DEF 14A of Iron Mountain Inc
Filed Apr 19, 2024 · FY20230001020569-24-000115
cda_peer_group
The MSCI US REIT Index is our primary benchmark for tracking our relative Total Shareholder Return (“TSR”) performance. We also track our compensation peer group, which represents companies of like sizes and businesses, for executive compensation benchmarking. This compensation peer group includes both real estate investment trust (“REIT”) and non-REIT companies. As the graph below shows, the Company’s TSR performance over the five-year period ended December 31, 2023 was at the 92nd percentile among the companies in our compensation peer group, while the total realizable pay for our CEO over this same period was at the 89th percentile among these companies. This, along with the Company’s stronger relative TSR (“rTSR”) performance as compared to the MSCI US REIT Index, further demonstrates pay for performance alignment.
cda_lti_design
| ▶CEO | | | | CEO: William Meaney (Age 63; CEO 2013-present) PERCENTAGE 2023 CEO INCENTIVE COMPENSATION AT RISK: 92% of Total Compensation METRICS USED FOR SHORT-TERM INCENTIVE COMPENSATION: Revenue, Adjusted EBITDA, AFFO Per Share, Strategic Objectives METRICS USED FOR LONG-TERM INCENTIVE COMPENSATION: ROIC, Revenue, New Product Exit Rate, Relative TSR STOCK OWNERSHIP GUIDELINES: Yes ANTI-HEDGING/ANTI-PLEDGING POLICY: Yes |
cda_severance
| NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS | 2 | | PROXY SUMMARY | 3 | | CORPORATE GOVERNANCE MATTERS | 9 | | PROPOSAL 1: ELECTION OF DIRECTORS | 9 | | Our Director Nominees | 10 | | Skills and Experience of Director Nominees | 16 | | Selection of Director Nominees | 16 | | Board and Committee Evaluations | 17 | | Board Structure | 17 | | Board Committees | 18 | | The Board’s Role, Responsibilities and Policies | 23 | | Director Compensation | 27 | | Other Corporate Governance Matters | 29 | | OFFICER EXCULPATION | 30 | | PROPOSAL 2: APPROVAL OF AMENDMENT TO IRON MOUNTAIN INCORPORATED’S CERTIFICATE OF INCORPORATION TO LIMIT LIABILITY OF CERTAIN OFFICERS | 30 | | EXECUTIVE COMPENSATION | 31 | | PROPOSAL 3: APPROVAL, BY A NON-BINDING ADVISORY VOTE, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS | 31 | | Compensation Discussion and Analysis | 32 | | Executive Summary | 32 | | 2023 Total Direct Compensation Components | 36 | | 2021 Performance Unit Results | 46 | | Tax Considerations | 50 | | Changes to 2024 Compensation Program | 50 | | Compensation Committee Report on Compensation Discussion and Analysis | 51 | | Compensation Tables | 52 | | Summary Compensation Table | 52 | | Grants of Plan-Based Awards For 2023 | 54 | | Outstanding Equity Awards at Fiscal Year End for 2023 | 55 | | Option Exercises and Stock Vested at Fiscal Year End for 2023 | 56 | | Non-Qualified Deferred Compensation for 2023 | 56 | | Employment Agreements | 57 | | Termination and Change in Control Arrangements | 57 | | Estimated Benefits and Payments Upon Termination | 60 | | Estimated Benefits Upon A Qualifying Termination Under the Applicable Severance Program in Connection with a Change in Control | 60 | | Median Employee to CEO Pay Ratio | 61 |
pvp
| 2023 Pay Versus Performance | 62 | | Additional Information | 65 | | Compensation Committee Interlocks and Insider Participation | 65 | | AUDIT MATTERS | 66 | | PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 66 | | Independent Registered Public Accounting Firm | 67 | | Audit Committee Report | 68 | | INFORMATION ABOUT STOCK OWNERSHIP | 69 | | Security Ownership of Certain Beneficial Owners | 69 | | Security Ownership of Management | 70 | | Delinquent Section 16(a) Reports | 70 | | Equity Compensation Plan Information | 71 | | OTHER MATTERS | 72 | | Stockholder Proposals | 72 | | Nominations of Individuals for Election as Directors Using Proxy Access | 72 | | Stockholder Solicitation of Proxies in Support of Director Nominees Other Than Company Nominees | 72 | | Other Matters Brought Before the Meeting | 72 | | Additional Documentation | 72 | | IRON MOUNTAIN EXECUTIVE OFFICERS | 73 | | ADDITIONAL INFORMATION | 74 | | Stockholders Entitled to Vote | 74 | | How to Vote | 74 | | If You Are a Registered Holder of Common Stock | 74 | | If You Hold Your Shares of Common Stock “In Street Name” | 75 | | Quorum | 75 | | Votes Required | 75 | | Abstentions and Broker Non-Votes | 75 | | Attendance at the Annual Meeting | 76 | | Revocability of Proxies | 76 | | Information Regarding the Company | 76 | | Notice Regarding the Availability of Proxy Materials | 77 | | ANNEX A: CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF IRON MOUNTAIN INCORPORATED | 78 |
BIOGRAPHY
BIOGRAPHY Ms. Arway served in a number of capacities during her 21-year career with the American Express Company, Inc., a publicly held global payments, network and travel company, until her retirement in 2008. Ms. Arway served as president, Japan/Asia Pacific/Australia Region, American Express International, Inc., Singapore from October 2005 to January 2008. From December 2004 to October 2005, Ms. Arway served as chief executive officer, American Express Australia Ltd., Sydney, Australia. From July 2000 to December 2004, Ms. Arway served as executive vice president and general manager, Corporate Travel North America, American Express Company, Inc. Ms. Arway has been a director of The Hershey Company, a publicly held company, since May 2010 and has been a director of DaVita Inc., a publicly held company, since May 2009. Ms. Arway also served as a director of Carlson Companies, Inc., a family-owned corporate travel management and private capital company, from May 2019 to July 2021.
