are met. Once the Compensation Committee determines whether the performance criteria have been met, the POP LTIP Units will be forfeited to the extent not earned based on the terms of POP. IfTo the extent an award is earned, an NEO will retain the number of POP LTIP Units equal in economic value to the percentage of the performance pool originally allocated to the NEO at the beginning of the applicable performance period. Any POP LTIP Units in excess of such amount will be forfeited. Additional LTIP Units will be issued to true up the original number of POP LTIP units issued for the performance period to the extent such original issuance was insufficient to cover the value of the earned award.
Upon the satisfaction of certain conditions, including achievement of the relevant performance criteria, each POP LTIP Unit may be convertible into a common unit of the operating partnership and then redeemable for one share of our common stock, or cash at our option.
As has become standard tax structuring for profits interests that only vest if performance hurdles are met, the POP LTIP Units are entitled to distributions during the performance period equal to 10% of our common stock dividend. However, contrary to most performance-based programs at other REITs, we are requiring participants to make a significant,non-refundable capital contribution for the POP LTIP Units they receive. This feature is intended to make POP LTIP Units comparable economically to POP participation points allocatedAllocations to applicable participants under the POP.participants. This structure is designed so that participants receive no additional compensation as a result of the exchange of participation pointsPOP Allocations into POP LTIP Units. This creates downside risk for participants if the performance hurdles are not achieved causing the forfeiture of the capital invested in their POP LTIP Units.
As such, the issuance of POP LTIP Units in exchange for participation pointsPOP Allocations does not affect the compensation amounts for the NEOs in the Summary Compensation Table or in the Grants of Plan-Based Awards Table. The exchange of the POP LTIP Units for participation pointsPOP Allocations does not result in incremental fair value for accounting purposes and does not change the total compensation of the NEOs. As a result, the issuance of the POP LTIP Units in exchange for participation pointsPOP Allocations does not change the presentation of the value of the participation pointsPOP Allocations in the Summary
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Compensation Table or in the Grants of Plan-Based Awards Table. The POP LTIP Units are included in the Outstanding Equity Awards at FiscalYear-End table at their threshold value at December 31, 2017.
As discussed in CD&A,the Compensation Discussion and Analysis, the POP compensation pool only funds if and to the extent our three-year, compound annualized TSR exceeds the three-year compound annualized TSR of the MSCI REIT Index by 100 basis points.
2016-2018 performance period:This performance period began on January 1, 2016, and |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 92 |
| DISCUSSION OF SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS |
$75.0 million was paid to participants, including the NEOs, in 2019 in the form of |
2017-2019 performance period: This performance period began on January 1, 2017, and |
| · | 2019-2021 performance period: This performance period began on January 1, 2019, and ended on December 31, 2021, and included 131 participants at its start. The value of the potential compensation pool on January 2, 2019, the date POP Allocations were awarded, was $21.2 million, determined using a Monte Carlo simulation. Variables used in the simulation under a risk-neutral premise include: (i) expected volatility of our common stock of 19%; (ii) expected volatility of the MSCI REIT Index of 15%; and (iii) correlation between our common stock and the MSCI REIT Index of 87%. Awards for the 2019-2021 performance period were determined by the Compensation Committee on January 18, 2022, resulting in pool funding of $100.0 million. Awards are paid to the NEOs in the form of equity subject to the holding and vesting requirements as described below. Such awards included a $15 million award paid to Mr. Moghadam and $6 million awards paid to each of our other NEOs. |
| · | 2020-2022 performance period: This performance period began on January 1, 2020, and will end on December 31, 2022, and included 114 participants at its start. The value of the potential compensation pool on January 2, 2020, the date POP Allocations were awarded, was $28.8 million, determined using a Monte Carlo simulation. Variables used in the simulation under a risk-neutral premise include: (i) expected volatility of our common stock of 19%; (ii) expected volatility of the MSCI REIT Index of 13%; and (iii) correlation between our common stock and the MSCI REIT Index of 81%. Such awards included a $15 million award paid to Mr. Moghadam, $6 million award paid to Mr. Reilly, Mr. Anderson, and Mr. Nekritz, $4 million award paid to Mr. Olinger and $0.9 million award paid to Mr. Arndt. |
| · | 2021-2023 performance period: This performance period began on January 1, 2021, and will end on December 31, 2023, and included 111 participants at its start. The value of the potential compensation pool on January 4, 2021, the date POP Allocations were awarded, was $30.3 million, determined using a Monte Carlo simulation. Variables used in the simulation under a risk-neutral premise include: (i) expected volatility of our common stock of 32%; (ii) expected volatility of the MSCI REIT Index of 29%; and (iii) correlation between our common stock and the MSCI REIT Index of 82%. The potential compensation pool was capped at $100.0 million. As of December 31, |
In accordance with the 2016 amendment of POP, applicable to the 2016-2018 and 2017-2019 performance periods, any amounts above $75 million will be paid over the course of three years after the end of the initial three-year performance period only if we continue to perform at or above the MSCI REIT Index.One-third of this excess amount above $75 million will be paid at the end of each of the three years following the initial three-year performance period, if we perform at or above the index at the end of each applicable year. A holding requirement applies to any equity paid until the end of the third year following the initial three-year performance period. If our absolute TSR is not positive, we will not be paid any amounts under the plan unless and until our absolute TSR turns positive. If our absolute TSR fails to turn positive within seven years after achieving the performance hurdle at the end of the initial three-year performance period, our awards will be forfeited.
| · | 2022-2024 performance period: This performance period began on January 1, 2022, and will end on December 31, 2024, and included 138 participants at its start. The value of the potential compensation pool on January 3, 2022, the date POP Allocations were awarded, was $30.4 million, determined using a Monte Carlo simulation. Variables used in |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 93 |
| DISCUSSION OF SUMMARY COMPENSATION TABLE AND THE GRANTS OF PLAN-BASED AWARDS |
the simulation under a risk-neutral premise include: (i) expected volatility of our common stock of 31%; (ii) expected volatility of the MSCI REIT Index of 29%; and (iii) correlation between our common stock and the MSCI REIT Index of 82%. The potential compensation pool was capped at $100.0 million. As of December 31, 2022, the projected value of this compensation pool was $100.0 million. |
In 2018, our NEOs voluntarily elected to apply long-term cliff vesting to 80% of any awards earned for the 2016-2018 and 2017-2019 performance periods. TheUnder their election, 20% of amounts earned under applicable portionhurdles will be paid at the time applicable hurdles are met. A holding requirement will apply to these amounts until the sixth year after the beginning of the awardsperformance period. 80% of amounts earned under applicable hurdles will vest at the end ofbe subject to cliff vesting until the tenth year after the beginning of the performance period.
In the case of the 2016-2018 performance period, for example, Mr. Moghadam was paid an initial award of $11.3 million. 20% of the $11.3 million award was paid to him in LTIP units in January 2019. A holding period applied to this amount until 2022 (the sixth year after the beginning of the performance period). LTIP units comprising 80% of the $11.3 million are subject to cliff vesting until 2026 (ten years after the beginning of the performance period). As we exceeded the MSCI REIT Index threshold at the end of 2020, 2021 and 2022, Mr. Moghadam was paid 20% of the $2 million holdback award in LTIP units in January 2021, 2022 and 2023, respectively, when the awards were approved by the Compensation Committee. A holding period applied to these amounts until 2022. LTIP units comprising 80% of the $2 million holdback award paid in January 2021, 2022 and 2023 are subject to cliff vesting until 2026. See discussion of POP in “Compensation Discussion and Analysis” for further details.
PPP Allocations
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Participation Points—PPP
Please see “Compensation Discussion and Analysis” for a discussion of the general structure of PPP and how it fits into our overall compensation program.
Under PPP, certain employeesNEOs receive participation pointsan allocation representing their share of a potential compensation pool (the “PPP Allocations”) that, if funded, will be awarded to the participantNEO in a percentage of equity with any remainder in cash. The equity portion of the earned award would be paid in RSUs or LTIP Units with a three-year vesting period (and starting with the 2018 annual grant cycle, a four-year vesting period).period. The participation points awardedPPP Allocations have no value unless and until an incentive fee or promote is received and the Compensation Committee grants the applicable PPP award. No awards or values are reported as of the date of the allocation of participation pointsPPP Allocations because it is not possible to determine whether any incentive fees or promotes will be received in future years from a particular venture. For accounting purposes, the cash awards will be expensed when earned and paid to participants and the equity awards are expensed over the vesting period.
The Compensation Committee initially allocated approximately 10,000 participation points to about 100 participants for each applicable venture, representing each venture’s PPP award pool. For each applicable venture prior to February 2020 through 2021, the Compensation Committee allocated participation pointsmade PPP Allocations to the NEOs such that 15% of the compensation pool will bewas paid to Mr. Moghadam and 6% of the compensation pool will bewas paid to each of Mr. Olinger, Mr. Reilly, Mr. Anderson, and Mr. Nekritz. Starting in February 2020, to reflect shifting responsibilities, the otherCommittee reduced PPP Allocations for Mr. Olinger to 4% with respect to the future promotes of certain new ventures. For applicable ventures in 2022, the Committee made PPP Allocations to the NEOs if such awards are earned. This percentage allocationthat approximately 3% of the compensation pool will be fixed regardlesswas paid to Mr. Arndt, 5% of the total number of participation points outstanding at the endcompensation pool was paid to Mr. Anderson and 4% of the performance period.compensation pool was paid to Mr. Nekritz, but did not change the PPP Allocations to Mr. Moghadam, Mr. Olinger, or Mr. Reilly. In determining the allocation of PPP participation pointsAllocations to the NEOs, the Compensation Committee utilized a similar rationale as with the awards of participation points made for POP Allocations discussed above.
PPP compensation pools were funded in 20172022, 2021 and 2016. No PPP awards were earned in 2015.2020. The value of a PPP award earned by ana NEO is reported as compensation in the year the award is earned bypaid to the NEO on the date of determination by the Compensation Committee. In 2014, PPP was amended to allow the Compensation Committee to grant awards with the equity percentage over 50% and the remainder in cash. The cash awards earned by the NEOs in 20172022, 2021 and 20162020 under PPP are included as“Non-Equity Incentive Plan Compensation” in the Summary Compensation Table for Fiscal Year 20172022 for the respective year. The equity awards (LTIP Units) are included as “Stock Awards” in the Summary Compensation Table for Fiscal Year 20172022 for the respective year.
