UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the
Registrant ☒
Filed by a
Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary
Proxy Statement
☐ Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒ Definitive
Proxy Statement
☐ Definitive
Additional Materials
☐ Soliciting
Material under §240.14a-12
DigitalBridge
Group, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒ No
fee required
☐ Fee
paid previously with preliminary materials.
☐ Fee
computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
 |
DigitalBridge
Group, Inc.
750 Park of Commerce
Drive
Suite 210
Boca Raton, Florida
33487
(561) 570-4644
|
MESSAGE
FROM
OUR
CHAIRPERSON OF THE BOARD
To
the Stockholders of DigitalBridge Group, Inc.:
It
is our pleasure to invite you to the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”) of DigitalBridge Group,
Inc., a Maryland corporation. The 2023 Annual Meeting will be conducted virtually, via live audio webcast, on May 11, 2023, beginning
at 11:00 a.m., Eastern Time. You will be able to attend the virtual 2023 Annual Meeting, vote your shares and submit questions during
the meeting via live audio webcast by visiting https://web.lumiagm.com/286413441, using the
passcode and control number as discussed in the enclosed Notice of Annual Meeting of Stockholders.
I
sincerely hope that you will be able to attend and participate in the virtual meeting. Whether or not you plan to attend the annual meeting
via the live webcast, please authorize a proxy to vote your shares as soon as possible. You may authorize a proxy to vote your shares
by mail, telephone or Internet. The proxy card materials provide you with details on how to authorize a proxy to vote by these three methods.
We
look forward to receiving your proxy and thank you for your continued support.
| |
Sincerely,
NANCY
A. CURTIN
Chairperson
April 7, 2023
Boca Raton, Florida
|
NOTICE
OF
ANNUAL
MEETING OF STOCKHOLDERS
| |
|
|
|
|
 |
Date
and Time |
|
 |
Virtual
Meeting
via Live Audio Webcast |
|
 |
Record
Date |
May
11, 2023
11:00 a.m., Eastern Time |
|
https://web.lumiagm.com/286413441
Webcast Passcode: digitalbridge2023 |
|
You
can vote if you are a stockholder
of record on March 15, 2023. |
| Items
of Business |
|
| 1 |
Election
of Directors |
To
elect 9 directors nominated by our Board of Directors to serve until the 2024 Annual Meeting of Stockholders and until his or her successor
is duly elected and qualified; |
| 2 |
Advisory
Vote on Executive Compensation |
To
approve, on a non-binding, advisory basis, named executive officer compensation; |
| 3 |
Advisory
Vote on the Frequency of Future Advisory Votes on Executive Compensation |
To
recommend, on a non-binding, advisory basis, the frequency of the advisory vote on named executive officer compensation; |
| 4 |
Charter
Amendment |
To
consider and vote upon an amendment to our articles of amendment and restatement, as amended and supplemented, to decrease the number
of authorized shares of common stock; |
| 5 |
Ratification
of Independent Registered Public Accounting Firm |
To
ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2023; and |
| 6 |
Other
Business |
Transact
any other business that may properly come before the 2023 Annual Meeting or any postponement or adjournment of the 2023 Annual Meeting. |
Annual
Report
Our
2022 Annual Report to Stockholders accompanies this Proxy Statement.
Proxy
Voting
Your
vote is very important. Whether or not you plan to attend the virtual 2023 Annual Meeting via live webcast, you are encouraged to read
the proxy statement and submit your proxy card or voting instructions form as soon as possible to ensure that your shares are represented
and voted at the 2023 Annual Meeting. If you hold your shares as a record holder, you may vote your shares by proxy via the phone or the
Internet by following the instructions provided on the enclosed proxy card or by completing, signing, dating and returning your proxy
card in the postage-paid envelope provided. If you hold your shares through a broker or other custodian, please follow the instructions
you received from the holder of record to vote your shares.
| |
By Order of the
Board of Directors,
RONALD
M. SANDERS
Executive Vice
President, Chief Legal Officer
and Secretary
|
April
7, 2023
Boca
Raton, Florida
TABLE
OF
CONTENTS
|
PROXY
SUMMARY
|
DigitalBridge
Group, Inc.
750
Park of Commerce Drive
Suite
210
Boca
Raton, Florida 33487
(561)
570-4644 |
This
summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that
you should consider, and you should read the entire Proxy Statement carefully before voting. This Proxy Statement and the enclosed form
of proxy are first being mailed to stockholders of DigitalBridge Group, Inc., a Maryland corporation (the “Company,” “DigitalBridge,”
“DBRG,” “we,” “our” or “us”), on or about April 7, 2023.
Throughout
this Proxy Statement, common stock share and per share information, including units of DigitalBridge Operating Company, LLC, our operating
company, and stock award units have been revised for all periods presented to give effect to the one-for-four reverse stock split effected
in August 2022.
2023
Annual Meeting
| |
|
|
 |
Date
and Time |
|
 |
Place
via Live Audio Webcast |
May
11, 2023,
at 11:00 a.m., Eastern Time |
|
https://web.lumiagm.com/286413441;
passcode: digitalbridge2023 (unique 11-digit control number required) |
| |
|
|
| |
|
|
 |
Voting |
|
 |
Technical
Support
for the 2023 Annual Meeting |
| Only
holders of record of the Company’s Class A common stock, $0.04 par value per share (“Class A common stock”) and Class
B common stock, $0.04 par value per share (“Class B common stock,” and together with Class A common stock, our
“common stock”), as of the close of business on March 15, 2023, the record date, will be entitled to notice of
and to vote at the 2023 Annual Meeting of Stockholders (the “2023 Annual Meeting”). Each share of Class A common
stock entitles its holder to one vote. Each share of Class B common stock entitles its holder to 36.5 votes. |
|
If
you have difficulty accessing the virtual 2023 Annual Meeting, technicians will be available to assist you via the following toll free
phone number (800) 937-5449. |
DIGITALBRIDGE
2023 PROXY STATEMENT | 1
PROXY
SUMMARY
Proposals
and Board Recommendations
| Proposal |
Board
Recommendation |
For
More Information |
| 1 |
To
elect 9 directors nominated by our Board of Directors to serve until the 2024 Annual Meeting of Stockholders and until his or her successor
is duly elected and qualified |
 |
FOR
each of the nominees listed on the enclosed proxy
card |
Page
9 |
| 2 |
To
approve, on a non-binding, advisory basis, named executive officer compensation |
|
FOR |
Page
33 |
| 3 |
To
recommend, on a non-binding, advisory basis, the frequency of the advisory vote on named executive officer compensation |
|
ONE
YEAR |
Page
71 |
| 4 |
To
consider and vote upon an amendment to our articles of amendment and restatement, as amended and supplemented (“Charter”),
to decrease the number of authorized shares of common stock |
|
FOR |
Page
72 |
| 5 |
To
ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December
31, 2023 |
|
FOR |
Page
74 |
How
to Cast Your Vote
We
have provided you with three different methods for you to vote your proxy. Please see the enclosed proxy card or voting instruction form
for additional details regarding each voting method.
| By
Internet |
|
|
By
Telephone |
|
|
By
Mail |
| |
|
|
|
|
|
|
 |
|
|
 |
|
|
 |
| |
|
|
|
|
|
|
| Vote
24/7 |
|
|
Dial
toll-free to vote 24/7 |
|
|
Cast
your ballot, sign your proxy |
| |
|
|
|
|
|
card
and send by pre-paid mail |
2022
Year in Review
Despite
a dynamic macro environment, DigitalBridge delivered solid growth in revenue and earnings in 2022, maintaining its position as the partner
of choice to top management teams and institutional investors allocating capital to the durable digital infrastructure asset class. Today,
with over $65 billion in assets under management (“AUM”), DigitalBridge has established itself as a preeminent investor in
a sector benefiting from strong secular tailwinds.
Established
the Asset Management Platform as Our Strategic Growth Driver
|
■ |
Oriented DBRG around a scalable,
asset-light business model that represents an alternative approach to invest in the digital infrastructure ecosystem. |
|
■ |
Executed a series of transactions
to reinforce this roadmap including (i) the repurchase and consolidation of 100% ownership of our investment management business and (ii)
the acquisition of AMP Capital’s |
2
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROXY
SUMMARY
infrastructure
equity business (now rebranded InfraBridge) to add a mid-market capability to our franchise and enhance earnings.
|
■ |
Initiated the first stage of a planned deconsolidation of the
Operating segment with the DataBank recapitalization process, generating $425 million in proceeds to the Company, reflecting a 2.0x multiple
of invested capital since our initial investment in DataBank in December 2019, and aligning the Company’s balance sheet more closely
with the asset management business model. |
Scaled
AUM with New Capital Formation That Exceeded Targets
| ■ |
Cumulative organic
fundraising of $8.5 billion, including $4.8 billion in new third party fee earning equity under management (“FEEUM”), which
exceeded the midpoint of the FEEUM guidance by 26%. |
| ■ |
Grew FEEUM to $27.8
billion as of the last reported earnings release date, up 52% since the end of 2021, with contributions from new core and credit strategies,
co-invest, and the AMP (InfraBridge) acquisition. |
| ■ |
Successful launch
of new core and credit strategies and AMP (InfraBridge) acquisition advanced “Full Stack” profile, positioning DBRG as the
leading investor across the sector. |
Executed
Accretive Capital Allocation While Maintaining Strong Liquidity
| ■ |
Four accretive transactions
allocated over $900 million in cash to M&A and capital structure optimization, which we expect to drive an increase in annual run-rate
earnings of $85 million, an increase in earnings per share of $0.49/share. |
| ■ |
Despite significant
capital deployment, DigitalBridge prioritized and maintained strong liquidity, which stood at $680 million as of the last reported earnings
release date. |
| ■ |
Management continued
to de-lever the business, reducing both investment level and corporate debt on a pro-rata basis from $1.4 billion to $1.1 billion, a reduction
of over 20%. |
| ■ |
Established a “low
but grow” dividend ($0.01/quarter) for the first time since the transition to DigitalBridge. |
Strong
Portfolio-Level Performance Drove Great Outcomes
|
■ |
Despite rising rates and an inflationary environment, DigitalBridge
generated successful realizations from Wildstone (DBP I) and Vantage Towers (DBP II), and the DataBank recapitalization, which generated
$32.6 million of carried interest on a cumulative basis for DBRG shareholders. All three transactions were executed well in excess of
their carrying values. |
Stockholder
Engagement
Our
Board of Directors (“Board”) believes in listening to and communicating with stockholders. We believe stockholder insight
and recommendations should be an integral part of Board discussions on many matters. The input we receive from stockholders as part of
our regular engagement efforts impacts our compensation and corporate governance policies in a meaningful way. The Board, senior management
and our investor relations team maintain a robust dialogue with investors to gain their perspectives on current issues and address any
questions or concerns.
Following
outreach with stockholders representing more than 50% of our outstanding shares during 2021, the Company implemented meaningful changes
to the Company’s executive compensation program and enhanced transparency around certain compensation matters in the Company’s
proxy statement. In subsequent stockholder outreach campaigns in 2021 and 2022, we received positive feedback regarding the implementation
and continuation of these changes. Neither our Chief Executive Officer, nor any other named executive officer, participated in any of
these meetings with stockholders, and all of the feedback received was shared with the full Board of Directors.
DIGITALBRIDGE
2023 PROXY STATEMENT | 3
PROXY
SUMMARY
We
strongly consider the responses we receive from stockholders in implementing our executive compensation program and have maintained the
improvements we previously adopted. We look forward to continuing the dialogue with another stockholder outreach campaign led by Jon Fosheim,
the Chair of our Compensation Committee, in 2023.
For
further information, see “Executive Compensation Highlights” below.
Commitment
to Environmental, Social & Governmental (ESG) Initiatives
Overview—ESG
at DigitalBridge
The
Board of Directors at DigitalBridge provides ultimate oversight of our environmental, social and governance (“ESG”) program.
Our Nominating and Corporate Governance Committee is responsible for implementing and monitoring our ESG program. As we continue to expand
our business, this oversight is critical to ensuring that our implementation of ESG goals and policies progresses as planned and our strategy
evolves appropriately. During 2022, we made significant progress in implementing our ESG strategy, progressing on related goals and continuing
to build organizational capacity to effect change. The core components of our program include:
Governance:
Implementation of our ESG strategy and initiatives is led by our ESG Committee, which reports to the Board on a quarterly basis. The ESG
Committee is comprised of 10 diverse professionals, including members of senior management, that work across the Company’s activities.
The ESG Committee is responsible for setting the strategic plan for ESG initiatives across the Company and works with portfolio companies
to assist them in developing and implementing their ESG plans. For purposes of our ESG program, we define a portfolio company as any company
in which one of the Company’s private funds (i) owns a majority stake, (ii) has invested at least $100 million and (iii) has been
held for at least two years.
Responsible
Investment Policy: ESG Integration, including management of climate-related risks and opportunities, is guided by our Responsible
Investment Policy. DigitalBridge is a proud signatory of the Principles for Responsible Investment (“PRI”) because we recognize
the value of supporting a nonprofit organization that advances responsible investment globally, shares best practices across the industry,
and provides an assessment and peer benchmarking of our performance.
Due
Diligence Procedures: We have integrated ESG analyses into the due diligence of our digital equity fund investments and our
ESG analysis is presented to the relevant fund Investment Committee for each portfolio company that we invest in.
Asset
Management: We have developed an ESG reporting framework for DigitalBridge portfolio companies, identifying nine ESG-related
expectations as well as a set of ESG key performance indicators (“KPIs”) that we expect to be measured and reported quarterly
to the portfolio company board as well as to DigitalBridge’s ESG team. We typically hold calls with portfolio company ESG leadership
every two months and have built a central repository of key documents and tools that all of our portfolio companies can access and leverage
to further develop their ESG programs.
Transparency:
The Company issues an annual ESG Report, which is available on our website, to provide transparent communication around our ESG efforts.
We published our 2021 ESG report in June 2022 detailing measurable progress at both the Company and our portfolio companies. Our 2022
ESG Report will be released this spring. The information that is found on or accessible through our website is not
4
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROXY
SUMMARY
incorporated
into, and does not form a part of, this proxy statement or any other report or document that we file with or furnish to the Securities
and Exchange Commission (“SEC”).
DEI:
Under our Diversity, Equity and Inclusion (“DEI”) initiative, which consists of four pillars (mentorships, internships, recruitment
and careers and compensation), we will continue to ensure we have a workplace where people from all backgrounds can thrive. To accomplish
the company’s DEI goals, the ESG Committee collaborates with the DEI Committee, investment professionals, functional senior leaders
and portfolio company management. The DEI Committee is comprised of 15 cross-functional members, including members of senior management,
and reports to the CEO as its executive sponsor.
Board
Training: We invest in developing the Board’s understanding of ESG matters. We provided ESG updates regarding our progress
as well as pertinent ESG trends in the financial sector to our Board members during 2022. Briefings also covered climate-related risks
and opportunities, including the nexus of climate change and digital infrastructure as well as the science and evolving certification
schemes associated with achieving net zero greenhouse gas emissions.
Our
Approach to ESG Integration
ESG
PRIORITIES
We
have developed a thorough approach to addressing ESG matters across the investment life cycle and have identified the following as the
most material items that we consider during due diligence and actively monitor during asset management.
|
1. |
Climate Change: Energy Efficiency,
Greenhouse Gas (“GHG”) Emissions, and Physical Climate Risks |
|
2. |
Data Privacy, Data Security, and
Associated Human Rights |
|
3. |
Diversity, Equity, and Inclusion |
|
4. |
Ethics: Foreign Corrupt Practices
Act, Anti-Bribery, and Anti-Corruption |
|
5. |
Employee Wellbeing: Workplace Health
and Safety |
These
matters were selected according to two criteria: those that have the greatest effect on our business and those that are the most important
to our stakeholders. Our materiality assessment was informed by relevant leading global reporting frameworks including the Sustainability
Accounting Standards Board, Principles for Responsible Investment and the Task Force on Climate-Related Financial Disclosures.