REASONS FOR NOMINATION
| COMPENSATION COMMITTEE | | | 4 Meetings in 2023 | | CHAIR Murdock | MEMBERS Arway Ford Matlock Simons | Each member of the Compensation Committee qualifies as independent under the applicable NYSE listing standards, SEC rules and the Board’s independent assessment. | | | | | | | | ▲ROLES AND RESPONSIBILITIES | | | | | The Compensation Committee: | | | | | 1.reviews, approves and recommends to the independent members of the Board the annual compensation, including base salary, equity-based incentives and the payment of short-term incentive compensation, for the CEO; 2.approves all long-term equity incentives to our employees, including the executive officers, under the 2014 Stock and Cash Incentive Plan, as amended (the “2014 Plan”); 3.reviews and approves the annual compensation, including base salary, equity-based incentives and the payment of short-term incentive compensation, for the Company’s executive officers (as defined in Section 16 of the Securities Exchange Act of 1934), based on recommendations from the CEO and reports to the Board on such decisions, while annually reviewing the Company’s diversity, equity and inclusion (“DEI”) practices; 4.reviews the Company’s cash and stock-based incentive compensation plans to assess their effectiveness in meeting the Company’s goals and objectives and exercises all of the authority of the Board with respect to the administration of such plans; 5.annually reviews and discusses with management a draft of the Company’s Compensation Discussion and Analysis to be included in the Company’s annual proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K; 6.annually prepares and publishes an annual report of the Compensation Committee for inclusion in the Company’s annual proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K; 7.reviews and discusses at least on an annual basis the risks arising from the Company’s compensation policies for its employees; 8.reviews and discusses pay ratio disclosure for inclusion in the Company’s annual proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K; 9.annually reviews executive talent in coordination with the Board’s review; 10.furnishes periodic reports to the Board concerning the Compensation Committee’s work; and 11.takes other actions to meet its responsibilities as set forth in its written charter. The Board has delegated final authority for compensation decisions for the executive officers, other than our CEO, to the Compensation Committee. The Compensation Committee has the authority, as it deems appropriate, to delegate any of its responsibilities to a sub-committee and has delegated the authority to the CEO to approve within an approved budget long-term equity incentive grants below maximum thresholds to employees who are not executive officers or senior vice presidents. For a discussion concerning the process and procedures for determining executive compensation and the role of executive officers and compensation consultants in determining or recommending the amount or form of compensation, see the “Compensation Discussion and Analysis” section in this Proxy Statement. | | | |
REASONS FOR NOMINATION
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS The Board has adopted a Related Person Transaction Policies and Procedures (the “Related Persons Policy”), which provides that all transactions with related persons are subject to approval or ratification by our Audit Committee. With certain exceptions, the Related Persons Policy provides that the Audit Committee shall review the material facts of all transactions with related persons and either approve or disapprove of the transaction. Under the Related Persons Policy, covered transactions include all transactions involving (i) the Company, (ii) amounts in excess of $120,000 and (iii) a Related Person (a term that includes executive officers, directors, nominees for election as directors, beneficial owners of 5% or more of the Company’s outstanding Common Stock and immediate family members of the foregoing). The Audit Committee will determine, among other considerations, (i) whether the terms of a covered transaction are fair to the Company and no less favorable to the Company than would be generally available absent the relationship with the counterparty, (ii) whether there are business reasons for the transaction, (iii) whether the transaction impairs the independence of an outside director, (iv) whether the transaction would represent an improper conflict of interest and (v) whether the transaction is material. If the Company becomes aware of a transaction with a Related Person that has not been approved by the Audit Committee prior to its consummation, the Audit Committee shall review such transaction and evaluate all possible options, including ratification, revision or termination of such transaction and shall take such action as it deems appropriate under the circumstances. The Related Persons Policy is intended to supplement, and not supersede, our other policies and procedures with respect to transactions with Related Persons. During the year ended December 31, 2023, there were no new transactions with related persons that required the review of our Audit Committee. THE COMPANY’S POLICY AND BOARD OVERSIGHT OF POLITICAL EXPENDITURES Our Global Political Contribution Policy, adopted by our Nominating and Governance Committee, together with our Code of Ethics and Business Conduct, guide our approach to ethical business behavior and corporate political contributions. Our Global Political Contribution Policy provides that Iron Mountain does not make political contributions in any form or amount from corporate funds or resources, even when permitted by applicable law. Iron Mountain does not use corporate funds in support of or opposition to political candidates, political parties, political committees and other political entities organized and operating for political candidates or for “electioneering” communications. The Company administers IMPAC, which is a non-partisan political action committee supporting congressional candidates at the federal level only. IMPAC is governed by a set of bylaws and supervised by a board of directors composed of senior managers from different areas of the Company. IMPAC allows eligible employees to pool their resources to support candidates who understand the issues important to the Company’s business and its employees. Participation in IMPAC is strictly voluntary. Except for administrative expenses, IMPAC is funded solely by the Company’s employees and directors and is not supported by funds from the Company. IMPAC complies with federal election laws and all other applicable laws and reports regularly to the Federal Election Commission. The Company is a member of a number of trade associations that participate in public relations activities such as education and conferences, but not for the purpose of making political contributions. Our Code of Ethics and Business Conduct and our Global Political Contribution Policy are available on our website under the heading “Investors/Corporate Governance/Governance Documents.” Our Nominating and Governance Committee annually reviews contributions by the IMPAC, determines the IMPAC board members and reviews the Company’s Political Contribution Policy and the Company’s compliance therewith. DIRECTOR STOCK OWNERSHIP GUIDELINES We maintain director stock ownership guidelines that require non-employee directors to achieve and maintain ownership of our Common Stock at or above a prescribed level. Our directors who are also employees of the Company are subject to the Company’s executive stock ownership guidelines described on page 50 of this Proxy Statement. We established these guidelines to help align long-term interests of directors with stockholders. The guidelines require each director to own and retain Common Stock, exclusive of unexercised stock options and performance shares or performance units (“PUs”), having a value equal to six times the director’s annual cash retainer earned for serving on the Board. As of April 19, 2024, all of the Company’s non-employee directors are in compliance with the director stock ownership guidelines. Each director subject to the Company’s stock ownership guidelines is required to retain an amount equal to 50% of the net shares received as a result of the settlement or vesting of restricted stock, restricted stock units (“RSUs”), PUs or the exercise of stock options until such director meets the minimum ownership threshold. “Net shares” are those shares that remain after shares are sold or netted to pay any applicable taxes or purchase price. Because directors must retain a percentage of shares resulting from the vesting of RSUs until they achieve the minimum share ownership threshold, there is no minimum time period required to comply initially with the guidelines.
REASONS FOR NOMINATION
Any non-employee director who served on the Board or a committee for less than the entire year received a pro-rated retainer based on the dates such non-employee director served on the Board or the applicable committee. In addition, our Independent Chair of the Board receives a retainer of $150,000. Non-employee directors received annual grants of RSUs for the number of shares of our Common Stock equal to $170,000 divided by the Fair Market Value (as defined in the 2014 Plan) on May 9, 2023, the date of our 2023 Annual Meeting of Stockholders. Non-employee directors who joined the Board after the 2023 Annual Meeting of Stockholders received a pro-rated grant as of the date of their appointment to the Board. The RSUs vested immediately on the date of grant. The Director Deferred Compensation Plan (the “DDCP”) allows non-employee directors to defer the receipt of between 5% and 100% of their cash retainers, in which case participating non-employee directors receive shares of phantom stock in an amount equal to the amount of the cash retainer deferred divided by the fair market value of one share of Common Stock as of the crediting date. Non-employee directors may also defer some or all of their annual RSU grant under the DDCP and receive a number of shares of phantom stock equal to the amount of the annual RSU grant. Dividends, if any, accrued on such phantom stock are deemed to be similarly deferred and credited to the participating non-employee director’s account. The shares of phantom stock are payable in shares of Common Stock on various dates selected by each participating non-employee director or as otherwise provided in the DDCP. Deferral elections and elections relating to the timing and form of payments are made prior to the period in which the retainers, fees and awards are earned. The Company does not contribute any matching, profit sharing or other funds to the DDCP for any participating director. Amounts under the DDCP are treated as invested in shares of our Common Stock. The DDCP is administered by the Chair of the Compensation Committee and the executive vice president primarily responsible for oversight and administration of our compensation programs.
