UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the
Securities Exchange Act of 1934 (Amendment
No. )
Filed by the Registrant ☑
Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only(as Permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Equinix,
Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the
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Equinix 2017 Proxy Statement •
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2
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NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
Dear Stockholder:
You are cordially invited to attend the
Annual Meeting of Stockholders (the “Annual Meeting”) of Equinix, Inc., a Delaware corporation (“Equinix”).
The meeting will be held at our headquarters, located at One Lagoon Drive, Redwood City, Calif., on Wednesday, May 31, 2017, at
10:30 a.m. PDT, for the purpose of considering and voting on:
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1.
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Election of directors to the board of directors (the “Board”)
to serve until the next Annual Meeting or
until their successors have been duly elected and qualified;
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2.
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Approval, by a non-binding advisory vote, of the compensation
of our named executive officers;
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3.
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Approval, by a non-binding advisory vote, of the frequency
with which our stockholders will be asked to vote on the
compensation of our named executive officers;
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4.
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Approval of long-term incentive performance terms
for certain executives pursuant to Section 162(m) of the Internal
Revenue Code;
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5.
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Ratification of the appointment of PricewaterhouseCoopers LLP
as our independent registered
public accounting firm for the fiscal year ending Dec. 31, 2017; and
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6.
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Such other business
as may properly come before the meeting or any adjournments or postponements
thereof.
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The foregoing items of business are more
fully described in the attached proxy statement.
Only stockholders of record at the close
of business on April 5, 2017, are entitled to notice of, and to vote at, the Annual Meeting and at any adjournments or postponements
thereof. A list of such stockholders will be available for inspection at our headquarters, during ordinary business hours for the
10-day period prior to the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS,
Peter Van Camp
Executive Chairman
Redwood City, California
April 21, 2017
TO BE HELD
Wednesday, May 31, 2017
LOCATION
Equinix Corporate Headquarters
One Lagoon Drive
Redwood City, CA 94065
+1.650.598.6000
ATTENDANCE
Whether or not you plan to attend the
Annual Meeting,
please complete, sign, date and promptly return the accompanying proxy in the enclosed postage-paid
envelope, or follow the instructions in “Additional information” (page 49) to submit your proxy by telephone or
on the internet. You may revoke your proxy at any time prior to the Annual Meeting. If you decide to attend the Annual
Meeting and wish to change your proxy vote, you may do so automatically by voting in person at the meeting. Please note,
however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you
must obtain a proxy issued in your name from that record holder.
Important notice
regarding the availability
of proxy materials for the Annual Meeting to be held on May 31, 2017:
The proxy statement and annual report to stockholders
on Form 10-K are available at: proxy.equinix.com
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Equinix
2017 Proxy Statement •
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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PROXY SUMMARY
This summary highlights
some of the topics discussed in this proxy statement. It does not cover all of the information you should consider before voting,
and you are encouraged to read the entire proxy statement before casting your vote.
General
information
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MEETING:
Annual Meeting
of Stockholders
DATE:
Wednesday,
May 31, 2017
TIME:
10:30 a.m. PDT
LOCATION:
Equinix Corporate
Headquarters,
One Lagoon Drive, Redwood City, CA 94065
RECORD DATE:
April 5,
2017
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STOCK SYMBOL:
EQIX
EXCHANGE:
NASDAQ
COMMON STOCK OUTSTANDING:
77,911,859 shares as of April 5, 2017
REGISTRAR & TRANSFER AGENT:
Computershare
STATE OF INCORPORATION:
Delaware
YEAR OF INCORPORATION:
1998
PUBLIC COMPANY SINCE:
2000
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CORPORATE WEBSITE:
Equinix.com
INVESTOR RELATIONS WEBSITE:
investor.equinix.com
2017 ANNUAL MEETING MATERIALS:
proxy.equinix.com
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Governance
DIRECTOR NOMINEES:
10
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Thomas
Bartlett
(Independent
Director)
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Nanci
Caldwell
(Independent
Director)
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Gary
Hromadko
(Independent
Director)
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John
Hughes
(Independent
Director)
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Scott
Kriens
(Independent
Director)
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William
Luby
(Independent
Director)
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Irving
Lyons III
(Independent
Director)
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Christopher
Paisley
(Lead
Independent
Director)
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Stephen
Smith
(Chief
Executive
Officer and
President)
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Peter
Van Camp
(Executive
Chairman)
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DIRECTOR TERM:
One year
DIRECTOR ELECTION STANDARD:
Majority
votes cast
BOARD MEETINGS IN 2016:
14
STANDING BOARD COMMITTEES (MEETINGS IN 2016):
Audit (11), Compensation (5), Governance
(4), Nominating (1), Real Estate (8)
SUPERMAJORITY VOTING REQUIREMENTS:
No
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STOCKHOLDER RIGHTS PLAN:
No
STOCKHOLDER RIGHT TO CALL SPECIAL MEETINGS:
Yes
STOCKHOLDER RIGHT TO ACT BY WRITTEN CONSENT:
Yes
STOCKHOLDER PROXY ACCESS RIGHTS:
Yes
CORPORATE GOVERNANCE MATERIALS:
governance.equinix.com
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Equinix
2017 Proxy Statement •
PROXY SUMMARY
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Performance and Compensation Highlights
REVENUES ($M):
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AFFO ($M)
(1)
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2016 STOCK PRICE PERFORMANCE ($):
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CEO:
Stephen
Smith (age 60; CEO since 2007)
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CEO 2016 COMPENSATION MIX
(2)
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PERCENTAGE 2016 CEO INCENTIVE
COMPENSATION AT RISK:
100%
of Annual and 75% of Long Term
METRICS USED FOR INCENTIVE COMPENSATION:
Revenues, AFFO, Total Shareholder Return
TAX GROSS-UPS:
No
STOCK OWNERSHIP GUIDELINES:
Yes
ANTI-HEDGING POLICY:
Yes
RECOUPMENT POLICY:
Yes
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Items to Be Voted On
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DIRECTORS:
Election of directors
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COMPENSATION:
Advisory vote to approve named executive
officer compensation
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AUDIT:
Ratification of independent registered public
accountants
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Approval of the frequency with which our Stockholders
will be asked to vote on the compensation of our named executive officer
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Approval
of the long-term incentive performance terms for certain executives
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1.
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Funds from operations (“FFO”) and adjusted funds from operations (“AFFO”)
are non-GAAP financial measures commonly used in the REIT industry. FFO is calculated in accordance with the standards established
by the National Association of Real Estate Trusts (“NAREIT”). FFO represents net income (loss), excluding gains (losses)
from the disposition or real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated
joint ventures’ and non-controlling interests’ share of these items. AFFO represents FFO, excluding depreciation and
amortization expense on a non-real estate assets, accretion, stock-based compensation, restructuring charges, impairment charges,
acquisition costs, an installation revenue adjustment, a straight-line rent expense adjustment, amortization of deferred financial
costs, gains (losses) on debt extinguishment, an income tax expense adjustment, recurring capital expenditures and adjustments
from FFO to AFFO for unconsolidated joint ventures’ and non-controlling interests’ share of these items. For additional
definitions of non-GAAP terms and a detailed reconciliation between non-GAAP financial results and the corresponding GAAP measures,
please refer to the Investor Relations section of our website at Equinix.com.
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2.
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Reflects the market value of the RSU awards on the grant dates of Feb. 11, 2016 and Mar. 16, 2016. Assumes the maximum size
award is earned under the 2016 annual incentive plan and the maximum number of shares is earned under the performance-based RSU
awards.
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Equinix
2017 Proxy Statement •
PROXY SUMMARY
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Table of contents
NOTICE
OF ANNUAL MEETING
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OF
STOCKHOLDERS
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3
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Dear
Stockholder:
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3
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PROXY
SUMMARY
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4
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General
information
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4
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Governance
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4
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Performance
and compensation highlights
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5
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Items
to be voted on
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5
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GOVERNANCE
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7
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Election
of directors
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7
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Board
composition
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11
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Board
operations
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12
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Other
governance policies and practices
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16
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2016
Director compensation
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17
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Equinix
stock ownership
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19
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Related
party transactions
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20
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COMPENSATION
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21
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PROPOSAL
2 — Advisory non-binding vote on executive compensation
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PROPOSAL
3 — Advisory non-binding vote on frequency of executive compensation vote
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PROPOSAL
4 — Approval of material terms of long-term incentive performance awards for certain executives pursuant to section
162(m) of the internal revenue code
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Executive
officers
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25
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Executive
compensation and related information
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26
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Compensation
policies and practices risk assessment
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42
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Compensation
committee interlocks and insider participation
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43
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Equity
compensation plan information
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43
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Section
16(a) beneficial ownership reporting compliance
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44
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AUDIT
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45
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PROPOSAL
5 — Ratification of independent registered public accountants
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45
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ADDITIONAL
INFORMATION
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49
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Voting
information and attending the meeting
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49
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Delivery
of documents to stockholders sharing an address
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53
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Stockholder
proposals for 2018 annual meeting
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53
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Other
matters
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53
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Equinix
2017 Proxy Statement •
PROXY SUMMARY
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GOVERNANCE
Election of directors
All directors will be elected at the Annual Meeting
to serve for a term expiring at the next annual meeting of stockholders and until his or her successor is elected, or until the
director’s death, resignation or removal. If you sign your proxy card but do not give instructions with respect to the voting
of directors, your shares will be voted for the 10 persons recommended by the Board. If you wish to give specific instructions
with respect to the voting of directors, you must do so with respect to the individual nominee. If any nominee becomes unavailable
for election as a result of an unexpected occurrence, your shares will be voted for the election of a substitute nominee proposed
by Equinix’s Board. Each person nominated for election has agreed to serve if elected, and our Board has no reason to believe
that any nominee will be unable to serve.
The 10 directors who are being nominated for election
by the holders of common stock to the Board; their ages as of April 1, 2017; their positions and offices held with Equinix; and
certain biographical information, including directorships held with other public companies during the past five years, are set
forth below. In addition, we have provided information concerning the particular experience, qualifications, attributes and/or
skills that led the Nominating Committee and the Board to determine that each nominee should serve as a director of Equinix.
NOMINEES
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Thomas
Bartlett
Age 58
Independent director since: April 2013
Committees: Audit
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Current role
• Executive
vice president and chief financial officer, American Tower, an owner and operator of wireless and broadcast communications sites
that operates as a real estate investment trust (“REIT”) (since 2009)
Prior business experience
• Various
operations and business development roles with predecessor companies and affiliates, including most recently senior vice president
and corporate controller, Verizon Communications (1983–2009)
• Began career at Deloitte, Haskins
& Sells
Qualifications
• Experience at American Tower with
its conversion to and operation as a REIT
• Experience in telecommunications
and wireless infrastructure fields
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Accounting and financial expertise, including as a public company chief financial officer
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Nanci
Caldwell
Age 59
Independent director since: Dec.
2015
Committees: Governance
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Current role
• Corporate director (since 2005)
Prior business experience
• Executive vice president and chief
marketing officer, PeopleSoft (2001–2004)
• Various senior and executive
sales and marketing roles in Canada and the U.S., Hewlett-Packard (1982–2001)
Current public company boards (in addition
to Equinix)
• CIBC
• Citrix Systems
• Donnelley Financial Solutions
• Talend
Past public company boards
• Tibco Software
• Deltek
Qualifications
• Expertise
in enterprise sales, marketing and technology, which brings a valuable perspective to our Board to support our current sales and
marketing strategy
• Experience as an operating
executive at major public companies
• Experience with public company
M&A
• Experience on multiple Governance
Committees
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Equinix 2017 Proxy Statement •
GOVERNANCE
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Gary
Hromadko
Age 64
Independent director since: June 2003
Committees: Audit, Nominating and Real
Estate
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Current role
• Venture partner, Crosslink Capital,
a venture capital firm (since 2002)
Past public company boards
• Carbonite
Qualifications
• Active private investor since
1993
• Experience
as an investor in the networking, cloud and infrastructure service sectors, important customer segments to Equinix, and sectors
where trends are closely watched as important to our future strategy and positioning
• Experience with financial and
capital markets
• Experience with Equinix since
2003
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John
Hughes
Age 65
Independent director since: Jan.
2016
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Current role
• Corporate director
Prior business experience
• Executive chairman, TelecityGroup,
prior to its acquisition by Equinix (2014–2016)
• Non-executive chairman, TelecityGroup
(2007–2014)
• Executive
vice president and chief operating officer, Thales Group, a leading European provider of complex systems for the defense, aerospace
and commercial markets (2000–2004)
• President, GSM/UMTS Wireless
Networks, Lucent Technologies (1997–2000)
Current public company boards (in addition
to Equinix)
• Just Eat Group
• Spectris
• CSG Systems
Past public company boards
• Sepura
• Vitec Group
• TelecityGroup
Qualifications
• Experience
in data center industry, having led one of the largest data center providers in Europe
• View
of European markets and institutional knowledge of Telecity support Equinix’s EMEA strategy
•
Decades of experience leading global high-tech businesses
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Scott
Kriens
Age 59
Independent director since: July
2000
Committees: Compensation and Nominating
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Current role
• Corporate director
Prior business experience
•
Chief executive officer and chairman of the board of directors, Juniper Networks, a publicly-traded internet infrastructure
solutions company (1996–2008)
• Vice
president of sales and vice president of operations, StrataCom, a telecommunications equipment company, which Mr. Kriens co-founded
(1986–1996)
Current public company boards (in addition
to Equinix)
• Juniper Networks
Qualifications
• Extensive
experience in the sectors of communications services and internet infrastructure
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Executive leadership and management experience leading Juniper Networks, a high-growth company
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Equinix 2017 Proxy Statement •
GOVERNANCE
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William
Luby
Age 57
Independent director since: April
2010
Committees:
Compensation and Nominating
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Current role
• Managing partner, Seaport Capital,
a private equity firm, and its predecessor companies (since 1996)
Prior business experience
• Managing director, Chase Capital,
the private equity affiliate of Chase Manhattan
Past public company boards
• Switch & Data Facilities Company,
prior to its acquisition by Equinix in 2010
Qualifications
• Active investor in the telecommunications
industry for 25 years
• Experience as a director at
Switch & Data
• Familiarity with our industry
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Irving
Lyons
Age 67
Independent director since: Feb.
2007
Committees: Compensation, Real Estate
and Stock Award
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Current role
• Principal, Lyons Asset Management,
a California-based private investment firm (since 2005)
Prior business experience
• Chief investment officer, ProLogis,
a global provider of distribution facilities and services (1997–2004)
Current public company boards (in addition
to Equinix)
• ESSEX Property Trust
• ProLogis
Qualifications
• Experience
with global real estate, including as a chief investment officer at a real estate concern, which provides valuable insight to discussions
of site selection and negotiations as Equinix conducts expansion planning and management of its real estate portfolio
• Experience with REITs, as
well as his knowledge of capital markets and
executive
leadership and management experience
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Christopher
Paisley
Age 64
Independent director since: July
2007 (and as lead independent director since Feb. 2012)
Committees: Audit, Governance and
Real Estate
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Current role
• Dean’s Executive Professor
of Accounting, Leavey School of Business at Santa
Clara University (since 2001)
Prior business experience
• Senior vice president of finance
and chief financial officer, 3Com (1985–2000)
Current public company boards (in addition
to Equinix)
• Ambarella
• Fitbit
• YuMe
• Fortinet
Past public company boards
• Bridge Capital
• Control4
• Volterra Semiconductor
Qualifications
• Expertise in accounting and
finance
• Experience as a chief financial
officer at a technology company
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Extensive public company board and audit committee experience
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Equinix 2017 Proxy Statement •
GOVERNANCE
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Stephen Smith
Age 60
Director since: April 2007
Committees: Stock Award
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Current role
• Chief executive officer and president
(since 2007)
Prior business experience
• Senior vice president, HP services,
a business segment of Hewlett-Packard (2005–2006)
• Vice
president of global professional and managed services, Lucent Technologies, a communications solutions provider (2003–2005)
• Various
positions for Electronic Data Systems (EDS), a business and technology solutions company, including chief sales officer, president
of EDS Asia-Pacific, and president of EDS Western Region (1987–2003)
Current public company boards (in addition
to Equinix)
• F5 Networks
• NetApp
Past public company boards
• Volterra Semiconductor
Qualifications
• Experience acquired as
Equinix’s chief executive officer and president since 2007 uniquely positions him to understand Equinix’s needs,
challenges and opportunities
• Extensive career history at
technology services and critical infrastructure companies
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Prior executive leadership and management experience
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Peter
Van Camp
Age 61
Director since: April 2007
Committees: Governance
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Current role
• Executive chairman (since 2007)
Prior business experience
• Chief executive officer, Equinix
(2000–2007)
• President, Equinix (2006–2007)
• President, UUNET, the internet
division of MCI (formerly known as WorldCom) (1997–2000)
Current public company boards (in addition
to Equinix)
• Silver Springs Networks
Qualifications
• Long history with Equinix dating
back to 2000
• Experience acquired as Equinix’s
former chief executive officer and president bring valuable perspective to the Board
•
Extensive career history at technology services, communication services, and critical infrastructure companies
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The Board recommends a vote "FOR" each nominee
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Equinix 2017 Proxy Statement •
GOVERNANCE
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Board composition
BOARD SIZE
Equinix’s Board currently
consists of 10 directors. Equinix’s bylaws provide that the number of directors will be determined by the Board, and the
number of directors is currently set at 10. Thus there are no vacant seats on Equinix’s Board at this time.
MAJORITY VOTE STANDARD
Our bylaws provide that a director nominee
must receive a majority of the votes cast with respect to such nominee in uncontested director elections (i.e., the number of
shares voted “for” a director nominee must exceed the number of shares voted “against” such nominee).
If an incumbent director nominee fails to receive a majority of the votes cast in an uncontested election, the director shall
immediately tender his or her resignation to the Board. The Governance Committee of the Board, or such other committee
designated by the Board, shall make a recommendation to the Board as to whether to accept or reject the resignation of such
incumbent director, or whether other action should be taken. The Board shall act on the resignation, taking into account the
committee’s recommendation, and publicly disclose its decision regarding the resignation within 90 days following
certification of the election results. If the Board accepts a director’s resignation, or if a nominee for director is
not elected and the nominee is not an incumbent director, the remaining members of the Board may fill the resulting vacancy
or may decrease the size of the Board.
DIRECTOR INDEPENDENCE
The Board is currently comprised of 10 directors,
eight of whom qualify as independent directors pursuant to the rules adopted by the Securities and Exchange Commission applicable
to the corporate governance standards for companies listed on the NASDAQ National Market System. The Board has determined that
all the Equinix director nominees are independent within the meaning of the applicable NASDAQ listing standards, except for Mr.
Smith, Equinix’s chief executive officer and president, and Mr. Van Camp, Equinix’s executive chairman. The Audit,
Compensation, Nominating and Real Estate committees of the Board consist entirely of independent directors.