ESG
EXPECTATIONS FOR PORTFOLIO COMPANIES
DigitalBridge
sets high ESG expectations, shares best practices and equips each portfolio company with tools and resources to help them accelerate their
ESG initiatives. We have identified the following foundational practices, which we believe provide the groundwork for a portfolio company
to improve and report on its ESG performance over time:
|
■ |
ESG Policy and Responsibility: Each portfolio company
is asked to develop an ESG policy tailored to its business and assign ESG management to specific individual(s) at the company. Larger
companies may also have an ESG Committee or working group. |
|
■ |
Net Zero: Each portfolio company
is expected to complete its GHG footprint each year and have a Net Zero strategy roadmap approved by its board of directors. |
|
■ |
ESG Board Reporting: Each
portfolio company’s quarterly board report is expected to include an ESG section. |
|
■ |
ESG Responsibility (Whistleblower
Hotline): Each portfolio company is expected to have a hotline for all stakeholders to report concerns, and call logs should be made
available to its board. |
DIGITALBRIDGE
2023 PROXY STATEMENT | 5
PROXY
SUMMARY
|
■ |
Training: Each portfolio company
is expected have regular trainings that reach all employees on topics including employee safety, diversity and inclusion, unconscious
bias, climate change, discrimination, harassment and anti-bribery/Foreign Corrupt Practices Act (“FCPA”). |
|
■ |
Human Resources Audit: Each portfolio
company is expected to conduct human resources compliance reviews and/or audits with outside resources to ensure compliance with all relevant
regulations. |
|
■ |
Diversity and Inclusion: Each
portfolio company is expected to have a diversity and inclusion program with policies and procedures to ensure a diverse and inclusive
work environment. |
|
■ |
ESG Event Reporting: Each portfolio
company is expected to have a process in place to ensure that material ESG events (such as sexual harassment, serious workplace accidents,
FCPA violations, cyberattacks or similar large network outages, employment violations, product recalls, furloughs, regulatory investigations,
or lawsuits) are reported at the board level within 48 hours. |
|
■ |
Corporate Citizenship: Each portfolio
company is asked to have a formal corporate citizenship/philanthropic program that has executive-level sponsorship and oversight. |
NET
ZERO 2030
One
of our highest priorities at DigitalBridge remains reaching net zero GHG emissions. We measure this goal using the definition of net zero
provided by the Science Based Targets Initiative (“SBTi”). We believe that our net zero goal is important to our business
given our global strategic relationships with hyperscale data center providers, large mobile network operators and other customers with
aggressive decarbonization commitments. We continue to target the Company reaching net zero by 2030.
In
2022 and early 2023, we revised our net zero goal for portfolio companies to adapt to changes in the definition of net zero set by SBTi,
including a change that limits the ability to use offsets for Scope 1 and 3 GHG emissions. Our revised expectation for portfolio companies
is to complete an annual GHG footprint and to develop an emissions reduction plan to decrease their Scope 1 and Scope 2 GHG emissions
to zero by no later than 2030 (or for investments made in 2028, and thereafter—within two years from date of investment). Additionally,
we aim to ensure that before 2030 at least 30% of our portfolio companies have an SBTi (or standard of equivalent quality) approved and
achievable net zero target of 2040 or earlier.
We
plan to continue supporting portfolio companies in GHG emissions measurement, renewable energy procurement, emission reduction strategies
and roadmaps and will strive to ensure that portfolio companies are prioritizing resource efficiency, renewable power purchasing and value
chain engagement before balancing unavoidable emissions with high integrity carbon removals.
By
following best practices and consulting with industry experts, we believe that we have developed goals that are comprehensive, credible,
clear and achievable:
|
1. |
Comprehensive: We consider Scope 1,
2 and all significant Scope 3 GHG emissions at DigitalBridge. |
|
2. |
Credible: Our goal for DigitalBridge
aligns with the current SBTi definition of net zero. |
|
3. |
Clear: We utilize the Task Force on
Climate-Related Financial Disclosures framework to measure and report on progress in our annual ESG report. |
|
4. |
Achievable: We believe that the goals
we set for the Company and our portfolio companies are achievable using the framework described above. |
6
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROXY SUMMARY
| 2022
Progress |
|
| Governance |
■ Enhanced
portfolio company ESG data collection systems and disclosures to meet rising regulatory and investor expectations |
| |
■ Provided
detailed, expanded quarterly ESG reporting and updates to the Nominating and Corporate Governance Committee and the full Board |
| |
■ Increased
our support and resources available to portfolio companies on ESG issues |
| Climate
Change |
■ Updated
our Net Zero strategy to align with the changing requirements of SBTi |
| |
■ Advised
our portfolio companies on adjusting their climate roadmaps in light of changed SBTi requirements and continued supporting their work
in advancing their climate strategies |
| |
■ Reported
our climate-related risk management approach informed by guidance from the Task Force on Climate-Related Financial Disclosure for the
second year |
| Diversity,
Equity and Inclusion |
■ Adopted
and communicated a DEI Policy identifying four focus areas and ten supporting commitments, with input from our employees and broader stakeholders |
| |
■ Joined
the Institutional Limited Partners Association Diversity in Action initiative |
| |
■ Our
Chief Executive Officer signed the CEO Action for Diversity and Inclusion Pledge |
| |
■ 90%
of our Summer Internship Program participants were from groups historically underrepresented in finance |
| |
■ 45%
of new full-time employees hired in 2022 were female |
| Transparency |
■ Issued
our second ESG Report that contains disclosures based on the Sustainability Standards Board (SASB) Standards for Real Estate and Telecommunication
Services |
| |
■ More
than one third of DigitalBridge portfolio companies have now published ESG reports or websites |
| Human
Capital |
■ Expanded
the Summer Internship Program to 23 interns across six offices working in seven business units |
| |
■ Launched
our Inaugural Analyst Program with four analysts—all sourced from our Summer Internship Program |
| |
■ Created
a Careers and Compensation panel to attract and retain talent, including those from groups historically underrepresented in finance |
| |
■ Increased
guidance in our talent management software and learning solution |
| |
■ Launched
our first Employee Resource Group, a book club focused on fostering a better understanding of diversity, equity and inclusion |
DIGITALBRIDGE
2023 PROXY STATEMENT | 7
PROXY
SUMMARY
Corporate
Governance Highlights
| ✓ |
No classified
board(1) |
|
✓ |
Opted out of
MUTA(1) |
| ✓ |
Majority voting
standard for election of directors |
|
✓ |
Favorable stockholder
rights(2) |
| ✓ |
Anti-hedging/pledging
policy |
|
✓ |
Stock
ownership guidelines for directors and officers |
|
(1) |
Stockholder approval required for
DBRG board to adopt a classified board structure and other anti-takeover provisions. |
|
(2) |
DBRG stockholders have the ability to call special stockholders
meetings, remove and replace directors, amend bylaws and approve increases in the number of shares authorized for issuance. |
8
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1:
ELECTION
OF DIRECTORS
Based
on the recommendation of the Nominating and Corporate Governance Committee, the Board has unanimously recommended that the following 9
persons be elected to serve on our Board, each until the 2024 Annual Meeting of Stockholders and until his or her successor is duly elected
and qualified:
| |
|
|
|
|
| ■ James
Keith Brown |
|
■ Nancy
A. Curtin |
|
■ Jeannie
H. Diefenderfer |
| |
|
|
|
|
| |
|
|
|
|
| ■ Jon
A. Fosheim |
|
■ Marc
C. Ganzi |
|
■ Gregory
J. McCray |
| |
|
|
|
|
| |
|
|
|
|
| ■ Sháka
Rasheed |
|
■ Dale
Anne Reiss |
|
■ David
M. Tolley |
| |
|
|
|
|
Other than Mr.
Brown, who is a nominee that does not currently serve on the Board, all of the nominees are current directors and, other than Mr. Tolley,
who was appointed to the Board in August 2022, were elected by the stockholders at the 2022 annual meeting of stockholders.
Each
nominee has consented to being named in this Proxy Statement and to serve if elected. If, prior to the 2023 Annual Meeting, a nominee
is not able to serve for any reason or for good cause will not serve, proxies will be voted for an additional person designated by our
Board, unless our Board determines to reduce the number of directors or to leave a vacant seat on our Board in accordance with the Company’s
charter and bylaws.
 |
Our
Board of Directors Recommends a Vote “FOR” the Election of
Each of the Nominees Identified Above and Nominated by our Board of Directors. |
DIGITALBRIDGE 2023
PROXY STATEMENT | 9
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Board
of Directors
Our
Board of Directors believes that having a diverse mix of directors with complementary qualifications, expertise, and attributes is essential
to meeting its oversight responsibility. All of our directors except Marc C. Ganzi, our Chief Executive Officer, are independent. Each
of our directors attended at least 75% of the aggregate number of meetings held by: (i) the Board of Directors during such director’s
respective term of service in 2022; and (ii) each committee, in each case during the period in 2022 for which such director served as
a member.
Our
Board also recognizes the importance of refreshment, particularly in light of the Company’s recently completed digital transformation.
In 2022, we engaged Spencer Stuart, an executive search firm, to assist us in two searches to find two new Board candidates with investment
management experience and that would qualify as independent. Spencer Stuart identified David M. Tolley, who was appointed to the Board
in August 2022, and James Keith Brown, who is nominated for election at the 2023 Annual Meeting. In addition, the Board has maintained
its digital expertise, with five members having digital infrastructure and communications experience (four of such director nominees being
independent).
Nominees
for DigitalBridge Board of Directors—At-A-Glance
10
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Board
Composition and Refreshment
Our
Board recognizes the importance of having the right mix of skills, expertise and experience and is committed to continuously reviewing
its capabilities in relation to our strategic direction and ongoing refreshment. In keeping with this commitment, our Board added three
new independent directors with digital experience in 2021 and one new independent director with digital and investment management experience
in 2022, and has nominated one new independent director with investment management experience for election at the 2023 Annual Meeting.
Of our 9 highly qualified and diverse nominees for election at the 2023 Annual Meeting, five have digital infrastructure and communications
experience (four of such director nominees being independent).
Our
Nominating and Corporate Governance Committee has prioritized diversity in its refreshment over the past several years. As a result, our
9 director nominees for the 2023 Annual Meeting include three females (one of whom is also Asian American) and two African American males.
The table below
summarizes the key experience, qualifications and attributes for each director nominee and highlights the balanced mix of experience,
qualifications and attributes of the Board as a whole. This high-level summary is not intended to be an exhaustive list of each director
nominee’s skills or contributions to the Board.
| |
|
Brown |
Curtin |
Diefenderfer |
Fosheim |
Ganzi |
McCray |
Rasheed |
Reiss |
Tolley |
|
 |
CEO/Executive
Leadership |
■ |
■ |
■ |
■ |
■ |
■ |
|
■ |
■ |
|
 |
Qualified
Financial Expert |
|
|
|
■ |
|
|
|
■ |
■ |
|
 |
Digital |
|
|
■ |
|
■ |
■ |
■ |
|
■ |
|
 |
Capital
Markets |
■ |
■ |
|
■ |
■ |
|
■ |
■ |
■ |
|
 |
Investment/
Portfolio Management |
■ |
■ |
|
■ |
■ |
■ |
■ |
■ |
■ |
|
 |
Risk
Management |
■ |
■ |
■ |
|
■ |
■ |
|
■ |
■ |
|
 |
Legal/Regulatory |
|
■ |
|
■ |
■ |
|
|
■ |
|
|
DIGITALBRIDGE 2023
PROXY STATEMENT | 11
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| |
|
Brown |
Curtin |
Diefenderfer |
Fosheim |
Ganzi |
McCray |
Rasheed |
Reiss |
Tolley |
|
 |
Strategic
Transformation |
■ |
■ |
■ |
|
■ |
■ |
■ |
■ |
■ |
|
 |
Human
Capital |
■ |
■ |
■ |
|
■ |
■ |
■ |
|
■ |
|
 |
Corporate
Governance |
■ |
■ |
■ |
■ |
■ |
■ |
|
■ |
■ |
|
Our
Director Nominees
The
information below includes each director nominee’s name, age, principal occupation, business history and certain other information,
including the specific experience, qualifications, attributes and skills that led our Board to conclude that each such person should serve
as a director of our company.
| JAMES
KEITH BROWN |
|
 Independent
Director Nominee |
Former Senior Managing Director of Coatue
Management LLC
AGE 60 |
|
EXPERIENCE
■ Senior
Managing Director of Coatue Management LLC from 2018 to 2023
■ Executive
Managing Director & Head, Global Investor Relations of Och Ziff Capital Management (now Sculptor Capital Management) (NYSE: SCU) from
2003 to 2017
■ Managing
Director & Head, U.S. Institutional Sales & Relationship Management of Goldman, Sachs & Co. from 1999 to 2003
■ Managing
Director, Global Asset & Investment Management, Consulting and Endowments & Foundations Division;
VP, Global Asset Management,
Endowments & Foundations Division at
Bankers Trust Company from 1992
to 1999
■ Regional
Director, Foundation & Corporate Relations at Dartmouth College from 1991 to 1992
■ J.P.
Morgan & Co. from 1985 to 1990
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Over
25 years of investment management experience, including senior leadership roles in capital raising |
|
■ Well-versed
in engaging with private fund investors around the world and brings deep experience in product design and strategy
OTHER
POSITIONS/RECOGNITIONS
■ Board
member and member of co-investment committee of UNC Investment Fund (2018 to present)
■ Served
as the Chair of the Operating Committee at Coatue Management LLC
■ Served
on the Management Committee of Och Ziff (now Sculptor Capital Management) (NYSE: SCU) for a decade and ran Best Practice Committee for
the firm
■ Chair
of Executive Committee at the Lincoln Center (10 years)
■ President
of the Board of the New Museum (10 years and on the board for 24 years) and served on investment, finance and audit committees, among
others
■ Served
on board member of Andy Warhol Foundation (Chair of Finance and on Investment and Audit Committees)
EDUCATION
■ Bachelor
of Arts with Honors, University of North Carolina |
| |
|
|
|
|
12
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| NANCY
A. CURTIN |
|
Independent
Director since 2014 |
Chief Investment Officer of Alvarium
Tiedemann Holdings, Inc.
AGE 65
■ Chairperson
of the Board |
|
EXPERIENCE
■ Chief
Investment Officer and Board Director of Alvarium Tiedemann Holdings, Inc. (NASDAQ: ALTI) since 2023
■ Partner,
Group Chief Investment Officer, Head of Investment Advisory and participant member of the Supervisory Board of Alvarium Investments from
May 2020 through the business
combination of Alvarium Investments
with Tiedemann Wealth Management Holdings, LLC and certain other parties in
January 2023
■ Chief
Investment Officer and Head of Investments of Close Brothers Asset Management (CBAM), a UK investment and financial advice firm focused
on private clients, high-net-worth, charities, and family offices, from 2010 to 2019
■ Chief
Investment Officer and Managing Partner of Fortune Asset Management Limited, a hedge fund and long-only institutional advisory business,
from 2002 until its full acquisition by CBAM in 2010
■ Managing
Director of Schroders Plc and Head of Global Investments for the Mutual Funds business & founded Internet Finance Partners, a venture
arm of Schroders.