REASONS FOR NOMINATION
| NAME | FEES EARNED OR PAID IN CASH ($)(1) | STOCK AWARDS ($)(2) | | | ALL OTHER COMPENSATION ($) | TOTAL ($) | | Jennifer Allerton | $110,000 | | | 169,962 | — | $279,962 | | Pamela M. Arway | $260,000 | | | 169,962 | — | $429,962 | | Clarke H. Bailey | $145,000 | | | 169,962 | $201,750(3) | $516,712 | | Kent P. Dauten | $125,000 | | | 169,962 | — | $294,962 | | Monte Ford | $130,000 | | | 169,962 | — | $299,962 | | Robin L. Matlock | $110,000 | | | 169,962 | $7,348(3) | $287,310 | | Wendy J. Murdock | $130,000 | | | 169,962 | — | $299,962 | | Walter C. Rakowich | $145,000 | | | 169,962 | — | $314,962 | | Theodore R. Samuels(4) | $50,217 | | | 138,738 | $1,472(3) | $190,427 | | Doyle R. Simons | $130,000 | | | 169,962 | $77,869(3) | $377,831 | | Alfred J. Verrecchia(5) | $47,500 | | — | | $183,101(3) | $230,601 |
REASONS FOR NOMINATION
(1)Messrs. Samuels and Simons elected to defer 100% of their cash retainer fees to the DDCP. (2)The amounts reported in the “Stock Awards” column reflect the aggregate grant date fair value of RSUs granted in 2023 computed in accordance with Financial Accounting Standards Board Accounting Standards Codification 718 (“FASB ASC Topic 718”). Assumptions used in the calculation of these amounts are included in Note 2 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Each non-employee director, except Mr. Samuels, was granted 3,047 RSUs on May 9, 2023. Mr. Samuels was elected as a non-employee Director of the Company on July 17, 2023, and on that same day, he was granted 2,264 RSUs. Messrs. Bailey and Simons elected to defer 100% of their RSUs granted in 2023 pursuant to the DDCP. (3)The amounts reported in the “All Other Compensation” column for Messrs. Bailey, Simons, Samuels and Verrecchia and Ms. Matlock consist of dividend equivalents paid on phantom stock pursuant to the DDCP in 2023. (4)Mr. Samuels was appointed to the Board effective July 17, 2023. (5)Mr. Verrecchia was a director until May 2023. MODIFICATIONS TO DIRECTOR COMPENSATION FOR 2024 The Compensation Committee annually reviews, with assistance from our independent compensation consultants, the compensation of our non-employee directors in comparison to companies with similar revenues and business and makes adjustments it believes are appropriate. Effective January 1, 2024, we modified our non-employee director compensation plan to (1) increase the annual Board retainer from $80,000 to $85,000 per year, (2) increase the annual retainer for the Independent Chairperson of the Board from $150,000 to $160,000, and (3) increase the annual stock grant value for each non-employee director from $170,000 to $190,000.
RATIONALE
COMPENSATION PHILOSOPHY AND PRACTICES Our executive compensation programs are designed to attract, retain and focus the talents and energies of our executives on meeting the current and future objectives of the Company and are guided by the following design principles: General Program Competitiveness – In order to attract and retain top performing executives, we establish overall Total Direct Compensation (“TDC”). We define TDC as base salary plus short-term incentive (“STI”) compensation plus long-term incentive (“LTI”) compensation. We determine TDC, with reference to relevant external benchmarks, and the positioning of each executive’s pay relative to market benchmarks reflects experience, proficiency, strategic importance, and performance of required duties. Pay for Performance – The majority of compensation for our NEOs is performance-based. We award short- and long-term variable, performance-based compensation intended to deliver target compensation when our NEOs meet goals established by our Compensation Committee. Our compensation practices include the potential for above-target compensation (up to a maximum) when rigorous goals are achieved and below-target compensation when established goals are not achieved. Internal Parity – The overall target TDC opportunity for each executive reflects the responsibility, scope and complexity of that individual’s role within the Company. Alignment with Business Strategies and Stockholders – Our executive compensation programs reward achievement of enterprise financial goals and strategic objectives that drive long-term stockholder value creation, thereby aligning the interests of our executives with our stockholders.
RATIONALE
| WHAT WE DO | WHAT WE DON’T DO | | Align executive pay with performance Ensure proper balance of short- and long-term orientation in our incentive programs with a significant portion of executive target compensation at risk Maintain meaningful executive stock ownership requirements Include executive clawback policy on all cash and equity incentive awards Hold an annual “Say-On-Pay” advisory vote Retain an independent compensation consultant Maintain an insider trading policy that prevents hedging and pledging of shares | No change in control “single trigger” equity acceleration provisions No excise tax gross-ups in connection with a change in control No dividends or dividend equivalents paid until vesting No supplemental executive retirement plans |
2023 FINANCIAL AND OPERATIONAL PERFORMANCE
Our compensation programs also utilize a compensation peer group, representing companies of comparable size and business as outlined by the criteria on page 49, for executive compensation benchmarking. This compensation peer group includes both REIT and non-REIT companies. As the graph below shows, the Company’s TSR performance over the five-year period ended December 31, 2023 was at the 92nd percentile among the companies in our compensation peer group, while the total realizable pay for our CEO over this same period was at the 89th percentile among these companies. This, along with the Company’s stronger relative TSR performance as compared to the MSCI US REIT Index, further demonstrates pay for performance alignment.
2023 FINANCIAL AND OPERATIONAL PERFORMANCE
Total realizable pay is defined as the sum of the following components: actual base salaries, short-term incentive awards, and long-term incentive awards paid over the preceding five-year period; the value of all in the money stock options granted during the preceding five-year period; and the value as of December 31, 2023, of RSUs and PUs granted over the preceding five-year period (reflecting actual performance results or estimated performance, including accrued dividends). TSR is calculated based on the dividend adjusted closing price per share of Common Stock on the NYSE on December 31, 2018 through December 31, 2023. STOCKHOLDER PERSPECTIVE AND SAY-ON-PAY Stockholders are provided the opportunity to cast an annual advisory vote on the compensation of our NEOs. Iron Mountain’s long history of aligning long-term executive pay and performance is supported by our strong historical “Say-on-Pay” results, with approximately 95% of the votes cast for the approval of “Say-on-Pay” at our 2023 annual meeting of stockholders. The 2023 “Say-on-Pay” results were consistent with past support from our stockholders, as demonstrated in the graph below. We believe the consistently strong support since the adoption of “Say-on-Pay” demonstrates our stockholders’ satisfaction with the alignment of Company performance and NEO compensation.
OVERVIEW
OVERVIEW Our executive compensation program is designed to motivate and reward exceptional performance in a straightforward and effective way, while also recognizing the complexity, size, scope, and success of Iron Mountain’s business. The compensation of our NEOs has three primary components: annual base salary, short-term incentives, and long-term incentives. Our compensation programs are intended to support our long-term strategy, with the majority of our executive team pay being at risk, and in the form of long-term incentives. The Compensation Committee reviews benchmark data when making executive compensation decisions, but the Compensation Committee does not set compensation levels based solely on market data. Rather, the Compensation Committee reviews the 25th, 50th and 75th percentiles of relevant market data as one element in its decision-making process. Final executive compensation decisions reflect a variety of factors, including each executive’s experience, performance, the relative scope and complexity of the executive’s role within the organization, as well as where each executive’s pay level falls relative to the market data.
OVERVIEW
| | | | COMPENSATION ELEMENT | | | | | | | CEO | OTHER NEOS | ABOUT THE COMPENSATION ELEMENT | | | | | Base Salary | | | | | | | | | Base salary is a customary, fixed element of compensation intended to attract and retain highly qualified individuals. In order to avoid excessive risk taking, it is important that not all cash compensation be at-risk. | | | | | Short Term Incentive | | Annual cash short-term incentives are designed to focus executives toward achieving enterprise goals while recognizing their individual contributions, including: ▲Attaining financial goals in line with our annual budget; ▲Achieving strategic objectives; ▲Performing relative to initiatives in areas within their control; and ▲Rewarding outstanding individual performance. Our short-term incentive awards are expressed as a percentage of base salary, and the amount of compensation payable under each award is subject to a maximum payout; short-term incentive awards are also subject to our clawback policy described on page 47. | | | | | Financial Performance – 70% Strategic Objectives – 30% | | | | | | | Long Term Incentive | | Long-term equity incentives are designed to: ▲Align the interests of our executives with our stockholders; ▲Reward overall enterprise performance; and ▲Encourage the retention of our executives by providing additional opportunities for them to participate in the ownership of the Company and its future growth. Our long-term incentive awards are granted in the form of PUs, RSUs and stock options. PUs are earned based on performance, cliff vest three years from the date of the original grant based on achievement of performance goals, and settle in shares of our Common Stock. Stock options are granted at Fair Market Value (as defined in the 2014 Plan). RSUs and stock options typically vest ratably over three years and are settled in shares of our Common Stock. Equity awards are also subject to our clawback policy described on page 47. | | | | | PUs 85% Stock Options 15% | PUs 91% RSUs 9% | |
(2) SHORT-TERM INCENTIVES
(2) SHORT-TERM INCENTIVES The short-term incentive component of our executive compensation program is a variable, at-risk cash component that is aligned with our annual financial results. The 2023 short-term incentive goals were set at the beginning of 2023 and were based on our short-term financial expectations in 2023.
