DIGITAL REALTY TRUST, INC.

DEF 14A 1 ldlr2021_def14a.htm DIGITAL REALTY TRUST, INC. - DEF 14A DIGITAL REALTY TRUST, INC. - DEF 14A

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

Filed by the Registrant

Filed by a party other than the Registrant

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	Definitive Proxy Statement
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	Soliciting Material under §240.14a-12

DIGITAL REALTY TRUST, 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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A. William Stein

Chief Executive Officer

Dear Stockholder:

You are cordially invited to attend the 2021 Annual Meeting of Stockholders (the Annual Meeting) of Digital Realty Trust, Inc., a Maryland corporation (the Company), to be held on June 3, 2021, at 10:00 a.m. PDT, at 4 Embarcadero Center, Third Floor, Promenade Level conference center (Stanford Room), San Francisco, CA 94111.

The purposes of this year’s Annual Meeting are to:

(i)	consider and vote upon the election of Laurence A. Chapman, Alexis Black Bjorlin, VeraLinn Jamieson, Kevin J. Kennedy, William G. LaPerch, Jean F.H.P. Mandeville, Afshin Mohebbi, Mark R. Patterson, Mary Hogan Preusse, Dennis E. Singleton and A. William Stein as members of the Company’s Board of Directors, each to serve until the 2022 Annual Meeting of Stockholders and until a successor for each is duly elected and qualifies;

(ii)	consider and vote upon ratifying the selection of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021;

(iii)	consider and vote upon a resolution to approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers, as more fully described in the accompanying Proxy Statement (say-on-pay); and

(iv)	transact such other business as may properly come before the meeting or any adjournment(s) or postponement(s) thereof.

The accompanying Notice of 2021 Annual Meeting of Stockholders and Proxy Statement describe these matters. We urge you to read this information carefully.

It is important that your shares be represented and voted whether or not you plan to attend the Annual Meeting in person. If you choose not to attend and vote at the Annual Meeting in person, you may authorize your proxy via the Internet, by telephone or, if you are receiving a paper copy of the Proxy Statement, by completing and mailing a proxy card. Authorizing your proxy over the Internet, by telephone or by mailing a proxy card will ensure that your shares are represented at the Annual Meeting. Please review the instructions contained in the Notice of Internet Availability of Proxy Materials or proxy card regarding each of these options.

	Sincerely,

	A. William Stein
	Chief Executive Officer
	April 23, 2021

| DIGITAL REALTY TRUST, INC. | 2021 PROXY STATEMENT | 3

Notice of 2021 Annual Meeting of Stockholders

TO THE STOCKHOLDERS OF DIGITAL REALTY TRUST, INC.:

NOTICE IS HEREBY GIVEN that the 2021 Annual Meeting of Stockholders (the Annual Meeting) of Digital Realty Trust, Inc., a Maryland corporation (the Company), will be held at the date, time and location below:

Thursday, June 3, 2021
10:00 am PDT

4 Embarcadero Center, Third Floor
Promenade Level conference center (Stanford Room)
San Francisco, CA 94111

The Annual Meeting will be held for the following purposes:

1.	To consider and vote upon the election of Laurence A. Chapman, Alexis Black Bjorlin, VeraLinn Jamieson, Kevin J. Kennedy, William G. LaPerch, Jean F.H.P. Mandeville, Afshin Mohebbi, Mark R. Patterson, Mary Hogan Preusse, Dennis E. Singleton and A. William Stein as members of the Company’s Board of Directors (the Board) each to serve until the 2022 Annual Meeting of Stockholders and until a successor for each is duly elected and qualifies;
2.	To consider and vote upon ratifying KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021;
3.	To consider and vote upon a resolution to approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers, as more fully described in the accompanying Proxy Statement (say-on-pay); and
4.	To transact such other business as may properly come before the Annual Meeting or any adjournment(s) or postponement(s) thereof.

STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. YOUR VOTE IS IMPORTANT. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON. IF YOU CHOOSE NOT TO ATTEND AND VOTE AT THE ANNUAL MEETING IN PERSON, YOU MAY AUTHORIZE YOUR PROXY.