■ Head
of Emerging Markets at Baring Asset Management; Board member for Baring Venture Partners, Member of Global Senior Council and Senior Leadership
Team
■ Co-Head
of German Real Estate arm of Rho Asset Management, focused on private equity and real estate investments
■ Early
career, M&A and Corporate Finance at Morgan Stanley and Credit Suisse First Boston
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Over
25 years of investment management experience and senior leadership roles in global asset management, private equity, real estate, and
alternative asset investing that are key to the Board’s oversight of the Company’s investment strategy and management of its
investment portfolio |
|
■ Proven
business builder of global investment and wealth management businesses with C-suite and board responsibility driving significant AUM growth
at attractive operating margins
■ Successful
track record of CIO execution; leading large investment teams in pursuit of institutional quality investment disciplines to deliver superior
investment performance
■ Deep
understanding of regulatory environment for investment management, with proven ability to institute best practice front line controls,
oversight, and governance
OTHER
BOARDS
■ Right
to Play, global education charity helping over 2.3 million children each year in war torn countries and areas of significant dislocation
EDUCATION
■ Bachelor
of Arts, Summa Cum Laude, Princeton University
■ Master
of Business Administration, Harvard Business School
■ 2019:
Harvard Business School Executive Education, Woman on Boards Certificate
■ Harvard
Business School, Corporate Director Certification (accepted into programme, expected completion Q4 2023):
■ Audit
Committees in a New Era of Governance-Completed
■ Compensation
Committees: New Challenges, New Solutions-November 2023
■ Making
Corporate Boards More Effective-November 2023 |
DIGITALBRIDGE 2023
PROXY STATEMENT | 13
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| JEANNIE
H. DIEFENDERFER |
|
Independent
Director since 2020 |
|
Founder and Chief
Executive Officer of courageNpurpose, LLC
AGE
62
COMMITTEE
MEMBERSHIPS
■ Compensation
Committee
■ Nominating
& Corporate Governance Committee |
|
EXPERIENCE
■ Founder
and Chief Executive Officer of courageNpurpose, LLC since 2014
■ Executive
leadership positions at Verizon Communications, including leading Verizon’s global customer care organization for its largest enterprise
customers from 2010 to 2012, serving as Senior Vice President of Global Engineering & Planning from 2008 to 2010, and as Chief Procurement
Officer from 2005 to 2008
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Ms.
Diefenderfer’s substantial technical and operational experience in the telecommunications industry, as well as her senior executive
positions and service on public and advisory boards, will provide the Board with valuable insight as the Company continues to implement
its strategic transition, as well as guidance on corporate governance matters and complex business issues
OTHER
PUBLIC COMPANY BOARD EXPERIENCE
■ Windstream
Holdings, Inc. (formerly NASDAQ:WINMQ) (February 2016 to September 2020) |
|
■ MRV
Communications, Inc. (formerly NASDAQ:MRVC) (July 2014 to August 2017)
■ Westell
Technologies, Inc. (OTC WSTL) (September 2015 to September 2017)
OTHER
POSITIONS/RECOGNITIONS
■ CEO
of Center for Higher Ambition Leadership since June 2021
■ 2020
National Association of Corporate Directors (NACD) Directorship 100 list honoree
■ Independent
board member of Irth Solutions since March 2022
■ Trustee
of Olin College of Engineering
■ Board
Member of NACD NJ Chapter
■ Vice
Chair of the Board, Women in America
EDUCATION
■ Bachelor
of Science, Tufts University
■ Master
of Business Administration, Babson College |
| |
|
|
|
|
| JON
A. FOSHEIM |
|
Independent
Director since 2017 |
|
Chief Executive
Officer of Oak Hill REIT Management, LLC; Co-Founder, CEO of Green Street Advisors (Retired)
AGE
72
COMMITTEE
MEMBERSHIPS
■
Audit Committee
■
Compensation Committee (Chair)
|
|
EXPERIENCE
■ Chief
Executive Officer of Oak Hill REIT Management, LLC from 2005 until his retirement in 2011
■ Principal
and Co-founder of Green Street Advisors, a REIT advisory and consulting firm, from 1985 to 2005
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Extensive
investment management and senior leadership experience
■ Expertise
in financial analysis and accounting matters
OTHER
PUBLIC COMPANY BOARD EXPERIENCE
■ Apple
Hospitality REIT, Inc. (NYSE: APLE) (January 2015 to present; Member of Audit Committee and Corporate Governance Committee)
■ Associated
Estates Realty Corporation (formerly NYSE: AEC) (February 2015 to August 2015) |
|
OTHER
POSITIONS/RECOGNITIONS
■ Director
and Chairman of the Audit Committee of the Arnold and Mabel Beckman Foundation
■ 2003
Recipient of the National Association of Real Estate Investment Trusts (NAREIT) Industry Achievement Award
■ Previously
worked in institutional sales at Bear Stearns & Co. and the tax department at Touche Ross and Co. (now Deloitte & Touche LLP LLP)
EDUCATION
■ Bachelor
of Arts, University of South Dakota
■ Master
of Business Administration and Juris Doctor, University of South Dakota |
14
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| MARC
C. GANZI |
|
Director
since 2020 |
Chief Executive Officer
of DigitalBridge
AGE
51 |
|
EXPERIENCE
■ Founded
and served as Chief Executive Officer of Digital Bridge Holdings (“DBH”), from 2013 until its acquisition by DigitalBridge
in July 2019
■ Founded
Global Tower Partners (“GTP”), which grew to become one of the largest privately-owned tower companies in the U.S. under his
leadership before being acquired by American Tower Corporation in 2013
■ Consulting
partner for DB Capital Partners from 2000 to 2002 where he oversaw the institution’s investments in the Latin American tower sector
■ Co-founded
and served as President of Apex Site Management, one of the largest third-party managers of wireless and wireline communication sites
in the United States. In 2000, Apex merged with SpectraSite Communications to create one of the largest telecommunications site portfolios
in the United States at the time
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Leading
visionary and entrepreneur, with decades of investment experience in the digital infrastructure and telecommunications market, has led
and overseen the Company’s digital transformation as Chief Executive Officer
■ Extensive
experience as a founder and Chief Executive Officer of several digital companies, including DBH |
|
OTHER
POSITIONS/RECOGNITIONS
■ Member
of boards of corporations, including: Andean Telecom Partners, ExteNet Systems, Vantage Data Centers, Vertical Bridge, and Zayo Group
■ Assistant
Commercial Attaché in Madrid for the U.S. Department of Commerce’s Foreign Commercial Service Department in 1990
■ Presidential
Intern in the White House for the George H.W. Bush administration with the Office of Special Activities and Initiatives for the Honorable
Stephen M. Studdert in 1989
■ Board
Member of the Wireless Infrastructure Association from 2008 to 2017 and served as Chairman from 2009 to 2011
■ Member
of Nareit 2022 Advisory Board of Governors, Member of the Young Presidents’ Organization, the Broadband Deployment Advisory Committee
of the Federal Communications Commission, and currently serves on the board of the Aspen Valley Ski Club
EDUCATION
■ Bachelor
of Science, Wharton School of Business |
DIGITALBRIDGE 2023
PROXY STATEMENT | 15
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| GREGORY
J. MCCRAY |
|
Independent
Director since 2021 |
|
Chief Executive Officer
of FDH Infrastructure Services
AGE
60
COMMITTEE
MEMBERSHIPS
■ Nominating
& Corporate Governance Committee
■ Compensation
Committee |
|
EXPERIENCE
■ Chief
Executive Officer of FDH Infrastructure Services since June 2018
■ Chief
Executive Officer of Access/Google Fiber in 2017
■ Chief
Executive Officer of Aero Communications Inc., which provides installation, services and support to the communications industry, from
2013 to 2016
■ Chief
Executive Officer of Antenova, a developer of antennas and radio frequency modules for mobile devices, from 2003 to 2012
■ Chairman
and Chief Executive Officer of PipingHot Networks, which brought broadband fixed wireless access equipment to market, from 2001 to 2002
■ Senior
Vice President of customer operations at Lucent Technologies from 1996 to 2000
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Extensive
executive experience with 30 years of business, marketing, sales, engineering, operations, mergers and acquisitions, management
and international experience in the communications technology industry |
|
■ Experience
as a current and former director at other public companies, which enables him to provide significant insight as to governance and risk-related
matters
OTHER
PUBLIC COMPANY BOARD EXPERIENCE
■ Belden
Inc. (NYSE: BDC) (February 2022 to present; Member of the Nominating & Corporate Governance Committee and the Finance Committee)
■ ADTRAN
Inc. (NASDAQ: ADTN) (May 2017 to present; Member of the Compensation Committee and the Audit Committee)
■ Centurylink,
Inc. (NYSE: CTL) (January 2005 to February 2017; Chair of the Cyber Security & Risk Committee and Member of the Compensation Committee
and Nominating & Corporate Governance Committee)
OTHER
POSITIONS/RECOGNITIONS
■ Board
Member of FreeWave Technologies (February 2020 to present)
EDUCATION
■ Bachelor
of Science, Iowa State University
■ Master
of Science, Industrial & Systems Engineering, Purdue University
■ Executive
Business Programs, University of Illinois, Harvard, and INSEAD |
16
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| SHÁKA
RASHEED |
|
Independent
Director since 2021 |
|
SVP, Strategic Banking &
Wealth Management of Salesforce, Inc.
AGE
51
COMMITTEE MEMBERSHIPS
■ Audit
Committee
■ Nominating
& Corporate Governance Committee |
|
EXPERIENCE
■ SVP,
Strategic Banking & Wealth Management at Salesforce, Inc. (NYSE: CRM) since September 2022
■ Managing
Director, General Manager- Capital Markets, Microsoft Corporation, where he led the US Capital Markets division from September 2019 to
September 2022
■ Head
of Sales & Marketing at Bridgewater Associates from December 2016 to January 2019
■ Key
sales leadership, business development, management and other senior client engagement roles at: Lazard Asset Management (as Managing Director
& Head of Alternative Investments—Americas, from 2013 to 2016); and Citadel Asset Management (as Acting Head, and Director of
Distribution—Americas from 2010 to 2013)
■ Various
roles over 16 years at J.P. Morgan Chase & Co., with the last four years of his tenure at J.P. Morgan Asset Management, serving as
Managing Director, Senior Client Advisor, overseeing business development
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Seasoned
professional with over 25 years of business development, sales, strategy, leadership and management experience at premier financial services
organizations and technology companies |
|
■ Possesses
fintech acumen and deep financial services industry expertise across investment banking, debt & equity capital markets, private wealth
& institutional asset management across traditional assets and alternative investments (hedge funds, private equity, and real assets)
OTHER POSITIONS/RECOGNITIONS
■ Former
Expert Network Member at M12, Microsoft’s venture fund (2021 to 2022)
■ Former
Board Member, Chair of Finance Committee, The Robert Toigo Foundation (2008 to 2012)
■ Founding
Board Member (Brooklyn)/Board Chair (AF Endeavor) at Achievement First (2005 to 2010)
■ Robert
Toigo Fellow recipient (Harvard Business School)
■ At
Morehouse College: Oprah Winfrey full- academic scholarship recipient, a Ford Foundation Doctoral Scholar and a Woodrow Wilson Foundation
Public Policy & International Affairs Fellow, and as president of the student body and a representative on Morehouse’s Board
of Trustees
EDUCATION
■ Bachelor
of Arts, Morehouse College
■ Master
of Business Administration, Harvard Business School |
DIGITALBRIDGE
2023 PROXY STATEMENT | 17
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| DALE ANNE
REISS |
|
Independent
Director since 2019 |
|
Global and Americas Director
of Real Estate, Hospitality and Construction of Ernst & Young LLP (Retired)
AGE
75
COMMITTEE MEMBERSHIPS
■ Audit
Committee
■ Nominating
& Corporate Governance Committee (Chair) |
|
EXPERIENCE
■ Senior
Managing Director of Brock Capital Group LLC since December 2009 and Chairman of Brock Real Estate LLC since 2009
■ Senior
Partner at Ernst & Young LLP and predecessor firm from 1985 until her retirement in 2008; Global and Americas Director of Real Estate,
Hospitality and Construction from 1999 to 2008. Senior consultant to Global Real Estate Center from 2008 to 2011
■ Senior
Vice President and Controller at Urban Investment & Development Company from 1980 to 1985
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Extensive
expertise in financial and accounting matters from her experience over an extended period at several major public accounting firms
■ Leadership
experience in management and operations from her experience at major public accounting firms
■ Experience
as a director of other public and private companies
OTHER PUBLIC
COMPANY BOARD EXPERIENCE
■ Tutor
Perini Corporation (NYSE: TPC) (May 2014 to present; Chair of Audit Committee; Nominating and Governance Committee)
■ Starwood
Real Estate Income Trust, Inc. (November 2017 to present; Chair of Audit Committee) |
|
■ iStar
Inc. (NYSE: STAR) (July 2008 to May 2019; Chair of Audit Committee, Member of Nominating and Governance Committee)
■ Post
Properties, Inc. (formerly NYSE: PPS) (October 2008 to May 2013; Audit Committee, Nominating and Governance Committee)
■ Care
Capital Properties Inc. (formerly NYSE: CCP) (August 2015 to August 2017; Chair of Compensation Committee, Nominating and Governance Committee)
■ CYS
Investments, Inc. (formerly NYSE: CYS0 (January 2015 to July 2018; Audit Committee; Nominating and Governance Committee)
OTHER POSITIONS/RECOGNITIONS
■ Certified
Public Accountant
■ Governor
and Former Trustee of Urban Land Institute (1998 to present)
■ Trustee
of Southwest Florida Community Foundation
■ Trustee
of Sanibel Police Pension Board
■ Board
member of Educational Housing Services (NYC)
■ Trustee
of Collaboratory
EDUCATION
■ Master
of Business Administration, University of Chicago
■ Bachelor
of Science, Illinois Institute of Technology |
18 | DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| DAVID M. TOLLEY |
|
Independent
Director since 2022 |
|
Former EVP and Chief Financial
Officer of Intelsat S.A.
AGE
55
COMMITTEE MEMBERSHIPS
■ Audit
Committee
■ Compensation
Committee |
|
EXPERIENCE
■ Executive
Vice President and Chief Financial Officer of Intelsat S.A. from June 2019 to March 2022, where he helped to lead a multi-billion dollar
restructuring of one of the world’s largest satellite communications services providers
■ Chief
Financial Officer of Network Access Associates Ltd. (“OneWeb”), a satellite services company, from 2017 to 2019
■ Senior
Managing Director in the Private Equity Group at Blackstone from 2000 to 2011, where he led satellite services strategy and investing
and served on the Private Equity Investment Committee
■ Vice
President at Morgan Stanley in the Investment Banking Division, from 1990 to 2000, where he provided banking and advisory services to
established and emerging companies in the broader communications sector
QUALIFICATIONS,
ATTRIBUTES AND SKILLS
■ Deep
understanding of financial and accounting matters from his experience in management at other public and private companies |
|
■ Invaluable
expertise on Board practices and corporate governance matters to DigitalBridge from service as a director of other public companies
OTHER PUBLIC
COMPANY BOARD EXPERIENCE
■ WeWork
Inc. (NYSE: WE) (February 2023 to present)
■ KVH
Industries, Inc. (NASDAQ: KVHI) (June 2022 to present)
■ Cumulus
Media (NASDAQ: CMLS) (2006 to 2017)
■ New
Skies Satellites (2004 to 2006)
■ Centennial
Communications (formerly NYSE: CYCL) (2001 to 2005)
OTHER POSITIONS/RECOGNITIONS
■ Board
of Directors of ExteNet Systems (2016 to 2019)
EDUCATION
■ Master
of Business Administration from Columbia Business School
■ Bachelor
of Science in Economics and History from the University of Michigan. |
DIGITALBRIDGE
2023 PROXY STATEMENT | 19
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Corporate
Governance
Corporate Governance Guidelines
and Codes of Ethics
We are committed to good corporate
governance practices and, as such, we have adopted our Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Code
of Ethics for Principal Executive Officer and Senior Financial Officers discussed below to enhance our effectiveness. These guidelines
and codes are available on our website at www.digitalbridge.com under the heading “Shareholders—Corporate Governance.”
You can also receive a copy of our Corporate Governance Guidelines and Code of Business Conduct and Ethics, without charge, by writing
to:
Investor Relations
DigitalBridge Group, Inc.
750 Park of Commerce Drive
Suite 210
Boca Raton, FL 33487.
Our Corporate Governance Guidelines
are designed to assist our Board in monitoring the effectiveness of decision-making at the Board and management level and ensuring adherence
to good corporate governance principles, all with a goal of enhancing stockholder value over the long term. Our Corporate Governance Guidelines
govern, among other things, Board member qualifications, responsibilities, restrictions and education, Board and committee function, management
succession and self-evaluation. Our Code of Business Conduct and Ethics relates to the conduct of our business by our employees, officers
and directors. We strive to maintain high standards of ethical business practices and compliance with all laws and regulations applicable
to our business, including those relating to doing business outside the United States. Specifically, among other things, our Code of Business
Conduct and Ethics prohibits employees from providing gifts, favors or anything of value to government officials or employees or members
of their families without prior written approval from the Company’s Deputy General Counsel—Corporate. We have also adopted
a Code of Ethics for Principal Executive Officer and Senior Financial Officers, which applies to our Chief Executive Officer, Chief Financial
Officer and all other senior financial officers of our company. We will disclose any amendments or waivers from the Code of Ethics for
Principal Executive Officer and Senior Financial Officers and Code of Business Conduct and Ethics on our website.
