DEF 14A of Iron Mountain Inc
Filed Mar 30, 2023 · FY20220001308179-23-000452
Your Vote is Important Regardless of the Number of Shares that You Beneficially Own
| NAME | FEES EARNED OR PAID IN CASH ($)(1) | STOCK AWARDS ($)(2) | ALL OTHER COMPENSATION ($) | TOTAL ($) | | Jennifer Allerton | $117,500 | $169,950 | $– | $287,450 | | Pamela M. Arway | $142,253 | $169,950 | $– | $312,203 | | Clarke H. Bailey | $137,880 | $169,950 | $185,148(3) | $492,978 | | Kent P. Dauten | $135,000 | $169,950 | $– | $304,950 | | Monte Ford | $127,500 | $169,950 | $– | $297,450 | | Robin L. Matlock | $117,500 | $169,950 | $8,581(3) | $296,031 | | Wendy J. Murdock | $123,750 | $169,950 | $– | $293,700 | | Walter C. Rakowich | $145,000 | $169,950 | $– | $314,950 | | Doyle R. Simons | $120,000 | $169,950 | $62,458(3) | $352,408 | | Alfred J. Verrecchia | $265,000 | $169,950 | $171,183(3) | $606,133 |
OUR COMMUNITIES
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 compensation plus long-term incentive 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.
OUR COMMUNITIES
| 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 |
2022 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 48, for executive compensation benchmarking. This compensation peer group includes both REIT and non-REIT companies. As the graph below shows, the total realizable pay for our CEO over the five-year period ended December 31, 2022 was at the 74th percentile among the companies in our compensation peer group, while the Company’s TSR performance over this same period was at the 78th 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.
2022 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, 2022, 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, 2017 through December 31, 2022. 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 2022 annual meeting of stockholders. The 2022 “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 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 designed 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 relevant 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 rating, the relative importance of the executive’s role within the organization, as well as where each executive’s pay level falls relative to the market data.
OVERVIEW
| SHORT-TERM INCENTIVES(2) |
OVERVIEW
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 2022 short-term incentive goals were set at the beginning of 2022 and were based on our short-term financial expectations in 2022.
TARGET INCENTIVES
| The Compensation Committee approved an increase in target short-term incentive opportunity for Mr. McIntosh from 70% to 100% in 2022. The Compensation Committee determined that the 2022 target opportunity for all other NEOs represented the appropriate amount of short-term compensation at risk for each such NEO based on his or her role and market comparisons.(1) |
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 209.4% 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
| ▲ | 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% | 44.4% | | AFFO Per Share | 30% | 39.0% | | Strategic Objectives | 30% | 15.0% | | Weighted Payout | | 98.4% |
PERFORMANCE–SUMMARY
| Payout achievement represents the weighted percentage of the target incentive opportunity payout earned based on the level of the Company’s achievement of performance measures, as discussed below.(1) |
FINANCIAL PERFORMANCE–ADJUSTED EBITDA AND REVENUE
| ► SHORT-TERM INCENTIVE PAYOUT | | | | | | ADJUSTED EBITDA | REVENUE | PAYOUT % | | Threshold | 97.3% | 95% | 50% | | Target | 100% | 100% | 100% | | Maximum | 105% | 105% | 200% |
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 2022, the payout for the AFFO per share component of the short-term incentive element of TDC was 130%, 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 | | | | 130% | | | $3.53 | $3.72 | $3.90 | |
STRATEGIC OBJECTIVES
STRATEGIC OBJECTIVES The table below describes the specific key measures established in 2022 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. Overall, the Company achieved 15% of the specific strategic objectives targeted for 2022 based on the strategic objective results below:
STRATEGIC OBJECTIVES
| STRATEGIC OBJECTIVE | MEASURE | PERCENTAGE OF SHORT- TERM INCENTIVE TARGET BONUS | | GOALS | | RESULTS | PAYOUT %(1) | | Customer-Centric Culture | Net Promoter Score | 10% | Threshold (25%) | Target (100%) | Maximum (125%) | 14.1 | 0% | | | | | | | | | | | | | | 16 | 17.5 | 19 | | | | Innovation | Organic revenue from validated emerging and adjacent categories | 10% | Threshold (25%) | Target (100%) | Maximum (150%) | <$1,285M | 0% | | | | | | | | | | | | | | $1,285M | $1,345M | $1,385M | | | | Core Strength | Organic growth in Global Storage Volume | 10% | Threshold (25%) | Target (100%) | Maximum (150%) | >3M | 150% | | | | | | | | | | | | | | 0M | 1M | 3M | | |
STRATEGIC OBJECTIVES
| Payout achievement represents the weighted percentage of the target payout earned based on the level of the Company’s achievement of performance measures.(1) |
5-YEAR SHORT-TERM CORPORATE PERFORMANCE PAYOUT
5-YEAR SHORT-TERM CORPORATE PERFORMANCE PAYOUT
5-YEAR SHORT-TERM CORPORATE PERFORMANCE PAYOUT
| 2022 PROXY STATEMENT | 39 |
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS Based on the Company’s performance as measured against the 2022 STI Financial Targets and the application of the individual multiplier, our NEOs earned, on average, 112% of 2022 target short-term incentive opportunity. The following table sets forth information relating to the payouts of short-term cash incentive compensation to our NEOs during the year ended December 31, 2022.
