Equinix, Inc. (EQIX) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Equinix, Inc. And please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Charles Meyers, President and Chief Executive Officer of Equinix, Inc. Mr. Meyers, the floor is yours.

Thank you very much. I'd like to call the meeting to order. I'm -- as the operator said, I'm Charles Meyers, President and CEO at Equinix. I'll be presiding at the meeting. Along with my fellow directors and the executive officers of the company, I'd like to welcome all of you to our annual meeting of Stockholders. We very much appreciate your attendance, your interest and most importantly, your support of Equinix. The annual meeting is being held pursuant to the bylaws of the company and with prior notice to all stockholders. We're pleased to hold our annual meeting virtually again this year during global pandemic as we aim to maximize access and participation. I'd call your attention to the rules of conduct set forth for the meeting, which can be found in the files section in the lower left of your screen. [Operator Instructions] Questions from stockholders that pertain to a proposal will be addressed directly following the presentation of that proposal. Other questions asked by stockholders will be addressed at the end of the meeting during Q&A. After introducing the directors and officers in attendance and dealing with a few procedural matters, we'll take up the items to be acted upon. Maggie, over to you.

Hello. I'm Maggie Paige, VP of Legal, and I will now introduce those in attendance today. We welcome Peter Van Camp, our Chairman; Brandi Galvin Morandi, our Chief Legal and Human Resources Officer; Keith Taylor, our Chief Financial Officer; Katrina Rymill, our Vice President of Investor Relations and Sustainability; Darrin Short, our Senior Director of Stock Services and Payroll, and various other members of management.

Great. Thanks, Maggie. Also attending the meeting is Joe Zullo of PricewaterhouseCoopers, our independent auditor. Although PwC has indicated that it does not wish to make a statement, Mr. Zullo will be available to respond to appropriate questions during the Q&A period. In accordance with the bylaws, I'll act as Chairman of the Meeting, Maggie will act as Secretary of the meeting, and Darrin will serve as the Inspector of Elections for the meeting. Maggie, can you please report on the proof of notice of the meeting.

Sure. I have an affidavit of mailing from Computershare, certifying as to the giving of notice of this meeting and sending to stockholders of record as of April 1, 2021, the notice of Internet availability of proxy material or a proxy statement, proxy card and other material necessary to vote at this meeting, all of which Computershare commenced distributing to stockholders on April 15, 2021. I also have a copy of the 2020 annual report, which includes financial statements certified by PwC. A copy of this annual report was sent or made available to each stockholder entitled to vote at this meeting and an electronic copy of the annual report is available on the website that's used to access this meeting.

Okay. Thanks, Maggie. We have the list of the holders of record of common stock of the company at the close of business on April 1, 2021. This list of stockholders has been available for examination for any purpose relevant to this meeting during ordinary business hours for the past 10 days. This list is available for inspection during the meeting by request of any stockholder. The Secretary will please file a copy of the list of stockholders with the records of the company. Maggie, will you please present your report of attendance at the meeting so that we can determine whether a quorum is present?

Charles, on April 1, 2021, which was the record date for this annual meeting, there were outstanding and entitled to vote a total of 89,574,510 shares of common stock, has been informed by the Inspector of Election that there are 79,850,192 shares of stock represented by proxy or approximately 89% of all of the shares entitled to vote at this annual meeting. The shares so represented exceed 50% of the total shares entitled to vote at this meeting and thus, constitute a quorum.

Great. Thank you, Maggie. On the basis of the report of the Secretary and the Inspector of Election, I find that proper notice has been given and that a quorum is present. Accordingly, this meeting has been properly convened. So it's 10:05 a.m. on May 26, 2021, and polls for voting on all matters are open. All Equinix, Inc. stockholders entitled to vote at this meeting have the ability to do so online. If you're a stockholder entitled to vote and have not yet voted or if you want to change your previously cast vote, please do so via the website used to access this meeting. Please remember that if you've already voted by proxy, it is not necessary to vote again. After voting has been completed on all matters on the agenda, we will close the polls, and the Inspector of Election will provide his preliminary report. We will move now to a review of the proposals. The first proposal to come before the meeting is the election of directors. At this meeting, we'll be electing each of the 9 directors for a one year term, expiring at the 2022 annual meeting of stockholders and until their successors are duly elected and qualified. The nominees are, Thomas Bartlett, Nanci Caldwell, Adaire Fox-Martin, Gary Hromadko, Irving Lyons, Charles Meyers, Christopher Paisley, Sandra Rivera and Peter Van Camp. The information concerning their principal occupations, their service as Equinix Board Members, skills and qualifications and other matters which may be of interest are contained in the proxy statement. No other nominations were received prior to the deadline established in the company's bylaws. Therefore, no additional nominations may be made at this meeting, and I declare the nominations to be closed. Are there any questions or comments on the first proposal?

There are no questions on this proposal. We can move on to the second proposal.

Thanks, Katrina. Proposal 2 asks stockholders to approve, by nonbinding advisory vote, the fiscal year 2020 compensation of the named executive Officers, all as described in our proxy statement. This proposal is advisory, although nonbinding, the vote will provide information to our Compensation Committee and our Board of Directors regarding investor sentiment about our executive compensation philosophy, policies and practices, which our Compensation Committee and our Board of Directors will be able to consider when making future executive compensation decisions. Are there questions or comments on this proposal?

I see one question has been posted online. I'll go ahead and read this and direct it at Charles. Has the method for determining CEO incentive pay change in the past 12 months due to COVID?