Director Independence
Of our 9 directors being nominated
for election by our Board, our Board affirmatively determined that each of the following eight director nominees is independent under
the NYSE listing standards:
| ■ James
Keith Brown |
■ Nancy
A. Curtin |
| ■ Jeannie
H. Diefenderfer |
■ Jon
A. Fosheim |
| ■ Gregory
J. McCray |
■ Sháka
Rasheed |
| ■ Dale
Anne Reiss |
■ David
M. Tolley |
In determining director independence,
our Board considered whether or not each director or nominee has a direct or indirect material relationship with the Company and has otherwise
complied with the requirements for independence under the applicable NYSE rules. Marc C. Ganzi is not independent, as Mr. Ganzi is our
Chief Executive Officer.
20 | DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Board Leadership Structure
Our Board has appointed Ms. Curtin
as our independent, non-executive Chairperson of the Board. As Chairperson of the Board, Ms. Curtin:
| ■ |
presides over all meetings of the Board (including executive sessions of the
independent directors) and stockholders, |
| ■ |
reviews and approves meeting agendas, meeting schedules and other information, |
| ■ |
acts as a liaison between |
|
(1) |
the outside directors and management, including the Chief Executive Officer, |
|
(2) |
among independent directors, and |
|
(3) |
between interested third parties and the Board, |
| ■ |
serves as the focal point of communication to the Board regarding management
plans and initiatives, |
| ■ |
ensures that the role between Board oversight and management operations is respected, |
| ■ |
consults on stockholder engagement and governance matters, and |
| ■ |
performs such other duties as the Board requires from time to time. |
Our Chief Executive Officer, Mr.
Ganzi, is responsible for working with the Board in setting the Company’s strategic direction and day-to-day leadership and performance.
Mr. Ganzi has substantial experience, knowledge and relationships in the digital industry and our Board believes that having the Chairperson
role as a separate position allows Mr. Ganzi to focus on continued execution of the Company’s business plan, which will best serve
the interests of the Company.
In addition, the Board believes
that having an independent Chairperson:
|
(1) |
increases the independent oversight of the Company and enhances the Board’s objective evaluation
of our Chief Executive Officer, |
|
(2) |
provides our Chief Executive Officer with an experienced sounding board in the Chairperson, and |
|
(3) |
provides an independent spokesperson for the Company. |
Our Compensation, Audit and Nominating
and Corporate Governance Committees are currently comprised entirely of independent directors. The Board believes that having an independent
Chairperson of the Board and independent Compensation, Audit and Governance Committees provides a structure for strong independent oversight
of our management. Each committee chair presides over the chair’s committee meetings and reviews and approves meeting agendas, schedules
and other information for the committee. We believe that the Board’s leadership structure, including its independent chair, majority
of independent directors, and allocation of oversight responsibilities to appropriate committees, provides effective board-level risk
oversight. If in the future the Board, after considering facts and circumstances at that time, appoints the Chief Executive Officer as
Chairperson of the Board, we will promptly publicly disclose the appointment.
Under our Corporate Governance
Guidelines, if the Chairperson is not an independent director, the independent members of the Board shall elect an independent director
to serve as Lead Director, and the Board will develop duties and obligations for the Lead Director. We would expect any appointed Lead
Director to generally assume the duties and responsibilities of our independent Chairperson described above.
DIGITALBRIDGE
2023 PROXY STATEMENT | 21
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Board’s Role in Risk
Oversight
The Board is responsible for overseeing
and monitoring our risk management processes. The Board is assisted in its oversight responsibilities by the standing Board committees,
which have assigned areas of oversight responsibility for various matters as described in the Board committee charters and as provided
in NYSE rules. A summary of the risk oversight responsibilities allocated to the standing committees is set forth below. The Board or
the responsible committee considers short-term, medium-term and long-term risks in exercising their oversight responsibilities and considers
the immediacy and magnitude of the potential impact of a particular risk in assessing mitigation strategies. Our Board committees meet
regularly to discuss these areas of risk and report back to the Board.
| |
|
 |
|
|
 |
|
|
 |
| |
|
Audit Committee |
|
|
Compensation Committee |
|
|
Nominating and Corporate
Governance
Committee |
|
AREAS OF RISK |
|
■ Financial
■ Operational
■ Cybersecurity/Technology
■ Digital
Continuity Plans
■ Insurance
■ Foreign
Corrupt Practices Act
■ FX
Exposure/Counterparty Risk |
|
|
■ Compensation
Related Risks
■ Engagement
and Oversight of Independent Compensation Consultant
■ Shareholder
Engagement
■ HR
Matters |
|
|
■ Succession
Planning
■ Board
Refreshment
■ Onboarding
■ ESG
Oversight
■ Board
Education/Regulatory Developments
■ Board
Review and Evaluations |
In connection with its oversight
of risk to our business, our Board and its committees consider feedback from our Chief Financial Officer, Internal Auditor and other members
of management concerning the Company’s operations and strategies and consider the attendant risks to our business. The Board and
its committees also engage in regular discussions regarding risk management with our independent and internal auditors. The Board routinely
meets with our Chief Executive Officer and President, Chief Financial Officer, Chief Legal Officer and Chief Accounting Officer, and other
members of management as appropriate in the Board’s consideration of matters submitted for Board approval and risks associated with
such matters. Additionally, the Board of Directors is also responsible for overseeing our cybersecurity risks. Our head of information
technology provides annual cybersecurity updates to either our Board of Directors or the Audit Committee.
The Board and its committees hear
reports from the members of management responsible for the matters considered to enable the Board and each committee to understand and
discuss risk identification and risk management. All directors have access to members of management in the event a director wishes to
follow up on items discussed during the Board meeting. The Board and its committees consult with outside advisors and experts on risk
matters when necessary. The Board has also established a balance sheet oversight committee, composed of the Company’s Chief Financial
Officer, Chief Accounting Officer, Chief Legal Officer and Chief Risk Officer (once appointed) to independently review and make recommendations
to the Board concerning potential transactions that involve a potential conflict or related party transaction or that are outside the
strategic mandate of the Company set by the Board.
For further information regarding
the roles performed by each of our committees, including in connection with risk oversight, see “Proposal No. 1—Information
about our Board of Directors and its Committees.”
22 | DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Majority Voting Standard
for Election of Directors
Our bylaws provide that, in any
uncontested election of directors, a director nominee will be elected by a majority of all of the votes cast at a meeting of stockholders
duly called and at which a quorum is present. If in any uncontested election of directors an incumbent director does not receive a majority
of the votes cast by stockholders entitled to vote with respect to the election of that director, our Corporate Governance Guidelines
require such director to tender his or her resignation within three days after certification of the results. To the extent that one or
more directors’ resignations are accepted by the Board, the Nominating and Corporate Governance Committee will recommend to the
Board whether to fill such vacancy or vacancies or to reduce the size of the Board.
Directors Offer of Resignation
Policy
Our Corporate Governance Guidelines
provide that, whenever a member of our Board accepts a position with a company that is competitive to the Company’s business or
violates our Code of Business Conduct and Ethics, Corporate Governance Guidelines or any other Company policy applicable to members of
our Board, such Board member must offer his or her resignation to the Nominating and Corporate Governance Committee for its consideration.
Such Board member is expected to act in accordance with the Nominating and Corporate Governance Committee’s recommendation in this
regard.
Executive Sessions of Non-Management
Directors
Pursuant to our Corporate Governance
Guidelines and the NYSE listing standards, in order to promote open discussion among non-management directors, our Board of Directors
devotes a portion of each regularly scheduled Board and committee meeting to executive sessions without management participation. In addition,
our Corporate Governance Guidelines provide that if the group of non-management directors includes directors who are not independent,
as defined in the NYSE’s listing standards, at least one such executive session convened per year shall include only independent
directors. Our Chairperson of the Board presides and will continue to preside at these sessions.
Director Nomination Procedures
Our goal is to ensure that our
Board of Directors consists of a diversified group of qualified individuals that function effectively as a group. While it is expected
that qualifications and credentials for consideration as a director nominee may vary according to the particular areas of expertise being
sought as a complement to the existing composition of the Board of Directors, our Nominating and Corporate Governance Committee charter
provides that candidates for director must have the highest personal and professional integrity, a demonstrated exceptional ability and
judgment and an ability to be most effective, in conjunction with the other nominees to the Board, in collectively serving the long-term
interests of the Company and its stockholders.
In addition to the aforementioned
qualifications, the Nominating and Corporate Governance Committee shall assess the nominee’s independence and may consider, among
other things, the following, all in the context of an assessment of the perceived needs of the Board at that time:
| ■ |
diversity, age, background, skill and experience; |
| ■ |
personal qualities, high ethical standards and characteristics, accomplishments,
and reputation in the business community; |
| ■ |
knowledge and contacts in the communities in which the Company conducts business
and in the Company’s industry or other industries relevant to the Company’s business; |
| ■ |
ability and willingness to devote sufficient time to serve on the Board and committees
of the Board; |
DIGITALBRIDGE
2023 PROXY STATEMENT | 23
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
| ■ |
knowledge and expertise in various areas deemed appropriate by the Board; and |
| ■ |
fit of the individual’s skills, experience, and personality with those of
other directors in maintaining an effective, collegial, and responsive Board. |
The Nominating and Corporate Governance
Committee will seek to identify director candidates based on input provided by a number of sources, including (a) Nominating and Corporate
Governance Committee members, (b) other members of the Board of Directors and (c) stockholders of the Company. The Nominating and Corporate
Governance Committee also has the sole authority to consult with or retain advisors or search firms as it deems necessary or appropriate
in its sole discretion, including any search firm to assist in the identification of qualified director candidates.
In 2022, as part of our continuing
Board refreshment efforts, we engaged Spencer Stuart as a third party executive search firm to assist the Nominating and Corporate Governance
Committee in identifying, screening and assessing two potential director candidates.
All candidates submitted by stockholders
will be evaluated in the same manner as all other director candidates, provided that the advance notice and other requirements set forth
in our bylaws have been followed. Pursuant to our Bylaws, written notice by stockholders of qualifying nominations for election to our
Board at the 2023 Annual Meeting must have been received by December 2, 2022. We did not receive any such nominations and no other nominations
for election to our Board may be made by stockholders at the 2023 Annual Meeting.
Communications with the Board
Our Board has established a process
to receive communications from interested parties, including stockholders. Interested parties may contact the Chairperson of the Board,
at the following address:
“Chairperson”
c/o Secretary
DigitalBridge Group, Inc.
750 Park of
Commerce Drive
Suite 210
Boca Raton,
FL 33487
or
by email at chairperson@digitalbridge.com.
The Chairperson of the Board will
decide what action should be taken with respect to the communication, including whether such communication should be reported to the Board
of Directors.
Anti-Hedging/Pledging Policy
Our insider trading policy applicable
to all employees of the Company, including all of our officers and members of our Board, among others, strictly prohibits at all times:
|
(1) |
trading in call or put options involving the Company’s securities and other derivative securities, |
|
(2) |
engagement in short sales of the Company’s securities, |
|
(3) |
holding the Company’s securities in a margin account, and |
|
(4) |
pledging the Company’s stock to secure margin or other loans, except as otherwise approved by our
Board. |
24 | DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Information
about Our Board of Directors and Its Committees
During the year ended December
31, 2022, our Board met on 12 occasions. Each director then serving attended at least 75% of the aggregate number of meetings of our Board
and of all committees on which he or she served during his or her period of service.
All directors are expected to attend
the annual meeting of stockholders as provided in our Corporate Governance Guidelines. All of the directors on our Board in May 2022 attended
the 2022 Annual Meeting of Stockholders.
Our Board has established an Audit
Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these standing committees has adopted
a committee charter, which is available on our website at www.digitalbridge.com under the heading “Shareholders—Corporate
Governance” or by writing to:
Investor Relations
DigitalBridge
Group, Inc.
750 Park of
Commerce Drive
Suite 210
Boca Raton,
FL 33487 to request a copy, without charge.
In addition, the Board had three
additional committees in 2022. In 2021, the Board formed a special committee to oversee special counsel in its engagement relating to
the allegations against Thomas J. Barrack, Jr. (the “Special Investigation Committee”). The term of the Special Investigation
Committee expired in 2022, and Mr. Barrack was acquitted in November 2022. The members of the special committee were Ms. Diefenderfer
(Chairperson) and Messrs. McCray and Rasheed.
The Board also formed two separate
independent transaction committees in March 2022 to evaluate and negotiate potential transactions involving conflicts of interest with
senior management. The first committee was composed of Mses. Curtin (Chairperson) and Diefenderfer and Messrs. Carter, Fosheim, McCray,
Rasheed and Steffens and was dissolved following a decision not to pursue a transaction (the “Dynasty Committee”). The second
committee, composed of Messrs. Carter (Chairperson), Fosheim and Rasheed and Mses. Curtin, Diefenderfer and Reiss continues to oversee
the Company’s interest in the ongoing DataBank recapitalization (the “Catapult Committee”).
Each committee of our Board is
composed exclusively of independent directors, as defined by the listing standards of the NYSE. Moreover, the Compensation Committee is
composed exclusively of individuals referred to as “non-employee directors” in Rule 16b-3 of the Exchange Act, and “outside
directors” in Section 162(m) of the Internal Revenue Code of 1986, as amended.
2022 Board Committee Rotation
In connection with our Board’s
dedication to Board refreshment and our company’s digital transformation, the Nominating and Corporate Governance Committee conducted
an extensive evaluation of the skills, qualifications and diversity of our director nominees for the 2023 Annual Meeting. Following this
evaluation, upon the Nominating and Corporate Governance Committee’s recommendation, the Board approved the continuation of the
current committee composition and chairpersons.
DIGITALBRIDGE
2023 PROXY STATEMENT | 25
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
The below chart summarizes our
current Board committee memberships. We anticipate that Mr. Tolley will serve as Chair of the Audit Committee and Mr. Brown will join
the Audit Committee and Compensation Committee following the 2023 Annual Meeting.
 |
Committee Chair |
 |
Committee Member |
 |
Audit
Committee Financial Expert |
| (1) |
Mr. Carter is not a nominee for director at the 2023 Annual Meeting. |
| (2) |
Ms. Curtin serves as our independent, non-executive Chairperson of our Board. |
Audit Committee
Our Board has determined that all
five members of the Audit Committee are independent and financially literate under the rules of the NYSE. In addition, our Board has determined
that current Audit Committee members, J. Braxton Carter, Jon A. Fosheim, Dale Anne Reiss and David M. Tolley are “audit committee
financial experts,” as that term is defined by the SEC. The Audit Committee is responsible for the oversight of, among other things,
our accounting and financial reporting processes, the integrity of our consolidated financial statements and financial reporting process,
our systems of disclosure controls and procedures and internal control over financial reporting, the enterprise-wide risk management policies
of our operations, our compliance with financial, legal and regulatory requirements and our ethics program, the evaluation of the qualifications,
independence and performance of our independent registered public accounting firm, and the performance of our internal audit function.
In addition, the Audit Committee has established and maintains procedures for the receipt of complaints and submissions of concerns regarding
accounting and auditing matters. The Audit Committee met seven times in 2022. The Audit Committee Report is included later within this
Proxy Statement.
Nominating and Corporate
Governance Committee
Our Board has determined that all
members of the Nominating and Corporate Governance Committee are independent under the rules of the NYSE. The Nominating and Corporate
Governance Committee is responsible for, among other things, identifying and recommending to our Board qualified candidates for election
as directors and recommending nominees for election as directors at the annual meeting of stockholders. It also implements and monitors
our ESG program, our board education program and our Corporate Governance Guidelines. It reviews and makes recommendations on matters
involving the general operation of our Board and our corporate governance and annually recommends to our Board nominees for each committee
of our Board. In addition, the Nominating and Corporate Governance Committee annually facilitates the assessment of our Board’s
performance as a whole and of the individual directors and reports thereon to our Board. The Nominating and Corporate Governance Committee
met four times in 2022.