Stock options
We discontinued the issuance of stock options prior to the Merger in June 2011. Stock options outstanding are all vested and exercisable. Stock options granted generally vested ratably over a continued service period of three years, however, certain stock options previously granted as a result of the bonus exchange vested over aone-year period (25% per quarter). Stock options were granted with an exercise price equal to the closing price of our common stock on the grant date. The exercise price for any outstanding stock option may not be decreased after the grant date except for reductions approved by our stockholders or if there is an overall adjustment to our outstanding shares, such as an adjustment triggered by a stock split. Stock options expire on the tenth anniversary of the grant date.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
OUTSTANDING EQUITY AWARDS | ||
Outstanding Equity Awards at Fiscal Year-End
(DecemberDECEMBER 31, 2017)2022)*
| Option Awards(1) | Stock Awards(1) | Stock Awards(1) | ||||||||||||||||||||||||||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | |||||||||||||||||||||||||||||||||
Hamid Moghadam | 62,601 | (2) | $ | 4,038,391 | 43,549 | (2) | $ | 4,909,279 |
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| ||||||||||||||||||||||||||||||||||
| 72,988 | (3) | $ | 4,708,456 | |||||||||||||||||||||||||||||||||||||||||
| 46,560 | (4) | $ | 3,003,586 | 10,741 | (4) | $ | 1,210,833 |
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| |||||||||||||||||||||||||||||||||||
| 28,805 | (5) | $ | 1,858,211 | |||||||||||||||||||||||||||||||||||||||||
| 21,254 | (6) | $ | 1,371,096 | 27,449 | (5) | $ | 3,094,326 |
|
| |||||||||||||||||||||||||||||||||||
| 164,637 | (7) | $ | 10,620,733 | |||||||||||||||||||||||||||||||||||||||||
| 57,623 | (8) | $ | 3,717,260 | 70,938 | (7) | $ | 7,996,841 |
|
| |||||||||||||||||||||||||||||||||||
| 75,736 | (9) | $ | 4,885,729 | |||||||||||||||||||||||||||||||||||||||||
| 3,795 | (10) | $ | 244,815 | 8,444 | (8) | $ | 951,892 |
|
| |||||||||||||||||||||||||||||||||||
| 383,735 | (11) | — | (11) | |||||||||||||||||||||||||||||||||||||||||
| 234,179 | (12) | — | (12) | 67,161 | (9) | $ | 7,571,060 |
|
| |||||||||||||||||||||||||||||||||||
| 171,520 | (13) | — | (13) | |||||||||||||||||||||||||||||||||||||||||
| 93,855 | (11) | $ | 10,580,274 |
|
| |||||||||||||||||||||||||||||||||||||||
Thomas Olinger | 5,200 | $ | 22.14 | 2/11/20 | ||||||||||||||||||||||||||||||||||||||||
| 16,771 | (2) | $ | 1,081,897 | |||||||||||||||||||||||||||||||||||||||||
| 18,578 | (3) | $ | 1,198,467 | 5,802 | (12) | $ | 654,059 |
|
| |||||||||||||||||||||||||||||||||||
| 22,781 | (4) | $ | 1,469,602 | |||||||||||||||||||||||||||||||||||||||||
| 7,489 | (5) | $ | 483,115 | 16,414 | (13) | $ | 1,850,350 |
|
| |||||||||||||||||||||||||||||||||||
| 5,526 | (6) | $ | 356,482 | |||||||||||||||||||||||||||||||||||||||||
| 41,907 | (7) | $ | 2,703,421 | 87,172 | (14) | $ | 9,826,900 |
|
| |||||||||||||||||||||||||||||||||||
| 27,689 | (8) | $ | 1,786,217 | |||||||||||||||||||||||||||||||||||||||||
| 19,691 | (9) | $ | 1,270,266 | 254,647 | (15) | $ | 28,706,356 |
|
| |||||||||||||||||||||||||||||||||||
| 986 | (10) | $ | 63,607 | |||||||||||||||||||||||||||||||||||||||||
| 153,494 | (11) | — | (11) | 187,341 | (16) | $ | 21,118,951 |
|
| |||||||||||||||||||||||||||||||||||
| 93,671 | (12) | — | (12) | |||||||||||||||||||||||||||||||||||||||||
| 68,608 | (13) | — | (13) | 137,215 | (17) | $ | 15,468,247 |
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| |||||||||||||||||||||||||||||||||||
Eugene Reilly | 19,614 | (2) | $ | 1,265,299 | ||||||||||||||||||||||||||||||||||||||||
| 120,408 | (18) | $ | 13,573,594 |
|
| ||||||||||||||||||||||||||||||||||||||
| 77,688 | (19) | $ | 8,757,768 |
|
| ||||||||||||||||||||||||||||||||||||||
|
|
| 145,264 | (20) | —(20) | |||||||||||||||||||||||||||||||||||||||
|
|
| 99,866 | (21) | —(21) | |||||||||||||||||||||||||||||||||||||||
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|
|
| 133,037 | (22) | —(22) | |||||||||||||||||||||||||||||||||||||||
Timothy Arndt | 879 | (2) | $ | 99,090 |
|
| ||||||||||||||||||||||||||||||||||||||
| 23,002 | (3) | $ | 1,483,859 | |||||||||||||||||||||||||||||||||||||||||
| 24,932 | (4) | $ | 1,608,363 | 322 | (3) | $ | 36,299 |
|
| |||||||||||||||||||||||||||||||||||
| 7,489 | (5) | $ | 483,115 | |||||||||||||||||||||||||||||||||||||||||
| 5,526 | (6) | $ | 356,482 | 268 | (4) | $ | 30,212 |
|
| |||||||||||||||||||||||||||||||||||
| 51,885 | (7) | $ | 3,347,101 | |||||||||||||||||||||||||||||||||||||||||
| 28,624 | (8) | $ | 1,846,534 | 667 | (5) | $ | 75,191 |
|
| |||||||||||||||||||||||||||||||||||
| 19,691 | (9) | $ | 1,270,266 | |||||||||||||||||||||||||||||||||||||||||
| 986 | (10) | $ | 63,607 | 737 | (6) | $ | 83,082 |
|
| |||||||||||||||||||||||||||||||||||
| 153,494 | (11) | — | (11) | |||||||||||||||||||||||||||||||||||||||||
| 93,671 | (12) | — | (12) | 1,204 | (7) | $ | 135,727 |
|
| |||||||||||||||||||||||||||||||||||
| 68,608 | (13) | — | (13) | |||||||||||||||||||||||||||||||||||||||||
| 210 | (8) | $ | 23,673 |
|
| ||||||||||||||||||||||||||||||||||||||
| 1,678 | (9) | $ | 189,161 |
|
| ||||||||||||||||||||||||||||||||||||||
| 3,910 | (10) | $ | 440,774 |
|
| ||||||||||||||||||||||||||||||||||||||
| 2,139 | (11) | $ | 241,129 |
|
| ||||||||||||||||||||||||||||||||||||||
| 608 | (13) | $ | 68,540 |
|
| ||||||||||||||||||||||||||||||||||||||
| 4,073 | (14) | $ | 459,149 |
|
| ||||||||||||||||||||||||||||||||||||||
| 28,258 | (15) | $ | 3,185,524 |
|
| ||||||||||||||||||||||||||||||||||||||
| 7,651 | (18) | $ | 862,497 |
|
| ||||||||||||||||||||||||||||||||||||||
| 4,263 | (19) | $ | 480,568 |
|
| ||||||||||||||||||||||||||||||||||||||
|
|
| 8,231 | (20) | —(20) | |||||||||||||||||||||||||||||||||||||||
|
|
| 7,989 | (21) | —(21) | |||||||||||||||||||||||||||||||||||||||
|
|
|
| 13,303 | (22) | —(22) | |||||||||||||||||||||||||||||||||||||||
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
| OUTSTANDING EQUITY AWARDS |
| Stock Awards(1) | ||||||||||||||||
Name (a) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | ||||||||||||
Thomas Olinger** | 11,085 | (2) | $ | 1,249,612 |
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|
|
|
| ||||||
| 2,792 | (4) | $ | 314,742 |
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|
|
|
|
| ||||||
| 7,136 | (5) | $ | 804,441 |
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|
|
|
|
| ||||||
| 15,116 | (7) | $ | 1,704,027 |
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|
|
|
|
| ||||||
| 2,195 | (8) | $ | 247,442 |
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|
| �� |
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| ||||||
| 17,462 | (9) | $ | 1,968,491 |
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|
|
|
|
| ||||||
| 22,104 | (11) | $ | 2,491,784 |
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|
|
|
|
| ||||||
| 1,508 | (12) | $ | 169,997 |
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|
|
|
|
| ||||||
| 4,267 | (13) | $ | 481,019 |
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|
|
|
|
| ||||||
| 20,530 | (14) | $ | 2,314,347 |
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|
|
|
|
| ||||||
| 44,138 | (15) | $ | 4,975,677 |
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|
|
|
|
| ||||||
| 74,936 | (16) | $ | 8,447,535 |
|
|
|
|
|
| ||||||
| 54,885 | (17) | $ | 6,187,186 |
|
|
|
|
|
| ||||||
| 48,163 | (18) | $ | 5,429,415 |
|
|
|
|
|
| ||||||
| 31,072 | (19) | $ | 3,502,747 |
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|
|
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| ||||||
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|
|
|
|
|
| 38,737 | (20) | —(20) | |||||||
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|
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| 26,631 | (21) | —(21) | |||||||
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|
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|
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| 35,476 | (22) | —(22) | |||||||
Eugene Reilly | 13,724 | (2) | $ | 1,547,107 |
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|
|
|
|
| ||||||
| 2,792 | (4) | $ | 314,742 |
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|
|
|
|
| ||||||
| 7,136 | (5) | $ | 804,441 |
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|
|
| ||||||
| 21,215 | (7) | $ | 2,391,567 |
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|
|
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| ||||||
| 2,195 | (8) | $ | 247,442 |
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|
|
|
| ||||||
| 17,462 | (9) | $ | 1,968,491 |
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|
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|
|
| ||||||
| 27,366 | (11) | $ | 3,084,969 |
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|
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|
| ||||||
| 1,508 | (12) | $ | 169,997 |
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|
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|
| ||||||
| 4,267 | (13) | $ | 481,019 |
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|
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|
| ||||||
| 25,418 | (14) | $ | 2,865,371 |
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| ||||||
| 66,208 | (15) | $ | 7,463,628 |
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|
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|
| ||||||
| 74,936 | (16) | $ | 8,447,535 |
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|
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| ||||||
| 54,885 | (17) | $ | 6,187,186 |
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|
|
| ||||||
| 48,163 | (18) | $ | 5,429,415 |
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| ||||||
| 31,072 | (19) | $ | 3,502,747 |
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| ||||||
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| 58,105 | (20) | —(20) | |||||||
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| 39,946 | (21) | —(21) | |||||||
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| 53,215 | (22) | —(22) | |||||||
| 96 | |
| OUTSTANDING EQUITY AWARDS |
| Option Awards(1) | Stock Awards(1) | |||||||||||||||||||||||||||
Name (a) | Number of Securities Underlying Unexercised Options (#) Exercisable (b) | Option Exercise Price ($) (e) | Option Expiration Date (f) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | |||||||||||||||||||||
Edward Nekritz | 16,994 | (2) | $ | 1,096,283 | ||||||||||||||||||||||||
| 18,578 | (3) | $ | 1,198,467 | |||||||||||||||||||||||||
| 23,485 | (4) | $ | 1,515,017 | |||||||||||||||||||||||||
| 7,489 | (5) | $ | 483,115 | |||||||||||||||||||||||||
| 5,526 | (6) | $ | 356,482 | |||||||||||||||||||||||||
| 41,907 | (7) | $ | 2,703,421 | |||||||||||||||||||||||||
| 28,624 | (8) | $ | 1,846,534 | |||||||||||||||||||||||||
| 19,691 | (9) | $ | 1,270,266 | |||||||||||||||||||||||||
| 986 | (10) | $ | 63,607 | |||||||||||||||||||||||||
| 153,494 | (11) | — | (11) | |||||||||||||||||||||||||
| 93,671 | (12) | — | (12) | |||||||||||||||||||||||||
| 68,608 | (13) | — | (13) | |||||||||||||||||||||||||
Gary Anderson | 16,699 | (2) | $ | 1,077,252 | ||||||||||||||||||||||||
| 18,578 | (3) | $ | 1,198,467 | |||||||||||||||||||||||||
| 22,479 | (4) | $ | 1,450,120 | |||||||||||||||||||||||||
| 7,489 | (5) | $ | 483,115 | |||||||||||||||||||||||||
| 5,526 | (6) | $ | 356,482 | |||||||||||||||||||||||||
| 41,907 | (7) | $ | 2,703,421 | |||||||||||||||||||||||||
| 28,624 | (8) | $ | 1,846,534 | |||||||||||||||||||||||||
| 19,691 | (9) | $ | 1,270,266 | |||||||||||||||||||||||||
| 986 | (10) | $ | 63,607 | |||||||||||||||||||||||||
| 153,494 | (11) | — | (11) | |||||||||||||||||||||||||
| 93,671 | (12) | — | (12) | |||||||||||||||||||||||||
| 68,608 | (13) | — | (13) | |||||||||||||||||||||||||
Michael Curless | 11,592 | (2) | $ | 747,800 | ||||||||||||||||||||||||
| 16,809 | (3) | $ | 1,084,349 | |||||||||||||||||||||||||
| 23,485 | (4) | $ | 1,515,017 | |||||||||||||||||||||||||
| 7,489 | (5) | $ | 483,115 | |||||||||||||||||||||||||
| 5,526 | (6) | $ | 356,482 | |||||||||||||||||||||||||
| 37,916 | (7) | $ | 2,445,961 | |||||||||||||||||||||||||
| 21,468 | (8) | $ | 1,384,901 | |||||||||||||||||||||||||
| 19,691 | (9) | $ | 1,270,266 | |||||||||||||||||||||||||
| 986 | (10) | $ | 63,607 | |||||||||||||||||||||||||
| 153,494 | (11) | — | (11) | |||||||||||||||||||||||||
| 93,671 | (12) | — | (12) | |||||||||||||||||||||||||
| 68,608 | (13) | — | (13) | |||||||||||||||||||||||||
| Stock Awards(1) | ||||||||||||||||
Name (a) | Number of Shares or Units of Stock That Have Not Vested (#) (g) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (h) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested (#) (i) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) | ||||||||||||
Gary Anderson | 11,085 | (2) | $ | 1,249,612 |
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|
|
|
|
| ||||||
| 2,792 | (4) | $ | 314,742 |
|
|
|
|
|
| ||||||
| 7,136 | (5) | $ | 804,441 |
|
|
|
|
|
| ||||||
| 16,706 | (7) | $ | 1,883,267 |
|
|
|
|
|
| ||||||
| 2,195 | (8) | $ | 247,442 |
|
|
|
|
|
| ||||||
| 17,462 | (9) | $ | 1,968,491 |
|
|
|
|
|
| ||||||
| 24,209 | (11) | $ | 2,729,081 |
|
|
|
|
|
| ||||||
| 1,508 | (12) | $ | 169,997 |
|
|
|
|
|
| ||||||
| 4,267 | (13) | $ | 481,019 |
|
|
|
|
|
| ||||||
| 22,485 | (14) | $ | 2,534,734 |
|
|
|
|
|
| ||||||