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
| | | 2022 TARGET OPPORTUNITY | | 2022 END-OF-YEAR PERFORMANCE AND PAYOUT | | | | | NAMED EXECUTIVE OFFICER | SALARY | (%) | ($) | CORPORATE STI PAYOUT (% OF TARGET) | INDIVIDUAL MULTIPLIER (%) | FINAL STI PAYOUT (% OF TARGET) | PAYOUT ($) | | William L. Meaney | $1,200,000 | 175% | $2,100,000 | 98.4% | 18% | 116.1% | $2,438,000 | | Barry Hytinen | $750,000 | 110% | $825,000 | 98.4% | 25% | 123.0% | $1,015,000 | | Deirdre Evens | $575,000 | 100% | $575,000 | 98.4% | 0% | 98.4% | $566,000 | | Greg McIntosh(1) | $575,000 | 100% | $575,000 | 98.4% | 15% | 113.2% | $651,000 | | John Tomovcsik | $575,000 | 100% | $575,000 | 98.4% | 10% | 108.2% | $622,000 | | Average payout | | | | | | 112% | |
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
| Bonus figure has been converted to U.S. Dollars at a conversion rate of $1 USD to CAD $0.7341.(1) |
SHORT-TERM INCENTIVE COMPENSATION PAYOUTS
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(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 (PUs) | ▲ 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: Core Plan revenue performance is measured based on total revenue performance per year averaged over the three-year performance period. ▲ 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 ▲ 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 (RSUs) | ▲ 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 2022 annual long-term incentive grant process, we introduced a new feature that provides executives (other than the CEO) with 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. Historically, our executives (other than the CEO) received an annual equity grant with a mix of 45% RSUs and 55% PUs. For our executives (other than the CEO), the predefined Equity Choice mix allows the NEOs to elect a mix of RSUs ranging from 25% to 35% and PUs ranging from 65% to 75%. The average mix for our executives (other than the CEO) based on Equity Choice elections was 25% RSUs and 75% PUs for the 2022 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 2022 was:
(3) LONG-TERM INCENTIVES
| CEO | OTHER NAMED EXECUTIVE OFFICERS | | | |
(3) LONG-TERM INCENTIVES
| 2022 PROXY STATEMENT | 41 |
2022 PERFORMANCE UNITS
2022 PERFORMANCE UNITS 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. PUs accrue dividend equivalents in cash, or, in the case of stock dividends, additional PUs, and the dividend equivalents are payable when and if PUs vest and reflect only dividend equivalents attributable to shares earned. A portion of the 2022 long-term awards granted to the executives were awarded as PUs that can be earned based on operational and relative TSR performance:
OPERATIONAL PERFORMANCE
OPERATIONAL PERFORMANCE The Company’s operational performance has two components: the Core Plan and the Advanced Revenue Plan (the “ARP”). The Core Plan and the ARP are not additive. The 2022 PUs will pay out according to the Core Plan with a payout opportunity maximum of 200% until the threshold ARP hurdle is achieved. If the ARP threshold hurdle is achieved, then the 2022 PUs will pay out according to the Advanced Revenue Plan.
► CORE PLAN
| CORE OPERATIONAL 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 creation for stockholders and substantial increases in revenue. The ARP continues to be 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 an absolute three-year revenue goal that is designed to reflect exceptional revenue growth achievement.
ADVANCED REVENUE PLAN
| ADVANCED REVENUE PLAN (“ARP”) | | | Performance Metric | Revenue | | Performance Measure | Absolute 3-Year Revenue Goal | | 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 | 107% | 400% |
RELATIVE TSR PERFORMANCE
RELATIVE TSR PERFORMANCE The Company’s relative TSR performance during the three-year period beginning in 2022 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 | | 30(th)Percentile | 50% | | 50(th)Percentile | 100% | | 75(th)Percentile | 150%(2) | | 90(th)Percentile | 200%(2) |
RELATIVE TSR PERFORMANCE
| Results are interpolated between percentiles.(1) | | Regardless of the TSR percentile rank, if the Company’s absolute TSR is negative, the payout percentage will not exceed 100%.(2) |
RELATIVE TSR PERFORMANCE
| 2022 PROXY STATEMENT | 43 |
RELATIVE TSR PERFORMANCE
In the first quarter of 2022, 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 | $7,875,000 | $1,050,000 | $1,575,000 | $10,500,000 | | Barry Hytinen | $2,250,000 | $750,000 | $— | $3,000,000 | | Deirdre Evens | $1,387,500 | $462,500 | $— | $1,850,000 | | Greg McIntosh | $1,387,500 | $462,500 | $— | $1,850,000 | | John Tomovcsik | $1,387,500 | $462,500 | $— | $1,850,000 |
RELATIVE TSR PERFORMANCE
| 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.(1) |
RELATIVE TSR PERFORMANCE
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RELATIVE TSR PERFORMANCE
2020 PERFORMANCE UNIT RESULTS In 2020, 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 (rTSR) –25%, which vested in 2023 (the “2020 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, 2022, subject to meeting a minimum level of ROIC. The new product exit rate modifier may increase Operational PU performance by up to 25% based on the fourth quarter 2022 revenue exit run rate of new revenue streams. The rTSR-Based PU payout was based on the Company’s rTSR during the three-year performance period ended December 31,2022 measured relative to the MSCI US REIT Index. The overall payout for the 2020 PU Awards was 147.8% of target. OPERATIONAL PU PERFORMANCE RESULTS Following the completion of the performance period for the 2020 PU Awards, the Compensation Committee determined that the Company exceeded the minimum ROIC of 10.5%. The average actual three-year enterprise revenue was 104.3% of the target established by the Compensation Committee. The New Product Exit Rate was 25%. The total Operational PU performance was 130.4%. As a result, 97.8% of the target Operational PU payout was earned.