PROGRAM STRUCTURE
PROGRAM STRUCTURE Achievement of the target short-term incentive opportunity for each executive team member is based upon (1) the Company’s performance against a series of financial goals (the “STI Financial Targets”), (2) the Company’s performance against a series of strategic objectives and (3) personal performance against the individual goals and objectives of such executive team member set at the beginning of the year (referred to as an “individual multiplier”). Each member of the executive team has the same STI Financial Targets and the same strategic objectives, which serve to align our executive team toward the same enterprise goals. The individual multiplier component, however, allows for recognition of individual performance and contributions. The individual multiplier, when applied, can increase or decrease the short-term incentive compensation payouts depending on performance. In support of our philosophy of paying for performance, actual short-term incentive awards for our executive team may range from 0% to a maximum of 212.5% of target incentive opportunity. Where relevant, results are measured in constant currency to better reflect the effect of the executive’s performance on results during the applicable year.
PROGRAM STRUCTURE
| Financial Performance 70% (0% — 200% Payout) | + | Strategic Objectives 30% (Varies by Objective: 0% — 150% Payout) | × | Individual Multiplier (+/- 25%) |
PROGRAM STRUCTURE
▲70% of the short-term incentive opportunity is based on the Company’s financial performance, measured against two metrics: ▲40% of the short-term incentive opportunity is measured against enterprise Adjusted EBITDA and revenue, with increased payout opportunity if revenue exceeds the target level. We believe this component appropriately corresponds to our profitable growth objectives; and ▲30% of the short-term incentive opportunity is measured against AFFO per share on a constant currency basis. We believe this measure appropriately aligns payouts with our ability to generate excess cash flows to reinvest in the business and provide returns to our stockholders through dividends. ▲30% of the short-term incentive opportunity is based on the achievement of specific strategic objectives, which are centered on key drivers of our growth. The strategic objectives that comprise this component are discussed in further detail under the heading “Strategic Objectives” in this section. ▲In addition, each executive team member’s short-term incentive bonus may be increased or decreased (by the Board for the CEO and the Compensation Committee for the other NEOs) by as much as 25% based on such executive team member’s contribution to the measures above and performance against specific individual goals and objectives, including items such as the development and execution of business, organizational and marketing strategies with the objective to increase Adjusted EBITDA, revenue and AFFO per share and progress toward our strategic objectives.
PERFORMANCE–SUMMARY
| MEASURE & SCOPE | TARGET WEIGHTING | PAYOUT ACHIEVEMENT(1) | | Adjusted EBITDA and Revenue | 40% | 28.6% | | AFFO Per Share | 30% | 30.0% | | Strategic Objectives | 30% | 38.4% | | Weighted Payout | | 97.0% |
u SHORT-TERM INCENTIVE PERFORMANCE AND PAYOUT RANGE
u SHORT-TERM INCENTIVE PERFORMANCE AND PAYOUT RANGE
u SHORT-TERM INCENTIVE PERFORMANCE AND PAYOUT RANGE
| | ADJUSTED EBITDA | REVENUE | PAYOUT % | | Threshold | 97% | 95% | 50% | | Target | 100% | 100% | 100% | | Maximum | 105% | 105% | 200% |
u SHORT-TERM INCENTIVE PERFORMANCE AND PAYOUT RANGE
For 2023, the payout for the Adjusted EBITDA and Revenue component of the short-term incentive element of TDC was 71.5%, which is calculated based on the Company’s performance against the applicable STI Financial Targets as set forth below:
u SHORT-TERM INCENTIVE PERFORMANCE AND PAYOUT RANGE
| (IN MILLIONS) | TARGET | ACTUAL RESULTS(1) | | Adjusted EBITDA | $1,966 | $1,937 | | Revenue | $5,660 | $5,467 | | Payout Achievement Based on Actual Results | | 71.5% |
u SHORT-TERM INCENTIVE PERFORMANCE AND PAYOUT RANGE
(1)Actual results include certain adjustments approved by the Compensation Committee (e.g. constant currency).
FINANCIAL PERFORMANCE–AFFO PER SHARE
FINANCIAL PERFORMANCE–AFFO PER SHARE The AFFO per share component of our short-term incentive element of TDC is designed to ensure achievement of AFFO per share targets and then to reward overachievement if AFFO per share exceeds target levels. The Compensation Committee selected the minimum threshold level required for payout of this component to ensure that AFFO per share was sufficient relative to the dividend and capital investment requirements in the annual budget. The Compensation Committee selected a maximum payout of 150% of target and structured this component such that maximum payout was achieved only if AFFO per share exceeded levels that the Compensation Committee considered exceptional, based on the objectives of the annual operating plan and recent Company performance. For 2023, the payout for the AFFO per share component of the short-term incentive element of TDC was 100%, which is calculated based on the Company’s actual AFFO per share measured against the applicable STI Financial Target set forth below:
FINANCIAL PERFORMANCE–AFFO PER SHARE
| | THRESHOLD (50%) | TARGET (100%) | MAX (150%) | PAYOUT(1) | | AFFO per share | | | | 100% |
STRATEGIC OBJECTIVES
STRATEGIC OBJECTIVES The table below describes the specific key measures established in 2023 for each strategic objective on which an aggregate of 30% of the overall short-term incentive target bonus is based. The Compensation Committee selected the key measures described in the table below as the most important growth drivers that contribute towards achieving the objectives of our long-term strategy. In establishing the payout scales for each of the goals, the Compensation Committee considered growth, risk of achievement, strategic value, forecast uncertainty for early-stage products, and probability of attainment. The payout for the Strategic Objectives component of the short-term incentive element of TDC was 128%. The table below shows the Company’s 2023 strategic objectives performance against a series of strategic objectives.
STRATEGIC OBJECTIVES
| STRATEGIC OBJECTIVE | MEASURE | PERCENTAGE OF SHORT- TERM INCENTIVE TARGET BONUS | | GOALS | | RESULTS | PAYOUT % | | | | | Threshold (25%) | Target (100%) | Maximum (150%) | | | | Customer- Centric | Drive increased cross sell | 10% | | | | 25.1% | 150% | | Payout for the Customer-Centric objective: 150% | | | | | | | | | Core Strength | Megawatts booked | 10% | | | | 124 | 150% | | | New key downstream accounts signed | | | | | 9 | 150% | | | New use case solutions launched | | | | | 14 | 150% | | Payout for the Core Strength objective: 150% | | | | | | | | | Sustainability and DEI | GHG emission reductions | 10% | | | | >4.2% | 150% | | | Women (Globally, certain level) | | | | | 29.9% | 0% | | | BIPOC (US, certain level) | | | | | 25% | 100% | | Payout for the Sustainability and DEI objective: 84% | | | | | | | | | Payout Achievement Based on Actual Results: 128% | | | | | | | |
STRATEGIC OBJECTIVES
| u 5-YEAR SHORT-TERM CORPORATE PERFORMANCE PAYOUT |
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS Based on the Company’s performance as measured against the 2023 STI Financial Targets and the application of the individual multiplier, our NEOs earned, on average, 115% of 2023 target short-term incentive opportunity. The following table sets forth information relating to the payouts of short-term cash incentive compensation to our NEOs during the year ended December 31, 2023.