NOMINATION OF DIRECTORS
The Nominating Committee of the Board operates
pursuant to a written charter and has the exclusive right to recommend candidates for election as directors to the Board. The
Nominating Committee believes that candidates for director should have certain minimum qualifications, including being able
to read and understand basic financial statements, having high moral character, having business experience, and being over 21
years of age. The Nominating Committee’s process for identifying and evaluating nominees is as follows. In the case of
incumbent directors whose annual terms of office are set to expire, the Nominating Committee reviews such directors’
overall service to Equinix during their term, including the number of meetings attended, level of participation, quality of
performance, and any transactions of such directors with Equinix during their term. In the case of new director candidates,
the Nominating Committee first determines whether the nominee must be independent for NASDAQ purposes, which determination is
based upon the Equinix, Inc., Board of Directors Guidelines on Significant Corporate Governance Issues (the
“Guidelines”), the rules and regulations of the Securities and Exchange Commission, the rules of the NASDAQ Stock
Market, and the advice of counsel, if necessary. The Nominating Committee may then use its network of contacts to compile a
list of potential candidates, but may also engage, if it deems appropriate, a professional search firm. The Nominating
Committee will then meet to discuss and consider such candidates’ qualifications and choose candidate(s) for
recommendation to the Board.
Equinix 2017 Proxy Statement •
GOVERNANCE
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There is no fixed set of qualifications
that must be satisfied before a candidate will be considered. Rather, the Nominating Committee has the flexibility to
consider such factors as it deems appropriate. In evaluating potential nominees for Board membership, the Nominating
Committee considers qualification criteria, such as independence, character, ability to exercise sound judgment, demonstrated
leadership ability, skills, including financial literacy, educational background, diversity and experience, in the context of
the current and anticipated needs of the Board and of the company as a whole. In practice, the Nominating Committee has
sought members with experience relevant to our industry and current strategy. For example, in 2007 the addition of Mr. Lyons
to our Board was the result of a specific search designed to add experience in real estate to our Board as we embarked on a
period of major expansion; in 2013 the addition of Mr. Bartlett was designed to add further REIT experience to our Board in
advance of our REIT conversion; and in 2015 the addition of Ms. Caldwell was designed to add further experience in enterprise
technology to our Board as we continue to pursue the enterprise customer. The Nominating Committee understands the importance
and value of diversity on the Board, and is therefore pleased with the addition of Ms. Caldwell to our Board in 2015. The
Nominating Committee is committed to continue seeking out highly qualified women and individuals from minority groups to
include in the pool from which Board nominees are chosen.
The Nominating Committee will consider candidates
recommended by stockholders. Stockholders wishing to recommend candidates for consideration by the Nominating Committee may do
so in writing to the secretary of Equinix and by providing the candidate’s name, biographical data and qualifications. The
Nominating Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth
above, based on whether the candidate was recommended by a stockholder.
In addition, in March 2016, our bylaws were
amended to provide for proxy access for director nominations by stockholders (the “Proxy Access Bylaw”). Under
the Proxy Access Bylaw, any eligible stockholder, or eligible group of up to 20 stockholders, owning 3% or more of
Equinix’s outstanding common shares continuously for at least three years, may nominate and include in Equinix’s
annual meeting proxy materials for director nominees, up to a total number not to exceed the greater of 20% of the directors
then serving on the Board or two directors, provided that the eligible stockholder or eligible group of stockholders and the
director nominee(s) satisfy the requirements in the Proxy Access Bylaw. The Proxy Access Bylaw was first available to
stockholders for Equinix’s 2017 Annual Meeting of Stockholders.
A more detailed description on the functions
of the Nominating Committee can be found in the Nominating Committee Charter, published on the corporate governance section
of Equinix’s website at Equinix.com.
Board operations
BOARD LEADERSHIP STRUCTURE
Prior to his current role, Mr. Van Camp was serving
as both our chief executive officer and as chairman of the board. In April 2007, Mr. Van Camp stepped down as Equinix’s
chief executive officer but retained the chairmanship of the Board as executive chairman, thus separating the two roles. Today,
our chief executive officer is responsible for the day-to-day leadership of Equinix and its performance, and for setting the strategic
direction of Equinix. Mr. Van Camp, with his depth of experience and history with Equinix dating back to 2000, provides support
and guidance to the chief executive officer and to management as executive chairman. He also provides leadership to the Board
and works with the Board to define its structure and activities needed to fulfill its responsibilities, facilitates communication
among directors and between directors and senior management, provides input to the agenda for Board meetings, works to provide
an appropriate information flow to the Board, and presides over meetings of the full Board. Thus, while our chief executive officer
is positioned as the leader of Equinix and is free to focus on day-to-day challenges, our Board also has a strong leader with
deep knowledge of Equinix in Mr. Van Camp. We believe this structure is best for both Equinix and our stockholders.
In Feb. 2012, Mr. Paisley was designated by the Board
as its lead independent director. In this role, Mr. Paisley’s duties may include presiding at all meetings of the Board at
which the executive chairman is not present; calling and chairing all sessions of the independent directors; preparing the agenda
and approving materials for meetings of the independent directors; briefing management directors about the results of deliberations
Equinix 2017 Proxy Statement •
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among independent directors; consulting with
the executive chairman regarding agendas, pre-read materials and proposed meeting calendars and schedules; collaborating with the
executive chairman and acting as liaison between the executive chairman and the independent directors; and serving as the Board’s
liaison for consultation and communication with stockholders as appropriate, including on request of major stockholders. In addition,
the number of independent directors on our Board and our committee structure provide additional independent oversight of Equinix.
For example, the Audit, Compensation and Nominating Committees of the Board, and the Real Estate Committee of the Board, where
decisions regarding our expansion and capital deployment are vetted, consist entirely of independent directors. Our independent
directors regularly hold private sessions and have direct access to management. A self-assessment of the Board is also conducted
annually, at which time each member is free to evaluate and comment as to whether they feel this leadership structure continues
to be appropriate.
DIRECTOR ATTENDANCE
During the fiscal year ended Dec. 31, 2016, the Board
held 14 meetings. For the fiscal year, during their period of service, each of the incumbent directors attended or participated
in at least 80% of the aggregate of (i) the total number of meetings of the Board and (ii) the total number of meetings held by
all committees of the Board on which each such director served. In the event any director missed a meeting, that individual would
separately discuss material items with Mr. Smith or Mr. Van Camp.
BOARD COMMITTEES
The Board has six standing committees: the Audit
Committee, the Compensation Committee, the Governance Committee, the Nominating Committee, the Real Estate Committee and the Stock
Award Committee, in addition to special committees that may be formed from time to time. The following table provides membership
information for the incumbent directors for fiscal 2016 for such standing committees of the Board:
Name
|
Audit
|
Compensation
|
Governance
|
Nominating
|
Real Estate
|
Stock Award
|
Thomas Bartlett
|
X
|
|
|
|
|
|
Nanci Caldwell
|
|
|
X
|
|
|
|
Gary Hromadko
|
X
|
|
|
X
|
X
|
|
John Hughes
|
|
|
|
|
|
|
Scott Kriens
|
|
X
|
|
X
(1)
|
|
|
William Luby
|
|
X
|
|
X
|
|
|
Irving Lyons III
|
|
X
(1)
|
|
|
X
|
X
|
Christopher Paisley
|
X
(1)
|
|
X
|
|
X
|
|
Stephen Smith
|
|
|
|
|
|
X
|
Peter Van Camp
|
|
|
X
(1)
|
|
|
|
(1) Committee Chairman
A detailed description of the
Audit Committee can be found in the section entitled, “Report of the Audit Committee of the Board of Directors,” elsewhere
in this proxy statement. The members of the Audit Committee in 2016 were Mr. Bartlett, Mr. Hromadko and Mr. Paisley. Mr. Paisley
is chairman of the Audit Committee and both Mr. Bartlett and Mr. Paisley are considered financial experts. During the fiscal year
ended Dec. 31, 2016, the Audit Committee held 11 meetings.
The Compensation Committee oversees, reviews and
administers all of Equinix’s compensation, equity and employee benefit plans and programs relating to executive officers,
including the named executive officers; approves the global guidelines for the compensation program for Equinix’s non-executive
employees; and
Equinix 2017 Proxy Statement •
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approves Equinix’s projected
global equity usage. The Compensation Committee also acts periodically to evaluate the effectiveness of the compensation
programs at Equinix and considers recommendations from its consultant, Compensia, Inc., and from management regarding new
compensation programs and changes to those already in existence. In addition, the Compensation Committee is consulted to
approve the compensation package of a newly hired executive or of an executive whose scope of responsibility has changed
significantly. A more detailed description of the functions of the Compensation Committee can be found in the Compensation
Committee Charter, published on the corporate governance section of Equinix’s website at Equinix.com and also in the
“Compensation Discussion and Analysis” section below. The members of the Compensation Committee are Mr. Kriens,
Mr. Luby and Mr. Lyons. Mr. Lyons is chairman of the Compensation Committee. During the fiscal year ended Dec. 31, 2016, the
Compensation Committee held five meetings.
The Governance Committee
was established to (i) oversee the evaluation of the Board; (ii) review and consider developments in corporate governance
practices and to recommend to the Board a set of effective corporate governance policies and procedures applicable to
Equinix; and (iii) review and consider developments related to the Equinix Governance Risk and Compliance (“GRC”)
Program and to report out to the Board on GRC Program activites and recommendations. A more detailed description on the
functions of the Governance Committee can be found in the Governance Committee Charter, published in the corporate governance
section of Equinix’s website at Equinix.com. The members of the Governance Committee are Ms. Caldwell, Mr. Paisley and
Mr. Van Camp. Mr. Van Camp is chairman of the Governance Committee. During the fiscal year ended Dec. 31, 2016, the
Governance Committee held four meetings.
The Nominating Committee’s functions are described
above in the section entitled “Nomination of Directors.” The members of the Nominating Committee are Mr. Hromadko,
Mr. Kriens and Mr. Luby. Mr. Kriens is chairman of the Nominating Committee. During the fiscal year ended Dec. 31, 2016, the Nominating
Committee held one meeting.
The Real Estate Committee approves capital
expenditures in connection with real estate development, expansion or acquisition within parameters set by the full Board.
All decisions are made considering a projected 10-year internal rate of return and within the context of a multi-year capital
expenditure development pipeline and cash flow analysis provided by management to the Real Estate Committee. In approving
real estate capital expenditures, the Real Estate Committee also considers an overview of the project and the market,
including the competition, strategy, current capacity and sales pipeline. In addition, the Real Estate Committee has the
authority to analyze, negotiate and approve the purchase, sale, lease or sublease of real property, approve guarantees
related to real property transactions and, subject to any limitations or terms imposed by the full Board, if any, analyze,
negotiate and approve real estate-related financing transactions. The members of the Real Estate Committee are Mr. Hromadko,
Mr. Lyons and Mr. Paisley. During the fiscal year ended Dec. 31, 2016, the Real Estate Committee held eight meetings.
The Stock Award Committee has
the authority to approve the grant of stock awards to non-Section 16 officer employees and other individuals. The members of the
Stock Award Committee are Mr. Lyons and Mr. Smith. The Stock Award Committee typically does not hold meetings but acts by written
consent.
BOARD RISK OVERSIGHT
Our Board’s oversight of risk management
is designed to support the achievement of organizational objectives, including strategic objectives, to improve
Equinix’s long-term organizational performance of Equinix and enhance stockholder value. The involvement of the full
Board in setting Equinix’s business strategy is a key part of its assessment of what risks Equinix faces, what steps
management is taking to manage those risks, and what constitutes an appropriate level of risk for Equinix. Our senior
management attends the quarterly Board meetings, presents to the Board on strategic and other matters, and is available to
address any questions or concerns raised about risk-management-related issues, or any other matters. Board members also have
ongoing and direct access to senior management between regularly scheduled board meetings for any information requests or
issues they would like to discuss. In addition, in Sept. 2016 the Board held a strategy meeting with senior management to
discuss strategies, key challenges, and risks and opportunities for Equinix. The Board typically holds a meeting focused
solely on strategy annually, to set the stage for the planning and development of Equinix’s operating plan for the
coming year.
Equinix 2017 Proxy Statement •
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Equinix has completed a global risk
assessment to identify key strategic, operational, financial and regulatory compliance risks and will continue to evaluate
such risks. These risks have been communicated to and assessed by Equinix’s executive management, the Governance
Committee and the full Board. The Board is scheduled to receive its next enterprise risk briefing in Sept. 2017.
Additionally, in 2016 the full Board received briefings on multiple enterprise risks, including cybersecurity. Briefings on
cybersecurity, as well as other enterprise risks, will be provided in 2017.
While the Board has the ultimate oversight responsibility
for the risk management process, various committees of the Board also have responsibility for risk management. In particular, the
Governance Committee oversees Equinix’s GRC Program, formally launched in 2013. In connection with this oversight, the Governance
Committee receives quarterly updates on key issues, such as enterprise risk management, business continuity and disaster recovery
planning, cybersecurity and regulatory compliance. The Governance Committee evaluates the effectiveness of risk mitigation capabilities
identified in these areas and monitors for emerging risks. Equinix’s chief compliance officer, as leader of the GRC Program,
reports on the program at each meeting of the Governance Committee.
In addition, the Audit Committee’s charter
mandates that it discuss guidelines and policies governing the process by which management and other persons responsible for risk
management assess and manage Equinix’s exposure to risk, including Equinix’s major financial risk exposures and the
steps management has taken to monitor and control such exposures, based on consultation with management and the independent auditors.
The Audit Committee also receives an annual assessment of the adequacy of the controls over financial reporting, including an assessment
of the risks associated with the controls over the financial reporting process.
In setting compensation, the Compensation Committee
strives to manage risks arising from our compensation policies and programs by setting compensation at levels that maximize stockholder
long-term value without encouraging excessive risk-taking. For more information, please read “Compensation Policies and Practices
Risk Assessment.” Finally, the Real Estate Committee manages risk by evaluating real estate expansion opportunities and the
deployment of capital within the context of Equinix’s overall business and financial strategy and financial picture.
The Board believes that the risk management processes
in place for Equinix are appropriate.
BOARD ONBOARDING PROGRAM
Equinix has an onboarding program, overseen by the
Governance Committee, to introduce new Board members to Equinix and the Board. The program includes orientation sessions on the
Board’s structure and processes, Equinix’s compliance environment, and the business.
INVESTOR ENGAGEMENT
Equinix pursues engagement with its stockholders
throughout the year to best understand and address the issues that matter to our stockholders. This engagement is evidenced by
the following activities in 2016:
|
•
|
During 2016, we met with numerous investors around the world, including by attending and hosting 31 investor conferences, non-deal
roadshows, and investor group events
|
|
•
|
On June 23, 2016, we hosted the Equinix Analyst Day in New York, attended by over 300 investors and analysts, as well as by
the Equinix management team and members of the Board
|
|
•
|
We proactively reached out for meetings with our 20 largest stockholders in the spring of 2016 to discuss our proposed proxy
access bylaw prior to its adoption by our Board
|
|
•
|
Our lead independent director and our Compensation Committee chair met with certain stockholders after the 2016 annual meeting
to discuss questions about our governance practices and compensation program, respectively. These meetings were also attended by
our executive chairman
|
For information about how to contact our Board please
see the section below entitled “Stockholder Communications with the Board of Directors.”
Equinix 2017 Proxy Statement •
GOVERNANCE
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Other governance policies and practices
CORPORATE GOVERNANCE GUIDELINES
The Board follows its Guidelines published on the
corporate governance section of Equinix’s website at Equinix.com. The Guidelines reflect the Board’s dedication to
monitoring the effectiveness of policy and decision- making at the Board level. In conjunction with the Governance Committee, the
Board will continue to monitor the effectiveness of the Guidelines.
CODE OF ETHICS AND BUSINESS CONDUCT
The Board has adopted (1) a Code of Business Conduct
which applies to all directors, officers and employees and (2) an additional Code of Ethics for chief executive officer and senior
financial officers. These documents can be found on the corporate governance section of Equinix’s website at Equinix.com.
In addition, anonymous reporting hotlines have been established to facilitate reporting of violations of financial and non-financial
policies.
Should the Board ever choose to amend or waive a
provision of the Code of Ethics for chief executive officer and senior financial officers, we may disclose such amendment or waiver
on the corporate governance section of Equinix’s website at Equinix.com.
STOCK OWNERSHIP GUIDELINES
In its Guidelines, the
Board has established a stock ownership requirement for Equinix’s non-employee directors to encourage them to have a
significant financial stake in the company. The Guidelines state that each non-employee director should own not less than six
times their cash annual retainer for general service on the Board in shares of Equinix’s common stock, including
exercised stock options, vested restricted stock units (“RSUs”) and deferred RSUs. Non-employee directors serving
on the Board as of Nov. 17, 2010, had until Dec. 31, 2015, to comply with the requirement, and new non-employee directors
will have five years from the date of their election to the Board to comply. Compliance with this requirement is measured
annually at the end of each fiscal year. All directors subject to the guidelines were in compliance as of Dec. 31, 2016.
Stock ownership guidelines for Mr. Smith and his
direct reports have also been established and require that these executives achieve target ownership levels, expressed as a multiple
of salary, within five years from the adoption date of Nov. 30, 2012. The target ownership level for Mr. Smith is three times his
annual salary; for all others the target ownership level is one time their annual salary. Compliance with this requirement will
be measured annually at the end of each fiscal year, starting with 2017.
NO HEDGING POLICY
Equinix’s Securities Trading Policy
prohibits our Board members, officers, employees and consultants from engaging in hedging transactions related to
Equinix’s common stock.
RECOUPMENT POLICY
In Nov. 2016 the Compensation Committee
adopted a policy on recoupment of incentive compensation which applies to our executive officers (as defined by applicable
securities laws). The policy states that the Board may require the return, repayment or forfeiture of any cash or
equity-based incentive compensation payment or award received by any current or former executive officer during the three
completed fiscal years immediately preceding the date on which we are required to prepare a restatement of our financial
statements due to material noncompliance with any financial reporting requirements under the securities laws and if certain
other conditions are met.
Equinix 2017 Proxy Statement •
GOVERNANCE
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STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Interested parties may contact the Board by sending
correspondence to the attention of Equinix’s secretary, c/o Equinix, Inc., One Lagoon Drive, Redwood City, CA, 94065. Any
mail received by the secretary, except improper commercial solicitations, will be forwarded to the members of Equinix’s Audit
Committee for further action, if necessary. Equinix does not have a policy requiring attendance by members of the Board at Equinix’s
annual stockholder meetings. At Equinix’s 2016 Annual Meeting, Mr. Paisley, Mr. Smith and Mr. Van Camp were in attendance
and available for questions.
2016 Director compensation
Equinix uses a combination of cash and equity-based
incentive compensation to attract and retain qualified candidates to serve on the Board.
In setting director compensation, Equinix
considers the competitive compensation market for directors in the high-technology market, the demands of the various roles
that directors hold, and the time required to fulfill their duties to Equinix. Compensia, Inc. conducts a detailed review of
Equinix’s director compensation program every two years, with an abbreviated review in the off years, and presents its
findings to the Compensation Committee. The most recent detailed review occurred in Nov. 2016 and covered the design of the
current program as compared to peer practices, using the same peers used for executive compensation decisions, and the
alignment of total compensation and individual pay elements to this market. Based on this review, no changes to the current
program were recommended by the Compensation Committee to the full Board. Equinix’s current pay program dates back to
Sept. 2012.