RELATIVE TSR PERFORMANCE
| | | | | | THRESHOLD | ACTUAL RESULTS | | ROIC | | | | | 10.5% | 14.9% | | | YEAR | GOALS | | | ACTUAL RESULTS | OPERATIONAL COMPONENT | | Revenue Performance(1) (in millions) | 2020 | Threshold (95%) | Target (100%) | Maximum (105%) | $4,199 | | | | | | | | | | | | | $4,265 | $4,431 | $4,652 | | | | | 2021 | Threshold (95%) | Target (100%) | Maximum (105%) | $4,519 | 104.3% | | | | | | | | | | | | $4,075 | $4,275 | $4,483 | | | | | 2022 | Threshold (95%) | Target (100%) | Maximum (105%) | $5,341 | | | | | | | | | | | | | $5,042 | $5,307 | $5,573 | | | | New Product Exit Rate (in millions) | | Threshold (40%) | Target (100%) | Maximum (150%) | $374 | 25% | | | | | | | | | | | | $60 | $200 | $300 | | | | | | | | | Total Result: | 130.4% | | | | | | | Weighted Result: | 97.8% |
RELATIVE TSR PERFORMANCE
| Results are based on constant currency.(1) |
RELATIVE TSR PERFORMANCE
| 2022 PROXY STATEMENT | 45 |
RELATIVE TSR PERFORMANCE
rTSR-BASED PU PERFORMANCE RESULTS Following the completion of the performance period for the 2020 PU Awards, the Compensation Committee determined that award recipients had earned 200% of target for the 2020 rTSR-Based PUs based on the Company’s cumulative rTSR of 98.8% during the period, which represented the 99th percentile of the MSCI US REIT Index.
RELATIVE TSR PERFORMANCE
| | GOALS | | | | | | | rTSR(1) (percentiles) | Threshold 30(th) | 50(th) | 75(th) | Maximum 90(th) | | | | Actual MSCI US REIT Index Cumulative TSR | | | | | | | | | -28.6% | -9.7% | 11.3% | 30.6% | | | | | | | | | TOTAL RESULT: | 200% | | | | | | | WEIGHTED RESULT: | 50.0% |
RELATIVE TSR PERFORMANCE
| 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%.(1) |
RELATIVE TSR PERFORMANCE
The historic payouts for Iron Mountain’s PUs are as follows:
5-YEAR PERFORMANCE UNIT ACHIEVEMENT
5-YEAR PERFORMANCE UNIT ACHIEVEMENT OTHER COMPENSATION In addition to the TDC 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, 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.
5-YEAR PERFORMANCE UNIT ACHIEVEMENT
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5-YEAR PERFORMANCE UNIT ACHIEVEMENT
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:
5-YEAR PERFORMANCE UNIT ACHIEVEMENT
| Reviews and approves compensation for our CEO and our other executive team members | ▲ Annually approves a recommendation to the Board for 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. ▲ Annually reviews and approves the salary, short-term and long-term incentive compensation for our other executive team members 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. |
5-YEAR PERFORMANCE UNIT ACHIEVEMENT
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.
ESTABLISHING FINANCIAL PERFORMANCE GOALS
ESTABLISHING FINANCIAL PERFORMANCE GOALS
ESTABLISHING FINANCIAL PERFORMANCE GOALS
| 1 | 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. | | | | | 2 | 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. | | | | | 3 | 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. |
ESTABLISHING FINANCIAL PERFORMANCE GOALS
| 2022 PROXY STATEMENT | 47 |
ESTABLISHING FINANCIAL PERFORMANCE GOALS
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 2022. 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 2022, 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 2022, and also in early fiscal year 2023 with respect to compensation decisions for fiscal year 2022 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:
ESTABLISHING FINANCIAL PERFORMANCE GOALS
| ▲ | Comparable revenue size and industry; | | ▲ | Similar market capitalization; | | ▲ | Similar capital intensity; | | ▲ | Pays regular quarterly dividends; and | | ▲ | Similar degree of global operations. |
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Following its annual review of the Peer Group, the Compensation Committee modified the Peer Group from the prior year to remove Bread Financial Holdings (formerly Alliance Data Systems) due to the difference in market capitalization and add Public Storage. The chart below lists the Compensation Committee approved Peer Group for 2022:
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| THE 2022 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) | |
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| This company is a REIT.(1) |
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| 48 | |
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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:
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| ▲ | 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). |
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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: 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 2023, 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) and certain other executive officers. Prior to the Tax Cuts and Jobs Act of 2017 (“TCJA”), an exception existed for “performance-based” compensation. The Iron Mountain Incorporated 2002 Stock Incentive Plan (the “2002 Plan”) and the 2014 Plan were generally designed such that compensation arising on the exercise of options satisfied the then-effective performance-based exemption. Each of our plans authorizes the Compensation Committee to grant compensation that is partially or wholly nondeductible. As a result, it is expected that certain of our compensation arrangements will result in non-deductible compensation when the total exceeds $1,000,000, except certain historical awards that meet transition rules for continued deductibility under the TCJA.