26 | DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Compensation Committee
Our Board has determined that all
members of the Compensation Committee are independent under the rules of the NYSE. The Compensation Committee is responsible for, among
other things, reviewing and approving on an annual basis corporate goals and objectives relevant to our Chief Executive Officer’s
compensation and evaluating our Chief Executive Officer’s performance in light of such goals and objectives, determining compensation
for our executive officers, implementing and administering our equity compensation plans, preparing and submitting a report on executive
compensation for inclusion in our proxy statement and/or annual report and reviewing, evaluating and recommending to the Board, if appropriate,
changes to the compensation for directors. In addition, the Compensation Committee also ensures that compensation plans are designed with
an appropriate balance of risk and reward in relation to the Company’s overall business strategy and do not encourage excessive
or unnecessary risk-taking behavior.
The Compensation Committee may
delegate its authority to members as it deems appropriate, and any actions taken by such members must be reported to the full Compensation
Committee at its next regularly scheduled meeting. The Compensation Committee has the sole authority to retain and terminate such outside
legal, accounting or other advisors to the Compensation Committee as it deems necessary and advisable in its sole discretion, including
compensation consultants. In selecting such advisors or consultants, the Compensation Committee considers the independence of such advisor
or consultant, as determined by it in its business judgment, in accordance with the standards of the NYSE, any applicable rules and regulations
of the SEC and other applicable laws relating to independence of advisors and consultants. The Compensation Committee will be directly
responsible for the appointment, compensation, and oversight of the work of any compensation consultant or other advisor retained by the
Compensation Committee. The Compensation Committee met 12 times in 2022. The Compensation Committee Report is included later within this
Proxy Statement.
Compensation Committee Interlocks
and Insider Participation
There are no Compensation Committee
interlocks or employee participation on the Compensation Committee.
Director
Compensation
Determination of Compensation
Awards
The Compensation Committee has
responsibility for making recommendations to our Board regarding non-employee director compensation. Our goal is the creation of a reasonable
and balanced Board compensation program that aligns the interests of our Board with those of our stockholders. We use a combination of
cash and stock-based compensation to attract and retain highly-qualified candidates to serve on our Board. In setting director compensation,
we consider:
| ■ |
the significant amount of time that directors expend in fulfilling their duties
to us, |
| ■ |
participation on Board committees, |
| ■ |
the skill-level required by us of members of our Board, and |
| ■ |
competitive pay practice data. |
In 2022, the Compensation Committee
engaged an independent compensation consultant, Semler Brossy Consulting Group (“Semler Brossy”), to assist in its review
of competitive practice data regarding non-employee director compensation and to advise the Compensation Committee in connection with
making recommendations to our Board with respect to the amount and form of such compensation. In addition, Semler Brossy provided services
in 2022 relating to executive compensation matters for the Company’s executive officers as discussed in “Compensation Discussion
and Analysis” in this Proxy Statement.
DIGITALBRIDGE
2023 PROXY STATEMENT | 27
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Following
the Compensation Committee’s comprehensive review of competitive practice data and in consideration of advice provided by Semler
Brossy, the Compensation Committee recommended to our Board, and our Board approved, the non-employee director compensation program described
below for 2022.
Non-Employee
Directors
During
2022, our non-employee directors’ fees were as follows:
| Non-Employee
Directors’ Fees |
Annual
Cash Retainers
($) |
Annual
Stock Award
($) |
| Cash
Retainer |
100,000 |
|
| Additional
cash retainer for Chairperson(1) |
125,000 |
|
| Additional
cash retainer for Committee Chairpersons: |
|
|
| ■ |
Audit Committee |
25,000 |
|
| ■ |
Compensation Committee |
20,000 |
|
| ■ |
Nominating & Corporate
Governance Committee |
20,000 |
|
| Additional
cash retainer for Committee Members (other than Chairperson): |
|
|
| ■ |
Audit Committee |
15,000 |
|
| ■ |
Compensation Committee |
10,000 |
|
| ■ |
Nominating & Corporate
Governance Committee |
10,000 |
|
| Granted
promptly following annual re-election, subject to one-year vesting condition(2) |
|
175,000 |
|
(1) |
The Chairperson attends regularly scheduled
committee meetings without any additional compensation for such participation at the committee meetings for which he or she is not a member. |
|
(2) |
To be granted two business days following such director’s
re-election to the Board in the form of restricted shares of Class A common stock, which will vest in full on the one-year anniversary
of the date of grant, subject to the director’s continued service on the Board. In addition, promptly following initial appointment
or election to our Board, a pro rata portion (based on the period from such director’s initial appointment to the first anniversary
of the Company’s most recent annual stockholder meeting) of the Annual Stock Award is granted, subject to vesting on the first anniversary
of the Company’s most recent annual stockholder meeting. |
The
annual retainers are paid quarterly in arrears in cash. In addition, beginning in 2023, directors will receive a per meeting fee of $2,500
for any Board meeting(s) attended once the number of Board meetings exceeds 8 for the fiscal year and $1,500 for any Audit Committee,
Compensation Committee or Nominating & Corporate Governance Committee meeting(s) attended once the number of meetings of such committee
exceeds 8 for the fiscal year. The additional meeting fees are payable quarterly following the end of the previous quarter. The Company
also reimburses each of the directors for their travel expenses incurred in connection with their attendance at Board and committee meetings.
In
2022, (i) members of the Dynasty Committee received six-month retainers of $100,000 ($150,000 for the chairperson), (ii) members of the
Catapult Committee received six-month retainers of $50,000 ($75,000 for the chairperson), and (iii) members of each of the Catapult Committee,
the Dynasty Committee and the Special Investigation Committee received $2,000 per meeting attended in person and $1,000 per meeting attended
virtually. The compensation for these special committees of the Board was determined based on a number of factors, including the anticipated
amount of time expected to be devoted to the committee matters and additional work such committee members, including the Chairperson of
each committee, would be taking on in connection with such director’s participation on such committees.
In
2022, The Board met 12 times, the Audit Committee met 7 times, the Compensation Committee met 12 times, the Nominating & Corporate
Governance Committee met 7 times, the Dynasty Committee met 7 times, the Catapult Committee met 9 times and the Special Investigation
Committee met 7 times.
28
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
Non-Executive
Director Deferred Compensation Program
The
non-executive directors have the right to elect to receive all or a portion of their annual retainers and any additional annual retainers
in the form of deferred stock units in lieu of cash or restricted stock, which units would be issued as of the applicable payment date
and valued based on the closing price of the Company’s shares of Class A common stock on the business day prior to such applicable
payment date. Deferred stock units are payable in shares of the Company’s Class A common stock either upon the director’s
departure from the Board or in annual installments over three years following departure. All deferred stock units are entitled to receive
dividend equivalent payments, which are reinvested into additional deferred stock units. Any such additional deferred stock units will
be subject to the same restrictions and conditions, including any vesting conditions, as the deferred stock units with respect to which
they were credited.
Director
Compensation for 2022
The
following table provides information concerning the compensation of our non-employee directors for 2022:
| Name |
Fees
Earned or
Paid in Cash(1)
($) |
Stock
Awards(2)
($) |
All
Other
Compensation
($) |
Total
($) |
| J.
Braxton Carter |
323,000 |
175,003 |
— |
498,003 |
| Nancy
A. Curtin |
438,000 |
175,003 |
— |
613,003 |
| Jeannie
Diefenderfer |
297,316 |
175,003 |
— |
472,319 |
| Jon
A. Fosheim |
298,000 |
175,003 |
— |
473,003 |
| Gregory
J. McCray |
235,000 |
175,003 |
— |
410,003 |
| Sháka
Rasheed |
295,000 |
175,003 |
— |
470,003 |
| Dale
Anne Reiss |
192,000 |
175,003 |
— |
367,003 |
| John
L. Steffens(3) |
184,564 |
57,310 |
— |
241,874 |
| David
M. Tolley(4) |
42,120 |
119,386 |
— |
161,506 |
|
(1) |
Includes deferred stock units paid in lieu of cash to Ms. Curtin
and Messrs. Fosheim and Steffens. Consists of the following amounts earned and paid in cash or deferred stock units, as applicable, (i)
pursuant to annual director fees and (ii) in connection with service on one or more of the Catapult Committee, the Dynasty Committee and
the Special Investigation Committee: |
| Name |
Annual
Fees |
Special
Committee
Fees |
Total
Fees |
| J.
Braxton Carter |
135,000 |
188,000 |
323,000 |
| Nancy
A. Curtin |
225,000 |
213,000 |
438,000 |
| Jeannie
Diefenderfer |
123,316 |
174,000 |
297,316 |
| Jon
A. Fosheim |
135,000 |
163,000 |
298,000 |
| Gregory
J. McCray |
120,000 |
115,000 |
235,000 |
| Sháka
Rasheed |
125,000 |
170,000 |
295,000 |
| Dale
Anne Reiss |
135,000 |
57,000 |
192,000 |
| John
L. Steffens(3) |
79,564 |
105,000 |
184,564 |
| David
M. Tolley(4) |
42,120 |
— |
42,120 |
|
(2) |
Represents the grant date fair value, computed in accordance with
FASB ASC Topic 718, of the shares of common stock and/or deferred stock units granted to each of our non-employee directors on May 10,
2022, which was for the annual grant in connection with each director’s re-election to the Board (except for Mr. Tolley who was
appointed to the Board on August 30, 2022) on May 4, 2022. As of December 31, 2022, except for (i) 6,680 unvested shares held by each
of Mses. Diefenderfer and Reiss and Messrs. Carter and McCray, (ii) 6,267 unvested shares held by Mr. Tolley |
DIGITALBRIDGE
2023 PROXY STATEMENT | 29
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
and
(iii) 6,692 unvested deferred stock units held by each of Ms. Curtin and Messrs. Fosheim and Rasheed, none of our directors held any unexercised
option awards or unvested stock awards that had been granted as director compensation. Following Mr. Steffen’s resignation from
our Board, all unvested stock awards held by him were accelerated. Each of the stock awards in 2022 was issued in the form of deferred
stock units, except that 100% of the stock awards granted to each of Mses. Diefenderfer and Reiss and Messrs. Carter, McCray and Tolley
were in restricted shares of the Company’s Class A common stock.
|
(3) |
Mr. Steffens resigned from our Board
effective August 29, 2022. |
|
(4) |
Mr. Tolley was appointed to our Board
on August 30, 2022 and therefore, the compensation earned in 2022 includes Mr. Tolley’s pro rata portion of the annual cash retainers
and the initial equity to grant to Mr. Tolley on September 13, 2022. |
Director
Stock Ownership Guidelines
Our
Board adopted the following minimum stock ownership guidelines for non-executive members of our Board:
| Title |
Guideline |
|
| Non-Executive
Directors |
●●●● |
A
multiple of 4x annual director cash base retainer |
Pursuant
to the Non-Executive Independent Director Compensation Policy, each non-executive director is required to maintain ownership of shares
of Class A common stock of the Company (which may include deferred stock units) with a value no less than four-times (4x) the annual cash
base fee for his or her services. In connection with the foregoing share ownership requirement, each non-executive director shall have
until the end of the five-year period commencing upon such director’s initial election to the Board to comply with the minimum share
ownership requirement in order to stand for re-election. Each director is currently in compliance with these ownership requirements or
is within the five-year transition period.
30
| DIGITALBRIDGE
2023 PROXY STATEMENT
EXECUTIVE
OFFICERS
The
following sets forth certain information concerning our executive officers. Our executive officers, who are appointed annually by our
Board of Directors, are critical to creating and executing on the Company’s strategy.
| Name |
Age |
Position |
| Marc C. Ganzi |
51 |
Chief Executive Officer |
| Benjamin
J. Jenkins |
52 |
President
and Chief Investment Officer |
| Jacky
Wu |
40 |
Executive Vice President,
Chief Financial Officer and Treasurer |
| Ronald
M. Sanders |
59 |
Executive Vice President,
Chief Legal Officer and Secretary |
| Liam
Stewart |
45 |
Chief Operating Officer |
| Sonia
Kim |
49 |
Managing Director and
Chief Accounting Officer |
See
“Proposal No. 1: Election of Directors—Board of Directors” above for Mr. Ganzi’s biographical information.
| BEN JENKINS |
|
|
President
and Chief Investment Officer |
|
Benjamin
J. Jenkins is President and Chief Investment Officer
of DigitalBridge, a position he has held since March 2022. Mr. Jenkins previously served as Chief Investment Officer of the Company’s
Digital IM segment and as Chairman of Digital Bridge Holdings prior to its acquisition by DigitalBridge in July 2019. Mr. Jenkins is also
the Co-Founder of Digital Bridge Holdings and the former Chairman of Global Tower Partners. Prior to forming Digital Bridge Holdings in
2013, Mr. Jenkins was a Senior Managing Director and head of the Hong Kong office for The Blackstone Group. During his 12 years at Blackstone,
Mr. Jenkins led over a dozen private equity investments (including Global Tower Partners) across a range of industries and geographies,
including telecommunications deals in developed and emerging markets. Prior to joining Blackstone, Mr. Jenkins was an associate at Saunders,
Karp and Megrue and a financial analyst at Morgan Stanley. Mr. Jenkins received a Bachelor of Arts with honors from Stanford University
and an MBA with distinction from Harvard Business School. |
| JACKY WU |
|
|
Executive
Vice President, Chief Financial Officer and Treasurer |
|
Jacky
Wu is an Executive Vice President, Chief Financial
Officer and Treasurer of DigitalBridge. Prior to joining DigitalBridge in March 2020, Mr. Wu served as Executive Vice President and Chief
Financial Officer of Driven Brands, Inc. (NASDAQ: DRVN), America’s largest automotive aftermarket platform from September 2016 to
March 2020, during which time he oversaw the filing of Driven Brands’ registration statement in connection with its initial public
offering in March 2020. Prior to that, Mr. Wu served as Executive Vice President and Chief Financial Officer of Xura, Inc. (formerly Comverse,
Inc. (NASDAQ: MESG)) from April 2015 to September 2016, when the company was taken private. From May 2010 to March 2015, Mr. Wu was Vice
President at American Tower Corporation (NYSE: AMT), where he was Vice President of Finance and Mergers & Acquisitions from January
2014 to March 2015 and Vice President of Financial Planning and Analysis, US Tower from May 2010 to December 2013. Prior to that, Mr.