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
| NAMED EXECUTIVE OFFICER | SALARY | 2023 TARGET OPPORTUNITY | | 2023 END-OF-YEAR PERFORMANCE AND PAYOUT | | | | | | | | | | (%) | ($) | CORPORATE STI PAYOUT (% OF TARGET) | | INDIVIDUAL MULTIPLIER (%) | | FINAL STI PAYOUT (% OF TARGET) | | PAYOUT ($) | | William L. Meaney | $1,200,000 | 175% | $2,100,000 | | 97% | | 20% | | 116.4% | $2,444,400 | | Barry Hytinen | $750,000 | 110% | $825,000 | | 97% | | 20% | | 116.4% | $960,000 | | Mark Kidd | $575,000 | 100% | $575,000 | | 97% | | 25% | | 121.3% | $697,000 | | Greg McIntosh(1) | $575,000 | 100% | $575,000 | | 97% | | 15% | | 111.6% | $641,000 | | John Tomovcsik | $575,000 | 100% | $575,000 | | 97% | | 15% | | 111.6% | $641,000 | | Average payout (% of target) | | | | | | | | | 115% | |
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
(1)Bonus figure has been converted to U.S. Dollars at a conversion rate of $1 CAD to $0.741 USD.
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
| 42 | |
(3) LONG-TERM INCENTIVES
(3) LONG-TERM INCENTIVES We pay for performance and manage Iron Mountain long-term incentives to support our long-term strategic plan. Consistent with this approach and our compensation philosophy, the majority of annual compensation for our NEOs is provided in the form of long-term equity incentives that are linked to the achievement of certain growth objectives and includes a portfolio of equity awards described in the table below.
(3) LONG-TERM INCENTIVES
| LONG-TERM INCENTIVE COMPONENT | DESCRIPTION | PURPOSE | | Performance Units | ▲Three-year cliff vesting based on performance of the following: ▲Return on Invested Capital (“ROIC”): Funding is subject to meeting a minimum level of ROIC in the third year of the performance period. ▲Total Revenue: either a core plan revenue performance, which is measured based on total revenue performance per year averaged over the three-year performance period (the “Core Plan”), or if TSR is positive at the end of the three-year period and the predetermined revenue hurdle is achieved in the third year of the performance period, units will vest based on the Advanced Revenue Plan (the “ARP”). ▲Relative TSR: TSR performance relative to the MSCI US REIT Index over the three-year performance period. | ▲Ensures alignment to long-term stockholder value creation ▲Rewards top-line growth and capital efficiency ▲Rewards revenue growth achievement ▲ARP rewards accelerated revenue growth tied to Project Matterhorn goal achievement ▲Rewards TSR performance relative to a key REIT stock market index | | Stock Options | ▲Exercise price is equal to fair value on the date of grant ▲Vest ratably over three years and have a 10-year term | ▲Rewards price appreciation ▲Provides long-term horizon to minimize possible short-term fluctuations | | Restricted Stock Units | ▲Vest ratably over three years | ▲Provides retention and helps build stock ownership ensuring strong alignment with stockholders |
(3) LONG-TERM INCENTIVES
In conjunction with the 2023 annual long-term incentive grant process, the Company offered our executives (other than the CEO) the opportunity to elect a predefined mix of RSUs and PUs (“Equity Choice”). Equity Choice is intended to differentiate us in the marketplace, to attract and retain top employee talent, and to provide employees with the ability to participate in the annual long-term incentive grant process in a manner that increases employee engagement. Equity Choice elections are completed in December before the performance period. For our executives (other than the CEO), the predefined Equity Choice mix allows the NEOs to elect a mix of RSUs ranging from 0% to 35% and PUs ranging from 65% to 100%. The average mix for our executives (other than the CEO) based on Equity Choice elections was 9% RSUs and 91% PUs for the 2023 annual equity grant. Equity Choice is not available to our CEO. The Board of Directors determines the mix of equity vehicles for the CEO on an annual basis. Our long-term incentive program incentive component mix for 2023 was:
(3) LONG-TERM INCENTIVES
| u CEO | u OTHER NAMED EXECUTIVE OFFICERS | | | |
(3) LONG-TERM INCENTIVES
| 2024 PROXY STATEMENT | 43 |
2023 PERFORMANCE UNITS
2023 PERFORMANCE UNITS The Compensation Committee may grant PUs to participants under the 2014 Stock and Cash Incentive Plan. PUs are granted annually and have three-year cliff vesting based on performance measures as reviewed and approved by the Compensation Committee. PUs are earned based on the Company’s operational performance and relative TSR performance. Earned PUs vest on the third anniversary of the grant date and settle in shares of Common Stock. The Compensation Committee may grant dividend equivalents to any participant upon terms and conditions established by the Compensation Committee. Such dividend equivalents may be settled in cash, additional shares of common stock or a combination thereof and will be payable when and if PUs vest and reflect only dividend equivalents attributable to shares earned. A portion of the 2023 long-term awards granted to the executives were awarded as PUs that can be earned based on operational and relative TSR performance:
2023 PERFORMANCE UNITS
| | | | + | Relative TSR Performance — 25% Relative TSR Performance vs. MSCI US REIT Index (0% — 200% Payout) | | Operational Performance (after ROIC hurdle achievement) — 75% | | | | | | Core Plan (0% — 200% Payout) | OR | Advanced Revenue Plan (300% - 400% Payout) | | |
▶CORE PLAN
| CORE PLAN | | | Performance Metric | Revenue | | Performance Measure | Average of 3 One-Year Goals | | Payout Threshold | 50% | | Payout Target | 100% | | Payout Maximum | 200% |
▶CORE PLAN
| REVENUE PERFORMANCE LEVEL | ACTUAL PERFORMANCE AS A % OF TARGET | PAYOUT AS A % OF TARGET(1) | | Threshold | 95% | 50% | | Target | 100% | 100% | | Maximum | 105% | 200% |
▶ADVANCED REVENUE PLAN
▶ADVANCED REVENUE PLAN The Advanced Revenue Plan is an enhanced long-term incentive component intended to align the structure of the long-term incentive program with Project Matterhorn’s multi-year strategy to create meaningful value for stockholders and substantial increases in revenue. The ARP is measured against a multiple-year ROIC hurdle and has two additional hurdles that must be achieved before any payout opportunity: positive absolute TSR at the end of the 3-year performance period, and a predetermined revenue hurdle in the third year of the performance period, which reflects exceptional revenue growth achievement.
▶ADVANCED REVENUE PLAN
| ADVANCED REVENUE PLAN | | | Performance Metric | Revenue | | Performance Measure | Year Three Hurdle | | Payout Threshold | 300% | | Payout Target | 350% | | Payout Maximum | 400% |
▶ADVANCED REVENUE PLAN
| REVENUE PERFORMANCE LEVEL | ACTUAL PERFORMANCE AS A % OF TARGET | PAYOUT AS A % OF TARGET(1) | | Threshold | 98% | 300% | | Target | 100% | 350% | | Maximum | 108% | 400% |
RELATIVE TSR PERFORMANCE
RELATIVE TSR PERFORMANCE The Company’s relative TSR performance during the three-year period beginning in 2023 is measured relative to the MSCI US REIT Index. The payout will be determined at the end of the three-year performance period, based on the table below, by comparing the Company’s TSR for that period to the TSR of the companies in the MSCI US REIT Index over the same period.