| 52,525 | (15) | $ | 5,921,143 |
|
|
|
|
|
| ||||||
| 74,936 | (16) | $ | 8,447,535 |
|
|
|
|
|
| ||||||
| 54,885 | (17) | $ | 6,187,186 |
|
|
|
|
|
| ||||||
| 48,163 | (18) | $ | 5,429,415 |
|
|
|
|
|
| ||||||
| 31,072 | (19) | $ | 3,502,747 |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
| 58,105 | (20) | —(20) | |||||||
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|
|
|
|
|
| 39,946 | (21) | —(21) | |||||||
|
|
|
|
|
|
|
| 53,215 | (22) | —(22) | |||||||
Edward Nekritz | 11,085 | (2) | $ | 1,249,612 |
|
|
|
|
|
| ||||||
| 2,792 | (4) | $ | 314,742 |
|
|
|
|
|
| ||||||
| 7,136 | (5) | $ | 804,441 |
|
|
|
|
|
| ||||||
| 16,706 | (7) | $ | 1,883,267 |
|
|
|
|
|
| ||||||
| 2,195 | (8) | $ | 247,442 |
|
|
|
|
|
| ||||||
| 17,462 | (9) | $ | 1,968,491 |
|
|
|
|
|
| ||||||
| 22,104 | (11) | $ | 2,491,784 |
|
|
|
|
|
| ||||||
| 1,508 | (12) | $ | 169,997 |
|
|
|
|
|
| ||||||
| 4,267 | (13) | $ | 481,019 |
|
|
|
|
|
| ||||||
| 20,530 | (14) | $ | 2,314,347 |
|
|
|
|
|
| ||||||
| 48,663 | (15) | $ | 5,485,780 |
|
|
|
|
|
| ||||||
| 74,936 | (16) | $ | 8,447,535 |
|
|
|
|
|
| ||||||
| 54,885 | (17) | $ | 6,187,186 |
|
|
|
|
|
| ||||||
| 48,163 | (18) | $ | 5,429,415 |
|
|
|
|
|
| ||||||
| 31,072 | (19) | $ | 3,502,747 |
|
|
|
|
|
| ||||||
|
|
|
|
|
|
| 58,105 | (20) | —(20) | |||||||
|
|
|
|
|
|
| 39,946 | (21) | —(21) | |||||||
|
|
|
|
|
|
|
| 53,215 | (22) | —(22) | |||||||
Columns (b), (c), (d), (e) and |
| ** | Mr. Olinger stepped down as our CFO effective April 1, 2022, and served as an advisor until December 16, 2022. |
| (1) | Dollar amounts are based on the closing price of our common stock on December 31, |
| (2) | LTIP Units: vested on March |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
OUTSTANDING EQUITY AWARDS | ||
| (3) | LTIP Units: vested on March |
| (4) | LTIP Units: vested on March |
LTIP Units: will vest on December |
| (6) | LTIP Units: vested on March |
| (7) | LTIP Units: vested on March 13, 2023 (50%), and will vest on March 13, 2024. |
| (8) | LTIP Units: will vest in equal amounts on each March 27, 2023 and 2024. |
| (9) | LTIP Units: will vest in equal amounts on each September 9, 2023 and 2024. |
| (10) | LTIP Units: vested on February 25, 2023 (80%), and remainder will vest in equal amounts on each |
| (11) | LTIP Units: vested on March |
| (12) | LTIP Units: vested on March |
| (13) | LTIP Units: will vest in equal amounts on each |
| (14) | LTIP Units: vested on February 25, 2023 (25%), and remainder will vest in equal amounts on each February 25, 2024, 2025 and 2026. |
| (15) | LTIP Units: will vest in equal amounts on each |
| (16) | LTIP Units: units issued for the 2016-2018 POP Performance Period will vest on January 1, 2026. |
| (17) | LTIP Units: units issued for the 2017-2019 POP Performance Period will vest on January 1, 2027. |
| (18) | LTIP Units: units issued for the 2018-2020 POP Performance Period will vest on January 1, 2028. |
| (19) | LTIP Units: units issued for the 2019-2021 POP Performance Period will vest on January 1, 2029. |
| (20) | For the |
| (21) | For the 2021-2023 Performance Period, column (i) represents the number of POP LTIP Units issued to the NEO in exchange for the POP Allocation to the NEO under POP approved on January 4, 2021. No value is presented in column (j) because awards under POP have no threshold value. Actual awards will not be determined or paid until the end of the three-year performance period. As of December 31, 2022, the projected value of the compensation pool for the |
| (22) | For the 2022-2024 Performance Period, column (i) represents the number of POP LTIP Units issued to the NEO in exchange for the POP Allocation to the NEO under POP approved on January 3, 2022. No value is presented in column (j) because awards under POP have no threshold value. Actual awards will not be determined or paid until the end of the three-year performance period. As of December 31, 2022, the projected value of the compensation pool for the 2022-2024 Performance Period was $100.0 million. See the narrative discussion of LTIP Units that follows the Grants of Plan-Based Awards Table for 2022. |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
|
OPTION EXERCISES AND STOCK VESTED | ||
Option Exercises and Stock Vested in Fiscal Year 20172022*
| Stock Awards | ||||||||||||||||||||||
| Number of Shares Acquired on Vesting (#) (d) |
Realized on Vesting ($) (e) | ||||||||||||||||||||
Hamid Moghadam | 296,015(1)(2) | $ | 42,029,080(1)(2) | |||||||||||||||||||
Timothy Arndt | 13,299(1)(3) | $ | 1,916,534(1)(3) | |||||||||||||||||||
Thomas Olinger** | 81,595(1)(4) | $ | 11,615,304(1)(4) | |||||||||||||||||||
Eugene Reilly |
| $ | 13,719,473(1)(5) | |||||||||||||||||||
| $ | |||||||||||||||||||||
| $ | |||||||||||||||||||||
| ||||||||||||||||||||||
| ||||||||||||||||||||||
| ||||||||||||||||||||||
| ||||||||||||||||||||||
Columns (b) and |
Mr. Olinger |
Under certain conditions, an LTIP Unit is convertible into a common unit of the operating partnership which can then be redeemed into one share of our common stock (or cash at our election). Among other conditions, LTIP Units cannot be converted until they are vested and after the completion of a requisite waiting period from the date of issuance. See “Narrative Discussion to the Summary Compensation Table for Fiscal Year |
| (2) | Represents the vesting of LTIP Units as presented below: |
1,605 units with a value of |
17,108 units with a value of |
31,285 units with a value of |
51,288 units with a value of |
43,549 units with a value of |
35,470 units with a value of |
| · | 10,741 units with a value of $1,630,913, issued on March 15, 2019, vested on March 15, 2022; |
| · | 1,934 units with a value of $309,749, issued on March 18, 2021, vested on March 18, 2022; |
| · | 4,223 units with a value of $677,158, issued on March 27, 2020, vested on March 27, 2022; |
| · | 7,900 units with a value of $959,534, issued on July 6, 2018, vested on July 6, 2022; |
| · | 33,581 units with a value of $4,353,105, issued on September 9, 2020, vested on September 9, 2022; |
| · | 1,215 units with a value of $136,165, issued on December 17, 2018, vested on December 17, 2022; |
| · | 27,449 units with a value of $3,076,209, issued on December 19, 2019, vested on December 19, 2022; |
| · | 5,472 units with a value of $623,643, issued on December 29, 2021, vested on December 29, 2022; |
| · | 2,345 units with a value of $343,097, issued on December 9, 2016, vested on February 11, 2022; |
| · | 3,031 units with a value of $443,466, issued on December 11, 2017, vested on February 11, 2022; |
| · | 17,819 units with a value of $2,607,098, issued on December 17, 2019, vested on February 11, 2022. |
| (3) | Represents the vesting of LTIP Units as presented below: |
1,898 units with a value of |
3,661 units with a value of |
849 units with a value of |
1,352 units with a value of |
923 units with a value of |
268 units with a value of |
106 units with a value of |
| · | 263 units with a value of $31,944, issued on July 6, 2018, vested on July 6, 2022; |
| · | 840 units with a value of $108,889, issued on September 9, 2020, vested on September 9, 2022; |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 99 |
| OPTION EXERCISES AND STOCK VESTED |
| · | 667 units with a value of $74,751, issued on December 19, 2019, vested on December 19, 2022; |
| · | 203 units with a value of $23,136, issued on December 29, 2021, vested on December 29, 2022; |
| · | 1,203 units with a value of $176,011, issued on December 11, 2017, vested on February 11, 2022; |
| · | 1,066 units with a value of $155,966, issued on December 17, 2019, vested on February 11, 2022. |
| (4) | Represents the vesting of LTIP Units as presented below: |
642 units with a value of |
8,554 units with a value of |
| · | 7,368 units with a value of $1,102,105, issued on March 3, 2021, vested on March 3, 2022; |
| · | 13,055 units with a value of $1,944,020, issued on March 7, 2018, vested on March 7, 2022; |
| · | 11,085 units with a value of $1,629,384, issued on March 8, 2019, vested on March 8, 2022; |
| · | 7,558 units with a value of $1,127,427, issued on March 13, |
| · | 2,793 units with a value of $424,089, issued on March 15, 2019, vested on March 15, 2022; |
| · | 503 units with a value of $80,560, issued on March 18, 2021, vested on March 18, 2022; |
| · | 1,098 units with a value of $176,064, issued on March 27, 2020, vested on March 27, 2022; |
| · | 2,054 units with a value of $230,787, issued on June 19, 2018, vested on June 19, 2022; |
| · | 316 units with a value of $43,175, issued on December 6, 2018, vested on August 18, 2022; |
| · | 8,731 units with a value of $1,131,800, issued on September 9, 2020, vested on September 9, 2022; |
| · | 7,136 units with a value of $799,732, issued on December 19, 2019, vested on December 19, 2022; |
| · | 1,423 units with a value of $162,179, issued on December 29, 2021, vested on December 29, 2022; |
| · | 938 units with a value of $137,239, issued on December 9, 2016, vested on February 11, 2022; |
| · | 1,213 units with a value of $177,474, issued on December 11, 2017, vested on February 11, 2022; |
| · | 7,128 units with a value of $1,042,898, issued on December 17, 2019, vested on February 11, 2022. |
| (5) | Represents the vesting of LTIP Units as presented below: |
| · | 642 units with a value of $93,931, issued on February 11, 2022, vested on February 11, 2022; |
| · | 11,976 units with a value of $1,837,478, issued on February 25, 2022, vested on February 25, 2022; |
| · | 9,123 units with a value of $1,364,618, issued on March 3, 2021, vested on March 3, 2022; |
| · | 16,163 units with a value of $2,406,832, issued on March 7, 2018, vested on March 7, 2022; |
| · | 13,724 units with a value of $2,017,291, issued on March 8, 2019, vested on March 8, 2022; |
| · | 10,608 units with a value of $1,582,395, issued on March 13, 2020, vested on March 13, 2022; |
| · | 2,793 units with a value of $424,089, issued on March 15, 2019, vested on March 15, 2022; |
| · | 503 units with a value of $80,560, issued on March 18, 2021, vested on March 18, 2022; |
| · | 1,098 units with a value of $176,064, issued on March 27, 2020, vested on March 27, 2022; |
| · | 2,054 units with a value of $249,479, issued on July 6, 2018, vested on July 6, 2022; |
| · | 8,731 units with a value of $1,131,800, issued on September 9, 2020, vested on September 9, 2022; |
| · | 316 units with a value of $35,414 issued on December 17, 2018, vested on December 17, 2022; |
| · | 7,136 units with a value of $799,732, issued on December 19, 2019, vested on December 19, 2022; |
| · | 1,423 units with a value of $162,179, issued on December 29, 2021, vested on December 29, 2022; |
| · | 938 units with a value of $137,239, issued on December 9, 2016, vested on February 11, 2022; |
| · | 1,213 units with a value of $177,474, issued on December 11, 2017, vested on February 11, 2022; |
| · | 7,128 units with a value of $1,042,898, issued on December 17, 2019, vested on February 11, 2022. |
| (6) | Represents the vesting of LTIP Units as presented below: |
| · | 642 units with a value of $93,931, issued on February 11, 2022, vested on February 11, 2022; |
| · | 10,008 units with a value of $1,535,527, issued on February 25, 2022, vested on February 25, 2022; |
| · | 8,070 units with a value of $1,207,111, issued on March 3, 2021, vested on March 3, 2022; |
| · | 13,055 units with a value of $1,944,020, issued on March 7, 2018, vested on March 7, 2022; |
| · | 11,085 units with a value of $1,629,384, issued on March 8, 2019, vested on March 8, 2022; |
| · | 8,354 units with a value of $1,246,166, issued on March 13, 2020, vested on March 13, 2022; |
| · | 2,793 units with a value of $424,089, issued on March 15, 2019, vested on March 15, 2022; |
| · | 503 units with a value of $80,560, issued on March 18, 2021, vested on March 18, 2022; |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
100 |
OPTION EXERCISES AND STOCK VESTED | ||
1,098 units with a value of |
2,054 units with a value of |
8,731 units with a value of |
316 units with a value of |
7,136 units with a value of |
| · | 1,423 units with a value of $162,179, issued on December 29, 2021, vested on December 29, 2022; |
| · | 938 units with a value of $137,239, issued on December 9, 2016, vested on February 11, 2022; |
| · | 1,213 units with a value of $177,474, issued on December 11, 2017, vested on February 11, 2022; |
| · | 7,128 units with a value of $1,042,898, issued on December 17, 2019, vested on February 11, 2022. |
| (7) | Represents the vesting of LTIP Units as presented below: |
642 units with a value of |
9,637 units with a value of |
7,368 units with a value of |
13,055 units with a value of |
11,085 units with a value of |
8,354 units with a value of |
2,793 units with a value of |
March 15, 2022;
503 units with a value of |
1,098 units with a value of |
2,054 units with a value of |
8,731 units with a value of |
316 units with a value of |
7,136 units with a value of |
1,423 units with a value of |
29, 2022;
938 units with a value of |
1,213 units with a value of |
7,128 units with a value of |
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
101 |
NONQUALIFIED DEFERRED COMPENSATION | ||
Nonqualified Deferred Compensation in Fiscal Year 2017*2022*
| Name (a) | Plans | Executive Contributions in Last FY ($) (b) | Aggregate Earnings In Last FY ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | Plans | Executive Contributions in Last FY ($) (b) | Aggregate Earnings In Last FY ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE ($) (f) | ||||||||||||||||||||||||||