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| 2022 PROXY STATEMENT | 49 |
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CHANGES TO 2023 COMPENSATION PROGRAM 2023 PERFORMANCE TARGETS The Compensation Committee established the 2023 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. 2023 SHORT-TERM INCENTIVE DESIGN There were no changes made to the structure of short-term incentive program design for 2023. 2023 LONG-TERM INCENTIVE DESIGN The Compensation Committee reviewed the equity award vehicles offered to our equity award participants. As a part of this review, the Compensation Committee noted that the Company’s five-year TSR performance against the MSCI US REIT Index benchmark was at the 91st percentile versus index constituents. Although there were no changes made to the structure of the long-term incentive program design, the Compensation Committee adopted the following modifications for 2023:
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| ▲ | The Equity Choice election will include expanded options for our NEOs (other than the CEO) in 2023 to allow for 0% RSUs and 100% PUs. | | ▲ | For the CEO, the percentage of performance-based equity will be 85% PUs and 15% stock options. Further, the CEO will continue to be the only equity participant to receive stock options, as stock options are an incentive vehicle that are aligned with creating long-term stockholder value because they have a 10-year term, whereas PUs and RSUs have three-year performance/vesting periods. |
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| 50 | |
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CEO PAY OPPORTUNITY In connection with its annual compensation program review, the Board determined to increase Mr. Meaney’s Long-Term Incentive opportunity for 2023. This increase is based on the Company’s and CEO’s strong performance and future growth expectations (Mr. Meaney’s 2023 pay opportunity is set forth below).
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| ELEMENT | 2023 PAY OPPORTUNITY | CONSIDERATIONS | | Base Salary | ▲ Maintained annual base salary at $1,200,000 | ▲ Salary is appropriately positioned versus market | | Annual Bonus | ▲ Maintained target bonus at 175% of base salary | ▲ Target bonus is appropriately positioned versus market | | Long-Term Incentives | ▲ Increased economic value of long-term incentive awards to $11,500,000 | ▲ The Board has aligned Mr. Meaney’s mix with the significant accelerated growth expectations, resulting in a mix of 85% PUs and 15% stock options. This mix reflects an increase in performance-based equity compared to 2022 (75% PUs, 10% RSUs and 15% stock options) strengthening long-term alignment with stockholders |
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COMPENSATION COMMITTEE REPORT ON COMPENSATION DISCUSSION AND ANALYSIS We, the members of the Compensation Committee of the Board of the Company, have reviewed and discussed the Compensation Discussion and Analysis with the Company’s management. Based upon this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| NAMED EXECUTIVE OFFICER AND TITLE | YEAR | SALARY ($)(1) | BONUS ($)(2) | STOCK AWARDS ($)(3)(4) | OPTION AWARDS ($)(4)(5) | NON–EQUITY INCENTIVE PLAN COMPENSATION ($)(6) | ALL OTHER COMPENSATION ($)(7) | TOTAL ($) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | William L. Meaney(8) President and Chief Executive Officer | 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 | | | 2020 | $1,175,474 | | $7,878,144 | $1,387,499 | $1,785,000 | $55,492 | $12,281,609 | | Barry Hytinen Executive Vice President and Chief Financial Officer | 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 | | | 2020 | $705,482 | $1,000,000 | $4,231,990 | $– | $790,000 | $349,247 | $7,076,719 | | Deirdre Evens Executive Vice President and General Manager, Asset Lifecycle Management | 2022 | $575,004 | $– | $2,012,636 | $– | $566,000 | $316,273 | $3,469,912 | | | 2021 | $563,465 | $– | $1,879,817 | $– | $766,000 | $15,300 | $3,224,582 | | | 2020 | $513,464 | $– | $1,018,840 | $– | $416,000 | $15,011 | $1,963,315 | | Greg McIntosh Executive Vice President, Chief Commercial Officer and General Manager, Global Records and Information Management | 2022 | $530,675 | $– | $2,012,636 | $– | $651,000 | $25,068 | $3,219,379 | | | 2021 | $– | $– | $– | $– | $– | $– | $– | | | 2020 | $– | $– | $– | $– | $– | $– | $– | | John Tomovcsik Executive Vice President and Chief Operating Officer | 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 | | | 2020 | $513,464 | $– | $1,018,840 | $– | $416,000 | $7,923 | $1,956,227 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| For a list of 2022 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, 2022, 2021 and 2020. 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 and parking fees paid.(7) | | 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 2020-2022, 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 2020-2022. The “Swiss Benefits” have been converted to U.S. dollars using the average exchange rate for each year (1 Swiss Franc to $1.0490 for 2022,1 Swiss Franc to $1.0932 for 2021, 1 Swiss Franc to $1.0661 for 2020; collectively, “the Swiss Exchange Rates”). |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| 2022 PROXY STATEMENT | 53 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
The charts below set forth a more detailed breakdown of “All Other Compensation” for 2022.