RELATIVE TSR PERFORMANCE
| TSR PERCENTILE RANK(1) | PAYOUT AS A % OF TARGET | | 30th Percentile | 50% | | 50th Percentile | 100% | | 75th Percentile | 150%(2) | | 90th Percentile | 200%(2) |
RELATIVE TSR PERFORMANCE
(1)Results are interpolated between percentiles. (2)Regardless of the TSR percentile rank, if the Company’s absolute TSR is negative at the end of the three-year performance period, the payout percentage will not exceed 100%. In the first quarter of 2023, the Compensation Committee approved a target economic value for annual long-term equity grants for each of our executives, assuming target performance under the Core Plan. The table below sets forth the approved target economic value for annual long-term equity grants for each NEO:
RELATIVE TSR PERFORMANCE
| NAMED EXECUTIVE OFFICER | TARGET PUS(1) | RSUS | STOCK OPTIONS | TOTAL(1) | | William L. Meaney | $9,775,000 | — | $1,725,000 | $11,500,000 | | Barry Hytinen | $3,500,000 | — | — | $3,500,000 | | Mark Kidd | $2,250,000 | — | — | $2,250,000 | | Greg McIntosh | $1,850,000 | — | — | $1,850,000 | | John Tomovcsik | $1,202,500 | $647,500 | — | $1,850,000 |
RELATIVE TSR PERFORMANCE
(1)The values shown above reflect the intended fair market value and differ from the values reported in the “Summary Compensation Table” as the TSR-based PUs reflect the fair value from a Monte Carlo simulation due to the nature of the award.
RELATIVE TSR PERFORMANCE
| 2024 PROXY STATEMENT | 45 |
RELATIVE TSR PERFORMANCE
2021 PERFORMANCE UNIT RESULTS In 2021, then-current members of our executive team received awards of PUs based on financial performance (Operational Performance according to the Core Plan structure) –75% and relative TSR –25%, which vested in March 2024 (the “2021 PU Awards”). The Operational PU payout was based on the Company’s performance against total revenue objectives measured at the conclusion of the three-year performance period ended December 31, 2023, subject to meeting a minimum level of ROIC. A new product exit rate modifier may increase Operational PU performance by up to 25% based on the fourth quarter 2023 revenue exit run rate of new revenue streams. The rTSR payout was based on the Company’s rTSR during the three-year performance period ended December 31, 2023 measured relative to the MSCI US REIT Index. The overall payout for the 2021 PU Awards was 168.4% of target. OPERATIONAL PU PERFORMANCE RESULTS Following the completion of the performance period for the 2021 PU Awards, the Compensation Committee determined that the Company exceeded the minimum ROIC of 10.5%. The average actual three-year enterprise revenue was 126.3 % of the target established by the Compensation Committee. The new product exit rate modifier was 25%. The total Operational PU performance was 157.8%. As a result, 118.4 % of the target Operational PU payout was earned.
RELATIVE TSR PERFORMANCE
| | | | | | THRESHOLD | ACTUAL RESULTS | | ROIC | | | | | 10.5% | >10.5% | | | YEAR | | GOALS | | ACTUAL RESULTS | OPERATIONAL COMPONENT | | Revenue Performance(1) (in millions) | | Threshold (95%) | Target (100%) | Maximum (105%) | | | | | 2021 | | | | $4,519 | 126.3% | | | 2022 | | | | $5,341 | | | | 2023 | | | | $5,467 | | | | | Threshold (40%) | Target (100%) | Maximum (150%) | | | | New Product Exit Rate Modifier (in millions) | | | | | $362 | 25% | | | | | | TOTAL RESULT: | | 157.8% | | | | | | | WEIGHTED RESULT: | 118.4% |
RELATIVE TSR PERFORMANCE
(1)Results are based on constant currency.
RELATIVE TSR PERFORMANCE
| 46 | |
RELATIVE TSR PERFORMANCE
rTSR PU PERFORMANCE RESULTS Following the completion of the performance period for the 2021 PU Awards, the Compensation Committee determined that award recipients had earned 200% of target for the 2021 rTSR payout, based on the Company’s cumulative rTSR of 166.8% during the period, which represented the 99.7th percentile of the MSCI US REIT Index.
RELATIVE TSR PERFORMANCE
| | | GOALS | | | | | | rTSR(1) (percentiles) | Threshold 30th | 50th | 75th | Maximum 90th | | | | Actual MSCI US REIT Index Cumulative TSR | | | | | | | | | | | | | TOTAL RESULT: | 200% | | | | | | | WEIGHTED RESULT: | 50% |
RELATIVE TSR PERFORMANCE
(1)Results are interpolated between percentiles. Regardless of the TSR percentile rank, if the Company’s absolute TSR is negative, the payout percentage will not exceed 100%. OTHER COMPENSATION In addition to the Total Direct Compensation elements described above, our U.S.-based executive officers participate in the retirement and welfare benefits generally available to our full-time employees, such as medical, dental, life insurance, 401(k) Plan, the 2013 ESPP and other fringe benefits. Our U.S. based NEOs are eligible for certain executive benefits, including a voluntary executive deferred compensation program and an executive physical and limited perquisites, which are included in the “All Other Compensation” column and related footnote in the “Summary Compensation Table and Executive Deferred Compensation” sections of the Compensation Tables section of this Proxy Statement. Mr. Kidd receives additional benefits related to his temporary expatriate assignment in Switzerland. Also, during his temporary expatriate assignment in Switzerland, Mr. Kidd is eligible for most U.S.-based benefits excluding medical, dental and the executive deferred compensation program. See charts showing a more detailed breakdown of “All Other Compensation” on page 53 for more information EXECUTIVE COMPENSATION CLAWBACK POLICY In accordance with the SEC’s and NYSE’s new rules requiring a clawback policy, the Board has adopted a clawback policy, which is set forth in Exhibit A to our Corporate Governance Guidelines. The clawback policy provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws and describes certain remedies available to the Board to address executive officers who have engaged in fraudulent or other intentional misconduct. Moreover, the terms of our equity award agreements set forth that all equity awards made thereunder are subject to any applicable clawback policies.
RELATIVE TSR PERFORMANCE
| 2024 PROXY STATEMENT | 47 |
RELATIVE TSR PERFORMANCE
COMPENSATION COMMITTEE PROCESS AND OVERSIGHT In applying our compensation philosophy and design principles to establish appropriate compensation programs and target compensation levels, the Compensation Committee:
RELATIVE TSR PERFORMANCE
| Reviews and recommends the CEO’s compensation to the independent Directors for approval | ▲Annually reviews and recommends to the independent Directors the salary, short-term and long-term incentive compensation for our CEO. ▲Annually establishes the individual goals and objectives utilized in the short-term incentive program for our CEO. ▲The Compensation Committee’s recommendation reflects (1) an analysis of the Company’s performance against predetermined financial and strategic objective goals, (2) its evaluation of our CEO’s performance against predetermined individual objectives and (3) input from members of the Board. ▲The Compensation Committee’s recommendation is then presented to the independent members of the Board for approval. | | Reviews and approves compensation for our executive officers | ▲Annually reviews and approves the salary, short-term and long-term incentive compensation for our executive officers as recommended by our CEO. | | Reviews and approves short-term and long-term incentive programs for the executive team | ▲Annually reviews and approves the structure of our short-term and long-term incentive programs for the executive team, including performance metrics, performance and payout grids and the weighting applied to each metric. ▲The review typically balances an internal and external perspective developed in collaboration with members of management and the Compensation Committee’s independent compensation consultant. ▲Based upon this review, the Compensation Committee may maintain or modify the amount and mix of grants under our incentive programs. ▲Annually establishes the financial and strategic objective performance goals that are utilized in our short-term and long-term incentive plans. | | Evaluates the effectiveness and competitiveness of other executive compensation programs | ▲Periodically evaluates the effectiveness and competitiveness of other executive compensation programs, such as executive benefits, perquisites and our severance policies. These periodic evaluations are conducted to ensure alignment with our internal strategy and objectives and to consider external market practices. |
RELATIVE TSR PERFORMANCE
In determining whether to make changes to our executive compensation program, the Compensation Committee may consider a number of factors, including but not limited to, the size, scope, and performance of our business, evolving compensation trends, financial goals, and stockholders’ interests.