Non-employee directors receive a retainer in connection
with their service on the Board. For fiscal 2016, the annual retainer was $60,000. In addition, in lieu of regular meeting fees,
committee chairs (if any) and members received the following annual retainers for fiscal 2016, payable quarterly in arrears:
Committee
|
Chairman
|
Member
|
Audit
|
$30,000
|
$15,000
|
Compensation
|
$25,000
|
$12,500
|
Real Estate
|
$15,000
|
$5,000
|
Nominating
|
$12,500
|
$5,000
|
Governance
|
$12,500
|
$5,000
|
Currently, non-employee
directors only receive meeting fees for attendance at committee meetings in excess of a specified number of meetings in a calendar
year. The committee meeting fees and the threshold number of meetings that must be attended before any meeting fees are paid are:
|
|
|
Threshold
|
|
|
|
Number of
|
Committee
|
Chairman
|
Member
|
Meetings
|
|
|
|
|
Audit
|
$5,000
|
$3,000
|
12
|
Compensation
|
$5,000
|
$3,000
|
8
|
Real Estate
|
$5,000
|
$3,000
|
6
|
Nominating
|
$5,000
|
$3,000
|
5
|
Governance
|
$5,000
|
$3,000
|
5
|
Other
|
$5,000
|
$3,000
|
6
|
The Board has also designated a lead independent
director who earns a $25,000 annual retainer.
Equinix 2017 Proxy Statement •
GOVERNANCE
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|
Non-employee directors receive automatic
grants of RSUs. At our annual meeting of stockholders, each non-employee director who will continue to be a director after
that meeting is automatically granted an award of RSUs. For fiscal 2016, the grant date fair value of these annual awards was
$250,000. The automatic RSU awards become fully vested on the earlier of (i) the first anniversary of Equinix’s
immediately preceding annual meeting of stockholders or (ii) in the case of a non-employee director not standing for
reelection, the date of the first annual meeting of stockholders held subsequent to the date of grant. In addition, each
non-employee director receives a prorated award of RSUs upon joining the Board with a grant date fair value of $250,000. The
proration is based upon a fraction equal to (x) the number of days from the start date of the non-employee director until the
first anniversary of the date of Equinix’s immediately preceding annual meeting of stockholders divided by (y) 365. The
number of shares subject to each RSU award is determined by dividing the specified dollar value of the award by the closing
price of Equinix’s common stock on the date of grant. The RSUs granted to our directors will become fully vested if
Equinix is subject to a change-in-control; in the event of the non-employee director’s death, the portion of the RSUs
that would have become vested on the next scheduled vesting date will become fully vested. Directors accrue dividend
equivalent units on their RSUs. We allow our non-employee directors to elect to defer settlement of their RSUs. Directors are
also eligible to receive discretionary awards under Equinix’s 2000 Equity Incentive Plan. Our stock ownership
guidelines for non-employee directors are described above.
The following table sets forth all of the compensation
awarded to, earned by or paid to each non-employee who served during fiscal year 2016.
|
Fees Earned or Paid
|
|
|
Name
|
in Cash
(1)
($)
|
Stock Awards
(2)(3)(4)
($)
|
Total ($)
|
Thomas Bartlett
|
75,000
|
249,937
|
324,937
|
Nanci Caldwell
|
65,000
|
249,937
|
314,937
|
Gary Hromadko
|
91,000
|
249,937
|
340,937
|
John Hughes
|
57,692
|
1,840,207
|
1,897,899
|
Scott Kriens
|
85,000
|
249,937
|
334,937
|
William Luby
|
77,500
|
249,937
|
327,437
|
Irving Lyons III
|
93,000
|
249,937
|
342,937
|
Christopher Paisley
|
128,000
|
249,937
|
377,937
|
|
1.
|
Amounts listed in this column include the annual retainers for Board and committee service. Board and committee retainers
are prorated based on the number of days the director served
during the year. Mr. Hromadko, Mr. Lyons and Mr. Paisley received
additional fees for their attendance at real estate committee meetings in 2016. The amount in this column for Mr. Paisley
also includes a $25,000 retainer for service as lead independent director.
|
|
2.
|
Reflects RSUs covering 683 shares granted to each non-employee director on the date of our annual stockholders’ meeting
in June 2016, except that for Mr. Hughes, also reflects (a) RSUs covering 302 shares granted when Mr. Hughes joined the Board in
Jan. 2016 and (b) RSUs covering 4,874 shares granted in Feb. 2016 as a substitute award for shares Mr. Hughes held at Telecity,
which shares will vest in June 2018 subject to his continuous service as a non-employee director at Equinix.
|
|
3.
|
Reflects the aggregate grant date fair value of the RSU awards granted to the director in 2016 computed in accordance with
FASB ASC Topic 718. See Note 13 of the notes to our consolidated financial statements in our Annual Report on Form 10-K filed with
the Securities and Exchange Commission on Feb. 27, 2017 for a discussion of all assumptions made by Equinix in determining the
grant date fair value of our equity awards.
|
|
4.
|
As of Dec. 31, 2016, Mr. Kriens held outstanding options to purchase 10,592 shares of our common stock, Mr. Lyons held outstanding
options to purchase 5,296 shares of our common stock and Mr. Paisley held outstanding options to purchase 1,593 shares of our common
stock. As of Dec. 31, 2016, Mr. Bartlett, Ms. Caldwell, Mr. Hromadko, Mr. Kriens, Mr. Luby, Mr. Lyons and Mr. Paisley each held
683 unvested RSUs (including accrued dividend equivalent units) and Mr. Hughes held 5,557 unvested RSUs.
|
Mr. Van Camp is our executive chairman, but
not a named executive officer, and does not receive any additional compensation for services provided as a director. For the
year ended Dec. 31, 2016, Mr. Van Camp earned $320,978 in salary and was granted a total of 4,962 RSUs (at maximum award
sizes), with the same service and performance-vesting requirements as those granted to our named executive officers, for his
service as Equinix’s executive chairman. Mr. Smith, our chief executive officer and president, does not receive any
additional compensation for services provided as a director.
Equinix 2017 Proxy Statement •
GOVERNANCE
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18
|
Equinix stock ownership
The following table sets forth, as of April 1, 2017,
certain information with respect to shares beneficially owned by (i) each person who is known by Equinix to be the beneficial
owner of more than 5% of Equinix’s outstanding shares of common stock, (ii) each of Equinix’s directors and nominees,
(iii) each of the executive officers named in Executive Compensation and Related Information, and (iv) all current directors and
executive officers (as defined by applicable securities laws) as a group. Beneficial ownership has been determined in accordance
with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one
person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed
to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or
warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person,
the amount of shares is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason
of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does
not necessarily reflect the person’s actual voting power at any particular date. Unless otherwise indicated, the address
for each listed stockholder is c/o Equinix, Inc., One Lagoon Drive, Redwood City, CA 94065.
Name of Beneficial Owner
|
Number of Shares
|
Percentage of Total
|
Thomas Bartlett
|
3,864
|
*
|
Nanci Caldwell
|
389
|
*
|
Michael
Campbell
|
1,617
|
*
|
Gary
Hromadko
|
167,944
|
*
|
John
Hughes
|
2,329
|
*
|
Scott Kriens
(1)
|
84,900
|
*
|
William Luby
(2)
|
51,721
|
*
|
Irving Lyons
III
(3)
|
27,087
|
*
|
Charles Meyers
|
537
|
*
|
Christopher Paisley
(4)
|
19,627
|
*
|
Eric Schwartz
|
3,336
|
*
|
Stephen Smith
|
30,364
|
*
|
Karl Strohmeyer
|
1,460
|
*
|
Keith Taylor
|
37,996
|
*
|
Peter Van Camp
|
8,569
|
*
|
The
Vanguard Group LLC
(5)
100 Vanguard
Blvd, Malvern, PA 19355
|
11,993,481
|
15.39%
|
Black
Rock Fund Advisors
(6)
Park
Avenue Plaza, 55 East 52nd Street, New York, NY 10055
|
5,831,567
|
7.48%
|
All
current directors and executive officers as a group (14 persons)
(7)
|
450,401
|
*
|
|
1.
|
Includes 4,031 shares pursuant to vested RSUs as to which Mr. Kriens has deferred the settlement of until the earlier of 30
days from his termination of service or Feb. 15, 2032 and includes 959 shares pursuant to vested RSUs as to which Mr. Kriens has
deferred the settlement of until 30 days from his termination of service.
|
|
2.
|
Includes 6,220 shares pursuant to vested RSUs as to which Mr. Luby has deferred the settlement of until the earlier of 30 days
from his termination of service or Feb. 15, 2020, and 959 shares pursuant to vested RSUs as to which Mr. Luby has deferred the
settlement of until the earlier of 30 days from his termination of service or Feb. 15, 2022. Mr. Luby disclaims beneficial ownership
of 5,000 shares held in the Luby Family Trust except to the extent of his pecuniary interest therein.
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3.
|
Includes 5,296 shares subject to options exercisable within 60 days of April 1, 2017. Also includes 1,340 shares pursuant to
vested RSUs for which settlement has been deferred until the earlier of 30 days from his termination of service or Feb. 15, 2019
and 959 shares pursuant to vested RSUs for which settlement has been deferred until the earlier of 30 days from his termination
of service.
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4.
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Includes 1,593 shares subject to options exercisable within 60 days of April 1, 2017. Also includes an aggregate of 845 shares
held in trusts for Mr. Paisley’s children and a brother.
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5.
|
Based on the Schedule 13D filed with the Securities and Exchange Commission as of Dec. 31, 2016. Includes 11,870,577 shares
that are owned directly, 112,382 with sole voting power and 122,904 shares with dispositive power by The Vanguard Group Inc., an
investment advisor. The total amount beneficially owned for The Vanguard Group as a whole is 11,993,481.
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6.
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Based on the Schedule 13D filed with the Securities and Exchange Commission as of Dec. 31, 2016. Includes 5,183,470 shares
that are owned directly by Black Rock, Inc., a parent holding company.
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7.
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Includes an aggregate of 6,889 shares subject to options exercisable within 60 days of April 1, 2017. Also includes 14,468
shares pursuant to deferred RSUs.
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Equinix 2017 Proxy Statement •
GOVERNANCE
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19
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Related party transactions
APPROVAL OF RELATED PARTY TRANSACTIONS
Per its written charter, Equinix’s
Audit Committee is responsible for reviewing all related party transactions in accordance with the rules of the NASDAQ National
Market. Related parties include any of our directors or executive officers, our greater than 5% stockholders, and their immediate
family members.
We review related party transactions due to the potential
for a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to
interfere, with our interests. To identify related party transactions, each year we require our directors and executive officers
to complete a questionnaire identifying any transactions with us in which the executive officer or director or their family members
have an interest. We seek updates to this information from our directors and executive officers on a quarterly basis. We also ask
our directors to update their list of companies they are affiliated with on a quarterly basis to help us identify related party
transactions.
Finally, our Code of Business Conduct
establishes corporate standards of behavior for all our employees, officers and directors and sets our expectations of
contractors and agents. Our Code of Business Conduct seeks to deter wrongdoing and to promote honest and ethical conduct and
encourages the reporting of illegal or unethical behavior. Waivers of the Code of Business Conduct may be granted by
Equinix’s chief executive officer, chief legal officer or compliance officer, provided that waivers for executive
officers or directors may only be granted by the Board or by one of its committees.
The Audit Committee Charter and the Code of Business
Conduct are available on the corporate governance section of Equinix’s website at Equinix.com.
RELATED PARTY TRANSACTIONS FOR 2016
Cohen & Steers Capital Management, Inc. was
a holder of greater than 5% of our outstanding common stock during the 2016 fiscal year. In 2016, revenues from entities affiliated
with Cohen & Steers totaled approximately $403,000.
Equinix 2017 Proxy Statement •
GOVERNANCE
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20
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COMPENSATION
PROPOSAL 2
— Advisory non-binding vote
on executive compensation
The Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 (the “Dodd-Frank Act”) contains a provision that is commonly known as
“Say-on-Pay.” Say-on-Pay gives our stockholders an opportunity to vote on an advisory, non-binding basis to
approve the 2016 compensation of our named executive officers as disclosed in this proxy statement. We are asking our
stockholders to indicate their support for the compensation of our named executive officers as described in this proxy
statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our
named executive officers and the executive compensation program and practices described in this proxy statement. Our
executive compensation program is tied directly to the performance of the business to ensure strong growth and value creation
for stockholders using metrics we believe best indicate the success of our business. Please read “Compensation
Discussion and Analysis” and the executive compensation tables and narrative disclosure for a detailed explanation of
our executive compensation program and practices.
Accordingly, we ask that you vote “FOR”
the following resolution:
“RESOLVED, that the stockholders of Equinix,
Inc., hereby approve, on an advisory basis, the compensation of the named executive officers as disclosed pursuant to the compensation
disclosure rules of the Securities and Exchange Commission in Item 402 of Regulation S-K, including the Compensation Discussion
and Analysis, the compensation tables and any related material disclosed in this proxy statement.”
This advisory vote on executive compensation
is not binding on us. However, the Board and the Compensation Committee highly value the opinions of our stockholders. To the
extent there is a significant vote against this proposal, we will seek to determine the reasons for our stockholders’
concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns when
making future executive compensation decisions.
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The
Board recommends a vote "FOR" proposal 2
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Equinix 2017 Proxy Statement •
COMPENSATION
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21
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PROPOSAL 3
— Advisory non-binding
vote on frequency of executive compensation vote
The Dodd-Frank Act also contains a provision enabling
our stockholders to indicate how frequently we should have a “Say on Pay” vote. By voting on this Proposal 3, our stockholders
may indicate whether they would prefer to vote on an advisory, non-binding basis to approve the compensation of our named executive
officers every one, two or three years.
After careful consideration, the Board of
Directors has determined that a Say on Pay vote that occurs every year is the most appropriate alternative for Equinix.
Therefore, the Board recommends that you vote for an annual frequency on holding future Say on Pay votes. In reaching its
recommendation, the Board believes that an annual Say on Pay vote will allow our stockholders to provide us with meaningful
and direct input on our executive compensation philosophy, policies and programs. An annual advisory vote will also foster
useful communication with our stockholders by providing our stockholders with a clear and timely means to express any
concerns and questions.
You
may cast your vote on your preferred voting frequency by choosing the option of every year, every two years, every three years
or abstain from voting. Although this vote is advisory and not binding, the Board and Equinix highly value the opinions of our
stockholders and will consider the outcome of this vote when determining the frequency of future stockholder votes on executive
compensation.
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The
Board recommends a vote "FOR" proposal 3
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Equinix 2017 Proxy Statement •
COMPENSATION
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22
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PROPOSAL 4
— Approval of material
terms of long-term incentive performance awards for certain executives pursuant to section 162(m) of the internal revenue code
Under Section 162(m) of the Internal Revenue
Code (the “Code”), in order for compensation in excess of $1,000,000 paid in any year to any “covered
employee” to be deductible by Equinix, such compensation must qualify as “performance-based.” The
Compensation Committee of the Board has adopted the following terms, subject to stockholder approval, under which long-term
incentive awards for covered employees are intended to be performance-based for purposes of exemption from the limitations of
Section 162(m). Covered employees are defined by 162(m) of the Code as a company’s chief executive officer or any of
such company’s four other most highly compensated executive officers named in the proxy statement (but, under current
guidance, exclude the chief financial officer). To enable compensation in connection with long-term incentive awards that are
contingent on the attainment of performance goals to constitute “qualified performance-based” compensation within
the meaning of Section 162(m) of the Code, the stockholders of the Company are being asked to approve the following material
terms of the applicable performance awards: (i) the employees eligible to receive the performance-based long-term incentive
awards, (ii) the business criteria under which the performance-based long-term incentive awards will be determined, and (iii)
the maximum aggregate amounts of performance-based long-term incentive awards that may be made to any individual employee
during a specified period.
Actual long-term incentive awards are made
pursuant to other incentive plans, such as Equinix’s 2000 Equity Incentive Plan. Our 2000 Equity Incentive Plan was
approved by stockholders in 2004.
Eligible Employees.
Performance-based long-term
incentive awards may be granted to our covered employees and all of our other executive officers and executive team members (as
they may be constituted from time to time, and including persons who may become covered employees between the time of grant and
payment of the award). As of April 5, 2017, 14 employees are eligible to receive performance-based long-term incentive awards.
Business Criteria.
For performance
awards intended to qualify under Section 162(m), for each fiscal year or performance period, the Compensation Committee may
select one or more performance measures and set the performance goals for these measures. The performance criteria for
long-term incentive performance awards (whether such awards take the form of stock or stock units or equivalents) made (or
paid) to any covered employee shall consist of objective tests based on one or more of the following: earnings, cash flow,
customer satisfaction, revenues, financial return ratios, market performance, stockholder return and/or value, operating
profits (including adjusted EBITDA and adjusted funds from operations (“AFFO”)), net profits, earnings per share,
profit returns and margins, stock price, working capital, and changes between years or periods that are determined with
respect to any of the above-listed performance criteria. The performance periods may extend longer than a fiscal year up to
five calendar years, and may overlap one another. Performance criteria may be measured solely on a corporate, subsidiary or
business unit basis, or a combination thereof. The permissible forms, in which a performance goal may be expressed, include
percentage growth, performance against an index or peer companies, absolute growth, cumulative growth, a designated absolute
amount, percent of sales, and per share of common stock outstanding. The formula for any such award may include or exclude
items to measure specific objectives, such as losses from discontinued operations, unusual, infrequently occurring or
nonrecurring gains or losses, the cumulative effect of accounting changes, acquisitions or divestitures, and foreign exchange
impacts, and will be based on accounting rules and related Equinix accounting policies and practices in effect on the date
these awards are approved by the Compensation Committee.
Maximum Awards.
Under these terms, no employee
may receive a long-term incentive award in any calendar year for more than 250,000 Equinix shares of common stock, stock units
or share equivalents, subject to adjustment for changes in corporate capitalization, such as stock splits. In addition, these awards
are subject to
Equinix 2017 Proxy Statement •
COMPENSATION
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23
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any further limitations, including per-participant
limits, that may be specified in Equinix’s 2000 Equity Incentive Plan or any variable compensation plans under which actual
awards are authorized and issued. Award recipients will not be required to pay any cash consideration for the grant of performance-based
long-term incentive awards or for the receipt of shares of Equinix common stock (or the cash equivalent), if the applicable performance
goals are met, as certified by the Compensation Committee. As of April 5, 2017, the fair market value of a share of Equinix common
stock was $400.04.
New Plan Benefits.
Awards under these terms
will be based upon Equinix’s future performance. Accordingly, the amount of long-term incentive compensation to be paid in
the future to Equinix’s current and future covered employees under these terms cannot be determined at this time, as actual
amounts will depend on the size of such awards, on actual performance and on the Compensation Committee’s discretion to reduce
such amounts. For an understanding of the size and structure of these awards in the past, see the Outstanding Equity Awards at
2016 Fiscal Year-End table.
Federal Income Tax Consequences.