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| | WILLIAM L. MEANEY | BARRY HYTINEN | DEIRDRE EVENS | GREG MCINTOSH | JOHN TOMOVCSIK | | 401(k) Match | $9,150 | $9,150 | $9,150 | $15,528 | $8,626 | | Life Insurance | $384 | $384 | $384 | $– | $384 | | Parking | $7,800 | $6,240 | $4,160 | $– | $– | | Swiss Benefits | $10,138 | $– | $– | $– | $– | | Swiss Medical Insurance | $33,435 | $– | $– | $– | $– | | International Assignment Costs(9) | $– | $– | $292,185 | $– | $– | | Company Recognition Event Expenses | $– | $– | $10,394 | $9,540 | $– | | Total | $60,907 | $18,774 | $316,273 | $25,068 | $9,010 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| Mr. Meaney’s salary for each of 2020-2022 includes 100,000 Swiss Francs paid in accordance with the Swiss Employment Agreement, converted to U.S. dollars using the Swiss Exchange Rates.(8) | | Includes the following expatriate benefits in connection with Ms. Evens’ assignment in Singapore: $197,463 in company-paid housing-related expenses, a $46,868 cost of living adjustment, and $47,854 for relocation expenses for Ms. Evens and her family.(9) |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
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Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
GRANTS OF PLAN-BASED AWARDS FOR 2022 The following table sets forth certain information concerning the grants of plan-based awards to our NEOs during the year ended December 31, 2022. For a description of these awards, see the “Compensation Discussion and Analysis — 2022 Total Direct Compensation Components — Long-Term Incentives” section of this Proxy Statement.
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| NAMED | | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS(1) | | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS(2) | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING | EXERCISE OR BASE PRICE OF OPTION | CLOSING MARKET PRICE ON THE DATE OF | GRANT DATE FAIR VALUE OF STOCK AND OPTION | | EXECUTIVE OFFICER | GRANT DATE | THRESHOLD ($) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | OR UNITS (#)(3) | OPTIONS (#)(4) | AWARDS ($/SH) | GRANT ($) | AWARDS ($) | | William L. Meaney | N/A | $– | $2,100,000 | $4,397,400 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 3/1/2022 | N/A | N/A | N/A | N/A | 158,546 | 554,911 | 21,139 | 211,455 | $49.67 | N/A | $11,423,262 | | Barry Hytinen | N/A | $– | $825,000 | $1,727,550 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 3/1/2022 | N/A | N/A | N/A | – | 45,298 | 158,543 | 15,099 | N/A | N/A | N/A | $3,263,716 | | Deirdre Evens | N/A | $– | $575,000 | $1,204,050 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 3/1/2022 | N/A | N/A | N/A | – | 27,934 | 97,769 | 9,311 | N/A | N/A | N/A | 2,012,635 | | Greg McIntosh | N/A | $– | $575,000 | $1,204,050 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 3/1/2022 | N/A | N/A | N/A | – | 27,934 | 97,769 | 9,311 | N/A | N/A | N/A | $2,012,635 | | John Tomovcsik | N/A | $– | $575,000 | $1,204,050 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | | 3/1/2022 | N/A | N/A | N/A | – | 27,934 | 97,769 | 9,311 | N/A | N/A | N/A | $2,012,635 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| The amounts reported in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” column, sub-column “Threshold” and sub-column “Maximum,” reflect the minimum and maximum payment level of short-term incentive compensation for each of our NEOs, which is zero and 209.4% of target, respectively. Non-equity incentive plan awards actually paid by the Company for services rendered in 2022 are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above.(1) | | The amounts reported in “Estimated Future Payouts Under Equity Incentive Plan Awards” column, sub-column “Maximum,” reflect that the PUs awarded in 2022 provide the potential to earn up to approximately 350% of target, as described under the “2022 Total Direct Compensation Components — Long-Term Incentives” heading in the Compensation Discussion and Analysis section of this Proxy Statement.(2) | | Each RSU award was granted under the 2014 Plan, and each RSU award vests in three substantially equal annual installments beginning on the first anniversary of the grant date. Each RSU award is settled in shares of Common Stock on each vesting date.(3) | | Each stock option award was granted under the 2014 Plan, and each stock option award vests in three substantially equal annual installments beginning on the first anniversary of the grant date.(4) |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| 2022 PROXY STATEMENT | 55 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END FOR 2022 The following table sets forth certain information with respect to outstanding equity awards held by our NEOs at December 31, 2022. The market value amounts reported in the Stock Awards columns heading were determined using the closing price per share of Common Stock on the NYSE on December 30, 2022 of $49.85.