RELATIVE TSR PERFORMANCE
| ESTABLISHING FINANCIAL PERFORMANCE GOALS | | | | | | 1 | | 2 | | 3 | | The Compensation Committee initially approves annual financial performance targets based upon our annual operating plan approved by the Board, assuming constant currency. The multi-year performance targets are aligned with our long-term strategy. | | When the financial targets are set, the Compensation Committee approves a series of adjustment factors that identify the nature of potential adjustments to the target levels that may be considered throughout the applicable performance period. | | The Compensation Committee reviews the year-end results and, if applicable, adjusts certain financial targets based on the adjustment factors approved at the beginning of the applicable performance period. | | | u | | u | |
RELATIVE TSR PERFORMANCE
| 48 | |
RELATIVE TSR PERFORMANCE
ROLE OF THE CONSULTANT The Compensation Committee selects and retains the services of an independent compensation consultant and annually reviews the performance of the consultant. The Compensation Committee engaged Pay Governance LLC (“Pay Governance”) to serve as its independent compensation consultant for fiscal year 2023. Pay Governance received instructions from, and reported to, the Compensation Committee on an independent basis. Pay Governance reports directly to the Compensation Committee, has regular meetings with the chairperson of the Compensation Committee and meets with the Compensation Committee in executive session. The Compensation Committee has reviewed the nature of the relationship with its independent compensation consultant and considers the independence of the consultant in accordance with SEC and Nasdaq rules. For 2023, the Compensation Committee determined that there were no conflicts that impacted the advice and guidance provided by Pay Governance to the Compensation Committee. The Compensation Committee requested Pay Governance’s advice on a variety of matters, such as the amount and form of executive compensation, compensation strategy, market comparisons, pay and performance alignment versus industry peers, executive pay trends, compensation best practices, compensation-related regulatory developments, Say on Pay preparation, potential compensation plan designs and modifications, and provides assistance to the Nominating and Governance Committee on director compensation matters. The Compensation Committee consulted with Pay Governance, both with and without management, on several occasions during fiscal year 2023, and also in early fiscal year 2024 with respect to compensation decisions for fiscal year 2023 performance. ROLE OF PEERS To provide an external perspective relative to executive compensation levels, plan design trends and market best practices, the Compensation Committee reviews market analyses derived from the Peer Group and prepared by our independent compensation consultant. The Compensation Committee, in collaboration with our independent compensation consultant and management, reviews the Peer Group annually based on the following criteria: ▲Comparable revenue size and industry; ▲Similar market capitalization; ▲Similar capital intensity; ▲Pays regular quarterly dividends; and ▲Similar degree of global operations. Following its annual review of the Peer Group, the Compensation Committee approved the Peer Group without any modifications from the prior year. The chart below lists the Compensation Committee approved Peer Group for 2023:
RELATIVE TSR PERFORMANCE
| THE 2023 PEER GROUP INCLUDES THE FOLLOWING COMPANIES: | | | | ABM Industries | Digital Realty(1) | Public Storage(1) | | Brinks Company | Equifax | SBA Communications(1) | | Broadridge Financial | Equinix(1) | Stericycle | | Cintas | Global Payments | Western Union | | Clean Harbors | Paychex | Weyerhaeuser(1) | | Crown Castle International(1) | Prologis(1) | |
RELATIVE TSR PERFORMANCE
(1)This company is a REIT. ROLE OF CEO AND OTHER EXECUTIVE TEAM MEMBERS At the Compensation Committee’s request, our CEO and other members of the executive team assist the Compensation Committee in carrying out its duties throughout the year by completing specific tasks, including: ▲Our CEO establishes the individual goals and objectives for our executive team (other than the CEO) and proposes his own individual goals and objectives, which are reviewed and revised, and subsequently approved by the Board; ▲Our CEO develops compensation recommendations for our executive team (other than the CEO) for the Compensation Committee’s review and approval, including salary levels, the potential economic value of long-term incentives and achievement of individual goals and objectives; and ▲Each executive team member prepares a self-review to assist the review of his or her performance against individual goals and objectives, which self-review is shared with the Compensation Committee (for the CEO) or the CEO (for our other executive team members).
RELATIVE TSR PERFORMANCE
| 2024 PROXY STATEMENT | 49 |
RELATIVE TSR PERFORMANCE
CONSIDERATION OF RISK IN OUR COMPENSATION PROGRAMS After its annual review of the Company’s incentive compensation arrangements for all employees, the Compensation Committee concluded that the components and structure of the Company’s compensation plans do not create risks that are reasonably likely to result in a material adverse effect to the Company. The process undertaken to reach this conclusion involved an analysis of the Company’s compensation plans by management and a review of conclusions by the Compensation Committee’s independent compensation consultant and the Compensation Committee. EXECUTIVE STOCK OWNERSHIP GUIDELINES The Company maintains stock ownership guidelines that require certain executives, including our NEOs, to acquire and maintain ownership of our Common Stock, exclusive of unexercised stock options and unearned or unvested PUs, as a multiple of base salary as follows:
RELATIVE TSR PERFORMANCE
| CEO | | | 6X | | CFO | | 3X | | | EVPs reporting to the CEO | 2X | | |
RELATIVE TSR PERFORMANCE
The Company established this program to help align the long-term interests of executives with stockholders. Each member of the executive team subject to the Company’s stock ownership guidelines is required to retain an amount equal to 50% of the net shares received as a result of the vesting of RSUs or PUs until such executive meets the minimum ownership threshold. “Net shares” are those shares that remain after shares are sold or netted to pay withholding taxes and any purchase price. The Company measures Executive Stock Ownership Guideline compliance annually in March and continuously monitors compliance until the next measurement date. As of the most recent measurement date in March 2024, all members of the executive team who are subject to the Executive Stock Ownership Guidelines are in compliance with the Executive Stock Ownership Guidelines. TAX CONSIDERATIONS Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a federal income tax deduction to public companies for compensation in excess of $1,000,000 paid in any year to the principal executive officer (in our case, the CEO), the principal financial officer (in our case, the CFO) and certain other current and former executive officers. Our compensation approach, including awards under each of the Iron Mountain Incorporated 2002 Stock Incentive Plan (the “2002 Plan”) and the 2014 Plan may result in compensation that is partially or wholly nondeductible. Because we intend to continue to qualify as a REIT under the Code and generally are not subject to federal income taxes, provided that we distribute to our stockholders at least 100% of our taxable income in respect of each year, we do not expect the tax deduction limitation under Section 162(m) of the Code to have a material impact on us. CHANGES TO 2024 COMPENSATION PROGRAM 2024 PERFORMANCE TARGETS The Compensation Committee established the 2024 performance targets for both short-term and long-term incentive awards based on a range of considerations. As part of its regular process, the Compensation Committee maintained its approach of identifying challenging yet attainable goals with competitive payouts in order to motivate employee performance. 2024 SHORT-TERM INCENTIVE DESIGN There were no changes made to the structure of short-term incentive program design for 2024. 2024 LONG-TERM INCENTIVE DESIGN The Compensation Committee reviewed the equity award vehicles offered to our equity award participants. There were no changes made to the structure of the long-term incentive program design for 2024.
RELATIVE TSR PERFORMANCE
| 50 | |
RELATIVE TSR PERFORMANCE
CEO PAY OPPORTUNITY In connection with its annual compensation program review, the Board determined to increase Mr. Meaney’s Long-Term Incentive opportunity for 2024. This increase is based on the Company’s and CEO’s strong performance and future growth expectations (Mr. Meaney’s 2024 pay opportunity is set forth below).