IMPORTANT NOTE: Because of the uncertainties surrounding the impact of COVID-19, we are planning for the possibility that the Annual Meeting may be held solely by means of remote communication. If we take this step, we will announce the decision to do so in advance of the Annual Meeting, and details on how stockholders can participate will be set forth in a press release issued by the Company and available at investor.digitalrealty.com.

How to authorize your proxy:

	If you are viewing the Proxy Statement on the Internet, you may authorize your proxy electronically via the Internet by following the instructions on the Notice of Internet Availability of Proxy Materials mailed to you and the instructions listed on the Internet site.
	If you receive a paper copy of the Proxy Statement, you may authorize your proxy by completing and mailing the proxy card enclosed with the Proxy Statement, or you may authorize your proxy electronically via the Internet or by telephone by following the instructions on the proxy card.
	If your shares are held in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should review the Notice of Internet Availability of Proxy Materials provided by that firm to determine whether and how you will be able to authorize your proxy by telephone or over the Internet.

Authorizing a proxy over the Internet, by telephone or by mailing a proxy card will ensure that your shares are represented at the Annual Meeting.

The Board has fixed the close of business on March 29, 2021 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting and at any postponement(s) or adjournment(s) thereof.

Austin, Texas

Dated: April 23, 2021

By Order of Our Board of Directors,

Joshua A. Mills

Secretary

Table of Contents

PROXY SUMMARY		6

PROXY STATEMENT		17

Information Concerning Voting and Solicitation		17

PROPOSAL 1.	ELECTION OF DIRECTORS	20

Nominees for Election for a One-Year Term Expiring at the 2022 Annual Meeting		21
Board Governance Documents		30
Independent Directors		30
Board Meetings		30
Board Leadership Structure		30
Director Continuing Education		30
Board Committees		31
Director Qualifications and Experience		34
Board’s Role in Oversight of Risk		36
Stockholder and Interested Party Communications with the Board		37

PROPOSAL 2.	RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	38

Independent Registered Public Accounting Firm		38
Audit Committee Report		39

PRINCIPAL STOCKHOLDERS		40

EXECUTIVE COMPENSATION		42

Compensation Discussion and Analysis		42
Executive Summary		42
Compensation Committee Report		57
Grants of Plan-Based Awards		60
Narrative Disclosure to Compensation Tables		61
Outstanding Equity Awards at Fiscal Year-End		62
Option Exercises and Stock Vested		64
Nonqualified Deferred Compensation		64
Deferred Compensation Plan		64
Potential Payments upon Termination or Change in Control		65
CEO Pay Ratio		67
2021 Compensation		67

DIRECTOR COMPENSATION		68

STOCK OWNERSHIP GUIDELINES		70

Anti-Hedging and Anti-Pledging Policy		70

COMPENSATION RISK ASSESSMENT		70

EQUITY COMPENSATION PLANS		71

PROPOSAL 3.	ADVISORY NON-BINDING VOTE ON EXECUTIVE COMPENSATION	72

Background		72
Summary		72
Recommendation		73

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		74

Review, Approval or Ratification of Transactions with Related Persons		74
Indemnification Agreements		74

ANNUAL REPORT ON FORM 10-K		74

OTHER MATTERS		74

Stockholder Proposals and Nominations		75
Householding of Proxy Materials		75

APPENDIX		76

Non-GAAP Financial Measures		76

| DIGITAL REALTY TRUST, INC. | 2021 PROXY STATEMENT | 5

Meeting:	Annual Meeting of Stockholders	Stock Symbol:	DLR
Date:	Thursday, June 3, 2021	Exchange:	New York Stock Exchange
Time:	10:00 a.m. PDT
Location:	4 Embarcadero Center, Third Floor	State of Incorporation:	Maryland
	Promenade Level conference center (Stanford Room)	Public Company Since:	2004
	San Francisco, CA 94111
Record Date:	March 29, 2021	Common Stock Outstanding as of the Record Date:	281,365,660 shares
Corporate Website: www.digitalrealty.com
Investor Relations Website: investor.digitalrealty.com

						Committee Membership
Name	Age	Years on Board			Independent	Audit	Compensation	Nominating and Corporate Governance
Laurence A. Chapman	71		16
Alexis Black Bjorlin	47		1
Michael A. Coke*	53		3
VeraLinn Jamieson	60		1
Kevin J. Kennedy	65		8
William G. LaPerch	65		8
Jean F.H.P. Mandeville	61		1
Afshin Mohebbi	58		5
Mark R. Patterson	60		5
Mary Hogan Preusse	52		4
Dennis E. Singleton	76		16	**
A. William Stein	67		6