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| | OPTION AWARDS | | | | STOCK AWARDS | | | | | NAMED EXECUTIVE OFFICER | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS: EXERCISABLE (#) | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS: UNEXERCISABLE (#) | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED UNITS THAT HAVE NOT VESTED (#) | EQUITY INCENTIVE PLAN AWARDS: MARKET VALUE OF UNEARNED UNITS THAT HAVE NOT VESTED ($) | | William L. Meaney | 210,140 | – | $31.00 | 2/13/2024 | 25,518(5) | $1,272,072 | 140,347(9) | $6,996,298 | | | 349,247 | – | $48.54 | 2/19/2025 | 2,115(6) | $105,433 | 11,632(10) | $579,855 | | | 829,506 | – | $36.59 | 2/18/2026 | 53,268(7) | $2,655,410 | 227,109(11) | $11,321,384 | | | 461,696 | – | $37.00 | 2/16/2027 | 21,139(8) | $1,053,779 | 158,546(12) | $7,903,518 | | | 342,228 | – | $33.72 | 2/15/2028 | | | | | | | 345,295 | – | $35.72 | 2/20/2029 | | | | | | | 349,182 | 174,591(1) | $33.80 | 2/19/2030 | | | | | | | 44,146 | 22,074(2) | $29.55 | 3/09/2030 | | | | | | | 143,206 | 286,412(3) | $34.73 | 3/01/2031 | | | | | | | – | 211,455(4) | $49.67 | 3/01/2032 | | | | | | Barry Hytinen | | | | | 16,442(13) | $819,634 | 27,662(9) | $1,378,951 | | | | | | | 16,441(13) | $819,584 | 31,672(11) | $1,578,849 | | | | | | | 7,545(5) | $376,118 | 45,298(12) | $2,258,105 | | | | | | | 21,787(7) | $1,086,082 | | | | | | | | | 15,099(8) | $752,685 | | | | Deirdre Evens | 29,639 | – | $37.00 | 2/16/2027 | 4,438(5) | $221,234 | 16,272(9) | $811,159 | | | 35,575 | – | $35.72 | 2/20/2029 | 19,100(7) | $952,135 | 23,754(11) | $1,184,137 | | | | | | | 9,311(8) | $464,153 | 27,934(12) | $1,392,510 | | Greg McIntosh | 3,923 | – | $38.83 | 2/19/2025 | 1,775(5) | $88,484 | 6,508(9) | $324,424 | | | 6,744 | – | $31.46 | 3/09/2026 | 7,870(7) | $392,320 | 12,669(11) | $631,550 | | | 6,839 | – | $37.00 | 2/16/2027 | 9,311(8) | $464,153 | 27,934(12) | $1,392,510 | | | 4,009 | – | $33.72 | 2/15/2028 | | | | | | | 13,442 | – | $35.17 | 3/25/2029 | | | | | | John Tomovcsik | 24,965 | – | $38.83 | 2/19/2025 | 4,438(5) | $221,234 | 16,272(9) | $811,159 | | | 11,859 | – | $35.72 | 2/20/2029 | 19,100(7) | $952,135 | 23,754(11) | $1,184,137 | | | | | | | 9,311(8) | $464,153 | 27,934(12) | $1,392,510 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| Options vested on February 19, 2023.(1) | | Options vested on March 9, 2023.(2) | | Options vest in two substantially equal installments on March 1, 2023 and March 1, 2024.(3) | | Options vest in three substantially equal installments on March 1, 2023, March 1, 2024 and March 1, 2025.(4) | | RSUs vested on February 19, 2023.(5) | | RSUs vested on March 9, 2023.(6) | | RSUs vest in two substantially equal installments on March 1, 2023 and March 1, 2024.(7) | | RSUs vest in three substantially equal installments on March 1, 2023, March 1, 2024 and March 1, 2025.(8) | | The number of PUs based on Revenue, new product exit rate & ROIC awarded in 2020 included in the table reflects target performance. After the end of the 2022 fiscal year, the Company’s performance was determined resulting in an overall payout of 147.8% of target. The actual earned PUs vested in one installment on February 19, 2023.(9) | | The number of PUs based on Revenue, new product exit rate & ROIC awarded in 2020 included in the table reflects target performance. After the end of the 2022 fiscal year, the Company’s performance was determined resulting in an overall payout of 147.8% of target. The actual earned PUs vested in one installment on March 9, 2023.(10) | | The number of PUs based on Revenue, new product exit rate & ROIC awarded in 2021 included in the table reflects target performance. The Company’s performance will be determined at the end of 2023. The number of TSR-Based PUs awarded in 2021 included in the table reflects target performance. Final TSR performance will be determined at the end of 2023. Earned PUs, if any, will vest in one installment on March 1, 2024.(11) | | The number of PUs based on Revenue & ROIC awarded in 2022 included in the table reflects target performance. The Company’s performance will be determined at the end of 2024. The number of TSR-Based PUs awarded in 2022 included in the table reflects target performance. Final TSR performance will be determined at the end of 2024. Earned PUs, if any, will vest in one installment on March 1, 2025.(12) | | RSUs vested on January 2, 2023.(13) |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
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Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
OPTION EXERCISES AND STOCK VESTED AT FISCAL YEAR END FOR 2022
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| | OPTION AWARDS | | STOCK AWARDS | | | NAMED EXECUTIVE OFFICER | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($) | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($)(1) | | William L. Meaney | 73,046 | $1,395,148 | 228,908 | $10,390,501 | | Barry Hytinen | N/A | N/A | 51,321 | $2,550,640 | | Deirdre Evens | 29,037 | $617,907 | 31,979 | $1,474,544 | | Greg McIntosh | N/A | N/A | 13,581 | $691,048 | | John Tomovcsik | N/A | N/A | 31,979 | $1,474,544 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| Includes the payout of accrued cash dividend equivalents.(1) |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
NON-QUALIFIED DEFERRED COMPENSATION FOR 2022 EXECUTIVE DEFERRED COMPENSATION The Company provides certain of its highly compensated employees in the United States, including our NEOs, with the opportunity to defer between 5% and 100% of any 2022 non-equity incentive compensation and/or up to between 5% and 50% of base salary through the Executive Deferred Compensation Plan (the “EDCP”). This benefit is offered to these employees in part because they are limited by the Code and applicable nondiscrimination testing rules in the amount of 401(k) contributions they can make under the Company’s 401(k) Plan. Deferral elections and elections relating to the timing of payments are made prior to the period in which the salary and/or incentive compensation bonuses are earned. The Company does not contribute any matching, profit sharing or other funds to the EDCP for any employee. Participants in the EDCP can elect to invest their deferrals in funds that mirror, as closely as possible, the investment options available under the Company’s 401(k) Plan. The EDCP does not pay any above market rates and is administered by the Compensation Committee. Participants may elect to receive benefits when they separate from service or on a specified date in the future. Benefits are distributed either in a lump sum or in five or 10 annual payments. Participants may choose from an array of investment options that generally mirror the investment options available in the 401(k) plan. While the assets are held in a Rabbi Trust, the responsibility to pay benefits are unfunded and unsecured obligations of the Company. Ms. Evens is the only NEO who participated in the EDCP during the year ended December 31, 2022.