RELATIVE TSR PERFORMANCE
| ELEMENT | 2024 PAY OPPORTUNITY | CONSIDERATIONS | | Base Salary | ▲Maintained annual base salary at $1,200,000 | ▲Salary is aligned appropriately based on performance and market data | | Annual Bonus | ▲Maintained target bonus at 175% of base salary | ▲Target bonus is aligned appropriately based on performance and market data | | Long-Term Incentives | ▲Increased economic value of long-term incentive awards to $12,500,000 | ▲The Board has aligned Mr. Meaney’s mix with the significant accelerated growth expectations, resulting in a mix of 85% PUs and 15% stock options. |
RELATIVE TSR PERFORMANCE
COMPENSATION COMMITTEE REPORT ON COMPENSATION DISCUSSION AND ANALYSIS We, the members of the Compensation Committee of the Board of the Company, have reviewed and discussed the Compensation Discussion and Analysis with the Company’s management. Based upon this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
SUMMARY COMPENSATION TABLE FOR 2023, 2022 AND 2021
SUMMARY COMPENSATION TABLE FOR 2023, 2022 AND 2021
SUMMARY COMPENSATION TABLE FOR 2023, 2022 AND 2021
| NAMED EXECUTIVE OFFICER AND TITLE | YEAR | SALARY ($)(1) | BONUS ($) | STOCK AWARDS ($)(2)(3) | OPTION AWARDS ($)(3)(4) | NON–EQUITY INCENTIVE PLAN COMPENSATION ($)(5) | ALL OTHER COMPENSATION ($)(6) | TOTAL ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | William L. Meaney(7) President and Chief Executive Officer | 2023 | $1,186,723 | — | $9,456,866 | $1,724,995 | $2,444,400 | $54,156 | $14,867,140 | | | 2022 | $1,179,902 | — | $9,848,262 | $1,575,000 | $2,438,000 | $60,907 | $15,102,071 | | | 2021 | $1,184,326 | — | $11,234,806 | $1,387,499 | $3,182,000 | $57,487 | $17,046,118 | | Barry Hytinen Executive Vice President and Chief Financial Officer | 2023 | $750,002 | — | $3,386,082 | — | $960,000 | $37,850 | $5,133,934 | | | 2022 | $744,232 | — | $3,263,716 | — | $1,015,000 | $18,774 | $5,041,723 | | | 2021 | $725,001 | — | $2,314,758 | — | $1,208,000 | $15,300 | $4,263,059 | | Mark Kidd(8) Executive Vice President and General Manager, Data Centers and Asset Lifecycle Management | 2023 | $567,312 | — | $2,176,727 | — | $697,000 | $428,775 | $3,869,814 | | | 2022 | — | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — | — | | Greg McIntosh(9) Executive Vice President, Chief Commercial Officer and General Manager, Global Records and Information Management | 2023 | $541,170 | — | $1,789,768 | — | $641,000 | $29,347 | $3,001,285 | | | 2022 | $530,675 | — | $2,012,636 | — | $651,000 | $25,068 | $3,219,379 | | | 2021 | — | — | — | — | — | — | — | | John Tomovcsik Executive Vice President and Chief Operating Officer | 2023 | $575,004 | — | $1,810,789 | — | $641,000 | $9,009 | $3,035,802 | | | 2022 | $575,004 | — | $2,012,636 | — | $622,000 | $9,010 | $3,218,649 | | | 2021 | $563,465 | — | $1,879,817 | — | $871,000 | $8,812 | $3,323,094 |
SUMMARY COMPENSATION TABLE FOR 2023, 2022 AND 2021
(1)Total reported reflects salary earned during the fiscal year, adjusted for changes in salary rates, where applicable. (2)The amounts reported in the “Stock Awards” column present the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. Assumptions used in the calculation of these amounts are included in Note 2 to the Company’s Consolidated Financial Statements included in the Company’s Annual Reports on Form 10-K for the years ended December 31, 2023, 2022 and 2021. These amounts were not paid to or realized by the NEO in the year indicated. The grant date fair values of PUs included in this column are calculated assuming target level attainment of each applicable performance goal, except for the TSR-Based PU awards. The TSR-Based PU awards include a market-based performance condition and the fair value reflects the expected value of the award determined under a Monte Carlo simulation. The table below illustrates the RSU value, the expected value of PUs and the value if each recipient were to achieve the applicable maximum payout for all PUs. All values are determined as of the grant date. (3)For a list of 2023 stock and option awards, see the “Grants of Plan-Based Awards” table below. (4)The amounts reported in the “Option Awards” column reflect the aggregate grant date fair value of stock options granted in the year indicated computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 2 to the Company’s Consolidated Financial Statements included in the Company’s Annual Reports on Form 10-K for the fiscal years ended December 31, 2023, 2022, and 2021. These amounts were not paid out or realized in the year indicated. (5)The amounts reported in the “Non-Equity Incentive Plan Compensation” column reflect amounts paid to our NEOs under our non-equity incentive compensation plans based on the achievement of selected performance targets earned in the specified year and paid in the following year. Non-equity incentive compensation awards are calculated based on the applicable NEO’s base salary earnings before any deductions or deferrals, such as 401(k) contributions or deferred compensation plan contributions. Details regarding the calculation of these payments are included in the “Compensation Discussion and Analysis” section of this Proxy Statement. (6)The amounts reported in the “All Other Compensation” column include 401(k) Plan Company match, income on premiums paid with respect to group term life insurance. With respect to Mr. Meaney, the amounts reported in the “All Other Compensation” column include payment for medical insurance in Switzerland. Also, during the years 2021-2023, Mr. Meaney’s spouse occasionally accompanied him on business related travel on private aircraft. There were no incremental costs associated with spousal travel on the Company’s aircraft during the years 2021-2023. The “Swiss Benefits” have been converted to U.S. dollars using the average exchange rate for each year (1 Swiss Franc to $1.1136 for 2023, 1 Swiss Franc to $1.0490 for 2022, 1 Swiss Franc to $1.0932 for 2021; collectively, “the Swiss Exchange Rates”). (7)Mr. Meaney’s salary for each of the years 2021-2023 includes 100,000 Swiss Francs paid in accordance with the Swiss Employment Agreement, converted to U.S. dollars using the Swiss Exchange Rates. (8)No amounts are reported for Mr. Kidd for 2022 and 2021 because he was not an NEO in 2022 and 2021. (9)No amounts are reported for Mr. McIntosh for 2021 because he was not an NEO in 2021.
SUMMARY COMPENSATION TABLE FOR 2023, 2022 AND 2021
| 52 | |
SUMMARY COMPENSATION TABLE FOR 2023, 2022 AND 2021
| | COMPONENTS OF STOCK AWARDS | | ADDITIONAL INFORMATION | | NAMED EXECUTIVE OFFICER | RSU VALUE ($) | PU VALUE - EXPECTED ($) | PU VALUE - MAXIMUM ($) | | William L. Meaney | — | 9,456,866 | 33,099,031 | | Barry Hytinen | — | 3,386,082 | 11,851,287 | | Mark Kidd | — | 2,176,727 | 7,618,545 | | Greg McIntosh | — | 1,789,768 | 6,264,188 | | John Tomovcsik | 647,470 | 1,163,319 | 4,071,617 |
GENERAL
| | | | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOs(3) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOs(4) | VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: | | | | | YEAR | SUMMARY COMPENSATION TABLE TOTAL FOR PEO(1) | COMPENSATION ACTUALLY PAID TO PEO(2) | | | TOTAL SHAREHOLDER RETURN | PEER GROUP TOTAL SHAREHOLDER RETURN(5) | NET INCOME (MILLIONS)(6) | REVENUE (MILLIONS)(7) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $14,867,140 | $48,784,130 | $3,760,209 | $8,587,954 | $277.56 | $113.54 | $187.26 | $5,480 | | 2022 | $15,102,071 | $14,437,479 | $3,737,416 | $4,268,522 | $189.43 | $99.82 | $562.15 | $5,104 | | 2021 | $17,046,118 | $59,232,411 | $3,562,277 | $7,434,654 | $189.58 | $132.23 | $452.73 | $4,492 | | 2020 | $12,281,609 | $13,757,847 | $3,744,539 | $3,807,249 | $100.98 | $92.43 | $343.10 | $4,147 |