Hamid Moghadam | AMB NQ Plans & 2012 NQDC Plan(1) | $ | 3,691,324 | $ | 13,599,633 | (2) | $ | — | $ | 69,171,398 | AMB NQ Plans & 2012 NQDC Plan | — | ($ | 54,658,223 | )(1) | — | $ | 131,586,968 | ||||||||||||||||||
Notional Account NQDC Plan(3) | $ | — | $ | 11,298,907 | $ | — | $ | 33,399,540 | ||||||||||||||||||||||||||||
Thomas Olinger | AMB NQ Plans & 2012 NQDC Plan(1) | $ | — | $ | 394,125 | (2) | $ | — | $ | 2,026,053 | ||||||||||||||||||||||||||
|
| Notional Account NQDC Plan(2) | — | ($ | 2,708,756 | ) | — | $ | 77,863,149 | ||||||||||||||||||||||||||||
Timothy Arndt | AMB NQ Plans & 2012 NQDC Plan | $385,242 | ($ | 57,536 | )(1) | — | $ | 672,619 | ||||||||||||||||||||||||||||
Thomas Olinger** | AMB NQ Plans & 2012 NQDC Plan | — | ($ | 1,523,505 | )(1) | — | $ | 3,800,036 | ||||||||||||||||||||||||||||
Eugene Reilly | $ | — | $ | — | $ | — | $ | — |
| — | — | — | — | |||||||||||||||||||||||
Gary Anderson |
| — | — | — | — | |||||||||||||||||||||||||||||||
Edward Nekritz | $ | — | $ | — | $ | — | $ | — |
| — | — | — | — | |||||||||||||||||||||||
Gary Anderson | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||
Michael Curless | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||
| * | Column (c) has been omitted from this table because it is not applicable. |
Mr. Olinger stepped down as our CFO effective April 1, 2022, and |
| (1) | Represents earnings that are computed based on the specific investment options that are elected by the NEO, as described in the narrative discussion that follows these footnotes. Primarily these earnings consist of the dividends paid on the shares of our common stock deferred by the NEO and the change in the market value of those shares. These amounts are not included in the NEO’s total compensation presented in the Summary Compensation Table for Fiscal Year |
| (2) | Participants in our nonqualified deferred compensation plans prior to the Merger received alump-sum payment, triggered by the Merger, equal to the value of their account balance in June 2011. After the Merger, we established a new nonqualified deferred compensation plan that is discussed in further detail below. Under this Notional Account NQDC Plan, an initial account credit value was established for the |
|
| |||
| ||
Narrative Discussion to Nonqualified Deferred Compensation in Fiscal Year 20172022 Table
2012 NQDC Plan
Effective 2012, we established a nonqualified deferred compensation plan (the “2012 NQDC Plan”). The 2012 NQDC Plan allows certain eligible employees andnon-employee directors of the company and our participating subsidiaries to elect to defer up to 100% of their eligible compensation, such as annual salary, bonus, equity awards and directors’ fees, that were earned and vested on or after January 1, 2012. The deferred compensation under the 2012 NQDC Plan is our unsecured obligation and amounts deferred are held in a rabbi trust. Participants select from various investment options available under the plan to earn investment credits on their elective deferrals. There are no guaranteed returns for any of the investment options or for any participants in the plans. The amount of earnings that a participant receives depends on the participant’s investment elections related to cash balances in the account and, with respect to shares of our common stock that have been deferred, the dividends earned on that stock and the change in market value of the stock during the period. The 2012 NQDC Plan offers a variety of investment choices with respect to cash contributions. Our common stock is not an investment option available with respect to deferrals of cash compensation. The NEOs did not electMr. Arndt elected to defer any80% of their 2017 cash compensation (salary or bonus)his 2022 salary under the 2012 NQDC Plan.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 102 |
| NONQUALIFIED DEFERRED COMPENSATION |
If a participant elects to defer the receipt of an equity award, the underlying common stock is held in the rabbi trust, which cannot be reinvested in any other investment option. Cash dividends earned on these shares of our common stock after deferral are credited with earnings and losses based on specific investment options, other than our common stock, that are selected by the participant. Distributions under these plans are made in a lump sum payment upon termination of employment, or service as anon-employee director, or in the event of a change in control or death of a participant. With respect to equity awards deferred bynon-employee directors, participants may elect to receive distributions prior to termination of service.
We have reserved the right under the 2012 NQDC Plan to make discretionary matching contributions to participant accounts from time to time. No such discretionary contributions have been made. The participants’ elective deferrals and matching contributions, if any, are fully vested at all times. We pay all of the administrative costs associated with the 2012 NQDC Plan. Generally, the compensation that is deferred istax-deferred until it is distributed to the participant. However, amounts deferred are subject to FICA and Medicare employee and employer taxes in accordance with statutory requirements.
In December 2014, the 2012 NQDC Plan was amended, primarily to allow for LTIP Units to be issued in lieu of other deferred compensation upon a distribution event. In December 2022, the 2012 NQDC Plan was amended, primarily to align plan participants’ installment payment options more closely across the 2012 NQDC Plan, the 2005 NQ Plan, and the Notional Account NQDC Plan.
AMB NQ Plans
Prior to the Merger, we maintained two nonqualified deferred compensation plans: (i) the Amended and Restated AMB 2005 Nonqualified Deferred Compensation Plan (the “2005 NQ Plan”) and (ii) the Amended and Restated Nonqualified Deferred Compensation Plan (the “2002 NQ Plan”), (together, the “AMB NQ Plans”). The AMB NQ Plans allowed our directors and certain eligible employees to defer certain compensation, including the receipt of restricted stock awards and, in the case of the 2002 NQ Plan, gains from exercise of stock options, received under our equity compensation plans. The AMB NQ Plans provided that upon a change in control, such as the Merger in June 2011, participants would receive alump-sum payment equal to the vested account balance. Such distributions were made in 2011.
Compensation subject to deferral elections made under the AMB NQ Plans prior to the Merger with respect to compensation earned in 2011 and beyond was not subject to the distributions under the AMB NQ Plans triggered by the Merger. Mr. Moghadam has deferred certain gains resulting from the exercise of stock options under the 2002 NQ
|
| |||
| ||
Plan. In addition, Mr. Moghadam and Mr. Olinger have deferred shares of our common stock received upon vesting of certain equity awards under the 2005 NQ Plan.
The deferred compensation under the AMB NQ Plans is our unsecured obligation and amounts deferred are held in a rabbi trust. Participants select from various investment options available under the plans to receive investment credit on their elective deferrals. There are no guaranteed returns for any of the investment options or for any participants in the plans. The amount of earnings that a participant receives depends on the participant’s investment elections related to cash balances in the account and, with respect to deferred shares of our common stock, the dividends earned on the stock and the change in market value of the stock during the period. Cash dividends earned on shares of our common stock after deferral are credited earnings and losses based on specific investment options, other than our common stock, selected by the participant. Distributions under these plans are made in either a lump sum payment or installments. Participants can elect a specific distribution date in accordance with Section 409A of the Internal Revenue Code or, if no election is made, the amounts will be distributed upon termination of the participant’s employment with us. Distributions are also made in the event of change in control or a participant’s death or disability.
In December 2014, the 2005 NQ Plan was amended, primarily to allow for LTIP Units to be issued in lieu of other deferred compensation upon a distribution event under the plan. In December 2022, the 2005 NQ Plan was amended, primarily to align plan participants’ installment payment options more closely across the 2012 NQDC Plan, the 2005 NQ Plan and the Notional Account NQDC Plan.
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 103 |
| NONQUALIFIED DEFERRED COMPENSATION |
Notional Account NQDC Plan
The Notional Account NQDC Plan was adopted in conjunction with the Merger with the purpose of providing the opportunity for certain participants of the AMB NQ Plans to continue to receive tax deferred earnings with respect to taxes on distributions triggered by the Merger.
Each participant in the AMB NQ Plans who continued to be employed by us after the Merger or continued as anon-employee director after the Merger received an initial account credit in a notional earnings account under the Notional Account NQDC Plan. Mr. Moghadam and Mr. Olinger participate in the Notional Account NQDC Plan. The initial account credit value for a participant was equal to the deemed amount of the tax liability on the distributions they received in 2011 that were triggered by the Merger. The initial account credit value is either invested in our common stock or hypothetically invested in measurement funds selected by the participant, which do not include our common stock. Measurement funds are used for measurement purposes only and planthe Notional Account NQDC Plan participants do not have rights in or to the underlying hypothetical investments.
A notional earnings account is credited with hypothetical earnings or charged with hypothetical losses associated with the underlying hypothetical investments in measurement funds. Upon a distribution event under the plan,Notional Account NQDC Plan, the participant is entitled to the excess, if any, of the value in the notional earnings account (representing the value of the initial account credit plus cumulative earnings or losses associated with the underlying hypothetical investments, if any) over the initial account credit value.
In December 2014, the Notional Account NQDC Plan was amended, primarily to allow for LTIP Units to be issued in lieu of other deferred compensation upon a distribution event under such plan.
In September 2020, the Compensation Committee approved a form of amendment to the Notional Account NQDC Plan, which allows for the conversion of a notional stock account under such plan into an account structure intended to operate more similarly to accounts under our 2012 NQDC Plan. The value of a current notional stock account was to be determined using the stock price on the day of conversion. The account value upon conversion can be invested all or in part in investment options available under the Notional Account NQDC Plan, including our common stock or cash. This amendment became effective as of April 2021.
In December 2022, the Notional Account NQDC Plan was amended, primarily to align plan participants’ installment payment options more closely across the 2012 NQDC Plan, the 2005 NQ Plan, and the Notional Account NQDC Plan.
Mr. Moghadam’s initial account credit value was in the amount of $25,798,616. A rabbi trust was created to hold shares of our common stock and cash in the amount of Mr. Moghadam’s initial account credit balance. WeAt the inception of the Notional Account NQDC Plan, we issued 803,945 shares of our common stock to the rabbi trust representing Mr. Moghadam’s initial account credit value. The number of shares was determined based on the price of our common stock at the time, $32.09 per share. Mr. Moghadam iswas entitled to direct the voting of these shares and, as such, they arewere reflected as beneficially owned by him in the stock ownership table presented below.him. Mr. Moghadam iswas not entitled to receive these shares upon distribution of his notional earnings account under the plan.Notional Account NQDC Plan. Upon a distribution event under the plan,Notional Account NQDC Plan, Mr. Moghadam iswas entitled to the excess, if any, of the value in the notional earnings account (representing the value of the initial account credit plus cumulative earnings or losses associated with the underlying common stock, if any) over the initial account credit value. Upon the April 2021 amendment to this plan, Mr. Moghadam’s notional stock account was valued per the amendment and the account value was invested in an investment measurement fund available under such plan. As a result, Mr. Moghadam is no longer entitled to direct the voting of the 803,945 shares of our common stock in the Notional Account NQDC Plan’s rabbi trust.
Mr. Olinger’s initial account credit value was hypothetically invested in measurement funds selected by him. The initial account credit value for Mr. Olinger was $122,697.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
104 |
NONQUALIFIED DEFERRED COMPENSATION | ||
In December 2014, the Notional Account NQDC Plan was amended, primarily to allow for LTIP Units to be issued in lieu of other deferred compensation upon a distribution event under the plan.