Wu spent eight years at Verizon Communications (NYSE: VZ), from 2002 to 2010, where he served in numerous accounting, finance and business
development roles, including as the Director and Chief Financial Officer of Verizon’s Digital Services Inc. from 2009 to 2010. He
graduated summa cum laude, Phi Beta Kappa and with Departmental Honors with a Master of Business Administration and a Bachelor of Science
in Economics from Tulane University. |
DIGITALBRIDGE
2023 PROXY STATEMENT | 31
EXECUTIVE
OFFICERS
| RONALD M. SANDERS |
Executive
Vice President and the Chief Legal Officer and Secretary |
|
Ronald
M. Sanders is an Executive Vice President and the Chief
Legal Officer and Secretary of DigitalBridge. Mr. Sanders is responsible for the management of global legal affairs and generally provides
legal and other support to the operations of DigitalBridge. Prior to joining the DigitalBridge business in 2004, Mr. Sanders was a Partner
with the law firm of Clifford Chance US LLP. Mr. Sanders received his Bachelor of Science from the State University of New York at Albany
in 1985, and his Juris Doctor from the New York University School of Law in 1988. |
| LIAM STEWART |
Chief
Operating Officer |
|
Liam
Stewart is Chief Operating Officer of DigitalBridge,
a position he has held since March 2022. Prior to joining DigitalBridge in September 2020 as the Chief Operating Officer of the Company’s
Digital IM segment, Mr. Stewart was the Chief Financial Officer of Macquarie Infrastructure Corporation from June 2015 until September
2020. Mr. Stewart has approximately 15 years of experience in acquiring, operating and financing infrastructure assets in the U.S., Australia,
and Asia. Prior to joining Macquarie Infrastructure and Real Assets in 2014, Mr. Stewart was a Senior Vice President and Management Partner
at Global Tower Partners (GTP), where he had responsibility for all capital markets initiatives and led over a dozen domestic and international
financings for GTP. He was also responsible for all treasury, capital markets and strategic planning, budgeting, forecasting, investor
relations and reporting initiatives at GTP. Prior to joining GTP in 2009, Mr. Stewart was employed by the Macquarie Group where he had
day to day responsibility for a listed Macquarie affiliate’s North American media and telecommunications investments. Mr. Stewart
has an MBA from the Kellogg School of Management at Northwestern University and a Bachelor of Arts and Bachelor of Laws from the University
of New South Wales. He is also admitted to practice as a solicitor in the state of New South Wales. |
| SONIA KIM |
Managing
Director and Chief Accounting Officer |
|
Sonia
Kim is a Managing Director and Chief Accounting Officer of DigitalBridge,
a position she has held since January 2021. Ms. Kim is responsible for financial reporting and accounting policy matters for DigitalBridge
and its managed vehicles. Prior to joining DigitalBridge in 2008, Ms. Kim was an auditor with Deloitte & Touche LLP and PricewaterhouseCoopers
LLP, serving clients primarily in real estate and financial services industries. Ms. Kim received a Bachelor of Arts in Business Economics
from the University of California, Los Angeles, and is a Certified Public Accountant in the State of California. |
32
| DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 2:
NON-BINDING,
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
Pursuant
to Section 14A(a)(1) of the Exchange Act, we are providing stockholders with the opportunity to approve the following non-binding, advisory
resolution:
“RESOLVED,
that the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the Item
402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
We
are asking our stockholders to indicate their support for the resolution approving our named executive officers’ compensation as
described in this Proxy Statement. This advisory vote is commonly referred to as “say-on-pay.” This vote is not limited to
any specific item of compensation but rather addresses the overall compensation of our named executive officers and our philosophy, policies
and practices relating to their compensation as described in this Proxy Statement in accordance with the SEC’s compensation disclosure
rules. Please see “Compensation Discussion and Analysis” in this Proxy Statement for additional details about our executive
compensation programs, including information about the compensation of our named executive officers for 2022.
The
resolution approving the compensation of our named executive officers is advisory and, therefore, will not have any binding legal effect
on the Company, our Board or the Compensation Committee. Our Board and the Compensation Committee value the opinions of our stockholders
and intend to take the results of the vote on this proposal into account in future decisions regarding the compensation of our named executive
officers.
|
Our
Board of Directors Recommends a Vote “FOR” Approval, on a Non-binding, Advisory
Basis, of Named Executive Officer Compensation. |
DIGITALBRIDGE
2023 PROXY STATEMENT | 33
COMPENSATION
COMMITTEE
REPORT
The Compensation Committee of our
Board of Directors has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with
management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion
and Analysis be included in this Proxy Statement.
Respectfully
submitted by the Compensation Committee:
34 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION
AND ANALYSIS
This Compensation Discussion & Analysis
section discusses the compensation of our named executive officers (NEOs) as follows:
| Name |
Position |
| Marc C. Ganzi |
Chief Executive
Officer |
| Benjamin J. Jenkins |
President and Chief Investment
Officer |
| Jacky Wu |
Executive Vice President,
Chief Financial Officer and Treasurer |
| Ronald M. Sanders |
Executive Vice President,
Chief Legal Officer and Secretary |
| Liam Stewart |
Chief Operating Officer |
Executive
Compensation Program
Executive Leadership
In early 2019, our Board of Directors
determined to transform the strategy of the Company from one focused on multiple real estate asset classes to one focused exclusively
on the digital infrastructure sector, which is experiencing strong secular growth. To execute on this transformative shift, in July 2019,
the Company acquired Digital Bridge Holdings, a leading investor in digital infrastructure, with the agreement that Digital Bridge Holding’s
CEO, Mr. Ganzi, would within a two-year period become CEO of the Company. The business plan envisioned that the Company would rotate its
assets to become a pure play digital infrastructure company and commence an orderly disposition of its legacy assets and liabilities.
Mr. Ganzi was appointed as CEO
in July 2020 and led the Company through the pivot envisioned in July 2019. Highlights from Mr. Ganzi’s tenure include completing
the Company’s rotation to 100% digital profile ahead of schedule, effectively rotating over $80 billion in AUM, and generating net
proceeds of over $1.2 billion in the disposition of the Company’s legacy assets; expanding the Company’s asset management
platform through successful fundraising for the Company’s flagship DBP II fund, which raised $8.3 billion in 2021 and the launch
of new core, credit, and venture strategies; executing two strategic acquisitions which consolidated the Company’s ownership of
its asset management platform and contributed to significant increases in expected earnings. These activities have increased FEEUM to
over $27 billion (from $7 billion in July 2020) and AUM to over $65 billion (from $21 billion in July 2020) as of the date of this proxy
statement. See “Proxy Summary—2022 Year in Review” for additional highlights from 2022.
DIGITALBRIDGE
2023 PROXY STATEMENT | 35
COMPENSATION DISCUSSION AND ANALYSIS
Our Structured Pay Model
With Marc C. Ganzi’s appointment
as our company’s CEO in July 2020, our Compensation Committee engaged in a robust assessment of CEO pay models used among peers
across the alternative asset management industry, which included consideration of feedback from stockholder engagement and recommendations
from Semler Brossy, our independent compensation consultant. Following its assessment, our Compensation Committee adopted a structured
pay model for 2021, which was primarily driven by formulaic-based determinations of rigorous financial and non-financial goals, and included
the following improvements:
|
(1) |
increased the weighting of corporate financial metrics in the Company’s annual incentive plan from 60%
to 75%, and decreased the weighting attributable to pre-established individual goals, objectives and performance targets from 40% to 25% |
|
(2) |
established that 50% of all long-term incentive equity compensation, regardless of whether paid by the Company or Company-managed vehicles,
will be performance-based |
|
(3) |
increased the rigor of the performance hurdles in our total stockholder return (TSR) performance-based equity
awards by increasing the minimum payout threshold from the 10th percentile to the 25th percentile, increasing the threshold for target
payout from the 50th percentile to the 55th percentile, and capping payouts at target when absolute TSR is negative |
This structured pay model, described
further herein, was used to determine compensation for 2022 performance for our NEOs. Our Compensation Committee reviewed our compensation
program with Semler Brossy again in 2023 and believes that our compensation program, which maintains the structured pay model with the
improvements described above, best aligns the incentives of our NEOs with the interests of our stockholders.
Stockholder Engagement
We believe in maintaining an ongoing
dialogue with our stockholders and seek their feedback on a wide range of issues, including compensation practices. At our 2022 Annual
Meeting of Stockholders, our stockholders voted on the say-on-pay advisory proposal to approve the compensation paid to our NEOs. Of the
votes cast, more than 85% were in favor of the say-on-pay proposal at our 2022 Annual Meeting of Stockholders. During 2022, in a stockholder
outreach campaign led by Jon Fosheim, the Chair of our Compensation Committee, we met with institutional investors representing approximately
14% of our outstanding stock to solicit feedback and better understand their individual concerns on our overall executive compensation
program. Neither our CEO nor any other NEO participated in any of these meetings with investors.
As previously noted, we strongly
considered the responses we received from stockholders in implementing our executive compensation program. Our Compensation Committee
deeply values the continued interest of and feedback from our shareholders on our executive compensation program and is committed to maintaining
an active dialogue with them to ensure their perspectives are thoughtfully taken into account. We anticipate another stockholder outreach
campaign, led by Mr. Fosheim in 2023 to continue this dialogue.
36 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Pay
for Performance Philosophy and Program Objectives
OUR
PHILOSOPHY
The
primary goal of our executive compensation program is to align the interests of our executive officers with those of our stockholders
in a way that allows us to attract and retain the best executive talent.
| 1 |
 |
|
|
2 |
|
|
|
3 |
|
| Attract
and Retain Industry Talent |
|
|
Variable
Pay Structure Linked to
Financial Objectives |
|
|
Performance
and Compensation Benchmarking |
| ■ |
Implements
elements consistent with compensation programs of our peers, including base salaries, cash bonuses, equity awards and incentive fee allocations
in our managed funds and investment vehicles, in order for us to remain competitive in the market for attracting and retaining executive
talent
|
|
|
■ |
Focuses
on creating variable pay structures, emphasizing long-term compensation directly related to our stock price, relative TSR and other strategic
and financial objectives
|
|
|
■ |
Benchmarks
our performance and compensation against our peers with consideration of company market capitalization and complexity as indicated by
revenues, range of businesses and other factors to set target levels of compensation and determine the value and level of award opportunities
|
OUR
APPROACH
Our
executive compensation program consists of salary and certain variable pay components, including annual cash bonus, long-term incentive
equity awards, and incentive fee allocations in our managed funds and investment vehicles. Our executive compensation program is designed
to strengthen the link between pay and performance.
| 1 |
 |
|
|
2 |
|
|
|
3 |
|
|
|
4 |
 |
| Annual
Cash Bonus Approach |
|
|
Equity
and Cash Weighting |
|
|
Long-Term
Incentive |
|
|
Incentive
Fee Allocations |
| ■ |
Utilizes
a formulaic approach to determining annual cash bonus awards to executive officers involving objective corporate financial metrics (75%)
and subjective elements (25%) relating to personal performance targets, as opposed to a fully discretionary approach |
|
|
■ |
Sets
incentive targets more heavily weighted towards equity over cash compensation |
|
|
■ |
Grants
at least 50% of long-term incentive equity compensation in the form of performance-based awards based on relative TSR |
|
|
■ |
We
allocate a portion of incentive fees to management, which may result in payments to them, from time to time, upon the achievement of minimum
return hurdles on investments made by our managed funds and investment vehicles. See “Incentive Fee Allocations.” |
DIGITALBRIDGE
2023 PROXY STATEMENT | 37
COMPENSATION
DISCUSSION AND ANALYSIS
COMPENSATION
PRACTICES
We
believe that our executive compensation programs provide appropriate performance-based incentives to attract and retain leadership talent
in the highly competitive market in which we operate, to align management and stockholder interests and to continue to drive our long-term
track record of superior returns to stockholders. The following are key features of our executive compensation programs:
| |
|
What
We Do |
|
|
| |
✔ |
Pay
for performance. The vast majority of total compensation,
including payments from incentive fee allocations, is tied to performance (i.e., there are minimum incentive targets, but not guaranteed
minimum payments) and salaries comprise a relatively small portion of each executive’s overall compensation opportunity.
|
|
|
| |
✔ |
Long-term
alignment with stockholders. Our equity incentive
awards are subject to time-based, multi-year vesting schedules to enhance executive officer retention. |
|
|
| |
✔ |
Relative
TSR Performance Alignment. We align the interest
of our executive officers with our long-term investors by designing our equity compensation program to provide for future multi-year,
performance-based equity awards based on relative total stockholder return performance with target set at 55th percentile.
|
|
|
| |
✔ |
Absolute
TSR Performance Cap. Beginning in 2020, payouts
of performance-based equity awards are capped at target when absolute TSR is negative. |
|
|
| |
✔ |
Emphasis
on Performance-Based Awards. 50% of all long-term
incentive awards granted to executive officers are performance-based (regardless of the source of such award).
|
|
|
| |
✔ |
Clawback
Policy. We impose a clawback policy with respect
to incentive payments. |
|
|
| |
✔ |
Stock
Ownership Guidelines. We follow robust stock ownership
guidelines for our executives and directors. |
|
|
| |
✔ |
Peer
Benchmarking. We consider and benchmark peer companies
in establishing executive compensation. |
|
|
| |
✔ |
Independent
Compensation Consultant. An independent compensation
consultant is retained by the Compensation Committee. |
|
|
| |
|
What
We Don’t Do |
|
| |
x |
No
Tax Gross Ups. We do not provide tax gross-ups
on compensation payments made in connection with a change of control. |
|
| |
x |
No
Guaranteed Bonuses. We do not provide guaranteed
bonuses. |
|
| |
x |
No
Single Trigger Cash Severance. We do not provide
for single trigger cash severance in connection with a change of control. |
|
| |
x |
No
Dividends on Unearned Performance-Based Awards. We
will not pay dividends or distributions on unearned equity awards subject to performance-based vesting. |
|
| |
x |
No Hedging or Pledging. We
do not allow hedging or pledging of Company securities.
|
|
WE
PAY FOR PERFORMANCE
Variable
pay, consisting of long-term incentive equity awards, annual cash bonus and, if any, incentive fee allocations, constitutes the vast majority
of our executive compensation. This weighting towards variable pay allows the Compensation Committee to reward strong performance and
penalize poor performance in both our business operations and our stock price. Our variable pay components contain structural elements
from alternative asset managers in recognition that the incentives of our executives need to be aligned with stockholders as well as our
private fund investors.
38
| DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
To
build even stronger pay for-performance alignment with our stockholders, 50% of long-term incentive equity awards granted by the Company
are “at-risk” performance-based stock awards, the ultimate value of which depends on the Company’s total stockholder
return relative to peer companies based on future performance.
The
following charts present the ratio of the components of total direct compensation (salary, annual cash bonus and equity awards) and incentive
fee payments in 2022 for our Chief Executive Officer individually, and the weighted average of each component for our other current NEOs
as a group:
Extraordinary
Incentive Fees Paid in 2022
In
2022, several transactions resulted in the Company receiving its first payments of carried interest realized on digital infrastructure
investments, the most important of which was the first stage of the DataBank recapitalization. The DataBank recapitalization transactions
involved the sale of a portion of the Company’s ownership interest in DataBank, which decreased the Company’s interest from
20% as of December 2021 to 11% as of December 2022 and generated $425 million in net proceeds to the Company (including the Company’s
share of carried interest, net of allocation to employees), reflecting a 2.0x multiple of invested capital since the Company’s initial
investment in DataBank in December 2019. In addition to providing an an excellent return on the Company’s investment and substantial
liquidity to the Company, the DataBank transactions advanced the Company’s goals to deconsolidate DataBank, simplify its business
model and financial reporting and align the Company’s balance sheet more closely with the asset management business model. Approximately
79% of the incentive fees paid to our NEOs in 2022 were from carried interest realized in connection with the successful DataBank recapitalization
in the second half of 2022.
In
aggregate, the Company received $32.6 million (net of allocation to employees and to Wafra) of carried interest in 2022, $20.1 million
of which was attributable to the partial DataBank recapitalization described above. The remaining $12.5 million was attributable to sales
of investments by DBP I and DBP II, which represented significant milestones as the first exit transactions from our flagship funds and
resulted in profits for and the return of capital to our fund investors. We believe that these successful outcomes support the Company’s
strategy, have enhanced our ability to raise new funds and new capital and provided other tangible benefits to the Company.
The
incentive fee payments reported in this proxy statement were made pursuant to contractual arrangements with our NEOs determined by incentive
fee allocations made in prior periods. See “Incentive Fee Allocations” below for a discussion of incentive fee allocations
to our NEOs. While payments on incentive fee allocations are not predictable, we anticipate that such payments may continue to be a significant
element of executive compensation over the long term as our managed funds mature and we exit other investments that generate profits for
the Company and our investors. We believe creating strong alignment between our executives and our private fund investors through incentive
fee allocations to our
DIGITALBRIDGE
2023 PROXY STATEMENT | 39
COMPENSATION
DISCUSSION AND ANALYSIS
NEOs
and key employees is important to the continued growth of our investment management business and serves to benefit our stockholders.
The
incentive fee payments to our NEOs in 2022 in connection with the transactions described above were reviewed by the Compensation Committee
and factored into its 2022 compensation decisions. See “2022 Total Recurring Direction Compensation (NEOs)” for a review of
decreases to total direct compensation to our NEOs and “Pay Versus Performance—Compensation Actually Paid and Cumulative TSR”
for a review of the decrease in ‘compensation actually paid’ to our NEOs from 2021 to 2022.
Process
for Determining Compensation
During
the first quarter of each fiscal year, the Compensation Committee determines base salaries, target annual cash bonuses and long-term incentive
equity awards and adopts an annual incentive plan, which establishes a formulaic approach to determining the amount of target cash bonuses
to be paid, for executive officers. The Compensation Committee engages Semler Brossy, a nationally recognized independent consulting firm,
to review and provide independent analysis and recommendations to the Compensation Committee regarding compensation to our NEOs, our annual
incentive plan our peer group, and other compensation matters based on their experience and relevant market data.