The
following is only a summary of the effect of federal income taxation upon Equinix and performance-based long-term incentive
award recipients. It does not purport to be complete, and does not discuss the income tax laws of any municipality, state or
foreign country in which the employee may reside. As further described above in this proposal, performance-based long-term
incentive awards granted to covered employees may qualify as “qualified performance-based compensation” under
Section 162(m) of the Code. To qualify for this exception, the awards must be granted by a committee consisting solely of two
or more “outside directors” within the meaning of Section 162(m). In addition, the vesting and/ or payment of the
awards, must be contingent upon satisfying performance goals based on one or more of the business criteria listed above (see
above description under “Business Criteria”), as established and certified by a committee consisting solely of
two or more outside directors. To qualify, awards must also be within the maximum limits on the amount that may be awarded to
any one employee during any calendar year (as specified above under “Maximum Awards”). If awards constitute
“qualified performance-based compensation” the amounts payable to covered employees pursuant to the awards should
be deductible by Equinix. Such amounts will be taxable to award recipients as ordinary income at the time shares are
delivered or cash is paid, as applicable.
Nothing
in these terms precludes the Compensation Committee from making any payments or granting any awards outside of these terms that
are not designed to qualify for tax deductibility under Section 162(m) and there is no guarantee that awards intended to qualify
for tax deductibility under Section 162(m) will ultimately be viewed as so qualifying by the Internal Revenue Service.
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The
Board recommends a vote "FOR" proposal 4
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Equinix 2017 Proxy Statement •
COMPENSATION
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24
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Executive officers
The following are the executive officers (as defined
by applicable securities laws) of Equinix (with the exception of Mr. Smith, Equinix’s chief executive officer and president,
whose information appears in the section “Election of Directors”), their ages as of April 1, 2017, their positions
and offices held with Equinix, and certain biographical information. All serve at the discretion of the Board.
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Mike
Campbell
Age 51
Chief sales officer
(since 2016)
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Prior business experience
• Senior vice president of sales,
Equinix Americas (2015–2016)
• Various
sales management positions, most recently as senior vice president of sales, Symantec (2010–2015)
• Vice president, sales, Verisign
Americas, Verisign, prior to its merger into Symantec (2004–2010)
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Samuel
Lee
Age 49
President, Equinix
Asia-Pacific
(since 2006)
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Prior business experience
• Managing director, Equinix Hong
Kong (2000–2005)
• Managing
director, Pacific Gateway Exchange, a provider of wholesale and retail long distance, internet and bandwidth services (1998–2000)
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Charles
Meyers
Age 51
Chief operating
officer (since 2013)
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Prior business experience
• President, Equinix Americas (2010–2013)
• Various
positions, including group president of messaging and mobile media, and as product group executive for the security and communications
portfolio, VeriSign, an internet security company now part of Symantec (2006–2010)
•
Various positions, including group vice president of global marketing, president of IP and data services and senior vice
president, Softswitch Services (2001–2006)
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Eric
Schwartz
Age 50
President, Equinix
EMEA (since 2008)
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Prior business experience
• Chief development officer, Equinix
(2008–2008)
• Vice president, strategy and services,
Equinix (2006–2008)
• Vice
president, IP Communications, Bell South, a telecommunications company (1997–2006)
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Karl
Strohmeyer
Age 45
President, Equinix
Americas
(since 2013)
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Prior business experience
• Various
roles, including group vice president, Level 3 North American enterprise group, Level 3, a communications services company (2001–2013)
• Various executive positions,
NetRail, an internet services company (1998–2001)
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Equinix 2017 Proxy Statement •
COMPENSATION
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25
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Keith
Taylor
Age 55
Chief financial
officer (since 2005)
|
Prior business experience
• Various
roles, including vice president, finance and chief accounting officer, Equinix (2001–2005)
• Director of finance and administration,
Equinix (1999–2001)
• Vice president
finance and interim chief financial officer, International Wireless Communications, an operator, owner and developer of wireless
communications networks (1996–1999)
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Executive compensation and related information
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis (“CD&A”)
describes Equinix’s executive compensation policies and decisions for the individuals who served as our chief executive
officer and chief financial officer during 2016, as well as the other individuals included in the 2016 Summary Compensation Table
in this proxy statement, who are collectively referred to as the named executive officers. Those individuals are:
• Stephen Smith—chief executive
officer and president
• Keith Taylor—chief financial
officer
• Charles Meyers—chief
operating officer
• Eric Schwartz—president,
EMEA
• Karl Strohmeyer—president,
Americas
Executive Summary
Overview
Our executive compensation program is tied directly
to the performance of the business to ensure strong growth and value creation for stockholders using metrics we believe best indicate
the success of our business.
In 2016, our compensation program for the named
executive officers consisted primarily of base salary, annual incentive compensation, and long-term incentive compensation in
the form of time and performance-based restricted stock units (“RSUs”), for total potential compensation in 2016 as
follows
(1)
:
For 2016, 100% of our short-term and 75%
of our long-term incentives for our named executive officers were performance-based and at-risk, dependent on annual revenue and
adjusted funds from operations (“AFFO”)
(2)
growth, along with relative total stockholder return (“TSR”)
achievement against the IWB Russell 1000 Index Fund (the “Russell 1000”).
|
1.
|
Reflects the market value of the RSU awards on the grant dates of Feb. 11 and Mar. 16, 2016. Assumes the maximum size award
is earned under the 2016 annual incentive plan and the maximum number of shares is earned under the performance-based RSU awards.
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2.
|
AFFO represents funds from operations (“FFO”), excluding depreciation and amortization expense on non-real estate
assets, accretion, stock-based compensation, restructuring charges, impairment charges, acquisition costs, an installation revenue
adjustment, a straight-line rent expense adjustment, amortization of deferred financing costs, gains (losses) on debt extinguishment,
an income tax expense adjustment, recurring capital expenditures and adjustments from FFO to AFFO for unconsolidated joint ventures’
and non-controlling interests’ share of these items. FFO represents net income (loss), excluding gains (losses) from the
disposition of real estate assets, depreciation and amortization on real estate assets and adjustments for unconsolidated joint
ventures’ and non-controlling interests’ share of these items.
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Equinix 2017 Proxy Statement •
COMPENSATION
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26
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2016 Results
For 2016, we delivered revenue growth of 33% and
AFFO growth of 30%, on an as-reported basis, over strong 2015 results. Our revenue growth was greater than 14% on an organic and
constant currency basis. These results are reflected in the 2016 compensation of our named executive officers.
Governance
In Nov. 2016 the Compensation Committee
adopted a policy on recoupment of incentive compensation which applies those persons who are designated by the Board as “officers”
for purposes of Section 16 of the Securities Exchange Act of 1934, as amended and the rules promulgated thereunder (“Executive
Officers”). The policy states that the Board may require the return, repayment or forfeiture of any cash or equity-based
incentive compensation payment or award received by any current or former executive officer during the three completed fiscal years
immediately preceding the date on which we are required to prepare a restatement of our financial statements due to material noncompliance
with any financial reporting requirements under the securities laws and if certain other conditions are met.
In addition, our executive compensation
philosophy is complemented by the following governance best practices:
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•
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Mr. Smith and his direct reports are subject to stock ownership guidelines, at a level of three
times and one time base salary, respectively
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•
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We have a policy prohibiting all employees, including the named executive officers and members
of the Board, from engaging in transactions involving options on Equinix’s securities, such as puts, calls and other derivative
securities, whether on an exchange or in any other market, or in hedging transactions, such as collars and forward sale contracts
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•
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Our executives and members of the Board are prohibited from holding Equinix securities in a margin
account or pledging Equinix securities as collateral for a loan, absent an exception granted by the Compensation Committee on a
case-by-case basis
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•
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Named executive officers at Equinix are not offered any significant perquisites or tax gross-ups, other than in connection
with a relocation or international assignment
|
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•
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Our Compensation Committee is comprised solely of independent members
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|
•
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An independent Compensation Committee compensation consultant, Compensia, Inc., is retained
directly by the Compensation Committee and performs no other work for Equinix
|
|
•
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The Compensation Committee reviews tally sheets when making executive compensation decisions
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|
•
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In March 2017, we conducted a risk assessment of our compensation programs and presented the
results to the Compensation Committee. The Compensation Committee considered the findings of the assessment and agreed with our
conclusion that our compensation programs do not create excessive or inappropriate risks for Equinix
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Equinix 2017 Proxy Statement •
COMPENSATION
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Say on Pay 2016
In 2016, we held our annual stockholder
advisory vote on executive compensation. The proposal received significant stockholder support, with more than 96% of shares represented
in person or by proxy at the meeting, and entitled to vote on the matter, voting in favor of our program. The voting results did
not result in any changes to our executive compensation program design for 2017.
2016 Executive Compensation Program
2016 Program Philosophy and Objectives
Our executive compensation philosophy
for 2016 was to provide competitive total rewards programs globally to attract and retain top talent, utilizing a pay-for-performance
strategy at both the company and the individual level. Consistent with our compensation philosophy, a significant percentage of
each executive officer’s total compensation is tied to performance, as illustrated by the potential pay mixes described above.
2016 Pay Positioning
In making compensation decisions for
2016, the Compensation Committee assessed compensation levels against data provided by its consultant, Compensia, and approved
compensation plans and arrangements taking into account our competitive market for talent, including a peer group of companies
against which we compare our performance and executive compensation programs.
For 2016 executive compensation,
our goal was to provide base salary targeted at the 50th percentile and total cash compensation targeted between the 50th and
75th percentiles of market competitive pay practices, if targeted levels of performance were achieved under the annual cash
incentive plan. We generally targeted equity compensation at the 80th percentile of market competitive pay practices, to
aggressively align executive performance and rewards to company results and stockholder interests. We believe our
company’s strong performance in recent years, and the fact that a significant percentage of each executive
officer’s total compensation is tied to performance and thus “at risk,” supports our target pay
positioning.
We use peer group survey data, proxy
statement data and technology industry survey data to define our competitive market. With the assistance of Compensia, a preliminary
list of peer group companies was selected to establish the competitive market for the compensation of our executive officers in
May of 2015. In developing the peer group, the Committee decided to retain its 2014 approach to peer group selection, and oriented
the peer group predominately towards technology companies with similar financial characteristics (to reflect Equinix’s competitive
market), but included some “technology REITs” to provide a more balanced market perspective recognizing the importance
of considering REIT industry pay practices. Factors considered in developing the peer group included revenue of approximately
0.5-2.0x Equinix’s then-current revenue and market capitalization of approximately 0.33-3.0x Equinix’s then-current
market capitalization. Our peer group is reviewed annually to ensure it reflects changes in our market and competitors for business
and talent. For 2016 compensation decisions, our peer group consisted of the following companies:
• Adobe Systems
• Akamai Technologies
• American Tower
• Autodesk
|
• Brocade Communications
• Cerner
• Citrix Systems
• Crown Castle Intl.
|
• Digital Realty Trust
• F5 Networks
• Netflix
• Rackspace Hosting
|
• Red Hat
• Salesforce.com
• Synopys
• Trimble Navigation
|
The Compensation Committee reviews the
executive compensation levels of our executive officers at least annually to determine positioning to the competitive market.
If an element of compensation is found to be below the desired target level, a recommendation may be made by the chief
executive officer, or by the executive chairman in the case of the chief executive officer, to adjust that element of
compensation in light of our compensation philosophy and individual performance. Likewise, if the review shows an element of
our compensation to be above the desired target level, that data is also taken into consideration in determining compensation
position and movement for that individual. Our philosophy is not to reduce compensation, but instead to work with the various
elements comprising total compensation to slow or freeze an element’s growth
Equinix 2017 Proxy Statement •
COMPENSATION
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28
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to achieve the desired level of targeted total
compensation. In 2015, we participated in the AON/Radford High Technology compensation survey and used peer market data from a
subset of the survey to benchmark our executive positions for 2016 compensation decisions. In addition, we analyze peer company
data directly from proxy statements and other public sources.
2016 Compensation-Setting Process
In addition to reviewing executive officers’
total target compensation against the competitive market, the Compensation Committee also considers recommendations from the chief
executive officer regarding each compensation element for the executive officers who report directly to him based on the competitive
market data and his assessment of their individual performance. The chief executive officer, as the manager of the executive team,
assesses the named executive officers’ contributions to Equinix’s performance and makes a recommendation to the Compensation
Committee with respect to any merit increase in base salary, target annual incentive compensation opportunity and equity awards
for each named executive officer, other than himself. Each element of compensation is recommended to the Compensation Committee
based upon the individual’s performance, as well as internal equity within the framework established through the competitive
market data. The Compensation Committee also considers total target compensation compared to the competitive market data. The
Compensation Committee meets to evaluate, discuss and modify or approve these recommendations based on their own judgment. For
2016, the Compensation Committee, assisted by the executive chairman, conducted a similar evaluation of the chief executive officer’s
performance and approved his compensation elements.
Members of management support the Compensation Committee
in its work by preparing periodic analysis and modeling related to the compensation programs and providing frequent updates on
programs that fall under the Compensation Committee’s responsibility. In addition, the Compensation Committee has the exclusive
authority under its charter to engage the services of independent outside counsel, consultants, accountants and other advisers
to assist it in carrying out its duties. Since 2006, the Compensation Committee has engaged the services of Compensia as its independent
consultant to advise it on matters related to compensation for executive officers and other key employees, and on best practices
to follow as they review and make decisions on Equinix’s compensation programs. Our chief executive officer attends most
Compensation Committee meetings and reviews and provides input on agendas and compensation proposals and recommendations brought
before the Compensation Committee for review and approval.
In connection with the 2016 compensation decisions,
in Sept. 2015 Compensia presented to the Compensation Committee a detailed executive compensation analysis, assessing Equinix’s
current executive pay and financial performance as compared to our peer group. For our executive officers, including the named
executive officers, Compensia identified any gaps between the current and target pay positioning and presented market competitive
data for each position for base salary, target annual incentive compensation opportunity, long-term incentive compensation and
target total direct compensation, to provide a framework and guide for making individual compensation decisions. Compensia also
presented to the Compensation Committee an equity compensation market review, comparing the practices of our peer group in terms
of equity usage and equity program design.
At the same meeting, Compensia provided the Compensation
Committee with “tally sheets” outlining the total dollar compensation paid to each named executive officer in 2012,
2013, 2014 and 2015, including base salary, annual incentive compensation, long-term equity compensation and other compensation.
The Compensation Committee used the tally sheet information as a basis for understanding the potential impact of recommended changes
to the elements of our executive compensation program and to evaluate the degree to which unvested shares held by a named executive
officer encouraged retention.
In Nov. 2015, the Compensation Committee
considered executive compensation recommendations and compensation for the named executive officers was approved in Feb. and
Mar. 2016.
Compensia continues to advise the Compensation Committee
on an ongoing basis, and a representative from the firm attends all Compensation Committee meetings. In 2016, Compensia performed
its annual market review of executive pay practices, perquisites and benefits, as discussed above, and director compensation. Compensia
also provides routine updates to the Compensation Committee regarding legal and regulatory
Equinix 2017 Proxy Statement •
COMPENSATION
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trends. In 2016, Compensia also provided the
Compensation Committee with modeling and recommendations for Equinix’s equity program. The Compensation Committee has assessed
the independence of Compensia pursuant to Securities and Exchange Commission rules and concluded that Compensia’s work for
the Compensation Committee does not raise a conflict of interest.
Principal Elements of Executive Compensation
Base Salary
Base salary for the executive officers is
established based on the underlying scope of their respective responsibilities, taking into account competitive market
compensation data and individual performance. In Feb. 2016, based on the executive compensation assessment from the fall and
the recommendations of the chief executive officer (except with respect to his own salary which was recommended by
Equinix’s executive chairman in consultation with the Compensation Committee), base salaries for our named executive
officers were approved by the Compensation Committee, effective Mar. 1, 2016, for Eric Schwartz and Feb. 21, 2016, for all
other named executive officers, as follows:
Name
|
Prior Salary
|
New Salary
|
Increase
|
Stephen Smith
|
$900,000
|
$1,000,000
|
11.1%
|
Keith Taylor
|
$525,000
|
$580,000
|
10.5%
|
Charles Meyers
|
$520,000
|
$575,000
|
10.6%
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Eric Schwartz
|
$390,000
|
$425,000
|
9.0%
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Karl Strohmeyer
|
$430,000
|
$450,000
|
4.7%
|
For 2016, named executive officer salaries
were positioned based on our philosophy of the 50th market percentiles for cash compensation. The base salary increases were based
primarily on the aggressive continued upward movement of base salaries in the competitive market, along with our desire to keep
total cash compensation aligned to our philosophy and individual performance considerations.
Annual Incentive Compensation
Annual incentive compensation for the named
executive officers is linked to the attainment of Equinix’s corporate growth goals and is not tied to individual
performance. This focus on team performance at the executive level is designed to align senior leaders towards common goals.
Accordingly, in Mar. 2016, the Compensation Committee adopted the 2016 incentive plan, pursuant to which the named executive
officers were eligible to earn an annual cash bonus. Under the 2016 incentive plan, the Compensation Committee assigned each
named executive officer an annual target bonus opportunity tied to the achievement of specific goals related to revenue and
AFFO as set forth in the 2016 operating plan approved by the Board. These goals included results from our recently closed
acquisitions of Telecity and Bit-isle and were reflective of bookings growth based on an assessment of our addressable
market, together with what we had experienced in prior years, while taking into account the available inventory in each of
our markets and the unfolding global economic conditions. The goals also contemplated strong growth in the U.S., Europe and
Asia, investment in headcount and key areas to scale Equinix to the appropriate operating level, continued expansion in key
markets where inventory was limited or would become limited during the year, and where we saw customer demand, and
distributions to our stockholders. Because there would be no pool if revenue and AFFO were 95% or less than the operating
plan target, annual incentive compensation was 100% at risk. For 2016, Equinix funded 100% of the 2016 incentive plan.
