Introductory Note
Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “our company,” “the company” or “Digital Realty” refer to Digital Realty Trust, Inc., together with its consolidated subsidiaries, including Digital Realty Trust, L.P., our “operating partnership.”
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On December 30, 2022, the Board of Directors (the “Board”) of Digital Realty Trust, Inc. appointed Matthew Mercier to serve as Chief Financial Officer of the company effective January 1, 2023. Andrew P. Power, the company’s President and Chief Executive Officer, resigned as Chief Financial Officer concurrently with the effectiveness of Mr. Mercier’s appointment.
Mr. Mercier, age 43, joined the company in 2006 and most recently served as our Senior Vice President of Global Finance and Accounting. He previously served as our Senior Vice President of Finance from 2015 to March 2020 and Vice President of Finance prior to then.
In connection with Mr. Mercier’s appointment as Chief Financial Officer, on December 30, 2022, the Compensation Committee of the Board (the “Committee”) approved an annual base salary for Mr. Mercier equal to $450,000 and a target and maximum annual bonus equal to 100% and 200%, respectively, of his base salary, in each case, effective as of January 1, 2023.
In addition, in December 2022, the Committee approved the grant of 2023 annual equity awards to Mr. Mercier consisting of time-vesting long-term incentive units in our operating partnership valued at $750,000 and performance-vesting Class D units in our operating partnership valued at $375,000 (based on target performance, with maximum performance equal to 200% of target). A portion ($537,500) of the time-vesting long-term incentive units is subject to vesting in annual installments over a four-year period with the first vesting date on February 27, 2024 and a portion ($212,500) is subject to vesting in sixteen quarterly installments over a four-year period with the first vesting date on April 1, 2023, in each case, subject to Mr. Mercier’s continued service with the company. The performance-vesting Class D units are subject to vesting based on our total stockholder return over a three-year performance period measured relative to the MSCI US REIT Index (RMS) over the performance period, subject to Mr. Mercier’s continued service with the company. The annual equity awards were granted on January 1, 2023.
In connection with Mr. Mercier’s appointment, on December 30, 2022, the Committee approved the company’s entry into, and the company entered into, an Executive Severance Agreement with Mr. Mercier (the “Mercier Severance Agreement”). Pursuant to the Mercier Severance Agreement, Mr. Mercier is eligible to receive certain severance payments and benefits in the event of a qualifying termination of his employment, subject to the terms and conditions set forth therein. The Mercier Severance Agreement has an initial term commencing on January 1, 2023 and ending on December 31, 2023, and, thereafter, the term of the Mercier Severance Agreement will automatically be extended for successive
one-year
periods unless the company or Mr. Mercier elects not to extend the term by notifying the other party with 60 days prior written notice. In the event that a change in control occurs during the term of the Mercier Severance Agreement, the term will automatically be extended to the second anniversary of the date of such change in control.
The foregoing description of the Mercier Severance Agreement is qualified in its entirety by the description of the company’s form of Executive Severance Agreement included in the company’s proxy statement filed with the Securities and Exchange Commission on April 22, 2022 under the headings “Executive Compensation – Compensation Discussion and Analysis – Severance and Change in Control Benefits” and “Executive Compensation – Potential Payments upon Termination or Change in Control” and by the full text of the Mercier Severance Agreement, the form of which was filed as an exhibit to our Annual Report on Form
10-K
for the year ended December 31, 2021.