During
the 2022 evaluation period, to establish a framework for executive compensation for 2022, the Compensation Committee and Semler Brossy
discussed each of the elements of our compensation plan, including cash bonus, long-term incentive equity awards and incentive fee allocations,
carefully evaluated details of equity compensation plans within the Company’s peer group and reviewed other relevant company published
survey data. Semler Brossy met with members of the Compensation Committee and management in separate meetings and calls regarding these
matters. In addition, the Compensation Committee considered the Company’s performance and relative stockholder return, the amount
of compensation payable, including annual incentive awards, to similarly situated officers within our peer group and prior stockholder
votes on executive compensation, among other factors, prior to adopting the 2022 Annual Incentive Plan.
The
2022 Annual Incentive Plan combines both objective and subjective measures for evaluating cash bonus compensation of our NEOs. In early
2023, the Compensation Committee made annual cash bonus determinations for our NEOs under the 2022 Annual Incentive Plan as further described
herein.
PEER
BENCHMARKING
Based
on recommendations from Semler Brossy, we effectuated a re-balance of our peer group in 2022 to reflect the completion of our digital
transformation as well as our company’s size in terms of revenue, assets, market capitalization and enterprise value.
Our
peer group for 2022 consisted of the following companies:
| |
American
Tower
Apollo Global Management
Ares Management
Blackstone Group
Carlyle Group |
|
|
|
Crown Castle International
CyrusOne
Digital Realty Trust
Equinix
Iron Mountain |
|
|
|
KKR & Co
SBA Communications Switch
Uniti Group |
Based
on recommendations from Semler Brossy, we added Blue Owl Capital, Cohen & Steers, Federated Hermes, Hamilton Lane, StepStone Group
and TPG and removed American Tower, Crown Castle International, CyrusOne, Equinix, Digital Realty Trust, Iron Mountain, SBA Communications,
Switch and Uniti Group for 2023. These changes effectuate a re-balance of our peer group to reflect our focus on investment management
and intent to deconsolidate our digital operating assets.
40
| DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Our
peer group for 2023 consists of the following companies:
| |
Apollo
Global Management
Ares
Management
Blackstone
Group
Blue
Owl Capital |
|
|
|
Carlyle
Group
Cohen
& Steers
Federated
Hermes
Hamilton
Lane |
|
|
|
KKR
& Co
StepStone
Group
TPG
|
2022
Compensation Decisions
Based
upon its review of our corporate performance, as described above, and the individual performance of each NEO as discussed in this Compensation
Discussion and Analysis, the Compensation Committee approved the compensation amounts outlined in the table below. This table provides
a comprehensive summary of each NEO’s total recurring direct compensation for the 2022 performance year. This perspective may be
useful in reviewing key incentive compensation decisions, as this is how the Compensation Committee considers performance and pay, with
incentive compensation generally reflective of prior year’s performance. It should be noted that the table below is not intended
to be a substitute for the Summary Compensation Table presented in “Compensation Tables and Related Narrative,” as certain
amounts in the table below are different than the amounts in the Summary Compensation Table. The most significant differences are that
this table (i) reflects long-term incentive equity awards granted in March 2023 for the 2022 performance year, while the Summary Compensation
Table provides the value of the equity awards for the year in which they were granted and (ii) excludes non-recurring compensation items
included in the All Other Compensation column of the Summary Compensation Table.
2022
TOTAL RECURRING DIRECT COMPENSATION (NEOs)
| Executive |
Salary
($) |
Annual
Cash
Bonus
($) |
Long-Term
Incentive Equity
Awards(1)
($) |
Total
Direct
Compensation
($)(2) |
%
Change
from
2021 to
2022(3) |
| Marc
C. Ganzi |
1,200,000 |
1,697,189 |
2,545,783 |
5,442,972 |
(59.1)% |
| Benjamin
J. Jenkins |
700,000 |
492,888 |
1,600,000 |
2,792,888 |
n/a |
| Jacky
Wu |
650,000 |
900,000 |
2,000,000 |
3,550,000 |
7.4% |
| Ronald
M. Sanders |
475,000 |
1,003,380 |
1,688,000 |
3,166,379 |
(22.3)% |
| Liam
Stewart |
600,000 |
538,657 |
1,600,000 |
2,738,657 |
n/a |
| Total |
3,625,000 |
4,632,113 |
9,433,782 |
17,690,896 |
n/a |
| (1) |
Represents the dollar amount of 2022
grants approved by the Compensation Committee in 2023. |
| (2) |
Excludes incentive fee allocation
payments. See “Incentive Fee Allocations” for a discussion of incentive fee allocations and the variable nature of incentive
fee payments. |
| (3) |
Mr. Jenkins and Mr. Stewart became
executive officers of the Company in March 2022. |
Elements
of Compensation
The
key elements of our executive compensation program are as follows:
ANNUAL
BASE
SALARY |
|
ANNUAL CASH
BONUS |
|
LONG-TERM
INCENTIVE EQUITY
AWARDS |
|
INCENTIVE FEE
ALLOCATIONS |
|
OTHER BENEFITS |
DIGITALBRIDGE
2023 PROXY STATEMENT | 41
COMPENSATION
DISCUSSION AND ANALYSIS
ANNUAL
BASE SALARY
Base
salaries are designed to compensate our executive officers at a fixed level of compensation that is market competitive and commensurate
with each executive’s skills, experience and contributions. In determining base salaries, our Compensation Committee considers a
number of factors, including, among other factors, each executive officer’s role and responsibilities, qualifications and experience,
past performance, unique skills, future potential with our Company, compensation paid for similar positions within our peer group (including
other comparable companies, as applicable) and internal pay equity.
The
table below sets forth the base salaries of our NEOs for the 2021 and 2022 years:
| |
|
Base
Salary |
|
Percentage |
| Named
Executive Officer |
|
2021
($) |
|
2022
($) |
|
Change
(from
2021 to
2022) |
| Marc
C. Ganzi |
|
1,200,000 |
|
1,200,000 |
|
0% |
| Benjamin
J. Jenkins |
|
n/a |
|
700,000 |
|
n/a |
| Jacky
Wu |
|
600,000 |
|
650,000 |
|
8% |
| Ronald
M. Sanders |
|
475,000 |
|
475,000 |
|
0% |
| Liam
Stewart |
|
n/a |
|
600,000 |
|
n/a |
ANNUAL
CASH BONUS
The
annual bonus payment is designed to incentivize our executive officers at a variable level of compensation based on performance of both
our Company and each individual. The Compensation Committee considers corporate goals, objectives and performance in determining the annual
bonus payment under our Annual Incentive Plan.
The
table below sets forth the base salaries of our NEOs for the 2021 and 2022 years:
| |
|
Annual
Cash Bonus |
|
|
| Named
Executive Officer |
|
2021
($) |
|
2022
($) |
|
Change
(from
2021 to
2022) |
| Marc
C. Ganzi |
|
4,844,052 |
|
1,697,189 |
|
(65.0)% |
| Benjamin
J. Jenkins |
|
n/a |
|
492,888 |
|
n/a |
| Jacky
Wu |
|
1,206,889 |
|
900,000 |
|
(25.4)% |
| Ronald
M. Sanders |
|
1,910,908 |
|
1,003,380 |
|
(47.5)% |
| Liam
Stewart |
|
n/a |
|
538,657 |
|
n/a |
2022
ANNUAL INCENTIVE PLAN OVERVIEW
In
March 2022, the Compensation Committee established the 2022 Annual Incentive Plan and approved target cash bonuses for our then-current
NEOs. The 2022 Annual Incentive Plan provided a 75% weighting across five corporate financial metrics:
■ Digital
FEEUM Capital Raise (25%)
■ Digital
IM Revenues (20%)
■ Digital
Operating Revenues (5%)
■ Digital
IM Fee Related Earnings (“FRE”) (20%)
■ Digital
Operating Adjusted EBITDA (5%)
42
| DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
In
addition, the 2022 Annual Incentive Plan provided a 25% weighting to individual goals and objectives (based on pre-established individual
performance targets applicable to the responsibilities of the relevant executive officer). For 2022, the objective financial metric performance
hurdles that our NEOs were required to achieve were established in connection with the Company’s budgeted operations for 2022. The
Compensation Committee believes that the corporate financial metric targets established in the 2022 Annual Incentive Plan were robust
and rigorous targets at the time they were established.
For
2022, the individual goals component of the 2022 Annual Incentive Plan was based on specific, measurable goals and objectives, which varied
by individual. These individual goals and objectives related to the following five areas of business focus for the Company during 2022:
(1) rotating AUM, (2) growing the investment management business, (3) developing our ESG program, (4) increasing net asset value and stock
price and (5) enhancing the efficiency of our operations. For each of these areas of focus, the Compensation Committee considered the
specific achievements of the targets and goals that were established, as set forth in the following table:
| |
|
2022
Management Priorities |
Results |
| 1 |
ROTATING
AUM |
■ Close
the Wellness Infrastructure Sale in the first quarter of 2022 |
■ Closed
in the first quarter of 2022 for net equity value of $316 million ($161 million in cash and $155 million 5-year seller’s note) |
| ■ Wind
down BRSP shares over the next 12-18 months |
■ 34.9
million shares were sold for net proceeds of $201 million in February 2023 |
| 2 |
GROWING
INVESTMENT MANAGEMENT |
■ Restructure
Wafra Investment |
■ Closed
transaction with Wafra in May 2022 to acquire stake in IM business |
|
■ Establish
operations for Credit, SAF and Ventures
■ Raise
$5.0 billion of FEEUM in 2022 |
■ Credit
and SAF each held first closes; continued to expand seed portfolio for Ventures with leading Series C round for ConnectBase
■ $4.8
billion raised |
|
|
| 3 |
DEVELOPING
OUR ESG PROGRAM |
■ Continue
to lead on ESG and DEI; increase all ESG & DEI metrics |
■ Continued
adoption of DBRG’s ESG program at portfolio companies; improvements across the board |
| 4 |
INCREASING
NET ASSET VALUE AND STOCK PRICE |
■ Increase
DBRG share price
■ Exceed
2022 Guidance |
■ Risk-off
environment created headwinds; we remain optimistic for 2023
■ Organic
FRE miss; however, significant nominal beat inclusive of Wafra & AMP transactions |
|
|
| 5 |
ENHANCING
THE EFFICIENCY OF OUR OPERATIONS |
■ Achieve
positive recurring corporate cash flows |
■ Run-rate
recurring cash flows expected to become positive following the AMP transaction closing and beginning of SAF/Credit fees |
DIGITALBRIDGE
2023 PROXY STATEMENT | 43
COMPENSATION
DISCUSSION AND ANALYSIS
Based
on achievement levels of the performance goals and related payout percentages described below, we paid the following amounts to our NEOs
as annual cash bonuses for 2022 based on the following overall payout percentage of the target opportunity for each of our NEOs:
| Name |
Payout
Percentage of Target |
2022
Annual Cash Bonus
($) |
| Marc
C. Ganzi |
118% |
|
1,697,189 |
|
| Benjamin
J. Jenkins |
70% |
|
492,888 |
|
| Jacky
Wu(1) |
100% |
|
900,000 |
|
| Ronald
M. Sanders |
70% |
|
1,003,380 |
|
| Liam
Stewart |
70% |
|
538,657 |
|
| (1) |
Per Mr. Wu’s amended and restated
employment agreement, the Company is required to pay his 2022 incentive compensation at minimum of target. |
In
March 2023, the Compensation Committee determined the performance and payout levels that were achieved for our annual cash bonuses for
2022 based on available financial results for the corporate financial metrics component and based on the individual goals and objectives
component described below. The following summarizes the performance and payout decisions made by the Compensation Committee for each of
the performance goals established in the 2022 Annual Incentive Plan:
| |
|
|
|
|
|
|
|
|
Other
NEO Payout |
|
CEO
Payout |
| |
Minimum |
|
Target |
|
Maximum |
|
Actual |
|
Percentage
of |
|
Percentage
of |
| Performance
Goal |
|
|
($
in million) |
|
|
|
Target(1) |
|
Target(1) |
| Digital
FEEUM Capital Raise |
3,535.0 |
|
4,535.0 |
|
5,535.0 |
|
4,825.6 |
|
129% |
|
230% |
| Digital
IM Revenues |
175.5 |
|
195.0 |
|
214.5 |
|
176.1 |
|
3% |
|
5% |
| Digital
Operating Revenues |
41.5 |
|
46.1 |
|
50.7 |
|
47.4 |
|
127% |
|
225% |
| Digital
IM FRE |
108.0 |
|
120.0 |
|
132.0 |
|
96.3 |
|
0% |
|
0% |
| Digital
Operating Adjusted EBITDA |
21.2 |
|
23.6 |
|
26.0 |
|
24.1 |
|
123% |
|
214% |
| Individual
Goals & Objectives |
Varies
by individual (0-200%)(2) |
|
|
100% |
|
150% |
| (1) |
Payout range under the 2022 Annual
Incentive Plan was established at 0-425% for our Chief Executive Officer and 0-200% for each of our other NEOs, with linear interpolation
for performance between the minimum and maximum ranges set forth above. |
| (2) |
The Compensation Committee determined
that the payout percentage for the individual goals & objectives component was 100% for each of our NEOs other than our Chief Executive
Officer. |
LONG-TERM
INCENTIVE EQUITY AWARDS
The
Compensation Committee approved the following long-term incentive equity award grants to our NEOs for 2022. The actual number of shares
or restricted stock units, as applicable, granted pursuant to each type of award was based on the dollar amount of the award divided by
the closing price of our Class A common stock on the third trading day following the release of the Company’s earnings for the year
ended December 31, 2021.
| |
|
|
|
|
|
|
|
|
|
| |
DBRG
Time- |
|
DBRG
Performance- |
|
DBRG
Total Long-
Term
Incentive |
|
%
of DBRG Total Long-Term
Incentive
Equity Award |
| Name |
Based Award
($) |
|
Based Award
($) |
|
Equity Award
($) |
|
Time-
Based |
|
Performance-
Based |
| Marc
C. Ganzi |
3,633,048 |
|
3,633,048 |
|
7,266,096 |
|
50% |
|
50% |
| Benjamin
J. Jenkins(1) |
450,000 |
|
— |
|
450,000 |
|
100% |
|
— |
| Jacky
Wu |
750,000 |
|
750,000 |
|
1,500,000 |
|
50% |
|
50% |
| Ronald
M. Sanders |
844,000 |
|
844,000 |
|
1,688,000 |
|
50% |
|
50% |
| Liam
Stewart(1) |
1,200,000 |
|
— |
|
1,200,000 |
|
100% |
|
— |
44
| DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
| (1) |
Messrs. Jenkins and Stewart became
NEOs following amendments to their employment agreements on March 28, 2022, which was after the date we issued awards for 2022 performance.
We do not issue performance-based restricted stock units to employees other than our NEOs, so at the time of grants, Messrs.
Jenkins and Stewart received only time-based restricted Class A common stock. |
The
DBRG time-based award for 2022 performance was issued in shares of our restricted Class A common stock and vests annually over a three-year
period, subject to continued employment. The DBRG performance-based award for 2022 performance was issued in restricted stock units and
has a three-year performance period (March 15, 2022 to March 14, 2025) with payout opportunity ranging from zero to 200% of the target
value, depending on the relative total stockholder return performance of our company as compared to our peer group for 2022.
Recipients
of the 2022 DBRG performance-based award will not be entitled to receive dividends or dividend equivalents before performance-based vesting
has occurred.