Equinix 2017 Proxy Statement •
COMPENSATION
|
30
|
Metric
|
Weighting
|
Target
|
Results*
|
Achievement
|
Revenue
|
50%
|
$3,550 million
|
$3,566 million
|
100%
|
AFFO
|
50%
|
$1,078 million
|
$1,129 million
|
100%
|
*
|
Adjusted for one-time events and excluding the impact of fluctuations in foreign currencies against the foreign currency rates
applied in the 2016 operating plan.
|
The target bonus opportunity set for each named executive
officer was based on the target bonuses for comparable positions in our competitive market, targeting the 50th–75th percentiles
for total cash compensation, and was stated in terms of a percentage of the named executive officer’s base salary. For 2016,
the Compensation Committee approved increases in the target bonus opportunities for Messrs. Taylor, Meyers, Schwartz and Strohmeyer
to keep their target total cash compensation, including salary and variable pay mix, on pace with the competitive market. There
was no change to the target bonus opportunity for Mr. Smith. Under the 2016 annual incentive plan, target bonus opportunities,
as a percentage of base salary, and bonus awards (calculated based on salary in effect at year-end) were as follows:
|
2015 Bonus Opportunity
|
2016 Bonus Opportunity
|
Bonus Award Paid
|
Name
|
(% Base Salary)
|
(% Base Salary)
|
(100% of Target)
|
|
|
|
|
Stephen Smith
|
125%
|
125%
|
$1,250,000
|
Keith Taylor
|
90%
|
95%
|
$551,000
|
Charles Meyers
|
90%
|
95%
|
$546,250
|
Eric Schwartz
|
70%
|
75%
|
$318,750
|
Karl Strohmeyer
|
70%
|
75%
|
$337,500
|
Long-Term Equity Compensation
The Compensation Committee believes that stock awards
with performance-based vesting encourage executive performance by focusing on long-term growth and profitability, which it believes
are the primary drivers of stockholder value creation. Generally, a market competitive equity award is made in the year that an
executive officer commences employment with Equinix. Thereafter, additional “refresh” awards are generally made during
the first quarter of each year. The size of each award is based upon consideration of a number of factors, including consideration
of the individual’s position with Equinix, their potential for future responsibility and promotion, their individual performance
in the recent period, Equinix’s performance in the recent period, the competitive marketplace trends, internal equity and
the retention value of unvested shares held by the individual at the time of the new grant. In general, given the heavy at-risk
performance orientation, the desired pay position for long-term equity compensation for executives is at the 80th percentile of
the competitive market data.
Our equity awards also accrue dividend equivalents,
which vest on the same schedule as the underlying award and are settled in cash, and therefore no dividend equivalents are paid
on awards unless and until the underlying award becomes earned and vested.
In Feb. and Mar. 2016, the Compensation
Committee discussed long-term incentive compensation awards in the form of RSUs for the executive officers, including the
named executive officers, and determined that for 2016, TSR would be kept as a performance metric for 25% of long-term
incentive compensation for executive officers (the “TSR Performance-Based Award”) as a means of further aligning
management incentives and stockholder interests. Additionally, a time-based award (the “Time-Based Award”)
represented 25% of long-term incentive compensation. The Committee believed that having a limited percentage of long-term
compensation allocated to time-based awards was an appropriate retention balance with our performance-based awards, while
still tying executives’ interests to our stock price performance over the vesting schedule. The remaining 50% of
long-term incentive compensation would be based on revenue and AFFO performance (the “Revenue-AFFO Performance-Based
Award”).
Equinix 2017 Proxy Statement •
COMPENSATION
|
31
|
In Feb. and Mar. 2016, the Compensation Committee
considered proposals for performance-based RSU awards, including proposed award sizes, and granted a Revenue-AFFO Performance-Based
Award, a TSR Performance-Based Award and a Time-Based Award to each of the executive officers.
2016 Awards
Revenue-AFFO Performance-Based Awards
The Revenue-AFFO Performance-Based Awards were
100% at risk and could be earned only if Equinix achieved revenues greater than $3,396 million and AFFO greater than $1,046
million in 2016. The number of RSUs earned would then be determined linearly based on the degree of achievement of revenue
and AFFO targets, from 0% of the award at or below the foregoing thresholds to 100% of the award (upon achievement of both
revenue and AFFO stretch goals of at least $3,575 million and $1,102 million, respectively). Fifty percent of any earned RSUs
would vest upon certification that Equinix had achieved at least the minimum revenue and AFFO goals for 2016; 25% of the
earned RSUs will vest on Feb. 15, 2018; and the remaining 25% of the earned RSUs will vest on Feb. 15, 2019. The Compensation
Committee deemed the one year performance period, followed by time based vesting over the following two years, appropriate
given the high growth orientation of the business and the practices of peer companies with whom we compete for talent.
The revenue and AFFO goals were determined as described
above under “Annual Incentive Plan” but with additional stretch goals required to be obtained in order to earn 100%
of the award. The goals excluded the impact of fluctuations in foreign currencies against the foreign currency rates used in the
2016 operating plan and were subject to adjustment for losses from discontinued operations, the cumulative effect of accounting
changes, acquisitions or divestitures, sales of assets, and/or data center expansions not contemplated by Equinix at the time of
grant.
TSR Performance-Based Awards
The number of shares
earned under the TSR Performance-Based Awards will be determined based on the TSR of Equinix’s common stock
(“EQIX”) against the Russell 1000 over a three-year period, calculated using the 30-day trading averages for both
EQIX and the Russell 1000 prior to the start (Jan. 1, 2016) and end (Dec. 31, 2018) of the performance period. The number of
RSUs vesting under the TSR Performance-Based Awards scale up or down such that the target shares increase or decrease by 2%
for every 1% that Equinix’s TSR exceeds or falls below the Russell 1000. Vesting will occur in early 2019 upon
certification of TSR over the performance period.
Time-Based Awards
Shares issuable under the Time-Based Awards vest
in three equal tranches on Jan. 15th in each of 2017, 2018 and 2019.
While the Compensation Committee approved maximum
award amounts at or near the top end of the market, the Compensation Committee believed this was appropriate because achieving
maximum payout under both the Revenue-AFFO Performance-Based Award and the TSR Performance-Based Award would/will require significant
over-performance by Equinix. The following table presents the maximum number of RSUs that could/can be earned under each RSU award,
as follows:
Equinix 2017 Proxy Statement •
COMPENSATION
|
32
|
Name
|
Revenue-AFFO
Performance-Based
Award (#)
|
TSR Performance-
Based Award (#)
|
Time
Based Award (#)
|
|
|
|
|
Stephen Smith
|
18,190
|
9,096
|
9,093
|
Keith Taylor
|
7,442
|
3,720
|
3,720
|
Charles Meyers
|
7,442
|
3,720
|
3,720
|
Eric Schwartz
|
4,796
|
2,398
|
2,398
|
Karl Strohmeyer
|
5,292
|
2,646
|
2,646
|
As described above, when adjusted for
currency fluctuations and one-time events, we achieved revenues of approximately $3,566 million and AFFO of approximately
$1,129 million for 2016. The certification of this performance triggered the Revenue-AFFO Performance-Based Awards at 97% of
the maximum award, with 50% vesting immediately and the remainder vesting into 2019 as described above.
Severance, Change-in-Control and Other Post-Employment
Programs
As described in detail under “Potential
Payments Upon Termination or Change-in-Control” in this proxy statement, we have entered into a severance agreement as
a part of each named executive officer’s offer of employment which provides for a cash severance payment and benefits
in the event his or her employment is terminated for any reason other than cause or he or she voluntarily resigns under
certain circumstances as described in the agreement. In the case of Mr. Meyers, Mr. Schwartz and Mr. Strohmeyer, these
agreements provide for severance payments and benefits only if the termination or voluntary resignation occurs in connection
with a change-in-control of Equinix. In the case of Mr. Smith and Mr. Taylor, the severance benefits are not contingent upon
a change-in-control. The severance agreements of Mr. Meyers, Mr. Schwartz and Mr. Strohmeyer also specify that they cannot
voluntarily resign for four months following a change-in-control of Equinix and still trigger the benefits under the
severance agreement. This “stay-put” clause was requested by the Compensation Committee to require that these
named executive officers stay to assist with any transition after a change-in-control. Mr. Smith’s severance agreement
provides that any restricted stock outstanding on the date of termination of employment will vest pro rata as to any
partially completed installment. All of the severance agreements have a three-year term and none provide for tax gross-ups.
The severance program is a competitive element of executive recruitment and compensation and allows for a temporary source of
income in the event of an executive officer’s involuntary termination of employment. In addition, in the case of
executive officers with agreements contingent on a change-in-control, the program is also designed to keep these executive
officers focused on a transaction designed to benefit stockholders, even if a job loss may result. Mr. Schwartz also has an
employment agreement with our Netherlands subsidiary in connection with his international assignment.
RSU awards granted to our named executive
officers vest as to 50% of the outstanding unvested portion of such awards in connection with an involuntarily termination or
voluntary resignation for good reason under certain circumstances, within 12 months following a change-in-control, in the
case of an involuntary termination, and between the date that is four months following a change-in-control and the date that
is 12 months following a change-in-control, in the case of a voluntary resignation for good reason. We believe some provision
for acceleration of equity awards in connection with employment terminations around a change-in-control protects the
stockholders’ interests by encouraging our executive officers to continue to devote their attention to their duties and
to facilitate an acquisition with minimized distraction, and by neutralizing bias the executive officers might have in
evaluating acquisition proposals that could result in a loss of equity compensation. In addition, we believe that the events
triggering payment, both a change-in-control and an involuntary termination of employment, and then only when there is no
misconduct by the executive officer, are reasonable hurdles for the ensuing rewards.
RSU awards granted to our employees, including our
named executive officers, shall vest as to the next unvested tranche of the award in the event of the death of the individual as
a benefit to his or her estate; provided however, in the case of performance RSUs, that the RSUs have been earned based on actual
performance results as certified by the Board or a committee thereof.
Equinix 2017 Proxy Statement •
COMPENSATION
|
33
|
Benefits and Perquisites
Retirement, life, health and other welfare benefits
at Equinix are the same for all eligible employees, including the named executive officers, and are designed to be aligned to
our competitive market. Equinix shares the cost of health and welfare benefits with all of our eligible employees and offers an
employer matching contribution to participant contributions to our Section 401(k) plan, for which all employees, including the
named executive officers, are eligible. In 2016, the maximum match was $7,950.
The Compensation Committee has approved an Executive
Physical Program to proactively manage health risks for our executive officers.
In May 2016, the Compensation Committee
approved an extension of the expatriate agreement for Mr. Schwartz in connection with his leadership role of our European
business and his assignment to our EMEA headquarters in Amsterdam, the Netherlands. The term of the expatriate agreement
extends through June 2019. For a complete discussion of the benefits and perquisites incurred under the expatriate agreement
in 2016, see the 2016 Summary Compensation Table in this proxy statement.
None of our named executive officers received tax
gross-ups or other amounts during 2016 for the payment of taxes in connection with other compensation payments, with the exception
of Mr. Schwartz in connection with his overseas assignment. For further information, see the 2016 Summary Compensation Table in
this proxy statement.
Accounting and Tax Considerations
Accounting Considerations
Base salary and annual incentive compensation are
recorded as an expense for financial reporting purposes by Equinix over the period the services are rendered by the individual
employees. In terms of long-term equity compensation, the fair value of RSU awards, determined as of their grant date, is amortized
as an expense for financial reporting purposes over the awards’ vesting period.
For 2016, the total compensation expense of Equinix’s
equity compensation programs under Financial Accounting Standards Board Accounting Standards Codification Topic 718, requiring
that all equity-based awards to employees be recognized in the income statement based upon their fair value over the requisite
service period, was approximately $156.1 million. The total compensation expense is considered by management in setting equity
compensation levels at Equinix.
Tax Considerations
Section 162(m) of the Internal Revenue Code places
a limit of $1 million on the amount of compensation that we may deduct for federal income tax purposes in any one year with respect
to our chief executive officer or any of our three other most highly compensated executive officers (excluding our chief financial
officer), each referred to as a “covered employee.” There is an exemption to the $1 million limitation for performance-based
compensation meeting certain requirements.
With the intention of qualifying for the
exemption from the $1 million deduction limitation, our stockholders approved a limitation under our 2000 Equity Incentive
Plan on the maximum number of shares of common stock for which any one participant may be granted stock options per fiscal
year and, in 2007 and 2012, our stockholders approved performance criteria and other terms intended to permit us to grant
long-term incentive awards (including performance-based RSUs) for covered employees under our Incentive Plan that would be
performance-based for purposes of the exemption from the limitations of Section 162(m). We are asking stockholders to
reapprove these performance terms this year. For further information, see Proposal 4 elsewhere in this proxy statement.
Equinix 2017 Proxy Statement •
COMPENSATION
|
34
|
To maintain flexibility in compensating our
named executive officers, the Compensation Committee has not adopted a policy requiring all compensation to be deductible. The
limitation of Section 162(m) does not cause a substantial impact to our income tax position.
COMPENSATION COMMITTEE REPORT
Equinix’s Compensation Committee has reviewed
and discussed the foregoing Compensation Discussion and Analysis with management and, based on such review and discussions, the
Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
The Compensation Committee:
Irving Lyons III, Chairman
Scott Kriens
William Luby
Equinix 2017 Proxy Statement •
COMPENSATION
|
35
|
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation awarded
to, earned by, or paid to each individual who served as Equinix’s “principal executive officer” or Equinix’s
“principal financial officer” during the fiscal year, and Equinix’s three other most highly compensated executive
officers for the fiscal year (collectively, our “named executive officers”).
|
|
|
|
|
Non-Equity
|
All Other
|
|
Name and Principal
|
|
|
|
Stock Awards
(1)
|
Incentive Plan
|
Compensation
|
|
Position
|
Year
|
Salary ($)
|
Bonus ($)
|
($)
|
Compensation
(2)
($)
|
($)
|
Total ($)
|
Stephen Smith
|
2016
|
984,615
|
—
|
9,805,939
|
1,250,000
|
7,950
(3)
|
12,048,504
|
Chief Executive Officer &
|
2015
|
917,308
|
—
|
9,063,820
|
1,125,000
|
7,800
|
11,113,928
|
President
|
2014
|
804,231
|
—
|
9,688,500
|
1,012,500
|
7,800
|
11,513,031
|
Keith Taylor
|
2016
|
571,538
|
—
|
4,011,574
|
551,000
|
7,950
(3)
|
5,142,062
|
Chief Financial Officer
|
2015
|
538,462
|
—
|
3,509,627
|
472,500
|
7,800
|
4,528,389
|
|
2014
|
487,115
|
—
|
3,681,630
|
416,500
|
7,800
|
4,593,045
|
Charles Meyers
|
2016
|
601,583
|
—
|
4,011,574
|
546,250
|
7,950
(3)
|
5,167,357
|
Chief Operating Officer
|
2015
|
533,269
|
—
|
3,314,312
|
468,000
|
7,950
|
4,323,531
|
|
2014
|
483,077
|
—
|
2,906,550
|
412,250
|
7,800
|
3,809,677
|
Eric Schwartz
|
2016
|
433,186
|
—
|
2,585,547
|
314,259
|
1,247,126
(3)
|
4,580,118
(4)
|
President, EMEA
|
2015
|
328,271
|
—
|
2,008,041
|
273,000
|
803,546
|
3,412,858
|
|
2014
|
362,489
|
—
|
2,131,470
|
259,346
|
846,607
|
3,599,912
|
Karl Strohmeyer
|
2016
|
459,438
|
—
|
2,852,943
|
337,500
|
7,950
(3)
|
3,657,831
|
President, Americas
|
2015
|
443,654
|
—
|
2,608,181
|
301,000
|
7,800
|
3,360,635
|
|
2014
|
412,115
|
—
|
—
|
—
|
7,800
|
419,915
|
|
1.
|
Reflects the aggregate grant date fair value of stock awards granted to the named executive
officer in the applicable fiscal year computed in accordance with FASB ASC Topic 718. For 2016, includes the following stock awards
granted to our named executive officers: (a) performance-based stock awards tied to revenue and AFFO performance for fiscal 2016,
for which the amounts in this column were determined assuming earning of 100% of the maximum grant date fair value, which was determined
to be the probable outcome at the time of grant; (b) performance-based stock awards tied to relative Total Shareholder Return (TSR),
for which the amounts in this column represent the grant date fair value estimated using Monte Carlo simulations of the variables
over the three-year performance period for such awards; and (c) service-based stock awards. See Note 13 of the notes to our consolidated
financial statements in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on Feb. 27, 2017 for a
discussion of the assumptions made by Equinix in determining the values of our equity awards.
|
|
2.
|
The amounts in this column reflect the cash bonus awards to the named executive officers under
our annual incentive plan for the applicable fiscal year. The performance criteria and other terms of the 2016 annual incentive
plan are discussed in greater detail in “Compensation Discussion and Analysis” in this proxy statement.
|
|
3.
|
Amounts include matching contributions made by Equinix to the named executive officers’
respective 401(k) plan accounts. All Equinix U.S. employees are eligible for our 401(k) plan matching program. For Mr. Schwartz,
includes the following expatriate benefits in connection with Mr. Schwartz’s assignments to the United Kingdom and the Netherlands:
$165,524 in company-paid housing-related expenses, $1,040,516 in taxes paid on Mr. Schwartz’s behalf, net of additional amounts
withheld from his other compensation, a $25,493.72 cost of living adjustment, a $13,917 automobile allowance, and $1,675 for miscellaneous
expenses related to his assignments (such as mail forwarding, wire fees, tax preparation fees and relocation service fees). For
other individuals, excludes personal benefits totaling less than $10,000.
|
|
4.
|
Mr. Schwartz’s salary and certain other benefits paid in local currency have been converted from euro to US dollars using
an exchange rate of 1.1075.
|
Equinix has entered into expatriate agreements with
Mr. Schwartz, pursuant to which we agreed to provide benefits including an annual cost of living adjustment (with the amount subject
to review periodically), company-provided housing, an automobile allowance, an educational allowance, a utilities allowance and
a tax equalization provision to the extent his taxes in the United Kingdom and the Netherlands exceed the taxes he would have paid
in the United States. Equinix has not entered into employment agreements with any of the other named executive officers, other
than at-will offer letters. Equinix has entered into severance agreements pursuant to which each named executive officer is entitled
to cash severance upon certain terminations of employment, and our named executive officers are also entitled to certain vesting
acceleration benefits in connection with a change-in-control of Equinix. See the section entitled “Potential Payments upon
Termination or Change-in-Control” elsewhere in this proxy statement for detailed information.
Equinix does not have defined benefit pension plans
or non-qualified deferred compensation plans for the named executive officers.
Equinix 2017 Proxy Statement •
COMPENSATION
|
36
|
2016 GRANTS OF PLAN-BASED AWARDS
The table below sets forth each non-equity incentive
plan award and equity award granted to Equinix’s named executive officers during fiscal year 2016.
Our 2016 annual incentive plan provided for target
bonuses if Equinix achieved the revenue and AFFO goals in its 2016 operating plan. Under the 2016 annual incentive plan, the revenue
goal was weighted at 50% and the AFFO goal was weighted at 50%. For every 1% below operating plan for revenue, the revenue portion
of the incentive plan pool was subject to reduction by 20%, and for every 1% below operating plan for AFFO, the AFFO portion of
the incentive plan pool was subject to reduction by 20%, such that no bonuses were payable if revenue and AFFO were each 95% or
less than the operating plan target. Actual amounts earned and paid for fiscal 2016 performance are set forth in the Summary Compensation
Table above.
The amounts in the “Equity Incentive
Plan Award” column reflect two different types of performance-based RSU awards granted during fiscal 2016 with both
service and performance vesting requirements. With respect to the first grant, none of these RSUs would be earned unless
Equinix achieved greater than 95% of both revenue and AFFO goals for 2016, with the actual number of RSUs (ranging from the
“threshold” to the “maximum” amounts in the table) based on the extent to which Equinix achieved the
goals. The earned RSUs would then vest, subject to continued service as follows: 50% in Feb. 2017 and an additional 25% in
each of Feb. 2018 and Feb. 2019. As further described in “Compensation Discussion and Analysis” above, in Feb.