Investment funds and returns for 20172022
The participants in our nonqualified deferred compensation plans can elect measurement funds whichthat are generally the same investment funds that are available to participants in our 401(k) Plan, with the exception of investments in our company stock. Our company stock is not an available investment option under the nonqualified deferred compensation plans.Plan. These investment funds are shown below with the returns earned by these investmentsinvestment funds in 2017:2022:
Vanguard Treasury M/M Fund | 0.80% | Metropolitan West High Yield Bond I | 6.37% | |||||||
PIMCO Real Return/Institutional | 3.92% | Vanguard Interm. Term Bond Index Inst. | 3.88% | |||||||
Vanguard Short-Term Bond Index Admiral | 1.18% | Vanguard Balanced Index Fund (Instl) | 13.86% | |||||||
Vanguard Target Retirement Income | 8.47% | Vanguard Target Retirement 2015 | 11.50% | |||||||
Vanguard Target Retirement 2020 | 14.08% | Vanguard Target Retirement 2025 | 15.94% | |||||||
Vanguard Target Retirement 2030 | 17.52% | Vanguard Target Retirement 2035 | 19.12% | |||||||
Vanguard Target Retirement 2040 | 20.71% | Vanguard Target Retirement 2045 | 21.42% | |||||||
Vanguard Target Retirement 2050 | 21.39% | Vanguard Target Retirement 2055 | 21.38% | |||||||
Vanguard Target Retirement 2060 | 21.36% | American Beacon Small Cap Value I | 8.67% | |||||||
American Funds Growth Fund of Am.R6 | 26.53% | American Funds Wash. Mutual Inv R6 | 20.54% | |||||||
Vanguard Growth Index Fund (Inst) | 27.81% | Vanguard Institutional Index I | 21.79% | |||||||
VanguardMid-Cap Index Fund Instl. | 19.29% | Vanguard Small Cap Growth Index (Inst) | 21.94% | |||||||
Artisan International Institutional | 31.24% | Vanguard Total Intl Stock Index Admiral | 27.55% | |||||||
Invesco Global Real Estate R5 | 13.12% |
Vanguard Treasury M/M Fund | 1.50 | % | American Funds Growth Fund of AM R6 | -30.49 | % | |||||
American Funds Washington Mutual R6 | -8.18 | % | Fidelity 500 Index Fund | -18.13 | % | |||||
Fidelity Extended Market Index Fund | -26.43 | % | Cohen & Steers Global Realty Shares | -25.08 | % | |||||
American Beacon Small Cap Value | -7.72 | % | Impax Sustainable Allocation Fund | -16.22 | % | |||||
Vanguard Target Retirement 2020 | -14.15 | % | Vanguard Target Retirement 2025 | -15.55 | % | |||||
Vanguard Target Retirement 2030 | -16.27 | % | Vanguard Target Retirement 2035 | -16.62 | % | |||||
Vanguard Target Retirement 2040 | -16.98 | % | Vanguard Target Retirement 2045 | -17.36 | % | |||||
Vanguard Target Retirement 2050 | -17.46 | % | Vanguard Target Retirement 2055 | -17.46 | % | |||||
Vanguard Target Retirement 2060 | -17.46 | % | Vanguard Target Retirement 2065 | -17.39 | % | |||||
Vanguard Target Retirement Inc | -12.74 | % | Artisan International Inst. | -19.38 | % | |||||
Fidelity Total International Index Fund | -16.28 | % | Baron Discovery Fund Institutional Shares | -35.12 | % | |||||
Vanguard Total International Bond Index Fund Admiral | -12.92 | % | Vanguard Total World Stock Index Fund | -17.99 | % | |||||
Fidelity ST Bond Index Fund | -5.51 | % | Fidelity US Bond Index Fund | -13.04 | % | |||||
Metropolitan High Yield Bond | -11.24 | % | PIMCO Real Return Inst. | -11.86 | % | |||||
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
105 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | ||
Potential Payments uponUpon Termination or Change in Control
We have change in control and noncompetition agreements (the “CIC Agreements”) with our NEOs. The CIC Agreements are subject to automaticone-year extensions. Some form of severance benefits (cash payments and/or acceleration of vesting of unvested equity awards) are provided to our NEOs for:NEOs: (i) in the CIC Agreements; (ii) under the equity award agreements; or (iii) under the terms of POP. These benefits are available under the following scenarios: (1) death; (2) disability; (3) retirement (as defined and under certain circumstances); and (4) termination without cause or termination by employee for good reason within two years of a change in control (as defined)defined in the CIC Agreements).
In the event of a change in control, the CIC Agreements provide for severance benefits on a “double-trigger” basis with severance benefits payable only upon termination of employment (which is, generally, termination without cause or termination by employee for good reason as such term isterms are defined in the CIC Agreements), within two years following the change in control. Under the CIC Agreements, in consideration for the rights to receive such severance payments, the NEO is subject to confidentiality obligations during employment and after termination,non-competition obligations during the term of employment andnon-solicitation obligations for two years after the date of termination. A change of control, as defined in the CIC Agreements, generally occurs upon: (i) the consummation of a transaction, approved by our stockholders, to merge or consolidate the company with another entity, sell or otherwise dispose of all or substantially all of its assets or adopt a plan of liquidation,liquidation; provided, however, that a change in control shall not occur if a transaction results in 50% or more of the beneficial ownership of the voting power of the company or other relevant entity being held by the same persons (although not necessarily in the same proportion) who held the voting power of the company immediately prior to the transaction (except that upon the completion of the transaction, employees or employee benefit plans of the company may be a new holder of such beneficial ownership); (ii) the beneficial ownership of securities representing 50% or more of the combined voting power of the company is acquired, other than from the company, by any person (with certain exceptions); or (iii) at any time during any period of two consecutive years, board members at the beginning of such period cease to constitute at least a majority of the Board (unless the election or the nomination for election of each new director was approved by a vote of at leasttwo-thirds of the directors still in office at the time of such election or nomination who were directors at the beginning of such period).
Potential payments due to the NEOs under the scenarios listed above are presented in the table below based on the assumption that a termination occurred as of December 31, 2017.2022. The acceleration of vesting of unvested equity awards benefit is estimated using the closing stock price of our common stock on December 31, 20172022, of $64.51$112.73 per share. Under our company policy, each of our employees would be paid for their earned and unused vacation benefits upon termination under any termination scenario, so the value of this benefit is not included in the amounts below. Because the termination scenarios are as of December 31, 2017,2022, the NEOs would have completed the performance year such that they would receive their annual bonus and their annual long-term equity incentive award for the 20172022 performance year. Therefore, these payments are not considered to be severance benefits and such amounts are not included in the amounts presented.
| PROLOGIS PROXY STATEMENT | MARCH 24, 2023 |
106 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | ||
Name of Executive/Type of Benefit
| Death
| Disability
| After Change in Control: Termination without Cause or Voluntary Termination for Good Reason(1)
| |||||||||
Hamid Moghadam | ||||||||||||
Cash severance (salary and bonus)(2) | $ | 1,500,000 | $ | — | $ | 5,000,000 | ||||||
Health and welfare benefits(3) | $ | — | $ | — | $ | 86,320 | ||||||
280G adjustment(4) | $ | — | $ | — | $ | — | ||||||
Equity awards (vesting accelerated)(5)(6) | $ | 73,035,775 | $ | 73,035,775 | $ | 73,035,775 | ||||||
Total Estimated Value | $ | 74,535,775 | $ | 73,035,775 | $ | 78,122,095 | ||||||
Thomas Olinger | ||||||||||||
Cash severance (salary and bonus)(2) | $ | 350,000 | $ | — | $ | 2,700,000 | ||||||
Health and welfare benefits(3) | $ | — | $ | — | $ | 86,320 | ||||||
280G adjustment(4) | $ | — | $ | — | $ | — | ||||||
Equity awards (vesting accelerated)(5)(6) | $ | 25,848,075 | $ | 25,848,075 | $ | 25,848,075 | ||||||
Total Estimated Value | $ | 26,198,075 | $ | 25,848,075 | $ | 28,634,395 | ||||||
Eugene Reilly | ||||||||||||
Cash severance (salary and bonus)(2) | $ | 350,000 | $ | — | $ | 2,700,000 | ||||||
Health and welfare benefits(3) | $ | — | $ | — | $ | 86,320 | ||||||
280G adjustment(4) | $ | — | $ | — | $ | — | ||||||
Equity awards (vesting accelerated)(5)(6) | $ | 27,159,628 | $ | 27,159,628 | $ | 27,159,628 | ||||||
Total Estimated Value | $ | 27,509,628 | $ | 27,159,628 | $ | 29,945,948 | ||||||
Edward Nekritz | ||||||||||||
Cash severance (salary and bonus)(2) | $ | 350,000 | $ | — | $ | 2,700,000 | ||||||
Health and welfare benefits(3) | $ | — | $ | — | $ | 86,320 | ||||||
280G adjustment(4) | $ | — | $ | — | $ | — | ||||||
Equity awards (vesting accelerated)(5)(6) | $ | 25,968,193 | $ | 25,968,193 | $ | 25,968,193 | ||||||
Total Estimated Value | $ | 26,318,193 | $ | 25,968,193 | $ | 28,754,513 | ||||||
Gary Anderson | ||||||||||||
Cash severance (salary and bonus)(2) | $ | 350,000 | $ | — | $ | 2,700,000 | ||||||
Health and welfare benefits(3) | $ | — | $ | — | $ | 86,320 | ||||||
280G adjustment(4) | $ | — | $ | — | $ | — | ||||||
Equity awards (vesting accelerated)(5)(6) | $ | 25,884,265 | $ | 25,884,265 | $ | 25,884,265 | ||||||
Total Estimated Value | $ | 26,234,265 | $ | 25,884,265 | $ | 28,670,585 | ||||||
Michael Curless | ||||||||||||
Cash severance (salary and bonus)(2) | $ | 350,000 | $ | — | $ | 2,700,000 | ||||||
Health and welfare benefits(3) | $ | — | $ | — | $ | 94,347 | ||||||
280G adjustment(4) | $ | — | $ | — | $ | — | ||||||
Equity awards (vesting accelerated)(5)(6) | $ | 24,786,499 | $ | 24,786,499 | $ | 24,786,499 | ||||||
Total Estimated Value | $ | 25,136,499 | $ | 24,786,499 | $ | 27,580,846 | ||||||
Name of Executive/Type of Benefit | Death | Disability | After Change in Control: Termination without Cause or Voluntary Termination for Good Reason(1) | |||||||||
Hamid Moghadam |
|
|
|
|
|
|
|
|
| |||
Cash severance (salary and bonus)(2) | $ | 1,500,000 | — | $ | 5,000,000 | |||||||
Health and welfare benefits(3) | — | — | $ | 54,911 | ||||||||
280G adjustment(4) | — | — | — | |||||||||
Equity awards (vesting accelerated)(5)(6)(7) | $ | 169,627,230 | $ | 169,627,230 | $ | 169,627,230 | ||||||
Total Estimated Value | $ | 171,127,230 | $ | 169,627,230 | $ | 174,682,141 | ||||||
Timothy Arndt |
|
|
|
|
|
|
|
|
| |||
Cash severance (salary and bonus)(2) | $ | 48,870 | — | $ | 2,097,740 | |||||||
Health and welfare benefits(3) | — | — | $ | 109,305 | ||||||||
280G adjustment(4) | — | — | — | |||||||||
Equity awards (vesting accelerated)(5)(6) | $ | 8,784,384 | $ | 8,784,384 | $ | 8,784,384 | ||||||
Total Estimated Value | $ | 8,833,254 | $ | 8,784,384 | $ | 10,991,429 | ||||||
Thomas Olinger* |
|
|
|
|
|
|
|
|
| |||
Cash severance (salary and bonus)(2) | — | — | — | |||||||||
Health and welfare benefits(3) | — | — | — | |||||||||
280G adjustment(4) | — | — | — | |||||||||
Equity awards (vesting accelerated)(5)(6) | $ | 49,631,062 | $ | 49,631,062 | $ | 49,631,062 | ||||||
Total Estimated Value | $ | 49,631,062 | $ | 49,631,062 | $ | 49,631,062 | ||||||
Eugene Reilly |
|
|
|
|
|
|
|
|
| |||
Cash severance (salary and bonus)(2) | $ | 750,000 | — | $ | 3,500,000 | |||||||
Health and welfare benefits(3) | — | — | $ | 81,911 | ||||||||
280G adjustment(4) | — | — | — | |||||||||
Equity awards (vesting accelerated)(5)(6) | $ | 58,248,257 | $ | 58,248,257 | $ | 58,248,257 | ||||||
Total Estimated Value | $ | 58,998,257 | $ | 58,248,257 | $ | 61,830,168 | ||||||
Gary Anderson |
|
|
|
|
|
|
|
|
| |||
Cash severance (salary and bonus)(2) | $ | 527,500 | — | $ | 3,055,000 | |||||||
Health and welfare benefits(3) | — | — | $ | 98,505 | ||||||||
280G adjustment(4) | — | — | — | |||||||||
Equity awards (vesting accelerated)(5)(6) | $ | 55,213,453 | $ | 55,213,453 | $ | 55,213,453 | ||||||
Total Estimated Value | $ | 55,740,953 | $ | 55,213,453 | $ | 58,366,958 | ||||||
Edward Nekritz |
|
|
|
|
|
|
|
|
| |||
Cash severance (salary and bonus)(2) | $ | 495,000 | — | $ | 2,990,000 | |||||||
Health and welfare benefits(3) | — | — | $ | 98,505 | ||||||||
280G adjustment(4) | — | — | — | |||||||||
Equity awards (vesting accelerated)(5)(6) | $ | 54,320,406 | $ | 54,320,406 | $ | 54,320,406 | ||||||
Total Estimated Value | $ | 54,815,406 | $ | 54,320,406 | $ | 57,408,911 | ||||||
| * |
| ||
Mr. Olinger stepped down as our CFO effective April 1, 2022, and served as an advisor until December 16, 2022. | ||
| (1) | Cause is generally defined in the CIC Agreements as: (i) the willful and continued failure by the executive to substantially perform specified duties; (ii) the engaging in conduct that is demonstrably injurious to the company (monetarily or otherwise); or (iii) the engaging in egregious misconduct involving serious moral turpitude. Termination by employee for good reason, as generally defined in the CIC Agreements, can |
PROLOGIS PROXY STATEMENT | MARCH 24, 2023 | 107 |
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL |
| occur should we: (i) change the executive’s duties such that they are inconsistent with the position held prior to the change in control and results in a material diminution in the executive’s authority, duties or responsibilities; (ii) material reduction in the executive’s annual base compensation after the change in control; (iii) relocate the executive’s place of employment more than 50 miles from the current location or require the executive to be based anywhere other than where the executive was based prior to the change in control without the executive’s written consent resulting in a material change to geographic location; or (iv) not comply with the provisions of the agreements or arrangements pertaining to the officer’s compensation and benefits. |
| (2) | Under the death and disability scenarios contained in the CIC Agreements, the NEO would receive a cash severance payment equal to his annual base salary plus the annual bonus amount that he received or was entitled to receive for the most recent annual period (target level for |
| (3) | In the change in control scenario contained in the CIC Agreements, the NEO would receive a cash payment equal to the cost of continuation of health insurance coverage in place at the date of termination for 24 months. Additionally, the CIC Agreements provide for the payment of an amount equal to two times the company’s matching contribution under the 401(k) Plan ($ |
| (4) | The CIC Agreements provide for the reduction of any payments to which the NEO is entitled after a change in control should such payments constitute a “parachute payment” (as defined in Section 280G of the Internal Revenue Code). Such payments shall be either (a) reduced (but not below zero) so that the aggregate present value of the payment shall be $1.00 less than three times the officer’s “base amount” (also as defined in Section 280G of the Internal Revenue Code) so that no portion of the payment will be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code or (b) paid in full, whichever produces the better netafter-tax result for the NEO (taking into account any applicable excise tax under Section 4999 and any applicable income taxes). Under the scenarios for |
| (5) | The estimates for each scenario reflect the value that would be realized as of December 31, |
Under the death and disability scenarios, awards under POP would not be paid until the end of the performance period and the actual awards paid would be based on performance for the entire performance period. Under these scenarios, the value of the participation points allocated to each NEO under POP (and the POP LTIP Units exchanged for such participation points)
Under the death and disability scenarios, awards under POP would not be paid until the end of the applicable performance period and the actual awards paid would be based on performance for the entire performance period. Under these scenarios, the value of the POP Allocation to each NEO (and the POP LTIP Units exchanged for such POP Allocations) for the 2016-2018 performance period,
CEO Pay Ratio
For
Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. Pay ratios within our industry will also differ and may not be comparable depending on the size, scope, global breadth and structure of the company. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments and estimates that we used were as follows:
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” to ou r CEO and to our other named executive officers and certain financial performance measures of Prologis, including our company-selected measure, Core FFO per share (excluding Promotes). Compensation actually paid, as determined under SEC requirements, does not reflect the actual amount of compensation earned by or paid to our named executive officers during a covered year or the way in which the Compensation Committee views compensation decisions. For further information regarding Prologis’ pay-for-performance philosophy, please refer to “Compensation Discussion and Analysis”.