Note: Committee membership as of the date of this Proxy Statement.
*	Mr. Coke is not standing for re-election to the Board. Mr. Coke’s term on the Board, Audit Committee and the Nominating and Corporate Governance Committee will expire at the Annual Meeting.
**	Years on Board includes Mr. Singleton’s service as director emeritus. Mr. Singleton has served as director emeritus since June 2020. Prior to that, Mr. Singleton served on our Board for over 15 years.

	Separate Independent Chairman and Chief Executive Officer
	Our directors stand for election each year
	Majority voting standard for director elections
	10 of 11 directors standing for election are independent
	Executive sessions of Independent Directors
	3 audit committee financial experts
	Annual Board and Committee self-evaluations
	Oversight of risk by the Board

	Board orientation and continuing education program
	Codes of conduct for directors, employees and vendors
	Anti-hedging and anti-pledging policy
	Executive and director stock ownership guidelines
	No poison pill
	Proxy access
	Award-winning commitment to sustainability
	Commitment to our communities

	2020
Trade Associations	Company Dues and Contributions		Lobbying (%)⁽¹⁾	Company Dues Allocated to Lobbying
National Association of Real Estate Investment Trusts	$	240,000	25%	$	60,000
Real Estate Roundtable		35,000	65%		22,750
The Data Center Coalition		25,000	30%		7,500
Information Technology Industry Council		78,000	17.5%		12,400


(1)	Lobbying percentages obtained from the respective trade association.

•	A virtual auction to raise funds for breast cancer awareness
•	Several community involvement and external customer events
•	Supporting external virtual events with the Women’s Tech Forum
•	A series of Masterclass sessions open to all employees
•	Additional virtual events to support networking and career development during the pandemic

	In 2020, we set our global carbon emissions target with the Science-Based Target Initiative (SBTi). As the first data center operator of our size and global reach to join the SBTi, we have committed to reducing our Scope 1 and 2 emissions (direct and indirect company emissions) by area by 68% and Scope 3 emissions (indirect emissions in our value chain) by area by 24% by 2030.

	Our subsidiary Interxion France achieved carbon neutrality by end of 2020 and will seek to maintain this achievement through 2030, becoming the first major colocation data center operator in France to achieve carbon neutrality.

	We added two LEED Silver, one BREEAM Excellent, and one BCA Green Mark Platinum certified data center to our green building portfolio.

	We received EPA ENERGY STAR for Data Centers certifications for 31 sites in the U.S., demonstrating excellence in energy efficiency.

	We announced a 65 MW solar virtual power purchase agreement and 89 MW retail supply agreement to support our Dallas portfolio, bringing our total new solar and wind power contracts to 556 MW.

	In January 2020, we issued green bonds with total gross proceeds of approximately €1.4 billion. In September 2020, we issued green bonds with total gross proceeds of €750 million and in January 2021 we issued green bonds with gross proceeds of €1 billion. Proceeds from green bonds are typically allocated to support renewable energy projects, energy efficiency initiatives and sustainable data centers. We are the largest REIT issuer of green bonds.



LEADER IN THE LIGHT SUSTAINABILITY ACHIEVEMENT For the fourth consecutive year, we received Nareit’s 2020 data center “Leader in the Light” award, representing superior environmental efforts.	#10 ON TOP 30 TECH AND TELECOM LIST We are ranked #10 on the EPA’s Top 30 Tech and Telecom list of the largest green power users. We are also ranked #24 on the EPA’s National Top 100 list of green power users.	ENVIRONMENT + ENERGY LEADER, TOP PROJECT OF THE YEAR In 2020, we received the Top Project of the Year award from Environment + Energy Leader for our Global Water Strategy.