2017, our Compensation Committee determined that the number of RSUs earned was at 97% of the maximum level, based on our
achievement of our 2016 revenue and AFFO goals. The second grant reflects RSUs that may be earned based on achievement of
relative TSR for the three-year period from 2016 through 2018, as further described above in “Compensation Discussion
and Analysis.” The extent to which these RSUs are earned will be determined in early 2019, at which time they will vest
to the extent earned. For 2016, the Committee also approved time-based RSUs, which vest over three years in equal annual
installments.
|
|
Estimated Possible
Payouts Under
Non-Equity Incentive
|
Estimated Future Payouts Under Equity
|
All
Other Stock
Awards:
Number of
|
Grant Date Fair
|
|
|
Plan
Awards
|
Incentive Plan Awards
|
Shares of
|
Value of Stock
|
|
|
Target/Maximum
(1)
|
Threshold
|
Target
|
Maximum
|
Stock or Units
|
and Option
|
Name
|
Grant Date
|
($)
|
(#)
|
(#)
|
(#)
|
(#)
|
Awards
(2)
($)
|
Stephen Smith
|
n/a
|
1,250,000
|
|
|
|
|
|
|
03/16/2016
(3)
|
|
—
|
15,098
|
18,190
|
|
5,761,864
|
|
02/11/2016
(4)
|
|
1,819
|
4,548
|
9,096
|
|
1,543,045
|
|
02/11/2016
(5)
|
|
|
|
|
9,093
|
2,501,030
|
Keith Taylor
|
n/a
|
551,000
|
|
|
|
|
|
|
03/16/2016
(3)
|
|
—
|
6,177
|
7,442
|
|
2,357,328
|
|
02/11/2016
(4)
|
|
744
|
1,860
|
3,720
|
|
631,060
|
|
02/11/2016
(5)
|
|
|
|
|
3,720
|
1,023,186
|
Charles Meyers
|
n/a
|
546,250
|
|
|
|
|
|
|
03/16/2016
(3)
|
|
—
|
6,177
|
7,442
|
|
2,357,328
|
|
02/11/2016
(4)
|
|
744
|
1,860
|
3,720
|
|
631,060
|
|
02/11/2016
(5)
|
|
|
|
|
3,720
|
1,023,186
|
Eric Schwartz
|
n/a
|
314,259
|
|
|
|
|
|
|
03/16/2016
(3)
|
|
—
|
3,981
|
4,796
|
|
1,519,181
|
|
02/11/2016
(4)
|
|
480
|
1,199
|
2,398
|
|
406,796
|
|
02/11/2016
(5)
|
|
|
|
|
2,398
|
659,570
|
Karl Strohmeyer
|
n/a
|
337,500
|
|
|
|
|
|
|
03/16/2016
(3)
|
|
—
|
4,392
|
5,292
|
|
1,676,294
|
|
02/11/2016
(4)
|
|
529
|
1,323
|
2,646
|
|
448,867
|
|
02/11/2016
(5)
|
|
|
|
|
2,646
|
727,782
|
|
1.
|
Because each individual’s target bonus is a specified percentage of base salary, the target bonus amount in this table
is based on the annual base salary in effect at the end of the year when bonuses are calculated.
|
|
2.
|
The amounts in this column represent the aggregate grant date fair value of the equity award
calculated in accordance with FASB ASC Topic 718. See Note 1 under the Summary Compensation Table. Also see Note 13 of the notes
to our consolidated financial statements in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on
Feb. 27, 2017 for a discussion of the assumptions made by Equinix in determining the grant date fair values of our equity awards.
|
|
3.
|
These are performance-based RSUs eligible to be earned based on revenue and AFFO goals for fiscal 2016, as further described
above.
|
|
4.
|
These are performance-based RSUs eligible to be earned based on relative TSR over a three-year period, as further described
above.
|
|
5.
|
These RSUs vest over three years in equal annual installments on Jan. 15 of each of 2017, 2018 and 2019.
|
Equinix 2017 Proxy Statement •
COMPENSATION
|
37
|
OUTSTANDING EQUITY AWARDS AT 2016 FISCAL YEAR-END
The following table sets forth
information regarding all unvested stock awards held by each of our named executive officers as of Dec. 31, 2016. None of our
named executive officers held outstanding stock options at Dec. 31, 2016.
|
Option Awards
|
Stock Awards
|
|
|
|
|
|
|
|
|
Equity Incentive
|
Plan Awards:
|
|
|
|
|
|
|
|
|
Plan Awards:
|
Market or
|
|
|
Number of
|
Number of
|
|
|
|
|
Number of
|
Payout Value
|
|
|
Securities
|
Securities
|
|
|
Number of
|
Market Value of
|
Unearned
|
of Unearned
|
|
|
Underlying
|
Underlying
|
|
|
Shares or Units
|
Shares or Units
|
Shares, Units
|
Shares, Units
|
|
|
Unexercised
|
Unexercised
|
Option
|
Option
|
of Stock That
|
of Stock That
|
or Other Rights
|
or Other Rights
|
|
Name
|
Option (#)
|
Options (#)
|
Exercise Price
|
Expiration
|
Have Not
|
Have Not
|
That Have Not
|
That Have Not
|
|
Exercisable
|
Unexercisable
|
($)
|
Date
|
Vested
(#)
|
Vested
(1)
($)
|
Vested(2) (#)
|
Vested
(1)
($)
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
|
|
|
|
|
8,935
(2)
|
3,193,458
|
|
|
|
Smith
|
|
|
|
|
11,548
(3)
|
4,127,371
|
|
|
|
|
|
|
|
|
18,190
(4)
|
6,501,288
|
|
|
|
|
|
|
|
|
7,697
(5)
|
2,750,985
|
|
|
|
|
|
|
|
|
9,093
(6)
|
3,249,929
|
|
|
|
|
|
|
|
|
|
|
11,548
(7)
|
4,127,371
|
|
|
|
|
|
|
|
|
9,096
(8)
|
3,251,001
|
|
Keith Taylor
|
|
|
|
|
3,394
(2)
|
1,213,050
|
|
|
|
|
|
|
|
|
4,471
(3)
|
1,597,980
|
|
|
|
|
|
|
|
|
7,442
(4)
|
2,659,845
|
|
|
|
|
|
|
|
|
2,979
(5)
|
1,064,724
|
|
|
|
|
|
|
|
|
3,720
(6)
|
1,329,565
|
|
|
|
|
|
|
|
|
|
|
4,470
(7)
|
1,597,623
|
|
|
|
|
|
|
|
|
3,720
(8)
|
1,329,565
|
|
Charles
|
|
|
|
|
2,679
(2)
|
957,501
|
|
|
|
Meyers
|
|
|
|
|
4,223
(3)
|
1,509,342
|
|
|
|
|
|
|
|
|
7,442
(4)
|
2,659,845
|
|
|
|
|
|
|
|
|
2,814
(5)
|
1,005,752
|
|
|
|
|
|
|
|
|
3,720
(6)
|
1,329,565
|
|
|
|
|
|
|
|
|
|
|
4,222
(7)
|
1,508,985
|
|
|
|
|
|
|
|
|
3,720
(8)
|
1,329,565
|
|
|
|
|
|
|
2,143
(9)
|
765,930
|
|
|
|
Eric
|
|
|
|
|
1,965
(2)
|
702,311
|
|
|
|
Schwartz
|
|
|
|
|
2,558
(3)
|
914,255
|
|
|
|
|
|
|
|
|
4,796
(4)
|
1,714,138
|
|
|
|
|
|
|
|
|
1,704
(5)
|
609,027
|
|
|
|
|
|
|
|
|
2,398
(6)
|
857,069
|
|
|
|
|
|
|
|
|
|
|
2,558
(7)
|
914,255
|
|
|
|
|
|
|
|
|
2,398
(8)
|
857,069
|
|
Karl Strohmeyer
|
|
|
|
|
3,323
(3)
|
1,187,673
|
|
|
|
|
|
|
|
|
5,292
(4)
|
1,891,413
|
|
|
|
|
|
|
|
|
2,214
(5)
|
791,306
|
|
|
|
|
|
|
|
|
2,646
(6)
|
945,707
|
|
|
|
|
|
|
|
|
|
|
3,324
(7)
|
1,188,030
|
|
|
|
|
|
|
|
|
2,646
(8)
|
945,707
|
|
Equinix 2017 Proxy Statement •
COMPENSATION
|
38
|
|
1.
|
Computed in accordance with Securities and Exchange Commission rules as the number of unvested units (which include accrued
dividend equivalent units) multiplied by the closing price of Equinix’s common stock on the last trading day at the end of
the 2016 fiscal year, which was $357.41 on Dec. 30, 2016. The actual value realized by the officer will depend on whether the award
vests and the future performance of Equinix’s common stock.
|
|
2.
|
These performance-based units were granted in fiscal 2014 and were eligible to be earned depending on whether and to what extent
Equinix achieved both its 2014 revenue and adjusted EBITDA goals. These share numbers reflect the amount actually earned for performance
during fiscal 2014, as determined in Feb. 2015. The remaining unvested amount vested in Feb. 2017.
|
|
3.
|
These performance-based units were granted in fiscal 2015 and were eligible to be earned depending on whether and to what extent
Equinix achieved both its 2015 revenue and AFFO goals. These share numbers reflect the maximum amount actually earned for performance
during fiscal 2015, as determined in Feb. 2016, with 50% of the RSUs vesting in Feb. 2016 and 25% of the RSUs vesting in each of
Feb. 2017 and Feb. 2018.
|
|
4.
|
These performance-based units were granted in fiscal 2016 and were eligible to be earned depending on whether and to what extent
Equinix achieved both its 2016 revenue and AFFO goals. These share numbers reflect the maximum amount actually earned for performance
during fiscal 2016, as determined in Feb. 2017, with 50% of the RSUs vesting in Feb. 2017 and 25% of the RSUs vesting in each of
Feb. 2018 and Feb. 2019.
|
|
5.
|
These time-based units were granted in fiscal 2015 and vest, subject to continuous service throughout the vesting period, in
three equal annual installments with the remaining unvested amount vesting on Jan. 15 of each of 2017 and 2018.
|
|
6.
|
These time-based units were granted in fiscal 2016 and vest, subject to continuous service throughout the vesting period, in
three equal annual installments on Jan. 15 of each of 2017, 2018 and 2019.
|
|
7.
|
These performance-based units were granted in fiscal 2015 and were eligible to be earned depending on meeting a relative TSR
goal for the three-year period ending Dec. 31, 2017. The share numbers in this table represent the maximum potential payout.
|
|
8.
|
These performance-based units were granted in fiscal 2016 and were eligible to be earned depending on meeting a relative TSR
goal for the three-year period ending Dec. 31, 2018. The share numbers in this table represent the maximum potential payout.
|
|
9.
|
These time-based units were granted in fiscal 2013, and the remaining unvested amount vests in Sept. 2017.
|
2016 OPTION EXERCISES AND STOCK VESTED
The following table shows the number of shares of
restricted shares or RSUs that vested during fiscal year 2016. None of our named executive officers acquired shares upon exercise
of options during fiscal year 2016.
|
Option Awards
|
Stock Awards
|
|
Number of Shares
|
|
Number of Shares
|
|
|
Acquired on Exercise
|
Value Realized on
|
Acquired on Vesting
|
Value Realized on
|
Name
|
(#)
|
Exercise
(1)
($)
|
(#)
|
Vesting
(2)
($)
|
Stephen Smith
|
—
|
—
|
45,083
|
13,316,481
|
Keith Taylor
|
—
|
—
|
17,179
|
5,073,917
|
Charles Meyers
|
—
|
—
|
16,673
|
5,071,904
|
Eric Schwartz
|
—
|
—
|
9,910
|
2,927,183
|
Karl Strohmeyer
|
—
|
—
|
8,716
|
2,729,155
|
|
1.
|
Value realized is based on the fair market value of our common stock on date of exercise minus the exercise price and does
not necessarily reflect proceeds actually received by the named executive officer.
|
|
2.
|
Value realized is based on the fair market value of our common stock on the vesting date, multiplied by the number of shares
or units vested, and does not necessarily reflect proceeds actually received by the named executive office.
|
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
Severance Agreements
We have entered into severance agreements with each
of our named executive officers. Under their severance agreements, Mr. Smith and Mr. Taylor are entitled to benefits if Equinix
terminates their employment for any reason other than cause or they voluntarily resign for good reason. Following a change-in-control,
the officers may not resign for good reason for a four-month period. Our other named executive officers are only entitled to severance
benefits if Equinix terminates their employment for any reason other than cause within 12 months after a change-in-control or if
they resign for good reason during the period beginning four months after a change-in-control and ending 12 months after a change-in-control.
In the event of a qualifying termination, these
severance agreements provide for the following benefits if the officer signs a general release of claims:
|
•
|
A lump sum severance payment equal to 100% of the officer’s annual base salary and target bonus (at the annual rate in
effect immediately prior to the actions that resulted in the qualifying termination).
|
|
•
|
If the officer elects to continue health insurance coverage under COBRA, then Equinix will pay the officer’s monthly
premium under COBRA for up to the 12-month period following cessation of the officer’s employment.
|
Equinix 2017 Proxy Statement •
COMPENSATION
|
39
|
|
•
|
Under Mr. Smith’s agreement only, his restricted stock awards will vest pro rata with respect to the installment that
would otherwise vest on the vesting date following his termination date, subject to any performance criteria applicable to a performance-vesting
award having been met as of his termination date.
|
In addition, for terminations
following a change-in-control, the officers may be eligible for accelerated vesting of equity as described below under
“Equity Vesting Acceleration.”
The severance agreements also contain
non-solicitation, non-competition (during employment with Equinix), cooperation and non-disparagement covenants.
The following definitions are used
in the severance agreements with our named executive officers:
|
•
|
In the case of Mr. Smith and Mr. Taylor, “good reason” means:
|
|
◦
|
a material diminution in the officer’s authority, duties or responsibilities;
|
|
◦
|
a material reduction in the officer’s level of compensation (including base salary and target bonus) other than pursuant
to a company-wide reduction of compensation where the reduction applicable to the officer is substantially equal, on a percentage
basis, to the reduction of the other executive officers;
|
|
◦
|
a relocation of the officer’s place of employment by more than 30 miles without the officer’s consent; or
|
|
◦
|
in the case of Mr. Smith only, a breach of his offer letter or severance agreement by Equinix or the failure of
any successor to assume those agreements.
|
|
•
|
In the case of the other named executive officers, “good reason” means:
|
|
◦
|
a material diminution in the officer’s authority, duties or responsibilities, provided, however, if by virtue of Equinix
being acquired and made a division or business unit of a larger entity following a change-in- control, the officer retains substantially
similar authority, duties or responsibilities for such division or business unit of the acquiring corporation, but not for the
entire acquiring corporation, such reduction in authority, duties or responsibilities shall not constitute good reason;
|
|
◦
|
a 10% or greater reduction in the officer’s average level of compensation over the prior three calendar years, determined
based on salary, target bonus and the FASB ASC Topic 718 grant value of any equity awards; or
|
|
◦
|
a relocation of the officer’s place of employment by more than 30 miles without the officer’s consent.
|
|
•
|
“Cause” includes the officer’s unauthorized use or disclosure of trade secrets which causes material harm
to Equinix, the officer’s conviction of, or a plea of “guilty” or “no contest” to a felony or the
officer’s gross misconduct.
|
|
•
|
The definition of “change-in-control” in the severance agreements with our named executive officers is the same
definition as in our 2000 Equity Incentive Plan, described below.
|
In May 2013, we entered into a revised expatriate
agreement with Mr. Schwartz pursuant to which he agreed to relocate to the Netherlands for approximately three years to serve as
our president, EMEA. Mr. Schwartz also has an employment agreement with our Netherlands subsidiary in connection with his international
assignment to the Netherlands. Pursuant to this employment agreement, if Mr. Schwartz is terminated by Equinix from the role of
president, EMEA, he is guaranteed a fixed term of employment until July 31, 2018 as a consultant on European affairs. The role
shall be at a work location in the Netherlands with an annual salary of EUR 60,000. Such role shall not entitle Mr. Schwartz to
any annual or long-term incentive compensation. In the event of a change-in-control of Equinix, if Mr. Schwartz is entitled to
benefits under both his severance agreement and his employment agreement with our Netherlands subsidiary, he will not be eligible
to receive both, but payments under one will offset payments made under the other. In addition, if we terminate Mr. Schwartz’s
employment during the assignment for any reason other than cause, or if Mr. Schwartz resigns and promptly returns to the United
States, we will pay the transportation costs to bring Mr. Schwartz, his family and his household goods back to the United States.
Mr. Schwartz may also be entitled to statutory severance under Netherlands law. In May of 2016 the Compensation Committee extended
this agreement through 2019.
Equinix 2017 Proxy Statement •
COMPENSATION
|
40
|
The following table estimates the amount
of compensation and benefits payable to each of our named executive officers under the severance agreements described above
as if their employment terminated upon a qualifying termination on Dec. 31, 2016, the last business day of the last fiscal
year.
|
Base Salary
|
Bonus
|
COBRA
|
Acceleration of
|
Total
|
Name
|
Severance
(1)
($)
|
Severance
(1)
($)
|
Premiums
(2)
($)
|
Vesting ($)
|
($)
|
Stephen
Smith
(4)
|
1,000,000
|
1,250,000
|
34,821
|
7,990,142
(3)
|
10,274,963
|
Keith
Taylor
(4)
|
580,000
|
551,000
|
34,821
|
—
(5)
|
1,165,821
|
Charles
Meyers
(5)
|
575,000
|
546,250
|
34,821
|
—
(5)
|
1,156,071
|
Eric
Schwartz
(5)
|
425,000
|
318,750
|
50,778
|
—
(5)
|
794,528
|
Karl
Strohmeyer
(5)
|
450,000
|
337,500
|
34,821
|
—
(5)
|
822,321
|
|
1.
|
The amounts in these columns are based on the officer’s 2016 base salary at the rate in
effect at year-end
.
|
|
2.
|
The amounts in this column represent the cost of the executive’s monthly health care premium
under COBRA for a 12-month period.
|
|
3
|
Represents the value of pro rata vesting of Mr. Smith’s equity awards under his severance
agreement, using the closing price of our common stock of $357.41 on Dec. 30, 2016, the last trading day of the year. Excludes
accelerated vesting for termination following a change-in-control under our equity award documents as described below.
|
|
4.
|
Assumes a voluntary resignation for good reason or involuntary termination of employment for any
reason other than cause.
|
|
5.
|
Assumes a change-in-control followed by a voluntary resignation for good reason or involuntary termination of employment for
any reason other than cause (or, in the case of Mr. Schwartz, if severance is triggered under his expatriate agreement). Excludes
accelerated vesting for termination following a change-in-control under our equity award documents as described below.
|
Equity Vesting
Acceleration
Pursuant to our 2000
Equity Incentive Plan, upon a change-in-control of Equinix, if the surviving corporation refuses to assume outstanding equity awards
or replace them with comparable awards, each equity award will become fully vested. If equity awards are assumed, our named executive
officers’ awards have the following provisions:
|
•
|
If the named executive officer is terminated without cause within 12 months after a change-in-control
or in the event of a certain voluntary resignations for good reason during the period beginning four months after a change-in-control
and ending 12 months after a change-in-control, RSU awards will vest as to 50% of the outstanding unvested portion of such awards.
|
|
•
|
In the event of a change-in-control before the end of the performance period of the awards based on financial performance,
each such award shall no longer be dependent on achievement of the financial performance goals, but shall instead convert to a
time-based award with 50% of the target number of RSUs under the award vesting on Feb. 15 of the following year and 25% vesting
on each Feb. 15 thereafter.
|
|
•
|
Our performance-based RSUs dependent on TSR performance will be deemed to be earned at the change- in-control based on performance
for a shortened period ending before the change-in-control, but subject to time-based vesting through the end of the original performance
period.
|
|
•
|
RSU awards granted to our employees, including our named executive officers, shall vest as to the
next unvested tranche of the award in the event of the death of the individual as a benefit to his or her estate; provided, however,
in the case of performance RSUs, that the RSUs have been earned based on actual performance results, as certified by the Board
or a committee thereof.
|
The following definitions
apply to our named executive officers’ equity awards: A “change-in-control” includes:
|
•
|
a merger of Equinix after which our stockholders own less than 50% of the surviving corporation
or its parent company;
|
|
•
|
a sale of all or substantially all of our assets;
|
|
•
|
a proxy contest that results in the replacement of more than half of our directors over a 24-month
period; or
|
|
•
|
an acquisition of 50% or more of our outstanding stock by any person or group, other than a person related to Equinix, such
as a holding company owned by our stockholders.
|
The definitions of
“cause” and “good reason” are the same as in the severance agreements described above.