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| NAMED EXECUTIVE OFFICER | EXECUTIVE CONTRIBUTIONS IN LAST FY ($) | REGISTRANT CONTRIBUTIONS IN LAST FY ($) | AGGREGATE EARNINGS IN LAST FY ($) | AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN LAST FY ($) | AGGREGATE BALANCE AT LAST YE ($)(1) | | Deirdre Evens | $747,999 | N/A | $(233,538) | N/A | $1,492,825 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| Deferred compensation accounts are deemed invested in mutual funds managed by third party administrators.(1) |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| 2022 PROXY STATEMENT | 57 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
EMPLOYMENT AGREEMENTS WILLIAM L. MEANEY In connection with his appointment as CEO, the Company entered into an offer letter with Mr. Meaney dated November 30, 2012 (the “CEO Offer Letter”). In addition to standard TDC elements (salary and short and long-term incentives), the CEO Offer Letter includes the following provisions:
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| ▲ | Mr. Meaney’s employment with the Company is on an at-will basis; | | ▲ | The Company agreed to pay Mr. Meaney a portion of his salary in Swiss Francs because Mr. Meaney is a Swiss citizen and, as a result of his responsibilities associated with the significant international focus of the Company, he works a portion of his time in Switzerland; | | ▲ | The Company agreed to reimburse Mr. Meaney for the cost of his Swiss medical insurance; and | | ▲ | Mr. Meaney is eligible for the Iron Mountain Companies Severance Plan and Severance Program No. 2 (the “CEO Severance Program”) as described under the “Termination and Change in Control Arrangements” heading below. |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
In December 2013, in order to implement the Swiss Franc salary payments agreed to in the CEO Offer Letter, and due to the customary nature of such agreements in Switzerland, a Swiss subsidiary of the Company entered into an employment agreement with Mr. Meaney (the “Swiss Employment Agreement”). As required by Swiss law, the Company, or one of its Swiss subsidiaries, funds certain benefits on Mr. Meaney’s behalf in connection with his Swiss employment, including an occupational benefit plan and occupational accident insurance. The Company’s contribution levels reflect amounts required by Swiss law and are quantified in the Summary Compensation Table. The Swiss Employment Agreement has no fixed term and is terminable by either party following a one-month notice period (except for certain acts identified by Swiss law). We do not have any agreements with Mr. Meaney or any other executive that provide for excise tax gross-up payments in connection with a change in control. BARRY HYTINEN In connection with his appointment as EVP & Chief Financial Officer of the Company, effective January 1, 2020, the Company entered into a letter agreement with Mr. Hytinen, dated November 25, 2019 (the “Hytinen Letter”). In addition to standard TDC elements (salary and short and long-term incentives), the Hytinen Letter includes the following provisions:
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| ▲ | Annual base salary of $725,000; | | ▲ | Signing bonus of $1,000,000, which was repayable if Mr. Hytinen had left the Company under certain circumstances within 18 months of his start date; | | ▲ | Target annual performance-based cash bonus of 110% of base salary; | | ▲ | Two sign-on restricted stock unit awards, with initial target values of $1,500,000 and $1,000,000, which vested ratably over three and two years, respectively. These grants were made to replace forfeited compensation from his former employer; and | | ▲ | Relocation benefits to assist with his relocation to the greater Boston area. |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| 58 | |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
TERMINATION AND CHANGE IN CONTROL ARRANGEMENTS The Company maintains various contracts and agreements that require payments to each NEO in connection with (1) any termination of such NEO, (2) a change in control of the Company, or (3) a change in such NEO’s responsibilities. This section describes the benefits that may become payable to our NEOs in connection with a termination of their employment with the Company and/or a change in control of the Company under arrangements in effect on December 31, 2022. EQUITY TREATMENT AT RETIREMENT As of March 1, 2022, upon an employee’s retirement on or after attaining age 55, if the employee attains a minimum service requirement of five (5) years and the sum of (i) the age at retirement plus (ii) years of service at the Company totals at least 65, then such employee will be entitled to continued vesting of any outstanding equity awards. If retirement occurs a minimum of six (6) months after grant date of any equity award, recipients are entitled to continued vesting of time-vested stock options and time-vested RSUs granted on or after March 1, 2022. These awards will continue vesting on the original vesting schedule, and the options would remain exercisable up to the original term of the stock option award. PUs will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. Prior to March 1, 2022 and after February 20, 2019, upon an employee’s retirement on or after attaining age 58, if the sum of (i) the age at retirement plus (ii) years of service at the Company totals at least 70, then such employee was entitled to continued vesting of any outstanding equity awards. If retirement occurred on or after July 1 in the year of grant for any year from 2019-2021, equity award recipients were entitled to continue vesting of time-vested stock options and time-vested RSUs granted. These awards continued vesting on the original vesting schedule, and the options remained exercisable up to three (3) years from retirement date. PUs will continue to vest and be delivered in accordance with the original vesting schedule of the applicable PU award and remain subject to the same performance conditions. EQUITY TREATMENT IN CONNECTION WITH TERMINATION OR A CHANGE OF CONTROL All unvested stock options and other equity awards granted under the 2002 Plan or the 2014 Plan vest immediately should an employee terminate his or her own employment for “good reason” or be terminated by the Company in connection with a “vesting change in control,” as such terms are defined in the 2002 Plan and 2014 Plan, within 14 days prior or 12 months after such vesting change of control. This provision applies to all outstanding options