Narrative Discussion to the Pay Versus Performance Table Compensation Actually Paid and Prologis TSR : The total shareholder return of Prologis, Inc. (“Prologis TSR”) was $at the end of 2020, $ 197.54at the end of 2021 and $ 135.67at the end of 2022. Compensation Actually Paid to our PEO was $ 56,804,770in 2020, $ 113,654,050in 2021 and negative $ 8,171,362in 2022. The average Compensation Actually Paid to our Non-PEO Named Executive Officers (“Non-PEO NEOs”) was $ 19,996,334in 2020, $ 37,255,257in 2021 and negative $ 967,175in 2022. Prologis TSR increased by 15% from December 31, 2019, to the end of 2020, with a total return of $ 14.63at the end of 2020 on an initial investment of $100 made at the closing price on December 31, 2019. Prologis TSR increased by 72% from 2020 to 2021, with a total return of $ 97.54at the end of 2021 on an initial investment of $100 made at the closing price on December 31, 2019. Compensation Actually Paid to our PEO increased by 100% from 2020 to 2021. Average Compensation Actually Paid to our Non-PEO NEOs increased by 86% from 2020 to 2021. Prologis TSR declined by 31% from 2021 to 2022 but remained positive with a total return of $ 35.67at the end of 2022 on an initial investment of $100 made at the closing price on December 31, 2019. Compensation Actually Paid to our PEO decreased by 107% from 2021 to 2022, resulting in negative Compensation Actually Paid to our PEO for 2022. Average Compensation Actually Paid to Non-PEO NEOs decreased by 103% from 2021 to 2022, also resulting in negative average Compensation Actually Paid to Non-PEO NEOs for 2022. Compensation Actually Paid and Net Income / Core FFO per share: Prologis’ Net Income has increased each year between 2020 and 2022, from $1,473,122,000 in 2020 to $2,933,571,000 in 2021 (a 99% increase from 2020 to 2021) to $3,358,796,000 in 2022 (a 14% increase from 2021 to 2022). Similarly, Prologis’ Core FFO per share (excluding Promotes)(6) has increased each year between 2020 and 2022, from $3.58 in 2020 to $4.09 in 2021 (a 14% increase from 2020 to 2021) to $4.61 in 2022 (a 13% increase from 2021 to 2022). As discussed above, Compensation Actually Paid to our PEO andNon-PEO NEOs increased from 2020 to 2021 but declined from 2021 to 2022. The relationship between both Core FFO per share (excluding Promotes)(6) and Net Income and Compensation Actually Paid underscores that while Prologis’ stock price declinedfrom year end 2021 to year end 2022—largely due to broader macroeconomic market factors—and thus resulted in lower Compensation Actually Paid (and Prologis TSR) from 2021 to 2022, our operational performance remained strong as demonstrated by key operational indicators like Net Income and Core FFO per share (excluding Promotes) (6) .
Prologis TSR vs. peer group total shareholder return: Prologis TSR outpaced the total shareholder return of the Cohen & Steers REIT Index in each of 2020, 2021 and 2022. Byyear-end 2022, the value of a $100 investment made at theclosing price on December 31, 2019 in Prologis would have been worth $135.67 versus only $101.78 for such an investment made at the same time in the Cohen & Steers REIT Index, a difference of $33.89. Tabular list of most important financial performance measures for 2022 fiscal year Below is a non-exhaustive list of financial performance measures the company uses in analyzing executive compensation, presented in no particular order, which the company considers to be the most important financial performance measures used to link Compensation Actually Paid to our NEOs to company performance during the 2022 fiscal year:
PROPOSAL 2 Advisory Vote to Approve the Company’s Executive Compensation for The Dodd-Frank Act allows our stockholders to vote to approve, on an advisory(non-binding) basis, the compensation of our NEOs as disclosed in this proxy statement in accordance with SEC rules. The compensation of our NEOs is discussed above under “Executive Compensation.” Our executive compensation programs are designed to attract, motivate and retain our NEOs, who are critical to our success. Under these programs, our NEOs are rewarded for the achievement of specific annual, long-term and strategic goals and the realization of increased stockholder value. Please read This proposal, commonly known as a“say-on-pay” proposal, gives our stockholders the opportunity to express their views on our NEOs’ compensation that is described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement. Accordingly, we ask our stockholders to vote “FOR” the following resolution at the annual meeting: “RESOLVED, that the company’s stockholders approve, on an advisory basis, the company’s You may vote for, vote against or abstain from voting to approve the above resolution on the company’s executive compensation for As an advisory vote, this proposal is not binding on the company. However, the Compensation Committee values the opinions of our stockholders and
The Board unanimously recommends that
PROPOSAL 3 Advisory Vote on the Frequency of Future Advisory Votes on the Company’s Executive Compensation (Proposal 3) As required by Section 14A of the Exchange Act, stockholders may cast a non-binding vote on how often we should include an advisory vote on executive compensation in our proxy materials for future annual or other meetings for which we must include executive compensation information. Stockholders may vote to have the advisory vote on executive compensation every year, every two years or every three years. Stockholders may also abstain from voting. The Board believes that these votes should occur every year, if our stockholders so choose. You will be able to specify, through your vote, one of four choices on your proxy card: one year, two years, three years or abstain. The non-binding vote on the frequency of future advisory votes on executive compensation will be the frequency receiving the greatest number of votes at the annual meeting. Abstentions and broker non-votes, if any, will have no effect on the outcome of the proposal. As an advisory vote, this proposal is not binding on the company. However, the Board values input from our stockholders and will consider the outcome of the vote when making a determination on the frequency of future advisory votes on executive compensation.
The Board unanimously recommends that the stockholders vote, on an advisory basis, “FOR” future stockholder advisory votes on executive compensation to be held ANNUALLY.
Director Compensation
Non-employee directors are compensated with a mix of cash and equity-based compensation, with a higher percentage of the overall mix in equity-based compensation. An employee who also serves as a member of the Board, such as Mr. Moghadam, does not receive additional compensation for service on the Board. In May Pay Governance’s review found that (i) our then-current non-employee director compensation was below the peer group median and, while above the S&P 500 Index median, below the 75th percentile of the S&P 500
Compensation applicable to service on the Board by ournon-employee directors for
The equity component of the compensation paid to our directors is awarded under the terms of the
Nonqualified Deferred Compensation Plans for Directors 2012 NQDC Plan and AMB NQ Plans Ms. Bita and Messrs. Fotiades In 2012, Mr. Fotiades deferred his annual cash retainer into a cash account under the 2012 NQDC Plan. As of December 31, See discussion of our deferred compensation plans in the narrative that follows the Nonqualified Deferred Compensation in Fiscal Year Notional Account NQDC Plan Under the Notional Account NQDC Plan, The initial account credit values for See discussion of our deferred compensation plans in the narrative that follows the Nonqualified Deferred Compensation in Fiscal Year ProLogis Deferred Fee Plan for Trustees This plan, which was assumed by us in the Merger, allowed members of the Trust’s board to receive their fees currently or elect to defer the receipt of their fees until after their board service ended. Deferrals were in the form of cash or Trust common shares. For those choosing shares, fees earned were credited to hypothetical fee deferral accounts based on the closing price of the common shares as of the date of the deferral. Under the Merger agreement, the Trust common shares in the deferral account were converted to our common stock using the Merger exchange ratio. Each share in the hypothetical account represents one share of our common stock and earns dividends under the same terms as dividends paid on our common stock. Upon retirement from the Board, the participant will be issued the shares of
common stock included in their hypothetical fee deferral account pursuant to specific deferral elections, which generally delay payment until the next fiscal year after service on the Board ends. No additional deferrals could be made under this plan after December 31, 2011. Mr. Fotiades participated in this plan at the time of the Merger. As of December 31,
Director Compensation for Fiscal Year
Security Ownership The number of shares of our common stock beneficially owned, as of the
The following table shows the number of shares of our common stock beneficially owned, as of March
Equity Compensation Plans We currently grant equity awards only under the
Audit Committee Report The purpose of the Audit Committee is to be an informed, vigilant and effective overseer of our financial accounting and reporting processes consistent with risk mitigation appropriate in the circumstances. The committee is directly responsible for the appointment, compensation and oversight of our independent We have reviewed and discussed the company’s audited financial statements for the fiscal year ended December 31, Based on the considerations referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report onForm 10-K for Audit Committee:
Carl B. Webb (Chair) Cristina G. Bita Avid Modjtabai Olivier Piani
Independent The Audit Committee engaged KPMG LLP as our independent In the course of the provision of services on our behalf, we recognize the importance of our independent The following table represents fees for professional audit services rendered for the audit of our consolidated financial statements for the years ended December 31,
PROPOSAL 4 Ratification of the Appointment of the Independent Public Accountant
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of our independent We are asking our stockholders to ratify the selection of KPMG LLP as our independent KPMG LLP representatives are expected to attend the You may vote for, vote against or abstain from voting on ratifying the appointment of KPMG LLP as our independent
The Board unanimously recommends that the stockholders vote FOR the ratification of the appointment of KPMG LLP as our independent
Proxy materials We are required under SEC regulations to provide you with a proxy statement when we ask you to sign a proxy designating individuals to vote on your behalf. A proxy is a legal designation of another person to vote the stock you own, which person is also referred to as your “proxy.” This designation may be done in a written document that is called a “proxy” or “proxy card.” The proxy materials consist of our Your vote is very important. For this reason, our Board is requesting that you permit your common stock to be represented and voted at the annual meeting by the proxies named on the proxy card. Notice of Internet Availability We have implemented the Notice and Access Rule enacted by the SEC for distribution of materials for our annual meeting. Accordingly, we are sending a Notice of Internet Availability to many of our stockholders of record and our beneficial owners. All stockholders will be able to access the proxy materials. We believe that the electronic availability of materials is an appropriate proxy communication solution that will allow us to provide our stockholders with the materials they need, while lowering the cost of delivery and reducing the environmental impact of our annual meetings. Stockholders may request to receive printed copies of the proxy materials.
