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

Hello, and welcome to the Annual Meeting of Stockholders of Equinix, Inc. Please note that today's meeting is being recorded. 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, operator. It's 10:00 a.m. Southern Time. So will the meeting please come to order. As the operater said, I'm Charles Meyers, President and Chief Executive Officer 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 you to our Annual Meeting of Stockholders. We very much appreciate your attendance, your interest and most importantly, your ongoing support of Equinix. The annual meetings held pursuant to the bylaws of the company and with written notice to all stockholders. We're pleased to hold our annual meeting virtually again this year as we're aiming to maximize access and participation. I also call your attention to the rules of conduct set forth for this meeting, which can be found in the Document section on the right side of your screen. Stockholders may submit questions at any time during the meeting by typing them into the Questions box on the virtual meeting screen. 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. So now I'll ask Maggie Paige to introduce those present today.

Hello, I'm Maggie Paige, VP of Legal, Corporate Governance and Securities, and I will now introduce those in attendance. We welcome Peter Van Camp, our Executive Chairman; Board members: Christopher Paisley, Ron Guerrier and Sandra Rivera; Keith Taylor, our Chief Financial Officer; Brandi Galvin Morandi, our Chief Legal and Human Resources Officer; Katrina Rymill, our Senior Vice President of Corporate Finance and Sustainability; Darrin Short, our Senior Director of Stock Services and Payroll and various other members of management. Also attending this meeting is Joe Zullo of PricewaterhouseCoopers, our independent auditor. Although PwC has indicated that it does not wish to make a statement, Mr. Zullo is available to respond to appropriate questions during the general Q&A period. In accordance with our bylaws, Charles will act as Chairman of the meeting, I will act as Secretary of the meeting, and Darrin will serve as Inspector of Elections for this meeting. I will now report on the proof of notice of meeting. I have an affidavit of mailing from Computershare in as to the giving of notice of this meeting and the sending to stockholders of record as of April 1, 2022, 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 14, 2022. I also have a copy of the 2021 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 used to access this meeting.

We have the list of the holders record of common stock of the company at the close of business on April 1, 2022. 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 this meeting by a 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 this meeting so that we can determine whether a quorum is present.

Charles, on April 1, 2022, the record date for this annual meeting, there were outstanding and entitled to vote, a total of 91,013,824 shares of common stock. I've been informed by the Inspector of Elections that there are 81,422,271 shares of stock represented by proxy or approximately 89% of all 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.

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 indeed present. Accordingly, this meeting has been properly convened. It is 10:05 a.m. on May 25, 2022, and the 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 are a stockholder entitled to vote and have not yet voted or if you want to change your previously cast vote, you may do so by clicking on the Vote tab on your screen. Please remember that if you already voted by proxy, it's not necessary to vote again. After voting has been completed on all matters on the agenda, we'll close the polls, and the inspector of election will provide his preliminary report and we'll 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 will be electing each of the 9 directors for a 1-year term expiring at the 2023 Annual Meeting of Stockholders and until their successors are duly elected and qualified. The nominees are: Nanci Caldwell; Adaire Fox-Martin; Ron Guerrier, Gary Hromadko, Irving Lyons; Charles Meyers, Christopher Paisley, Sandra Rivera and Peter Van Camp. Information concerning their principal occupations, 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.

Great. Thanks, Katrina. Proposal 2 ask stockholders to approve by nonbinding advisory vote, the fiscal year 2021 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 talent, culture and compensation committee and our Board of Directors regarding investor sentiment about our executive compensation philosophy, policies and practices which they will be able to consider when making future executive compensation decisions. Are there any questions or comments on the proposal?

There's no questions on this proposal. We can move on to the third proposal.

Great. Thank you. 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 -- sorry, independent registered public accounting firm and to audit the company's financial statements for the fiscal year ending December 31, 2022. Are there any questions or comments on this proposal?

Charles, there are currently no questions on this proposal. We can move on to the fourth proposal.

Okay. We'll now consider the stockholder proposal related to lowering the stock ownership threshold required to call a special meeting of stockholders, which was included in the proxy statement. I will now ask that 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. Can the operator, please unmute Mr. John Chevedden or his representative.

Hello. This is John Chevedden. Proposal for special shareholder meeting improvement. Shareholders ask our Board to take the steps necessary to amend the governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. It is more important for a more reasonable 10% of shares to have the right to call for a special shareholder meeting to help make up for our totally useless right deck by written consent. It's worth to have no right at all then to find out that the right as technically on the Equinix books is totally useless. Southwest Airlines and Target are companies that do not provide for a share written consent and yet provide for 10% of shares to call for a special shareholder meeting. Why would any group of shareholders that own 25% of our company find it attractive to do so will obtain a record date for written consent when the same owners of 25% of our company can compel management to hold a special shareholder meeting. To initiate written consent in Equinix, 25% of shares most petition management for the baby-step obtaining a record date. Once the record date is obtained then shareholders are on a tight schedule to obtain the consent of 51% of shares outstanding, which is equal to 60% of the shares that voted at the annual meeting. It would be hopeless to think that shares that don't have -- do not have the time to vote would have the time to go through the special procedural step stack by written consent. This turns into giving Equinix shareholders a Class A Catch-22 dilemma. In order to get a record date, 25% shares must give their contact information to management. Thus, it is easier than shooting fish in a barrel for Equinix management with free access to corporate war chest and professional [indiscernible] solicitors to pass the 25% of shares to change their mind and revoke their support for acting by written consent. Thus, while the base of 25% of shares is easily vulnerable to management attack with deep pockets company money, shareholders have a formidable task of doubling their number to 51% of shares, which equals 60% of shares to vote at the annual meeting in a limited time period with money out of their own pockets. We need a right for 10% of shares to call for a special shareholder meeting to make up for our totally useless right deck by written consent. Please vote yes, Proposal For special shareholder meeting improvement.

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

There are currently no questions on the proposal. We can move on to the next section.

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

Since everyone has had the opportunity to vote, it is now 10:12 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 preliminary report, each of the nominees for director has been elected as a Director of the company until the 2023 Annual Meeting and until their successors are duly elected and qualified. The 2021 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 the stockholder proposal related to lowering the stock ownership threshold for [indiscernible] to call a special meeting has not been approved. We will file the final report of the inspector of elections with the records of this meeting. We expect to report the results of the voting on a Form 8-K to be filed with the SEC within 4 business days of this meeting.

Great. Thanks, Maggie. That concludes the business for the meeting, and 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 currently have one question. Where have the successful director nominations come from in the last 5 years? Are there any director retirements expected and have any of the Board committees named a new Chairman in the last year.

This is Peter Van Camp. I'll field that question. Thank you for it. New directors largely comes from the efforts of our Nominating and Governance Committee. We're constantly under review of experiences and skills that would apply to this constantly changing technology business that we're in. So this is an active ongoing effort to make sure the Board is current in that knowledge and able to offer guidance and insight along the way. So that's the response to the first question. I would say the nominating governance committee is very active, but also myself as Chairman in those efforts. And the second one, I don't expect any retirements in the coming year. And lastly, there has been one new committee Chairman named Nanci Caldwell, became our Chairman of the Nominating and Governance Committee in just the past year.

At this time, there are no further questions.

All right. Ladies and gentlemen, thank you again for attending today's meeting. Operator, you may now end the meeting.

Yes, sir. This does conclude the meeting. You may now disconnect, and have a pleasant day.