8-KLeadership Changes

DIGITAL REALTY TRUST, INC. 8-K Report, Executive Changes (Aug 16, 2016)

Filed August 16, 2016For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

Digital Realty Trust, Inc. (DLR) announced on August 15, 2016, a significant change to its Board of Directors with the election of Afshin Mohebbi as an independent director. Mr. Mohebbi will serve until the 2017 Annual Meeting of Stockholders. This appointment is part of the company's ongoing efforts to enhance its board's expertise and independence. Furthermore, the company has adjusted its director compensation structure. The annual equity award for non-employee directors has been increased from $125,000 to $145,000, effective upon election. This move reflects an effort to attract and retain highly qualified independent directors by aligning their compensation with market standards and the company's long-term success through equity ownership. Mr. Mohebbi will receive a $75,000 annual fee in addition to his equity award.

Key Highlights

  • 1Afshin Mohebbi appointed as an independent director to the Board of Directors.
  • 2Mr. Mohebbi's term as director will extend until the 2017 Annual Meeting of Stockholders.
  • 3The annual non-employee director equity award value was increased from $125,000 to $145,000.
  • 4Mr. Mohebbi received a fully vested award of profits interest units upon election.
  • 5Eligible independent directors will receive an annual equity award of $145,000, with an option for profits interest units or common stock.
  • 6An annual fee of $75,000 will be paid to Mr. Mohebbi for his board service, with additional compensation for committee service.
  • 7Digital Realty expects to enter into a standard indemnification agreement with Mr. Mohebbi.

Frequently Asked Questions

Afshin Mohebbi has been elected as an independent director to Digital Realty Trust's Board of Directors. While the filing does not detail his specific background or the exact reasons for his appointment, such additions typically aim to bring new expertise, perspectives, and strengthen board oversight and governance.

The increase in the annual equity award for non-employee directors, from $125,000 to $145,000, is intended to better align director compensation with market practices and to incentivize directors to hold equity in the company. This can align their interests with those of long-term shareholders, as their compensation becomes more tied to the company's performance and stock value.

Profits interest units are a form of equity ownership in a subsidiary (in this case, Digital Realty Trust, L.P.). Awarding these units, which vest immediately, provides directors with an economic interest in the partnership's performance, similar to owning stock, and is a common practice for compensating and incentivizing non-employee directors in real estate investment trusts.

Yes, Mr. Mohebbi will receive an annual cash fee of $75,000 for his service on the Board of Directors. He will also be compensated for any committee service he undertakes on the board.