Summary
Equinix, Inc. (EQIX) filed an 8-K on March 21, 2016, to announce the approval of its 2016 Incentive Plan by the Compensation Committee of its Board of Directors, effective March 16, 2016. This plan outlines the executive compensation structure for the fiscal year ending December 31, 2016. The core of the plan ties annual bonuses for executive officers to the company's performance against specific financial goals. Specifically, bonuses are based on a percentage of base salary (ranging from 75% to 125% target) and are equally weighted between achieving revenue and Adjusted Funds from Operations (AFFO) targets. The plan explicitly includes the financial impact of recent acquisitions, such as TelecityGroup plc and Bit-isle, Inc., while excluding one-time events and currency fluctuations. Significant performance shortfalls below the set goals will result in a pro-rata reduction of the bonus pool, with no bonuses payable if revenue and AFFO fall to 95% or below the targets.
Key Highlights
- 1Equinix approved the 2016 Incentive Plan for eligible employees and executive officers, effective March 16, 2016.
- 2Executive annual target bonuses are set as a percentage of base salary, ranging from 75% to 125%.
- 3Bonus payouts are determined by company performance against revenue (50% weighting) and Adjusted Funds from Operations (AFFO) (50% weighting) goals.
- 4The plan explicitly incorporates the financial results of the recent TelecityGroup plc and Bit-isle, Inc. acquisitions.
- 5Performance goals exclude one-time events like unforecasted acquisitions or expansion projects, as well as foreign currency fluctuations.
- 6A strict performance metric is in place: for every 1% revenue or AFFO falls below target, the corresponding bonus pool portion reduces by 20%.
- 7No bonuses will be paid if revenue and AFFO are 95% or less of the established goals.