and unvested RSUs or PUs held by employees of the Company, including our NEOs. CEO SEVERANCE PROGRAM As provided for in the CEO Offer Letter, Mr. Meaney is a participant in the CEO Severance Program No. 2. Mr. Meaney is entitled to the benefits under the CEO Severance Program No. 2 in the event of a “qualifying termination,” which is generally defined as the termination of an eligible employee’s employment without “cause” or termination by the eligible employee for “good reason.” “Cause” is generally defined in the CEO Severance Program No. 2 as any of: (1) fraud, embezzlement or theft against the Company; (2) being convicted of, or pleading guilty or no contest to, a felony; (3) breach of a fiduciary duty owed to the Company; (4) material breach of any material policy of the Company; (5) willful failure to perform material assigned duties (other than by reason of illness); or (6) committing an act of gross negligence, engaging in willful misconduct or otherwise acting with willful disregard for the best interests of the Company. “Good reason” in the CEO Severance Program means that the Company has, without Mr. Meaney’s consent: (1) materially diminished the sum of his base compensation plus target nonequity incentive compensation; (2) required Mr. Meaney to be based at an office or primary work location that is greater than 50 miles from Boston, Massachusetts; (3) materially diminished Mr. Meaney’s authority and/or responsibilities and/or assigned Mr. Meaney to duties and responsibilities that are generally inconsistent with his position with Iron Mountain prior to the change; (4) ceased to have Mr. Meaney report directly to the Board; or (5) materially breached the CEO Severance Program No. 2 or the CEO Offer Letter. In the event of a qualifying termination under the CEO Severance Program No. 2, Mr. Meaney is entitled to certain severance benefits, including: (1) cash compensation consisting of (a) the sum of one year’s base salary, (b) a bonus payment equal to the annual target performance-based cash bonus for the year of termination, and (c) a pro-rated bonus in the year of termination; (2) one year of group health benefit continuation, and (3) 12 months outplacement. Mr. Meaney does not receive equity acceleration benefits under the CEO Severance Program No. 2. In accordance with the CEO Severance Program No. 2, if Mr. Meaney’s termination is in connection with a change in control, he will be eligible for two years’ base salary and target bonus (rather than one year) and 18 months of group health benefit continuation (rather than 12 months), and the other benefits he would otherwise be entitled to remain unchanged. The CEO Severance Program No. 2 also modifies the determination of a Vesting Change in Control where termination following a Change in Control is directed by a third party, within 90 days prior to the Change in Control (rather than 14 days) or within two years following the Change in Control (rather than 12 months).
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| 2022 PROXY STATEMENT | 59 |
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
NEO SEVERANCE PROGRAM Messrs. Hytinen, McIntosh, and Tomovcsik and Ms. Evens are entitled to the benefits under the Severance Program No. 1 in the event of a “qualifying termination,” which is generally defined as the termination of an eligible employee’s employment without “cause” or termination by the eligible employee for “good reason.” The definition of “cause” for the purposes of the Severance Program No. 1 is substantially the same as the definition of “cause” in the CEO Severance Program No. 2, as described above. The definition of “good reason” in the Severance Program No. 1 is substantially the same as “good reason” under the 2002 Plan and the 2014 Plan with an additional component that could result in an acceleration if the eligible employee were to terminate his or her employment within 14 days prior to or 12 months after a vesting change of control. The additional component is a material diminution in the responsibilities or title or position with the Company and/or the assignment of duties and responsibilities that are generally inconsistent with such eligible employee’s position with the Company immediately prior to the vesting change in control. In the event of a qualifying termination under the Severance Program No. 1, the eligible employee is entitled to certain severance benefits paid in equal installments over the Severance Period, including: (1) cash compensation consisting of one year’s base salary and a bonus payment generally equal to the annual target bonus for the eligible employee for the year of termination multiplied by such employee’s average payout percentage over the prior three years; (2) the Company’s payment of (a) the employer share of the cost of medical and dental coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) coverage until the earlier of (i) the first anniversary of such employee’s termination and (ii) the date on which COBRA coverage ends and (b) outplacement services for 12 months following termination; (3) accelerated vesting of outstanding RSUs and stock options scheduled to vest within 12 months following termination; and (4) pro-rated vesting of outstanding PUs based on actual performance using the following schedule and payable at the original vesting date, if earned as calculated at the end of the performance period:
Wendy J. Murdock, Chair Pamela M. Arway Monte Ford Robin L. Matlock Doyle R. Simons
| ▲ | PUs outstanding for less than 12 months—33% vested | | ▲ | PUs outstanding between 12 and 24 months—67% vested | | ▲ | PUs outstanding 24 months or longer—100% |
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) | | 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 |
GENERAL
| The dollar amounts reported in column (e) represent the average amount of compensation actually paid to our NEOs as a group (excluding our CEO), as computed in accordance with applicable SEC rules. The dollar amounts reported may not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding our CEO) during the applicable fiscal year. The names of the NEOs (excluding our CEO) included for purposes of calculating the average amounts in each applicable year are as described in footnote (3) above. In accordance with applicable SEC rules, the following adjustments were made to average total compensation for the NEOs as a group (excluding our CEO) for each fiscal year to determine the compensation actually paid, using the same methodology described above in footnote (2) above:(4) |