8-KLeadership ChangesMaterial Agreements

DIGITAL REALTY TRUST, INC. 8-K Report, Material Agreement (May 17, 2018)

Filed May 17, 2018For Securities:DLRDLR-PJDLR-PKDLR-PL

Summary

This 8-K filing from Digital Realty Trust, Inc. (DLR) on May 17, 2018, primarily concerns changes in executive personnel. Notably, Scott E. Peterson, the Chief Investment Officer, will resign from his employee and officer roles effective May 31, 2018, but will continue with the company as a consultant until February 28, 2019. This transition involves a separation agreement that includes a one-time cash payment of $287,500, continued vesting of equity awards during the consulting period, and the company expects to incur approximately $0.8 million in transition costs in Q2 2018. Additionally, Daniel W. Papes, Senior Vice President of Global Sales and Marketing, will depart on June 30, 2018. His departure will result in cash severance and other benefits as per his employment agreement, with the company anticipating approximately $1.2 million in separation compensation costs for Q2 2018. These executive changes, while impacting current quarter financials, are standard in corporate transitions and are subject to Mr. Peterson's adherence to confidentiality, non-disparagement, non-solicitation, and non-competition clauses.

Key Highlights

  • 1Scott E. Peterson, Chief Investment Officer, to resign as an officer and employee effective May 31, 2018.
  • 2Mr. Peterson will transition to a consulting role with Digital Realty until February 28, 2019.
  • 3Mr. Peterson eligible for a one-time payment of $287,500 and continued equity award vesting during consulting period.
  • 4Digital Realty expects to record approximately $0.8 million in costs related to Mr. Peterson's transition in Q2 2018.
  • 5Daniel W. Papes, SVP Global Sales and Marketing, to depart effective June 30, 2018.
  • 6Mr. Papes will receive cash severance and other benefits as per his employment agreement.
  • 7Company anticipates approximately $1.2 million in separation costs for Mr. Papes in Q2 2018.

Frequently Asked Questions

This filing reports on the planned departure of Scott E. Peterson from his executive role as Chief Investment Officer and Daniel W. Papes from his role as Senior Vice President, Global Sales and Marketing. The specific reasons for their departures are not detailed, but the company has entered into separation and consulting agreements for Mr. Peterson and a severance arrangement for Mr. Papes.

Investors should anticipate approximately $0.8 million in costs related to Scott E. Peterson's transition and $1.2 million in separation compensation for Daniel W. Papes. These costs are expected to be recorded in the second quarter of 2018.

Yes, Mr. Peterson will transition into a consulting role with the company after his resignation as an officer and employee. This consulting engagement is expected to last until February 28, 2019, and he will receive a one-time payment and continue to vest in outstanding equity awards during this period, subject to certain conditions.

Yes, the Separation Agreement includes confidentiality and non-disparagement restrictions that apply indefinitely. Additionally, there are non-solicitation and non-competition restrictions that are in effect during his consulting period.