Distribution of proxy materials On or about March Stockholders may request to receive proxy materials electronically by Stockholders will receive printed copies of the proxy materials if they have elected this form of delivery or they are participants in our 401(k) Plan. Printed copies of the proxy materials will be provided upon request at no charge by submitting a written notice to Investor Relations, Prologis, Inc., Pier 1, Bay 1, San Francisco, California 94111.
Voting If your shares are registered directly in your name with our transfer agent, Computershare Trust Company, N.A., you are considered the stockholder of record with respect to those shares and a Notice of Internet Availability or printed proxy materials and a proxy card are being sent directly to you. As the stockholder of record, you have the right to attend and to vote Most of our stockholders hold their shares in street name through a broker, bank, trustee or other nominee rather than directly in their own name. In this case, you are considered the beneficial owner of shares held in street name, and a Notice of Internet Availability or printed proxy materials are being forwarded to you together with a voting instruction Voting without attending the annual meeting Whether you hold shares directly as a stockholder of record or beneficially in street name, you may direct your vote without attending the annual meeting. You may vote by granting a proxy or, for shares held in street name, by submitting voting instructions to your broker, bank, trustee or nominee. In most cases, you will be able to do this by telephone, through the Internet or by mail. If you are a stockholder of record, please refer to the summary instructions on the proxy card included with your proxy materials or the instructions on how to vote contained in the Notice of
Internet Availability. If you hold your shares in street name, the voting instructions will be communicated to you by your broker, bank, trustee or nominee. The Notice of Internet Availability also provides instructions on how you can request a printed copy of the proxy materials and proxy card, if you desire. By Telephone or through the Internet—If you have telephone or Internet access, you may submit your proxy by following the instructions included with your proxy materials or, if you requested a printed copy of the proxy materials, on the proxy card. If you provide specific voting instructions, your shares will be voted as you have instructed. By Mail—If you requested a printed copy of the proxy materials, you may submit your proxy by mail by signing the proxy card or, for shares held in street name, by following the voting instruction card included by your broker, bank, trustee or nominee and mailing it in the postage-paid envelope that is included. If you provide specific voting instructions, your shares will be voted as you have instructed. The telephone and Internet proxy voting facilities for stockholders of record will close at 11:59 p.m., Eastern time, on May The availability of telephone and Internet voting for beneficial owners will depend on the voting processes of your broker, bank, trustee or nominee. Therefore, we recommend that you follow the voting instructions in the materials you receive from your broker, bank, trustee or nominee. If you vote by telephone or through the Internet, you do not have to return a proxy card or voting instruction card. The telephone and Internet proxy voting procedures are designed to authenticate stockholders by use of a control number and to allow stockholders to confirm that their instructions have been properly recorded. The method by which you vote will in no way limit your right to vote at the annual meeting if you later decide to attend the annual meeting
Changing your vote You may revoke your proxy at any time and change your vote at any time before the final vote at the annual meeting. If you are a stockholder of record, you may do this by signing and submitting a written notice to Edward S. Nekritz, Secretary, Prologis, Inc., Pier 1, Bay 1, San Francisco, California 94111, by submitting a new proxy card with a later date, by voting again by telephone or through the Internet (your latest telephone or Internet proxy is counted), or by attending the annual meeting All shares that have been properly voted (for which proxies have not been revoked) will be voted at the annual meeting. Specific voting instructions not given If you hold your shares directly in your name, and you sign and return a proxy card without giving specific voting instructions, the shares of common stock represented by that proxy will be voted as recommended by the Board. If you hold your shares in street name through a broker, bank, trustee or nominee and you do not provide specific voting instructions, your broker, bank, trustee or nominee will have discretion to vote such shares but only with respect to routine matters (Proposal If no voting instructions are received from you, and you hold your shares in street name, your broker, bank, trustee or nominee will not turn in a proxy card for your shares on thenon-routine matters proposed at our annual meeting.Non-routine matters are the election of directors (Proposal 1) and the advisory vote to approve the company’s executive compensation for
If you hold shares in your 401(k) Plan account and do not provide the trustee of the 401(k) Plan with specific voting instructions, the trustee will vote all uninstructed shares held in our 401(k) Plan in the same proportion as how instructed shares held in the 401(k) Plan are voted. Vote required for proposals Vote Required for Proposal 1 (Election of Directors): You may vote for, vote against or abstain from voting for any of the director nominees. Assuming a quorum is present, to elect a particular director nominee, the number of votes cast “For” a director nominee must exceed the number of such votes cast “Against” the director nominee. Abstentions and broker non-votes, if any, will have no effect on the outcome of the election. A more detailed description of these majority voting procedures is provided below under “Majority Voting.” Vote Required for Proposal 2 (Advisory Vote to Approve the Company’s Executive Compensation for 2022): You may vote for, vote against or abstain from voting for the resolution on the company’s executive compensation for 2022. Assuming a quorum is present, to be approved by the stockholders, the number of votes cast “For” the proposal must exceed the number of such votes cast “Against” the proposal. Abstentions and broker non-votes, if any, will have no effect on the outcome of the vote on this proposal. Vote Required for Proposal 3 (Advisory Vote on Frequency of Future Advisory Votes on the Company’s Executive Compensation): You will be able to specify, through your vote, one of four choices on your proxy card: one year, two years, three years or abstain. You are voting to indicate your choice of frequency options. The non-binding vote on the frequency of future advisory votes on executive compensation will be the frequency receiving the greatest number of votes at the annual meeting. Abstentions and broker non-votes, if any, will have no effect on the outcome of this proposal. Vote Required for Proposal 4 (Ratification of the Appointment of Independent Public Accountant): You may vote for, vote against or abstain from voting on ratifying the appointment of KPMG LLP as our independent public accountant for the year 2023. Assuming a quorum is present, to be approved by the stockholders, the number of votes cast “For” the proposal must exceed the number of such votes cast “Against” the proposal. Abstentions and broker non-votes, if any, will have no effect on the outcome of the vote on this proposal.
Proxy solicitation We pay the cost of soliciting proxies. Proxies may be solicited on our behalf by our directors, officers or employees, in person or by telephone, facsimile or other electronic means. These people will not be specially compensated for their solicitation of proxies. In accordance with the rules and regulations of the SEC and NYSE, we will also reimburse brokerage firms and other custodians, nominees and fiduciaries for their expenses incurred in sending proxies and proxy materials to the beneficial owners of shares of our common stock. NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROXY STATEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THE DELIVERY OF THIS PROXY STATEMENT SHALL, UNDER NO CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PROLOGIS, INC. SINCE THE DATE OF THIS PROXY STATEMENT. Admission to the annual meeting in virtual format
Asking questions at the annual meeting in virtual format Stockholders can ask and Board’s voting recommendations The Board recommends a vote:
Who can vote Each issued and outstanding share of common stock is entitled to one vote on each matter properly brought before the annual meeting. Holders of record of Prologis common stock at the close of business on the record date, March
Quorum requirement There is no right to cumulative voting. A quorum is met if a majority of the shares of common stock outstanding as of the record date are represented, in person or by proxy, at the virtual annual meeting. Your shares are counted as present at the virtual meeting if you are present and entitled to vote
If you are present at the virtual annual meeting in person or by proxy, but you abstain from voting on any or all proposals, your shares are still counted as present and entitled to vote for purposes of determining a quorum. Brokernon-votes are also counted as present and entitled to vote for purposes of determining a quorum. A brokernon-vote occurs when a nominee holding shares of our common stock for a beneficial owner is present at the virtual meeting, in person or by proxy, and entitled to vote, but does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that item and has not received instructions on how to vote with respect to that item from the beneficial owner. Majority voting Our bylaws provide that the vote required for election of directors is a “majority vote of the votes cast” in uncontested elections of directors. Accordingly, directors are required to be elected by the majority of votes cast by the shares present in person or represented by proxy with respect to such director in uncontested elections. A majority of the votes cast means that the number of shares voted “For” a director nominee by the holders of shares of common stock entitled to vote on the election of directors and represented in person or by proxy at the annual meeting must exceed the number of such shares voted “Against” the director nominee. Abstentions and brokernon-votes, if any, will have no effect on the outcome of the proposal. In a contested election (where a determination is made that the number of director nominees is expected to exceed the number of directors to be elected at a meeting), the vote standard will be a plurality of the votes cast with respect to such director. In the event of a contested election where the plurality vote standard applies, stockholders shall be permitted to vote only “for” a director nominee or to designate their vote be “withheld” from such nominee. If a nominee who is serving as a director is not elected by a majority vote at the annual meeting, then, under Maryland law, such director would continue to serve as a “holdover director.” Under our bylaws, any director who fails to be elected by a majority vote shall tender his or her resignation to the Board, subject to acceptance by the Board. The Governance Committee will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will then act on the Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of election results. If the resignation is not accepted, the director will continue to serve until the next annual meeting and until the director’s successor is duly elected and qualified. The director who tenders his or her resignation will not participate in the Board’s decision.Non-incumbent directors who are not elected at the annual meeting would not become directors and would not serve on the Board as a “holdover director.” Proxy access In 2016, we adopted proxy access with a “3/3/20/20” market standard. The amendment and restatement of our bylaws provides that, subject to certain requirements, a stockholder or a group of up to 20 stockholders, owning three percent or more of our outstanding common stock continuously for at least three years, can require us to include in our annual meeting proxy materials director nominations for up to 20% of the number of directors, or two directors, whichever is greater. Proxy access rights are subject to additional eligibility, procedural and disclosure requirements set forth in our bylaws.
Stockholder recommended nominees for director The Governance Committee will evaluate nominees for director recommended by stockholders against the same criteria that it uses to evaluate other director nominees, as described under
recommended by stockholders with respect to elections to be held at an annual meeting if notice of the nomination is timely delivered in writing to our secretary prior to the meeting. See “Submitting Stockholder Proposals” for notice requirements prescribed by our Bylaws. Additional matters present at the annual meeting We do not anticipate any other business to be brought before the
Submitting Stockholder Proposals There are no stockholder proposals for consideration at the Deadline for submitting stockholder proposals for inclusion in our If, however, the date of the Deadline for submitting stockholder proposals or director nominations not to be included in our If, however, the date of the If less than 100 days’ notice or prior public disclosure of the date of the Deadline for submitting proxy access director nominations to be included in our
If, however, the date of the If less than 100 days’ notice or prior public disclosure of the date of the Stockholder notice.As set forth in our bylaws, for stockholder proposals other than director nominations, such stockholder’s notice must contain, among other things, with respect to each proposed matter:
Please review our bylaws for more information regarding requirements to submit a stockholder proposal outside ofRule 14a-8. As set forth in our bylaws, for director nominations, a stockholder’s notice must contain, among other things, with respect to each proposed nominee:
We may require a proposed nominee to furnish other information to determine the eligibility of such proposed nominee to serve as one of our directors. Please review our bylaws for more information regarding proxy access eligibility, procedural and disclosure requirements and other relevant requirements to nominate directors.
Delinquent Section 16(a) Section 16(a) of the Exchange Act, as amended, requires our directors, certain officers and certain beneficial owners of our common stock to file reports of holdings and transactions in our common stock with the SEC and the NYSE.
Annual Report to Stockholders and Corporate Governance Documents We will provide copies of our annual report to requesting stockholders, free of charge, by contacting Investor Relations, Prologis, Inc., Pier 1, Bay 1, San Francisco, California 94111, telephone(415) 394-9000. Our Code of Ethics and Business Conduct, Governance Guidelines and our Audit, Compensation and Governance Committee charters can be viewed on our website at http://ir.prologis.com/ March San Francisco, California
APPENDIX A Definitions and Reconciliations of GAAP and Non-GAAP Financial Measures Please refer to our annual and quarterly financial statements filed with the Securities and Exchange Commission onForms 10-K and10-Q and other public reports for further information about us and our business.
Annualized TSR is calculated based on the stock price appreciation and dividends paid to show a total return to a stockholder over a period of time. This calculation assumes dividends are reinvested into the stock on the day the dividend is paid. We annualize TSR by converting the total return of the stock at the end of a prescribed time period to an annualized basis.
Assets Under Management (“AUM”) represents the estimated fair value of the real estate we own or manage through both our consolidated and unconsolidated entities. We Calculation of Per Share Amounts (in thousands, except per share amounts):
See definition of Core FFO below in “Funds from Operations attributable to common stockholders and unitholders”. Compound Annual Growth Rate,also referred to as CAGR, is used to determine the annual growth rate over a specified period of time longer than one year. The compound annual growth is calculated by dividing the ending value by the beginning value and multiplying the result to the power of one divided by the number of years in the calculation and then subtracting one from the result. We determined the The Dow Jones Sustainability Indices (“DJSI”) are global sustainability indices offered cooperatively by RobecoSAM and S&P Dow Jones Indices, tracking the stock performance of companies in terms of economic, environmental and social criteria. Estimated Value Creationrepresents the value that we expect to create through our development and leasing activities. We calculate Estimated Value Creation by estimating the Stabilized NOI that the property will generate and applying a stabilized capitalization rate applicable to that property. Estimated Value Creation is calculated as the amount by which the value exceeds our Estimated Weighted Average Margin is calculated on Funds from Operations attributable to common stockholders and unitholders (“FFO”). FFO is anon-GAAP financial measure that is commonly used in the real estate industry. The most directly comparable GAAP measure to FFO is net earnings. The National Association of Real Estate Investment Trusts (“NAREIT” or “Nareit”) defines FFO as earnings computed under GAAP to exclude historical cost depreciation and gains and losses from the sales, along with impairment charges, of previously depreciated properties. We also exclude the gains on revaluation of equity investments upon acquisition of a controlling interest and the gain recognized from a partial sale of our investment, as these are similar to gains from the
sales of previously depreciated properties. We exclude similar adjustments from our unconsolidated entities and the third parties’ share of our consolidatedco-investment ventures.