Thanks for the question. No -- the short answer is no. We have not made changes in the methodology for CEO compensation in the last 12 months or at all in response to COVID. There are methods by which our bonus payout is adapted for certain factors that are already in the disclosures, and our Compensation Committee looks at those, looks at compensation annually in light of performance and industry and business conditions, and are doing so again this year. With regard to COVID specifically, we did adjust the bonus payout, both on items that were positive impacts to the potential payout, the negative impact to the potential payout, all of which were approved by the Compensation Committee and are available in our disclosures.

There's no additional questions at this time. Let's go ahead and move on to the third proposal.

Okay. The next matter to come before the meeting is the ratification of the appointment of PwC as the company's independent registered public accounting firm. The Board of Directors recommends the ratification of the appointment of PwC to serve as the company's independent registered public accounting firm and to audit the company's financial statements for the fiscal year ending December 31, 2021. Are there questions or comments on this proposal?

There are no questions on this proposal. We can go on to the fourth proposal.

Great. Thanks, Katrina. We'll now consider the stockholder proposal related to the written consent of stockholders, which was included in the proxy statement. I will now ask the sponsor of the resolution or the designated representative of the resolution to please present the proposal now. You may introduce the proposal and make a brief supporting statement if you wish. Operator, please unmute Mr. John Chevedden, or his representative.

This is John Chevedden. Can you hear me okay?

We can, John.

Proposal 4, improve shareholder written consent. Shows request that our Board of Directors take the steps necessary to enable 10% of shares to request a record date to initiate written consent. If you have voted against this proposal, please consider changing your vote before the polls close in a minute or 2. This proposal topic just won majority support at BorgWarner on April 28. Our current version of written consent like the old BorgWarner written consent is useless and would not be used by any group of shareholders in their right mind. Currently, it takes the formal backing of 30% of shares that normally cast ballots at the annual meeting to do so little as to ask for a record date for written consent. Why would any group owning 30% of our stock seek to do so little as to get a date on a calendar for management when the same group of shareholders, with less effort, can compel management to hold a special shareholder meeting on a topic of their choosing. Door #1 is a date on the calendar for management that shareholders can frame and door #2 takes less effort and compels management to hold a special shareholder meeting. Thus, door #2, a special shareholder meeting is the clear choice, and our written consent is thus useless. Clearly, shareholders, when made aware of the uselessness of our current right deck by written consent would not approve it. Yet management claims that shareholders did approve it. This shows how management abused shareholder engagement by withholding key information on written consent in order for management to claim it got shareholder approval. Taking as my written consent is the means shareholders can use to raise important matters outside the normal annual meeting cycle, like the election of a new director. Shareholders might determine that a poor performing Director is in need of replacement. For instance, Mr. Peter Van Camp, Executive Chairman, received the most negative director votes at our 2020 annual meeting; and Mr. Christopher Paisley, Lead Director, was the runner up in negative director votes. Our management is apparently ignorant of the elementary fact that written consent can be structured so that all shareholders get advanced notice of a proposed action. The shareholder supporting written consent could only accomplish their objective if 64% of shares that normally voter at our annual meeting give approval. In resisting this proposal, management is opposed to listening to the voice of 64% of shares. Please vote yes. Proposal 4, improve shareholder written consent.

Thank you, Mr. Chevedden. The Board's response to this proposal was in the proxy statement. Are there any questions or comments on this proposal?

We have no additional questions on this proposal at this time. We can move on to the next section.

Okay. The polls are about to close. So if you've not yet voted, please do so. [Voting]

Since everyone has had the opportunity to vote, it is now 10:13 a.m. and the polls are closed. The Inspector of Elections has delivered his preliminary report and I will now announce the preliminary results. Based on the Inspector of Election's preliminary report -- oh, I'm sorry, Maggie -- this is your section, I'm sorry.

That's fine. But yes, I will go ahead and issue the report. Each of the nominees for director has been elected as a director of the company until the 2022 annual meeting and until their successors are duly elected and qualified. The 2020 compensation of the company's named executive officers has been approved by a nonbinding advisory vote. The proposal to ratify the appointment of PwC as the company's independent registered public accounting firm has been approved. And finally, the stockholder proposal related to written consent of stockholders has not been approved. We will file the final report of the Inspector of Election with the records of this meeting, and we expect to report the results of the voting on a Form 8-K to be filed with the SEC within 4 business days. Charles?

Thank you, Maggie. That concludes the business for the meeting. The meeting is now adjourned. We'll now proceed with the question-and-answer portion of the meeting. Please follow the instructions provided on the virtual meeting screen to submit any questions.

We have one question at this time. Charles, can you please give an example of product innovation in response to the COVID challenge?

Sure. I wouldn't point necessarily to any product innovation that was directly a response to the COVID challenge, but I would point to some of our prior innovations that proved to be particularly relevant during the period of COVID and the challenges associated with the move to work from home. The development of our Equinix fabric service offering is one that I think allowed a number of our customers to make rapid and real-time responses to the changes in network requirements that were created by the shift to work from home, and that has created significant demand for that offering. And so that's one that I think was directly relevant there. And then the other thing that I would comment on relative to COVID is that it has had a significantly increased impact in terms of people thinking about the importance of digital transformation, and therefore, responding to other elements of innovation across our portfolio. So -- but nothing else that I would point to specifically in terms of product innovation related directly to COVID.

Thank you. At this time, we have no further questions.

Great. Ladies and gentlemen, thank you very much for attending today's meeting. Operator, you can please end the meeting. Thank you.

And this concludes the meeting. You may now disconnect.