Equinix 2017 Proxy Statement •
COMPENSATION
|
41
|
The following table estimates the value
of the potential vesting acceleration for each named executive officer in connection with a change-in-control or termination of
employment following a change-in-control. We have assumed for this purpose that both the change-in-control and termination of employment
occurred on Dec. 31, 2016, the last business day of our last fiscal year.
|
Vesting Upon Involuntary Termination
|
Vesting if Equity Awards Not Assumed or
|
Name
|
Following a CIC
(1)
($)
|
Substituted Following a CIC
(1)
($)
|
Stephen Smith
|
14,416,969
|
25,640,479
|
Keith Taylor
|
5,683,462
|
10,153,875
|
Charles Meyers
|
5,692,755
|
10,428,009
|
Eric Schwartz
|
3,429,499
|
6,156,687
|
Karl Strohmeyer
|
3,841,564
|
6,495,455
|
|
1.
|
The value was calculated by multiplying the number of unvested awards as of Dec. 31, 2016 by $357.41, which was the closing
price of Equinix’s common stock on Dec. 30, 2016, the last trading day of the year. For awards subject to meeting revenue
and AFFO performance criteria for the year ended Dec. 31, 2016, the calculation of the unvested portion reflects the actual performance
for such year at 97% of the maximum level. For awards subject to meeting relative TSR goals for the three-year periods ending Dec.
31, 2017 and Dec. 31, 2018, assumes the maximum amount would have been earned based on a shortened performance period ending Dec.
31, 2016, if a change-in-control had occurred at such time.
|
Compensation policies and practices
risk assessment
We conducted a risk assessment of our
compensation programs and presented the results to our Compensation Committee. The Compensation Committee considered the findings
of the assessment and agreed with management’s conclusion that our compensation programs do not create excessive or inappropriate
risks for Equinix. Our assessment involved a review of our material compensation arrangements, policies and practices for the purpose
of identifying inherent risks and program features that mitigate or eliminate those risks. Factors that support this conclusion
include the following:
|
•
|
Overall mix of short- and long-term incentives, as well as a mix of fixed and variable compensation.
|
|
•
|
Base pay is fixed and targeted at the 50th percentile of market for all employees. Our competitive
base pay supports our goal of attracting and retaining employees while still representing an efficient use of our resources. There
is an annual market analysis and alignment with this objective, and Equinix’s annual salary increase budget is approved by
the Compensation Committee. Individual performance is also considered in setting base pay.
|
|
•
|
Short-term incentive compensation is earned under our annual incentive plan, which in 2017 will
be funded based upon our performance against equally weighted revenue and AFFO targets. We mitigate the risk of manipulation of
financial results through a combination of strict internal controls and plan design, including a cap on bonus payouts and the fact
that actual payouts are based on individual performance. In addition, for our executives, short-term incentive compensation represents
a modest portion of total compensation.
|
|
•
|
Long-term incentive compensation consists of RSUs. For non-executives, RSUs are granted with
time-based vesting. For executives, RSUs are granted with both performance and time-based vesting elements. These awards compose
the greatest portion of total compensation for our executives. Individual performance is considered in sizing the awards and award
sizes are capped. For 2017, the performance elements for one-half of an executive’s annual RSU grant consist of both revenue
and AFFO achievement targets. Use of these two metrics ensures that executives are motivated to meet revenue targets while keeping
costs contained. The risk of manipulation of financial results is also mitigated by strict internal controls. If the targets are
met, the awards continue to vest over the next two years, offsetting the risk of short-term decision-making. The performance element
for one-fourth of the RSUs consists of TSR achievement over a three-year period. If the three-year target is met, the awards vest
fully, offsetting the risk of short-term decision-making and aligning the interests of executives with stockholders. The remaining
one-fourth of the RSUs vest based on time only to align Equinix’s executive compensation program more closely to market practice.
|
|
•
|
In 2012, the Governance Committee approved stock ownership guidelines for Mr. Smith and his direct
|
|
Equinix 2017 Proxy Statement •
COMPENSATION
|
42
|
|
|
reports. The guidelines
require that these executives achieve target ownership levels, expressed as a multiple of salary, within five years from the adoption
date of Nov. 30, 2012. The target ownership level for Mr. Smith is three times his annual salary; for all others the target ownership
level is one time their annual salary.
|
|
•
|
The Compensation Committee, comprised of independent members of the Board, approves all compensation
for executives in its discretion. The Compensation Committee is advised by an independent consultant.
|
|
•
|
In 2016, the Compensation Committee adopted a policy on recoupment of incentive compensation which applies to our executive
officers (as defined by applicable securities laws).
|
Compensation committee interlocks and
insider participation
None of the members of the Compensation
Committee was at any time during the 2016 fiscal year or at any other time an officer or employee of Equinix. No executive officer
of Equinix serves as a member of the board of directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Board or Compensation Committee of Equinix.
Equity compensation plan information
following table provides information as of Dec. 31, 2016,
with respect to shares of our common stock issuable under our existing equity compensation plans:
|
A
|
B
|
C
|
|
|
|
Number of securities
|
|
|
|
remaining available for
|
|
Number of securities to
|
Weighted-average exercise
|
future issuance under
|
|
be issued upon exercise
|
price of outstanding
|
equity compensation
|
|
of outstanding options,
|
options, warrants and
|
plans, excluding securities
|
Plan category
|
warrants and rights
|
rights
|
reflected in Column A
|
|
|
|
|
Equity compensation
plans approved by security
holders
(1)
|
1,366,941
(2)(3)
|
$1.14
(4)
|
6,948,845
(5)
|
Equity compensation plans not approved by security holders
|
0
|
N/A
|
260,498
|
Total
|
1,366,941
|
$1.14
|
7,209,343
|
|
1.
|
On each Jan. 1, commencing on Jan. 1, 2001 and continuing through Jan. 1, 2010, the number of shares reserved for issuance
under the following equity compensation plans were automatically increased as follows: The 2000 Equity Incentive Plan was automatically
increased by the lesser of 6% of the then-outstanding shares of common stock or 6.0 million shares and the 2000 Director Option
Plan was automatically increased by 50,000 shares of common stock. On each Jan. 1, continuing through Jan. 1, 2015, the 2004 Employee
Stock Purchase Plan was automatically increased by the lesser of 2% of the then-outstanding shares of common stock or 500,000 shares.
|
|
2.
|
Includes 1,347,875 unissued shares subject to outstanding RSUs.
|
|
3.
|
Includes 1,601 stock options assumed pursuant to our acquisition of Switch & Data Facilities Company, Inc., effective April
30, 2010. No additional stock options, RSUs, or any other equity awards are issuable pursuant to the Switch and Data 2007 Stock
Incentive Plan, including upon the cancellation of the stock options and RSUs which were assumed.
|
|
4.
|
The weighted-average exercise price takes into account 1,347,875 shares under approved plans issuable upon vesting of outstanding
RSUs, which have no exercise price. The weighted-average exercise price for options only with respect to the approved plans is
$82.0093.
|
|
5.
|
Includes 3,427,867 shares available for future issuance under the 2004 ESPP.
|
Equinix 2017 Proxy Statement •
COMPENSATION
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43
|
The following equity compensation plan that
was in effect as of Dec. 31, 2016 was adopted without the approval of our security holders:
The Equinix, Inc., 2001 Supplemental Stock
Plan (the “2001 Plan”) was adopted by the Board on Sept. 26, 2001. We have reserved 1,494,275 shares of common
stock for issuance under the 2001 Plan, under which non-statutory stock options and restricted shares may be granted to
non-executive officer employees and consultants of ours or any parent or subsidiary corporation. Options granted under the
2001 Plan must have an exercise price equal to no less than 85% of the fair market value on the date of grant; however, as of
Dec. 31, 2016, all options granted under the 2001 Plan have an exercise price equal to 100% of the fair market value on the
date of grant. As of Dec. 31, 2016, options to purchase 0 shares of common stock were outstanding under the 2001 Plan,
260,498 shares remained available for future grants, and options covering 1,233,777 shares had been exercised. Pursuant the
2001 Plan, upon a change-in-control of Equinix, each outstanding option and all shares of restricted stock will generally
become fully vested unless the surviving corporation assumes the option or award or replaces it with a comparable award. Any
options or shares of restricted stock, granted prior to Feb. 2008, which are assumed or replaced in the transaction and do
not otherwise accelerate at that time, will become fully vested if the holder is subject to an involuntary termination within
18 months following the change- in-control. The Board may amend or terminate the 2001 Plan at any time, and the 2001 Plan
will continue in effect indefinitely, unless the Board decides to terminate the plan earlier.
Section 16(a) beneficial ownership reporting compliance
The members of the Board, the executive
officers of Equinix, and persons who hold more than 10% of Equinix’s outstanding common stock (“Section 16
Insiders”) are subject to the reporting requirements of Section 16(a) of the Exchange Act, which require them to file
reports with respect to their ownership of Equinix’s common stock and their transactions in such common stock. Based on
(i) the copies of Section 16(a) reports filed for the members of the Board and the executive officers for their 2016 fiscal
year transactions in common stock and their common stock holdings and (ii) the written representations received by such
persons, Equinix believes that all reporting requirements under Section 16(a) for such fiscal year were met in a timely
manner by Section
16 Insiders.
Equinix 2017 Proxy Statement •
COMPENSATION
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44
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AUDIT
PROPOSAL 5
— Ratification of independent
registered public accountants
Equinix is asking the stockholders to ratify the
appointment of PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) as Equinix’s independent registered public
accounting firm for the fiscal year ending Dec. 31, 2017. The affirmative vote of the holders of a majority of the shares present
in person or represented by proxy and entitled to vote on the proposal at the Annual Meeting will be required to ratify the selection
of PricewaterhouseCoopers.
If the stockholders fail to ratify the
selection, the Board will reconsider whether or not to retain that firm. Even if the selection is ratified, the Board in its
discretion may direct the appointment of different independent auditors at any time during the year if they determine that
such a change would be in the best interests of Equinix and its stockholders.
PricewaterhouseCoopers has audited Equinix’s
financial statements since 2000. Its representatives are expected to be present at the Annual Meeting, will have the opportunity
to make a statement if they desire to do so, and will be available to respond to appropriate questions.
Aggregate fees for professional services rendered
for Equinix by PricewaterhouseCoopers for the years ended 31, 2016 and 2015 were:
|
Dec. 31,
|
2016
|
2015
|
Audit
|
$7,137,830
|
$5,817,189
|
Audit-related
|
$734,500
|
$567,067
|
Tax
|
$3,300
|
$3,300
|
Other
|
$122,000
|
$7,500
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Total
|
$7,997,630
|
$6,395,056
|
Audit fees for the years ended Dec. 31, 2016 and 2015 were
for professional services rendered for the audits of the consolidated financial statements of Equinix and the financial statements
of certain of its subsidiaries, including the impact of Equinix’s acquisitions during both years.
The
Audit-related fees
for the years ended
Dec. 31, 2016 and 2015 were for assurance and related accounting and advisory services related to public financings, review of
documents filed with the Securities and Exchange Commission in the U.S. and with the Federal Financial Supervisory Authority in
Germany, and, in 2016, financial diligence related to the acquisition of the Verizon data center assets.
The
Tax fees
for the years ended Dec. 31,
2016 and 2015 were for professional services rendered to meet certain tax-related regulatory requirements.
The
Other fees
for the years ended Dec.
31, 2016 and 2015 were for attest procedures in connection with an Outsource Service Provider audit in 2016 and licensed
software tools used for financial reporting in both years.
Equinix 2017 Proxy Statement •
AUDIT
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Equinix’s Audit Committee adopted
pre-approval policies and procedures for audit and non-audit services during the fiscal year 2003. All audit, audit-related
and tax services are approved in advance by Equinix’s Audit Committee to assure they do not impair the independence of
Equinix’s independent registered public accounting firm. At the beginning of each fiscal year, management prepares an
estimate of all such fees for the duration of the fiscal year and submits the estimate to the Audit Committee for review and
pre-approval. Any modifications to the estimates are submitted to the Audit Committee for pre-approval at the next regularly
scheduled Audit Committee meeting, or if action is required sooner, to the chairman of the Audit Committee. All fees paid to
Equinix’s independent registered public accounting firm during the fiscal years 2016 and 2015 were in accordance with
this pre-approval policy.
|
The
Board recommends a vote "FOR" proposal 5
|
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Equinix 2017 Proxy Statement •
AUDIT
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46
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
While Equinix’s management has primary responsibility
for preparing Equinix’s financial statements and maintaining Equinix’s financial reporting process, the Audit Committee
serves as the representative of the Board for general oversight of Equinix’s financial accounting and reporting process,
system of internal control, audit process, process for monitoring compliance with laws and regulations, and Equinix’s Code
of Ethics for Chief Executive Officer and Senior Financial Officers. The Audit Committee also provides counsel to management and
the independent registered public accounting firm, PricewaterhouseCoopers, on the basis of the information it receives, discussions
with management and the independent registered public accounting firm, and the experience of the Audit Committee’s members
in business, financial and accounting matters.
The Audit Committee annually appoints an independent
registered public accounting firm to express an opinion on the financial statements and on Equinix’s internal control over
financial reporting based on an integrated audit.
Additionally, on a quarterly basis, the Audit
Committee reviews with management and the independent registered public accounting firm Equinix’s audited financial
statements or unaudited interim financial statements and the related earnings announcement before their public release, and
receives updates on, among other things, accounting policy and estimate changes, implementation of new accounting standards,
significant or unusual accounting transactions and significant estimates.
The Audit Committee also oversees the
responsibilities, budget, staffing and effectiveness of Equinix’s internal audit function, called Business Assurance
Services (“BAS”), and the head of BAS reports directly to the Audit Committee.
While the Governance Committee
has primary responsibility for risk oversight at the Board level, the Audit Committee also plays a role in overseeing Equinix’s
exposure to risk—particularly major financial risk—as described in “Board Risk Oversight” elsewhere in
this proxy statement.
The Audit Committee has the opportunity to
meet in a private session every meeting with each of (i) the independent registered public accounting firm, (ii)
Equinix’s head of BAS and (iii) management.
During fiscal year 2016, the Audit Committee consisted
of Messrs. Bartlett, Hromadko and Paisley. Mr. Paisley is the Audit Committee’s chairman and both Mr. Bartlett and Mr. Paisley
are considered financial experts. The Audit Committee held 11 meetings during the last fiscal year.
In this context, the Audit Committee hereby reports
as follows:
|
a)
|
The Audit Committee has reviewed and discussed the audited financial statements with Equinix’s management and the independent
registered public accounting firm.
|
|
b)
|
The Audit Committee has discussed with the independent registered public accounting firm the matters
required to be discussed by Codification of Statements on Auditing Standard No. 16, as adopted by the Public Company Accounting
Oversight Board.
|
|
c)
|
The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm
required by applicable requirements of the Public Company Accounting Oversight Board. The letter concerns the independent auditors’
communications with the Audit Committee about the registered accounting firm’s independence, which the committee has discussed
with the firm.
|
Equinix 2017 Proxy Statement •
AUDIT
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47
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Based on the Audit Committee’s
discussion with management and the independent registered public accounting firm and the Audit Committee’s review of
the representations of management and the report of the independent registered public accounting firm to the Audit Committee,
the Audit Committee approved the audited financial statements and recommended that the audited financial statements be
included in Equinix’s Annual Report on Form 10-K, for the fiscal year ended Dec. 31, 2016, for filing with the
Securities and Exchange Commission. The Audit Committee and the Board have also approved, subject to stockholder
ratification, the selection of PricewaterhouseCoopers as Equinix’s independent registered public accounting firm.
Each of the members of the Audit Committee is
independent as such term is defined under the rules of the Securities and Exchange Commission and the listing standards of
the NASDAQ Stock Market.
The Audit Committee:
Christopher Paisley, Chairman
Thomas Bartlett
Gary Hromadko
Equinix 2017 Proxy Statement •
AUDIT
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48
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ADDITIONAL
INFORMATION
Voting information and attending the meeting
ATTENDING THE ANNUAL MEETING
Only persons with evidence of stock ownership or
who are guests of Equinix may attend and be admitted to the Annual Meeting. Photo identification will be required (a valid driver’s
license or passport is preferred). If your shares are held in an account at a brokerage firm, bank, dealer or other similar organization,
you will need to bring a proxy or a letter from that broker, trust, bank or other nominee, or your most recent brokerage account
statement, that confirms that you are the beneficial owner of those shares. For assistance with directions to our headquarters
where the Annual Meeting will be held, please call +1.650.598.6000.
VOTING COMMON STOCK
On each matter to be voted upon, you have one vote
for each share of common stock you own as of April 5, 2017.
QUALIFYING TO VOTE
Only stockholders of record at the close of
business on April 5, 2017 will be entitled to vote at the Annual Meeting. On this record date, there were 77,911,859 shares
of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your
Name
If, on April 5, 2017, your shares were registered
directly in your name with Equinix’s transfer agent, Computershare, then you are a stockholder of record. As a stockholder
of record, you may vote in person at the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to
fill out and return the enclosed proxy card or vote by proxy over the telephone or on the internet as instructed below to ensure
your vote is counted.
Beneficial Owner: Shares Registered in the Name
of a Broker or Bank
If, on April 5, 2017,
your shares were held in an account at a brokerage firm, bank, dealer or other similar organization, then you are the
beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that
organization. The organization holding your account is considered the stockholder of record for purposes of voting at the
Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in
your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you
may not vote your shares in person at the meeting unless you request and obtain a valid proxy from your broker or other
agent.