Our FFO Measures. Our FFO measures begin with NAREIT’s definition and we make certain adjustments to reflect our business and the way that management plans and executes our business strategy. While not infrequent or unusual, the additional items we adjust for in calculatingFFO, as modified by Prologis,andCore FFO, both as defined below, are subject to significant fluctuations from period to period. Although these items may have a material impact on our operations and are reflected in our financial statements, the removal of the effects of these items allows us to better understand the core operating performance of our properties over the long term. These items have both positive and negative short-term effects on our results of operations in inconsistent and unpredictable directions that are not relevant to our long-term outlook. We calculate our FFO measures, as defined below, based on our proportionate ownership share of both our unconsolidated and consolidated ventures. We reflect our share of our FFO measures for unconsolidated ventures by applying our average ownership percentage for the period to the applicable reconciling items on an These FFO measures are used by management as supplemental financial measures of operating performance and we believe that it is important that stockholders, potential investors and financial analysts understand the measures management uses. We do not use our FFO measures as, nor should they be considered to be, alternatives to net earnings computed under GAAP, as indicators of our operating performance, as alternatives to cash from operating activities computed under GAAP or as indicators of our ability to fund our cash needs. We analyze our operating performance FFO, as modified by Prologis, attributable to common stockholders and unitholders (“FFO, as modified by Prologis”). To arrive at FFO, as modified by Prologis, we adjust the
We use FFO, as modified by Prologis, so that management, analysts and investors are able to evaluate our performance against other REITs that do not have similar operations or operations in jurisdictions outside the U.S. Core FFO attributable to common stockholders and unitholders (“Core FFO”). In addition to FFO, as modified by Prologis,we also useCore FFO.To arrive atCore FFO,we adjustFFO, as modified by Prologis, to exclude the following recurring and nonrecurring items that we recognized directly inFFO, as modified by
We use Core FFO, including by segment and region, to: (i) assess our operating performance as compared to other real estate companies; (ii) evaluate our performance and the performance of our properties in comparison with expected results and results of previous periods; (iii) evaluate the performance of our management; (iv) budget and forecast future results to assist in the allocation of resources; (v) provide guidance to the financial markets to understand our expected operating performance; and (vi) evaluate how a specific potential investment will impact our future results. Limitations on the use of our FFO measures. While we believe our modified FFO measures are important supplemental measures, neither NAREIT’s nor our measures of FFO should be used alone because they exclude significant economic components of net earnings computed under GAAP and are, therefore, limited as an analytical tool. Accordingly, these are only a few of the many measures we use when analyzing our business. Some of the limitations are:
We compensate for these limitations by using our FFO measures only in conjunction with net earnings computed under GAAP when making our decisions. This information should be read with our complete Consolidated Financial Statements prepared under GAAP. To assist investors in compensating for these limitations, we reconcile our modified FFO measures to our net earnings computed under GAAP as follows (in millions).
General and Administrative Expenses (“G&A”). Generally our property management personnel perform the property-level management of the properties in our owned and managed portfolio, which include properties we consolidate and those we manage that are owned by the unconsolidated co-investment ventures. We allocate the costs of our property management function to the properties we consolidate (included in rental expenses) and the properties owned by the unconsolidated co-investment ventures (included in strategic capital expenses) by using the square feet owned by the respective portfolios. Strategic capital expenses also include the direct expenses associated with the asset management of the unconsolidated co-investment ventures provided by our employees who are assigned to our strategic capital segment and promote expenses. We do not allocate indirect costs to strategic capital expenses. Global Customer Retention. The square footage of all leases commenced during the period that are rented by existing tenants divided by the square footage of all expiring and in-place leases during the reporting period. The square footage of
tenants that default or buy-out prior to expiration of their lease and short-term leases of less than one year, are not included in the calculation. GRESB (“Global Real Estate Sustainability Benchmark”) assesses the sustainability performance of real estate and infrastructure portfolios and assets worldwide. Investment Capacity is our estimate of the gross real estate LED lighting. LEDstands for “light-emitting diode.” LED lighting is a type of energy efficient lighting. Liquidity is equal to the sum of the current availability of our consolidated credit facilities ($
Loan-to-Market Value,or debt as a percentage of gross market capitalization, is anon-GAAP measure used by us to analyze the leverage risk in our debt risk portfolio. We make adjustments to reflect our economic ownership in each entity in which we invest, whether consolidated or unconsolidated. The following table presents the calculation ofLoan-to-Market Value for the years ended December 31 (in thousands).
Nareit (or NAREIT) is the representative voice for real estate investment trusts and publicly traded real estate companies with an interest in U.S. real estate and capital markets.
Net Operating Income (“NOI”) is anon-GAAP financial measure used to evaluate our operating performance and represents rental revenue less rental expenses. For our consolidated properties, it is calculated directly from our Consolidated Financial Statements as Rental Revenue less Rental Expenses. Net Promote Income includes actual REIT is defined as areal estate investment trust. Same Store. Our same store metrics are non-GAAP financial measures, which are commonly used in the real estate industry and expected from the financial community, on both a net effective and cash basis. We evaluate the We define our same store population for the three months ended December 31,
The following is a reconciliation of our consolidated rental revenues, rental recoveries, rental expenses and property NOI for the full year, as included in the Consolidated Statements of Income and within Note
Stabilization is defined as the earlier of when a property that was developed has been completed for one year, is contributed to a co-investment venture following completion or is 90% occupied. Stabilized NOIis equal to the estimated twelve months of potential gross rental revenue (base rent, including above or below market rents plus operating expense reimbursements) multiplied by 95% to adjust income to a stabilized vacancy factor of 5%, minus estimated operating expenses. Total Expected Investment (“TEI”)represents total estimated cost of development or expansion, including land, development and leasing costs. TEI is based on current projections and is subject to change. Total Stockholder Return (“TSR”)is calculated based on the stock price appreciation and dividends paid to show a total return to a stockholder over a period of time. This calculation assumes dividends are reinvested into the stock on the day the dividend is paid.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E40964-P03044-Z71836
V00292-P87245-Z84399 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY VOTING INSTRUCTION FORMCARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY PROLOGIS, INC. The Board of Directors recommends you vote FOR all the listed nominees: 1. Election of Directors For Against Abstain Nominees: 1a. Hamid R. Moghadam ! ! ! 1b. Cristina G. Bita ! ! ! The Board of Directors recommends you vote FOR the For Against Abstain following proposal: 1c. George L. Fotiades ! ! ! 2. Advisory Vote to Approve the Company’s Executive ! ! ! Compensation for 2017 1d. Lydia H. Kennard ! ! ! The Board of Directors recommends you vote FOR the following proposal: 1e. J. Michael Losh ! ! ! 3. Ratification of the Appointment of KPMG LLP as the ! ! ! Company’s Independent Registered Public Accounting Firm for the year 2018 1f. Irving F. Lyons III ! ! ! 1g. David P. O’Connor ! ! ! 1h. Olivier Piani ! ! ! 1i. Jeffrey L. Skelton ! ! ! 1j. Carl B. Webb ! ! ! 1k. William D. Zollars ! ! ! Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
PROLOGIS, INC. | ||||||||||||||||||||||||
The Board of Directors recommends you vote | ||||||||||||||||||||||||
FOR all the listed nominees: | ||||||||||||||||||||||||
1. Election of Directors | ||||||||||||||||||||||||
| For | Against | Abstain | ||||||||||||||||||||||
Nominees: | ||||||||||||||||||||||||
1a. Hamid R. Moghadam | ☐ | ☐ | ☐ | |||||||||||||||||||||
1b. Cristina G. Bita | ☐ | ☐ | ☐ | The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||
1c. James B. Connor | ☐ | ☐ | ☐ | 2. Advisory Vote to Approve the Company’s Executive Compensation for 2022 | ☐ | ☐ | ☐ | |||||||||||||||||
1d. George L. Fotiades | ☐ | ☐ | ☐ | The Board of Directors recommends you vote 1 year on the following proposal: | 1 Year | 2 Years | 3 Years | Abstain | ||||||||||||||||
1e. Lydia H. Kennard | ☐ | ☐ | ☐ | 3. Advisory Vote on the Frequency of Future Advisory Votes on the Company’s Executive Compensation | ☐ | ☐ | ☐ | ☐ | ||||||||||||||||
1f. Irving F. Lyons III | ☐ | ☐ | ☐ | |||||||||||||||||||||
1g. Avid Modjtabai | ☐ | ☐ | ☐ | The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |||||||||||||||||
1h. David P. O’Connor | ☐ | ☐ | ☐ | 4. Ratification of the Appointment of KPMG LLP as the Company’s Independent Registered Public Accounting Firm for the Year 2023 | ☐ | ☐ | ☐ | |||||||||||||||||
1i. Olivier Piani | ☐ | ☐ | ☐ | |||||||||||||||||||||
1j. Jeffrey L. Skelton | ☐ | ☐ | ☐ | |||||||||||||||||||||
1k. Carl B. Webb | ☐ | ☐ | ☐ | |||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | ||||||||||||||||||||||||
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date | |||||||||||||||||||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. E40965-P03044-Z71836 PROLOGIS, INC. Annual Meeting of Stockholders May 2, 2018 1:30 P.M. Pacific Time This proxy is solicited by the Board of Directors The undersigned hereby appoints each of Hamid R. Moghadam, Thomas S. Olinger, and Edward S. Nekritz as proxies for the undersigned with full power of substitution in each of them, to represent the undersigned at the Annual Meeting of Stockholders to be held on May 2, 2018, and at any and all adjournments or postponements thereof with all powers possessed by the undersigned if personally present at the meeting, and to cast at such meeting all votes that the undersigned is entitled to cast at such meeting in accordance with the instructions indicated on the reverse side of this form. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED AND THE SHARES ARE HELD DIRECTLY IN YOUR NAME, IT WILL BE VOTED (1) FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT, (2) FOR THE APPROVAL, BY ADVISORY VOTE, OF THE COMPANY’S EXECUTIVE COMPENSATION FOR 2017, (3) FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2018, AND (4) IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. IF THESE SHARES ARE HELD IN YOUR 401(K) PLAN ACCOUNT AND YOU DO NOT PROVIDE SPECIFIC VOTING INSTRUCTIONS, THE TRUSTEE WILL VOTE ALL UNINSTRUCTED SHARES HELD IN THE COMPANY’S 401(K) PLAN IN THE SAME PROPORTION AS HOW INSTRUCTED SHARES HELD IN THE 401(K) PLAN ARE VOTED. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING, THE PROXY STATEMENT, AND THIS PROXY. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. Continued and to be signed on reverse side
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V00293-P87245-Z84399
PROLOGIS, INC. Annual Meeting of Stockholders May 4, 2023 1:30 P.M. Pacific Time This proxy is solicited by the Board of Directors The undersigned hereby appoints each of Hamid R. Moghadam, Timothy D. Arndt, and Edward S. Nekritz as proxies for the undersigned with full power of substitution in each of them, to represent the undersigned at the Annual Meeting of Stockholders to be held on May 4, 2023, and at any and all adjournments or postponements thereof with all powers possessed by the undersigned if personally present at the meeting, and to cast at such meeting all votes that the undersigned is entitled to cast at such meeting in accordance with the instructions indicated on the reverse side of this form. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED PRIOR TO ITS EXERCISE. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS INDICATED AND THE SHARES ARE HELD DIRECTLY IN YOUR NAME, IT WILL BE VOTED (1) FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED IN THE PROXY STATEMENT, (2) FOR THE APPROVAL, BY ADVISORY VOTE, OF THE COMPANY’S EXECUTIVE COMPENSATION FOR 2022, (3) FOR AN ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPANY’S EXECUTIVE COMPENSATION EVERY YEAR, (4) FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2023, AND (5) IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. IF THESE SHARES ARE HELD IN YOUR 401(K) PLAN ACCOUNT AND YOU DO NOT PROVIDE SPECIFIC VOTING INSTRUCTIONS, THE TRUSTEE WILL VOTE ALL UNINSTRUCTED SHARES HELD IN THE COMPANY’S 401(K) PLAN IN THE SAME PROPORTION AS HOW INSTRUCTED SHARES HELD IN THE 401(K) PLAN ARE VOTED. THE UNDERSIGNED ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING, THE PROXY STATEMENT, AND THIS PROXY. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. Continued and to be signed on reverse side |