GRESB GREEN STAR RANKING We received an A score from the Global Real Estate Sustainability Benchmark (GRESB) Public Disclosure in 2020, representing our excellence in ESG business practices, and a Green Star rating from the GRESB Real Estate Assessment.	ENERGY STAR PARTNER OF THE YEAR Digital Realty became the first data center partner to receive the U.S. Environmental Protection Agency’s ENERGY STAR Partner of the Year Award in 2020 for its ENERGY STAR certification efforts and commitment to measuring and improving the energy efficiency of our data centers.	FTSE4GOOD INDEX SERIES INCLUSION Digital Realty is a constituent of the FTSE4Good Index Series. The FTSE4Good Index evaluates companies on their ESG practices and includes companies that meet globally recognized corporate responsibility standards.

	*We pay for performance* We utilize multiple performance measures across various performance periods.
	*We balance short-term and long-term incentives* Annual incentive bonus and long-term equity awards comprise a significant portion of executive officers’ compensation opportunity.
	*We align compensation with stockholders’ interests* A substantial majority of our named executive officers’ compensation is tied to total stockholder return performance.
	*We target outperformance* Target payouts for our performance-based equity awards aren’t achieved unless we match or outperform the REIT industry.
	*We do not have tax gross-ups* We do not provide tax gross-ups on any severance, change-in-control or other payments related to executive terminations.
	*We do not allow uncapped payouts* We have a defined compensation program that does not allow for uncapped bonus payouts.

Core FFO Performance	Total Enterprise Value	Market Capitalization
$6.22 per share⁽¹⁾	$54 billion⁽²⁾	$40 billion⁽³⁾

	STRATEGIC TRANSACTIONS	In March 2020, we completed the lnterxion combination in a stock-for-stock transaction, which valued lnterxion at approximately $8.4 billion in total enterprise value.
	STRATEGIC CAPITAL MARKETS TRANSACTIONS	In 2020, we opportunistically raised €3.25 billion at record low rates. We maintained our investment grade rating on our senior long-term unsecured notes. We also further strengthened our balance sheet with the redemption of high-coupon debt and preferred equity.
	STEADY DIVIDEND GROWTH	Increased the annual dividend on our Common Stock by 3.7% in 2020 from 2019, representing a compound annual growth rate of 11%, since our first full quarter of operations following our initial public offering in 2004.
	RECORD BOOKINGS	We delivered record bookings of $437.7 million for 2020⁽⁴⁾.
	PLATFORM DIGITAL^®	We continued to solve global coverage, capacity, and communities of interest connectivity needs for companies of all sizes through PlatformDIGITAL^®, our fit-for-purpose platform that simplifies access to data center capacity and interconnection through a single data center provider with tailored infrastructure deployments and controls.
	SUSTAINABILITY	Recognized as a leader for our sustainability platform, including receiving Nareit’s Leader in the Light award for data centers for the fourth consecutive year.

(1)	A reconciliation of FFO to net income is included on page 93 of our Annual Report on Form 10-K for the year ended December 31, 2020 and a reconciliation of FFO to core FFO is available in the Appendix.
(2)	Total enterprise value calculated as the market value of common equity, plus liquidation value of preferred equity and total debt at balance sheet carrying value.
(3)	The market value of common equity is based on the closing stock price on December 31, 2020 and assumes 100% redemption of the limited partnership units in our Operating Partnership, including common units and vested and unvested long-term incentive units, for shares of our common stock. Excludes shares of common stock potentially issuable upon conversion of our outstanding redeemable preferred stock upon certain change of control transactions, as applicable.
(4)	Includes interconnection bookings.

•	Sending a written notice of revocation to the Company’s Corporate Secretary at the Company’s principal executive office at 5707 Southwest Parkway, Building 1, Suite 275, Austin, TX 78735, ATTN: General Counsel and Secretary.
•	Delivering by mail, by telephone, via the Internet or in person a duly executed proxy bearing a later date.
•	Attending the Annual Meeting in person and voting in person. Attendance at the meeting will not, by itself, revoke a proxy.

	Proposal	Board Recommendation	Votes Required for Approval at Which Quorum is Present	Routine Matter
1:	Election of Director Nominees	FOR	Affirmative vote of majority of votes cast for each director nominee	No
2:	Ratification of KPMG as Our Independent Accounting Firm for 2021	FOR	Affirmative vote of majority of votes cast	Yes
3:	Advisory Vote on Compensation of Named Executive Officers (Say-On-Pay)	FOR	Affirmative vote of majority of votes cast	No

SEC Form DEF 14A filed by Digital Realty Trust, Inc.