WAYS TO VOTE
On the matters to be voted on, including the nominees
to the Board, you may vote “For” or “Against” or abstain from voting. The procedures for voting are fairly
simple:
Stockholder of Record: Shares Registered in Your
Name
If you are a stockholder of record, you may vote
in person at the Annual Meeting, vote by proxy using a proxy card, vote by proxy over the telephone, or vote by proxy on the internet.
Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend
the meeting and vote
Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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49
|
in person if you have already voted by proxy.
|
1.
|
To vote in person, come to the Annual Meeting and we will give you a ballot when you arrive.
|
|
2.
|
To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return
it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares
as you direct.
|
|
3.
|
To vote over the telephone, dial toll-free (from the U.S., Canada and U.S. Territories) 1-800-652-VOTE (8683) using a touch-tone
phone and follow the recorded instructions. You will be asked to provide the company number and control number from the enclosed
proxy card. Your vote must be received by 1 a.m. Central Time, on May 31, 2017, to be counted.
|
|
4.
|
To vote on the internet, go to www.investorvote.com/EQIX to complete an electronic proxy card. You will be asked to provide
the company number and control number from the enclosed proxy card or notice card. Your vote must be received by 1 a.m. Central
Time, on May 31, 2017, to be counted.
|
Beneficial Owner: Shares Registered in the Name
of Broker or Bank
If you are a beneficial owner of shares
registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions
from that organization, rather than from Equinix. Simply complete and mail the proxy card to ensure that your vote is
counted. Alternatively, you may vote by telephone or on the internet as instructed by your broker or bank. To vote in person
at the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent. Follow the instructions from your
broker or bank included with these proxy materials, or contact your broker or bank to request a proxy card.
We provide internet proxy voting
to
allow you to vote your shares online with procedures designed to ensure the authenticity and correctness of your proxy vote instructions.
However, please be aware that you must bear any costs associated with your internet access, such as usage charges from internet
access providers and telephone companies.
|
HOW VOTES ARE COUNTED
Votes will be counted by the inspector of election
appointed for the meeting, who will separately count “For” votes, “Against” votes, abstentions and broker
non-votes (when shares are held by brokers that do not have discretionary authority to vote on a matter and have not received voting
instructions from their clients).
If your shares are held by your broker as your
nominee (that is, in “street name”), you will need to obtain a proxy form from the institution that holds your
shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. If you do
not give instructions to your broker with respect to a “non-discretionary” matter, your shares will not be voted
on such matter and will not be counted as shares entitled to vote on such matter. For example, if you do not provide voting
instructions to your broker, the broker could vote your shares for Proposal No. 5 (the ratification of the appointment of
PricewaterhouseCoopers LLP as Equinix’s independent registered public accounting firm for the fiscal year ending Dec.
31, 2017), but not for the other proposals, including the election of directors.
Shares not present at the meeting and shares
voting “abstain” have no effect on the election of directors. For the other proposals, abstentions have the same
effect as “Against” votes. Broker non-votes have no effect and will not be counted towards the vote total for the
election of directors or for Proposals No. 2, 3 or 4. Abstentions and broker non-votes will be counted in determining whether
there is a quorum.
Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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50
|
VOTES NEEDED TO APPROVE EACH MATTER
|
1.
|
To be elected, directors must receive a majority of the votes cast (that is, the number of shares voted “for” a
director nominee must exceed the number of votes cast “against” that nominee), If any nominee for director receives
a greater number of votes “against” his or her election than votes “for” such election, our Bylaws require
that such person must immediately tender his or her resignation to the Board following certification of the vote.
|
|
2.
|
To be approved on an advisory non-binding basis, Proposal No. 2, the compensation of our named
executive officers, must receive a “For” vote from the majority of shares present and entitled to vote on the proposal
either in person or by proxy.
|
|
3.
|
Proposal No. 3 offers three choices (one year, two years or three years) regarding the frequency with which our stockholders
will be asked to approve the compensation of our named executive officers, and we will consider the frequency that receives a majority
of votes from the shares present either in person or by proxy and entitled to vote on the proposal to be the recommendation of
our stockholders.
|
|
4.
|
To be approved, Proposal No. 4, the approval of long-term incentive performance terms for certain executives pursuant to Section
162(m) of the Internal Revenue Code, must receive a “For” vote from the majority of shares present and entitled to
vote on the proposal either in person or by proxy.
|
|
5.
|
To be approved, Proposal No. 5, the ratification of PricewaterhouseCoopers as Equinix’s independent registered public
accounting firm for the fiscal year ending Dec. 31, 2017, must receive a “For” vote from the majority of shares present
and entitled to vote on the proposal either in person or by proxy.
|
RECEIPT OF MORE THAN ONE PROXY CARD
If you receive more than one proxy card, your shares
are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card
to ensure that all of your shares are voted.
RETURNING A BLANK PROXY
If you return a signed and dated proxy card
without marking any voting selections, your shares will be voted “For” the election of all nominees for director,
“For” the compensation of our named executive officers, “For” an annual frequency for the advisory
non-binding vote on frequency of executive compensation vote, “For” the approval of long-term incentive
performance terms for certain executives pursuant to section 162(m) of the Internal Revenue Code and “For” the
ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending
Dec. 31, 2017.
If any other matter is properly presented at the
meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his best judgment.
REVOKING A PROXY
You can revoke your proxy at any time before the
final vote at the meeting. You may revoke your proxy in any
one of three ways:
|
1.
|
You may submit another properly completed proxy card with a later date.
|
|
2.
|
You may send a written notice that you are revoking your proxy to Equinix’s Secretary at One Lagoon Drive, Redwood City,
CA 94065.
|
|
3.
|
You may attend the Annual Meeting and vote in person. Simply attending the meeting will not, by itself, revoke your proxy.
|
Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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51
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PROXY SOLICITATION
Equinix will pay for the entire cost of soliciting
proxies, including the fee to D.F. King & Co., Inc., who will help us solicit proxies, of $12,500, plus expenses. In addition
to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means
of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse
brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners. If you have any questions
or require any assistance with voting your shares, please contact our proxy solicitation firm, D.F. King & Co., Inc., at +1.866.207.2356.
QUORUM REQUIREMENT
A quorum of stockholders is necessary to hold a valid
meeting. A quorum will be present if at least a majority of the outstanding shares is represented by stockholders present at the
meeting or by proxy. On the record date, there were 77,911,859 shares outstanding and entitled to vote. Thus 38,955,930 shares
must be represented by stockholders present at the meeting or by proxy to have a quorum.
Your shares will be counted towards
the quorum only if you submit a valid proxy card or vote at the meeting. Abstentions and broker non-votes will be counted
towards the quorum requirement. If there is no quorum, a majority of the votes present at the meeting may adjourn the meeting
to another date.
ANNUAL MEETING VOTING RESULTS
Preliminary voting results will be announced
at the Annual Meeting. Final voting results will be published on a Current Report on Form 8-K filed within four business days
after the Annual Meeting.
INTERNET AVAILABILITY OF PROXY MATERIALS
This year, we are furnishing proxy materials to our
stockholders primarily via the internet, instead of mailing printed copies of those materials to each stockholder. We mailed a
Notice of Internet Availability of Proxy Materials (“Notice”) to certain of our stockholders. The Notice contains instructions
about how to access the proxy materials over the internet or request a printed copy of the materials, and for voting over the internet
or phone. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials
via email unless you elect otherwise. We encourage stockholders to take advantage of the availability of the proxy materials on
the internet to help reduce our environmental impact, and reduce the costs associated with the printing and mailing of materials.
This proxy statement and Equinix’s annual report
on Form 10-K are available online at Proxy.equinix.com. This website address is included for reference only. The information contained
on the Equinix website is not incorporated by reference into this proxy statement.
Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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52
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Delivery of documents to stockholders sharing
an address
A number of brokers with account holders who
are stockholders of Equinix will be “householding” Equinix’s proxy materials. A single set of proxy
materials or Notice will be delivered to multiple stockholders sharing an address, unless contrary instructions have been
received from the affected stockholders. Once you have received notice from your broker that they will be
“householding” communications to your address, “householding” will continue until you are notified
otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in “householding”
and would prefer to receive a separate proxy statement and annual report, please notify your broker, direct your written
request to Equinix, Inc., One Lagoon Drive, Redwood City, California 94065, Attn: Stock Services, or contact Equinix Stock
Services by telephone at +1.650.598.6000 and a separate proxy statement and annual report will be delivered to you promptly.
Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request
“householding” of their communications should contact their broker.
Stockholder proposals for 2018 annual meeting
Stockholders who intend to have a proposal
considered for inclusion in Equinix’s proxy materials for presentation at the 2018 Annual Meeting of Stockholders (the
“2018 Annual Meeting”) pursuant to Rule 14a-8 of the Exchange Act must submit the proposal to Equinix no later
than Dec. 22, 2017. Pursuant to Rule 14a-4(c) of the Exchange Act and Equinix’s Amended and Restated Bylaws,
stockholders who intend to present a proposal at the 2018 Annual Meeting without inclusion of such proposal in the proxy
materials are required to notify Equinix of such proposal not earlier than Jan. 31, 2018, and not later than 5 p.m., Pacific
Standard Time on March 2, 2018, so long as the 2018 Annual Meeting is not advanced by more than 30 days or delayed by more
than 70 days from May 31, 2018 (the anniversary date of the prior year’s annual meeting). If Equinix does not receive
notification of the proposal within that time frame, it will be considered untimely, and we will not be required to present
it at the 2018 Annual Meeting.
All stockholder proposals and notice of stockholder
proposals should be sent to Equinix, Inc., at One Lagoon Drive, Redwood City, California 94065, Attn: Secretary. Equinix reserves
the right to reject, rule out of order, or take other appropriate action with respect to any stockholder proposal that does not
satisfy the conditions and rules established by the Securities and Exchange Commission.
Other matters
The Board knows of no other
matters to be presented for stockholder action at the Annual Meeting. However, if other matters do properly come before the Annual
Meeting or any adjournments or postponements thereof, the Board intends that the persons named in the proxies will vote upon such
matters in accordance with their best judgment.
Equinix will mail without charge,
upon written request, a copy of Equinix’s annual report on Form 10-K for the fiscal year ended Dec. 31, 2016. Requests should
be sent to Equinix, Inc., at One Lagoon Drive, Redwood City, CA 94065, Attn: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS,
Peter Van Camp
Executive Chairman
Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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53
|
Whether or not you plan to attend
the Annual Meeting
, please complete, sign, date and promptly return the accompanying proxy in the enclosed postage-paid
envelope (if applicable), or follow the instructions above to submit your proxy by telephone or on the internet. You may
revoke your proxy at any time prior to the Annual Meeting. If you decide to attend the Annual Meeting and wish to change your
proxy vote, you may do so automatically by voting in person at the meeting. Please note, however, that if your shares
are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in
your name from that record holder.
Thank you for your attention to this matter. Your
prompt response will greatly facilitate arrangements for the Annual Meeting.
|
Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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54
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Equinix 2017 Proxy Statement •
ADDITIONAL INFORMATION
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55
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Corporate HQ
|
EMEA
|
Asia-Pacific
|
|
|
|
Equinix, Inc.
|
Equinix (EMEA) BV
|
Equinix Hong Kong Limited
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One Lagoon Drive
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Rembrandt Tower
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Units
6501-04A & 6507-08, 65/F
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Redwood City, CA 94065
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Amstelplein
1
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International
Commerce Centre
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USA
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1096
HA Amsterdam
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1
Austin Road West
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Netherlands
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Kowloon, Hong Kong
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Main: +1.650.598.6000
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Main: +31.20.754.0305
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Main: +852.2970.7788
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Email: info@equinix.com
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Email: info@eu.equinix.com
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Email: info@ap.equinix.com
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About Equinix
Equinix, Inc. (Nasdaq: EQIX) connects the
world’s leading businesses to their customers, employees and partners inside the most interconnected data centers. In 41
markets across five continents, Equinix is where companies come together to realize new opportunities and accelerate their business,
IT and cloud strategies.
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In a digital economy where enterprise business models are increasingly interdependent, interconnection is
essential to success. Equinix operates the only global interconnection platform, sparking new opportunities that are only possible
when companies come together.
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© 2017 Equinix, Inc.
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Equinix.com
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Important Notice Regarding the Availability of Proxy Materials for the
Equinix, Inc. Stockholder Meeting to be Held on May 31, 2017
Under Securities and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual stockholders’ meeting are available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted on and location of the annual meeting are on the reverse side. Your vote is important!
This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. The 2017 Proxy Statement and 2016 Annual Report to Stockholders are available at:
When you go online to view materials, you can also vote your shares.
Step 1: Go to www.investorvote.com/EQIX.
Step 2: Click on the icon on the right to view current meeting materials.
Step 3: Return to the investorvote.com window and follow the instructions on the screen to log in.
Step 4: Make your selection as instructed on each screen to select delivery preferences and vote.
When you go online, you can also help the environment by consenting to receive electronic delivery of future materials.
Obtaining a Copy of the Proxy Materials – If you want to receive a copy of these documents, you must
request one. There is no charge to you for requesting a copy. Please make your request for a copy as
instructed on the reverse side on or before May 22, 2017 to facilitate timely delivery.
2NOT +
02L67C
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Stockholder Meeting Notice
Equinix, Inc.’s Annual Meeting of Stockholders will be held on May 31, 2017 at One Lagoon Drive, Redwood City,California 94065, at 10:30 a.m. local time.
Proposals to be voted on at the meeting are listed below along with the Board of Directors’ recommendations.
The Board recommends a vote FOR all nominees and FOR Proposals 2, 4 and 5 and every 1 Yr for Proposal 3.
1.
Election of Directors:
01 -Thomas Bartlett
02 - Nanci Caldwell
03 -Gary Hromadko
04 -John Hughes
05 - Scott Kriens
06 - William Luby
07 - Irving Lyons, III
08 -Christopher Paisley
09 - Stephen Smith
10 - Peter Van Camp
2.
To approve by a non-binding advisory vote the compensation of Equinix, Inc.’s named executive officers.
3.
To approve by a non-binding advisory vote the frequency of stockholder non-binding advisory votes on Equinix, Inc.’s named
executive officer compensation.
4.
To approve long-term incentive performance terms for certain of Equinix, Inc.’s executives, pursuant to Section 162(m) of the Internal Revenue Code.
5.
To ratify the appointment of PricewaterhouseCoopers LLP as Equinix, Inc.’s independent registered public accounting firm for the fiscal year ending December 31, 2017.
PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE. To vote your shares you must vote online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend and vote at the meeting, please bring this notice with you.
Here’s how to order a copy of the proxy materials and select a future delivery preference:
Paper copies: Current and future paper delivery requests can be submitted via the telephone, Internet or email options below.
Email copies: Current and future email delivery requests must be submitted via the Internet following the instructions below.
If you request an email copy of current materials you will receive an email with a link to the materials.
PLEASE NOTE: You must use the number in the shaded bar on the reverse side when requesting a set of proxy materials.
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Internet – Go to www.investorvote.com/EQIX. Follow the instructions to log in and order a copy of the current meeting materials and submit your preference for email or paper delivery of future meeting materials.
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Telephone – Call us free of charge at 1-866-641-4276 and follow the instructions to log in and order a paper copy of the materials by mail for the current meeting. You can also submit a preference to receive a paper copy for future meetings.
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Email – Send email to investorvote@computershare.com with “Proxy Materials Equinix, Inc.” in the subject line. Include in the message your full name and address, plus the number located in the shaded bar on the reverse, and state in the email that you want a paper copy of current meeting materials. You can also state your preference to receive a paper copy for future meetings.
To facilitate timely delivery, all requests for a paper copy of the proxy materials must be received by May 22, 2017.
02L67C
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IMPORTANT ANNUAL MEETING INFORMATION
Electronic Voting Instructions Available 24 hours a day, 7 days a week!
Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy.
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxies submitted by the Internet or telephone must be received by
1:00 a.m., Central Time, on May 31, 2017. Vote by Internet
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Go to www.investorvote.com/EQIX
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Or scan the QR code with your smartphone
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Follow the steps outlined on the secure website
Vote by telephone
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Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone
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Follow the instructions provided by the recorded message
Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas.
X
Annual Meeting Proxy Card
• IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. •
Proposals — The Board recommends a vote FOR all nominees and FOR Proposals 2, 4 and 5 and every 1 Yr for Proposal 3.
1.
Election of Directors: For Withhold 01 - Thomas Bartlett 04 - John Hughes
07 - Irving Lyons, III
10 - Peter Van Camp
2.
To approve by a non-binding advisory vote the compensation of the Company’s named executive officers.
4. To approve long-term incentive performance terms for certain of our executives, pursuant to Section 162(m) of the Internal Revenue Code.
Non-Voting Items
Change of Address — Please print your new address below.
02 - Nanci Caldwell 05 - Scott Kriens 08 - Christopher Paisley
For Against Abstain
For Withhold For Withhold
03 - Gary Hromadko 06 - William Luby 09 - Stephen Smith
1 Yr
3. To approve by a non-binding advisory vote the frequency of stockholder non-binding advisory votes on the Company’s named executive officer compensation.
5. To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017.
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2 Yrs 3 Yrs Abstain
For Against Abstain
Comments — Please print your comments below. Meeting Attendance Mark the box to the right if you plan to attend the Annual Meeting.
Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1 — Please keep signature within the box. Signature 2 — Please keep signature within the box.
1UPX +
02KQLB
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• IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. •
Proxy — Equinix, Inc.
One Lagoon Drive, Redwood City, California 94065
This Proxy is Solicited on Behalf of the Board of Directors of Equinix, Inc. for the Annual Meeting of Stockholders to be held May 31, 2017
The undersigned holder of Common Stock, par value $0.001, of Equinix, Inc. (the “Company”) hereby appoints Stephen M. Smith and Brandi Galvin Morandi, or either of them, each with full power of substitution, to represent and to vote as specified in this Proxy all Common Stock of the Company that the undersigned stockholder would be entitled to vote if personally present at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on May 31, 2017 at
10:30 a.m. local time, on the first floor of the Company’s headquarters located at One Lagoon Drive, Redwood City, California, 94065, and at any adjournments or postponements of the Annual Meeting. The undersigned stockholder hereby revokes any proxy or proxies heretofore executed for such matters.
This proxy, when properly executed, will be voted in the manner as described herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS, FOR PROPOSALS 2, 4 AND 5 AND EVERY 1 YEAR FOR PROPOSAL 3, AND IN THE DISCRETION OF THE PROXIES AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING. The undersigned stockholder may revoke this proxy at any time before it is voted by delivering to the Secretary of the Company either a written revocation of the proxy or a duly executed proxy bearing a later date, or by appearing at the Annual Meeting and voting in person.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE DIRECTORS AND “FOR” PROPOSALS 2, 4 AND 5 AND EVERY 1 YEAR FOR PROPOSAL 3.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED RETURN ENVELOPE. If you receive more than one proxy card, please sign and return ALL cards in the enclosed envelope.
(continued and to be signed on reverse side.)
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