As
part of the meaningful changes to our 2020 executive compensation program, the Compensation Committee increased the rigor of the performance
payout thresholds of relative TSR performance-based awards by raising the bar for minimum and target payouts to the 25th percentile and
55th percentile, respectively, for performance periods beginning after 2021. For the 2022 DBRG performance-based award, these increased
bars were continued, and the following table provides the scale which will be used to determine the payout percentage (if any) upon completion
of the three-year performance cycle for such awards:
| Relative
TSR Percentile for the Performance Cycle |
|
%
of Target Restricted Stock Units Vested |
| Less
than 25th percentile |
|
0% |
|
| At
or greater than 25th percentile, but less than 30th percentile |
|
50% |
|
| At
or greater than 30th percentile, but less than 40th percentile |
|
60% |
|
| At
or greater than 40th percentile, but less than 50th percentile |
|
80% |
|
| At
or greater than 50th percentile, but less than 55th percentile |
|
90% |
|
| At
or greater than 55th percentile, but less than 60th percentile |
|
100% |
|
| At
or greater than 60th percentile, but less than 70th percentile |
|
120% |
|
| At
or greater than 70th percentile, but less than 80th percentile |
|
140% |
|
| At
or greater than 80th percentile, but less than 90th percentile |
|
160% |
|
| At
or greater than 90th percentile, but less than 100th percentile |
|
180% |
|
| At
100th percentile |
|
200% |
|
Further,
the Compensation Committee determined that for performance-based awards beginning in 2020, payouts will be capped at 100% of target when
absolute TSR is negative.
2020
PSU awards
The
performance-based award for 2020 was issued in restricted stock units and had a three-year performance period (March 15, 2020 to March
14, 2023) with payout opportunity ranging from zero to 200% of the target value, depending on the relative TSR of the Company as compared
to the Company’s peer group for 2020. Based on our TSR during the performance period relative to the peer group, our percentile
rank was 31st and, as a result, our NEOs for 2020 earned 60% of the 2020 performance-based award, which amount was settled in shares of
our Class A common stock as follows: Mr. Ganzi—7,333; Mr. Sanders—33,333; Ms. Kim 4,139.
DIGITALBRIDGE
2023 PROXY STATEMENT | 45
COMPENSATION
DISCUSSION AND ANALYSIS
INCENTIVE
FEE ALLOCATIONS
The
Company may earn incentive fees from its managed private funds and investment companies. Incentive fees are determined based on the performance
of the investment vehicles subject to the achievement of minimum return hurdles in accordance with the terms set out in the respective
governing agreements. As these hurdles are negotiated with third-party investors who have an interest to set hurdles as high as possible,
we believe the hurdles established are rigorous. In general, hurdle rates for incentive fee allocations are met when our third-party investors
receive 7-9% annualized returns, after which we are entitled to receive 10-20% of profits. A portion of the incentive fees earned by the
Company (generally 60-65%) is allocated to senior management, investment professionals and certain other employees of the Company. The
incentive fee allocations awarded to our employees, including our executive officers, are generally subject to vesting over a three to
four year period. Because the amount payable pursuant to the incentive fees is directly tied to the applicable vehicle’s performance,
we believe that incentive fee allocations promote a strong alignment of interests between the investors in those funds and our NEOs, and
in turn, benefits our stockholders. In addition, most alternative asset managers, including several of our peers, use incentive fee allocations
as a significant means of compensating and motivating their executives and investment professionals, and we believe that we must do the
same in order to attract and retain the top talent. Further, incentive fee allocations are paid by our third-party investors and, as a
result, such incentive fee allocations paid to our management team do not impact our general and administrative expense on a net basis.
As
we cannot predict the timing and amount of future payments in respect of incentive fee allocations, we do not solely use incentive fee
allocations to compensate our executives and instead have maintained a traditional corporate compensation structure (i.e., base salary,
annual cash bonus and long-term incentives). However, as the Company’s digital investment management business continues to grow,
it is expected that incentive fee allocations from the digital investment management business may become a more significant portion of
executive compensation. Our Compensation Committee continues to evaluate the structure and elements of our executive compensation program,
including but not limited to the potential increase in incentive fee allocation payments over time.
Individual
incentive fee allocations to our executive officers are approved by the Compensation Committee and based on recommendations made by management.
The investment fee allocation is subject to certain time-based vesting conditions, which we believe fosters employment retention.
Amounts
paid to our NEOs in respect of incentive fee allocations are disclosed in the “All Other Compensation” column in the Summary
Compensation Table. A portion of incentive fee allocations payable is generally not distributed to the recipient and is instead held in
escrow in order to enhance the recipient’s ability to satisfy any future clawback obligation, however, the amount reflected in the
Summary Compensation Table is inclusive of the amounts held in escrow. We exclude accrued but unvested incentive allocation payments from
the periods disclosed in the Summary Compensation Table in recognition that such amounts remain subject to forfeiture and are therefore
not reflective of compensation paid or earned by the NEOs during such periods.
OTHER
BENEFITS
The
Company provides a comprehensive benefits program to executives, including our NEOs, which mirrors the program offered to our other employees.
These benefits include, among other things, a 401(k) plan with matching contributions from the Company equal to 100% of the first 5% of
employee contributions and health and welfare benefits. Our NEOs participate on the same terms as other employees under these plans. The
Company may also provide, from time to time, certain perquisites to our NEOs, including pursuant to the terms of their employment agreements
(see “Employment Agreements” below). Refer to “Compensation Tables and Related Narrative—Summary Compensation
Table” below for additional information.
46
| DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Risk Management
The
Compensation Committee oversees all of our executive compensation policies and practices. In structuring our executive compensation program,
the Compensation Committee is focused on enhancing the alignment of interest between our executive management and our stockholders. We
believe that any risks arising from our policies and practices are not reasonably likely to have a material adverse effect on us, including
as a result of our clawback policy and stock ownership guidelines discussed below.
CLAWBACK
POLICY
In
August 2021, our Compensation Committee amended our clawback policy by expanding the scope of conduct by our employees which may result
in clawbacks by the Company. With respect to compensation for our executive officers on or after January 10, 2017, the Compensation Committee
may require the repayment or forfeiture of incentive payments to an executive officer on the basis of our performance in the event that
(i) there may be a restatement of our financial statements filed with the SEC and a lower payment would have been made to the executive
officer based upon the restated financial results, or (ii) it may be subsequently determined that the achievement of a performance goal
(other than financial results covered in (i)) was not met or was only met at a level that would have resulted in a lower payment to the
executive officer and such executive officer knowingly provided inaccurate information that caused the incorrect determination and was
terminated for cause. Pursuant to this clawback policy, our Board may require the repayment or forfeiture of the amount by which any of
the individual executive officer’s incentive payments received during the three-year period preceding either the publication of
the restated financial statements or the determination that achievement was not met (or only met at a lower level), respectively, exceeded
the lower payment that would have been made based on the restated financial statements or such determination. In addition, the clawback
policy provides that if the Board determines that an employee of the Company has engaged in conduct detrimental to the Company on or after
August 4, 2021, whether or not in the scope of his or her employment with the Company, that does cause, or is reasonably likely to cause,
significant reputational harm to the Company, the Compensation Committee may, in its discretion, (i) recover all or part of any equity-based
incentive compensation made to such employee during the three year period prior to such determination, (ii) recover all or part of any
distributions made to such employee during the three year period prior to such determination in respect of carried interest allocations,
or (iii) revoke any carried interest allocations made to such employee during the three year period prior to such determination. The Compensation
Committee expects to amend the clawback policy to comply with new NYSE rules that will be effective in the third quarter of 2023.
STOCK
OWNERSHIP GUIDELINES
Our
Compensation Committee adopted minimum equity ownership guidelines for our executive officers. Pursuant to these guidelines, such executive
officers are expected to own an aggregate number of shares of common stock, restricted stock units of DigitalBridge or common membership
units in our Operating Company (“OP Units”) or long-term incentive units in our Operating Company (“LTIP Units”),
whether vested or not, with an aggregate market value as follows:
| Title |
Guideline |
| Chief
Executive Officer and President |
●●●●●● |
A
multiple of 6X base salary in effect from time-to-time |
| Chief
Financial Officer |
●●●● |
A
multiple of 4X base salary in effect from time-to-time |
| Other
Executive Officers |
●●● |
A
multiple of 3X base salary in effect from time-to-time |
For
purposes of determining compliance with these guidelines, equity that remains subject to performance-based vesting conditions (i.e., vesting
based on the satisfaction of criteria other than, or in addition to, continued employment) is not counted. Ownership includes shares or
units owned: (a) by such person directly or indirectly through a broker or other nominee holder; (b) by such person’s immediate
family members sharing such person’s household; (c) by trusts for the benefit of such person or such person’s
DIGITALBRIDGE
2023 PROXY STATEMENT | 47
COMPENSATION
DISCUSSION AND ANALYSIS
immediate
family members; (d) by entities controlled by such person and/or such person’s spouse and of which a majority of the equity interests
are owned by such person or such person’s immediate family members; or (e) in such person’s 401(k) plan, individual retirement
account or employee stock purchase or deferred compensation plan.
Compliance
with these guidelines is measured as of the end of each fiscal year and, for any executive officer who did not hold such position as of
the date these guidelines were adopted, compliance will first be measured as of the end of the fifth full fiscal year following the year
in which such officer was initially appointed to such position. All of our NEOs were in compliance with the policy as of the December
31, 2022, or are on track to be by the first applicable measurement date.
Compensation
Tables and Related Narrative
Summary
Compensation Table
The
following table shows the compensation for each of our NEOs in accordance with Item 402(c) of Regulation S-K. In 2022, the successful
DataBank recapitalization and two other transactions resulted in carried interest payments to the Company and certain NEOs, which are
included in ‘All Other Compensation.’ For a discussion of these transactions and the associated benefits to the Company, see
“Extraordinary Incentive Fees Paid in 2022” above. For an overview of the decrease in compensation actually paid to our NEOs
from 2021 to 2022, see “Pay Versus Performance—Compensation Actually Paid and Cumulative TSR.”
| Name |
|
Year |
|
|
Salary
($) |
|
|
Bonus
($)
|
|
|
Stock
Awards(1)
($) |
|
|
Non-Equity
Incentive Plan Compensation ($) |
|
|
All
Other Compensation ($) |
|
|
Total
Compensation ($) |
|
| Marc C. Ganzi |
|
2022 |
|
|
|
1,200,000 |
|
|
|
— |
|
|
|
7,246,051 |
|
|
|
1,697,189 |
|
|
|
28,178,268 |
(2) |
|
|
38,321,508 |
|
| Chief
Executive Officer and President |
|
2021 |
|
|
|
1,200,000 |
|
|
|
— |
|
|
|
10,922,100 |
|
|
|
4,844,052 |
|
|
|
5,492,882 |
(3) |
|
|
22,459,034 |
|
| |
2020 |
|
|
|
1,060,000 |
|
|
|
3,125,000 |
|
|
|
176,489 |
|
|
|
— |
|
|
|
454,290 |
(4) |
|
|
4,815,779 |
|
|
Benjamin
J. Jenkins
President
and Chief Investment
Officer |
|
2022 |
|
|
|
700,000 |
|
|
|
— |
|
|
|
424,552 |
|
|
|
492,888 |
|
|
|
18,253,513 |
(2) |
|
|
19,870,954 |
|
| Jacky Wu |
|
2022 |
|
|
|
650,000 |
|
|
|
266,000 |
|
|
|
1,545,578 |
(5) |
|
|
634,000 |
|
|
|
567,361 |
(2) |
|
|
3,662,939 |
(5) |
| Executive
Vice President, Financial Officer and Treasurer |
|
2021 |
|
|
|
600,000 |
|
|
|
— |
|
|
|
4,190,479 |
|
|
|
1,206,889 |
|
|
|
254,095 |
(3) |
|
|
6,251,463 |
|
| |
2020 |
|
|
|
369,039 |
(6) |
|
|
585,000 |
|
|
|
858,883 |
|
|
|
— |
|
|
|
12,641 |
(4) |
|
|
1,825,563 |
|
| Ronald M. Sanders |
|
2022 |
|
|
|
475,000 |
|
|
|
— |
|
|
|
1,746,474 |
(5) |
|
|
1,003,380 |
|
|
|
536,626 |
(2) |
|
|
3,761,480 |
(5) |
Executive
Vice President,
General Counsel and Secretary |
|
2021 |
|
|
|
475,000 |
|
|
|
— |
|
|
|
1,966,564 |
|
|
|
1,910,908 |
|
|
|
26,677 |
(3) |
|
|
4,379,149 |
|
| |
2020 |
|
|
|
450,000 |
|
|
|
1,350,000 |
|
|
|
802,221 |
|
|
|
— |
|
|
|
917,649 |
(4) |
|
|
3,519,870 |
|
|
Liam
Stewart
Chief
Operating Officer |
|
2022 |
|
|
|
600,000 |
|
|
|
— |
|
|
|
1,132,136 |
|
|
|
538,657 |
|
|
|
1,019,946 |
(2) |
|
|
3,290,739 |
|
| (1) |
Represents the grant date fair value,
computed in accordance with FASB ASC Topic 718, of awards that were granted to our NEOs. The awards in this column include grants of (i)
restricted shares of Class A common stock, which vest in three annual installments following the date of grant, subject generally to the
executive’s continued employment with us or any of our subsidiaries through the applicable vesting dates; and (ii) restricted stock
units which remain subject to the achievement of cumulative performance goals for a three-year period following the grant date (see “Compensation
Discussion and Analysis-Elements of Compensation—Long-Term Incentive Equity Awards” for a discussion regarding the performance
goals for these awards) and are generally subject to time-based conditions that vest ratably over the three-year period. The fair value
of the restricted shares of our Class A common stock was determined based on our stock price on the grant date. A discussion of the assumptions
used in calculating the grant date fair value of the restricted stock units is set forth in Note 15 of the consolidated financial statements
in the |
48 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2022. As required by SEC rules, the amounts shown in the Summary Compensation
Table for the restricted stock units that are subject to performance conditions are based upon the probable outcome on the grant date,
which is consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant
date under FASB ASC Topic 718, excluding the effect of estimated forfeitures.
If
we assumed achievement of the highest level of the performance goals and vesting for the restricted stock units would be achieved at the
grant date, the value of the awards at the grant date would have been as follows:
(A)
For 2020: Marc C. Ganzi—$160,356 and Ronald M. Sanders—$728,888.
(B)
For 2021: Marc C. Ganzi—$11,483,984; Jacky Wu—$523,677; and Ronald M. Sanders—$2,067,733.
(C)
For 2022: Marc C. Ganzi—$7,636,916; Jacky Wu—$1,576,548; and Ronald M. Sanders—$1,774,149.
See
“Compensation Discussion and Analysis-Elements of Compensation—Long-Term Incentive Awards.”
| (2) |
Represents (i) $20,233,254, $13,201,020,
$230,539, $402,697 and $554,806 paid to Messrs. Ganzi, Jenkins, Wu, Sanders and Stewart, respectively, in respect of incentive fee allocations
(see “Extraordinary Incentive Fees Paid in 2022” above), (ii) $712,251 in reimbursements to Mr. Ganzi for private air travel,
(iii) $5,480,739, $3,865,808, $63,670, $33,957 and $106,116 received by Messrs. Ganzi, Jenkins, Wu, Sanders and Stewart, respectively,
pursuant to the allocation of 50% of the contingent consideration received from Wafra as additional bonus compensation to management to
be paid on behalf of certain employees to fund a portion of their share of capital contributions to the DigitalBridge funds, as approved
by the Compensation Committee, (iv) $1,707,721, $1,174,058, $213,465 and $213,465 paid to Messrs. Ganzi, Jenkins, Wu and Stewart, respectively,
in respect of the MIP, (v) $103,057 and $36,388 in relocation expenses paid to Mr. Wu and Mr. Stewart, respectively, (vi) $2,576, $217,
$1,576, $34,070 and $775 in cash dividends on unvested stock paid to Messrs. Ganzi, Jenkins, Wu, Sanders and Stewart, respectively, and
(vii) matching contributions in connection with the Company’s 401(k) plan, the standard Company-paid portion of premiums toward
the cost of health coverage under our group health insurance plan and premiums toward the cost of our standard life insurance coverage.
See “Certain Relationships and Related Transactions—MIP” for a discussion of the MIP, which was terminated by the Board
on March 27, 2023. Amounts with respect to incentive fee allocations (which could be used to fund potential future clawback obligations
if any were to arise) and the MIP include amounts retained and allocated for distribution to the respective NEO, but not yet distributed
to the NEO as of December 31, 2022. |
| (3) |
Represents (i) for Mr. Ganzi, $1,114,839
in respect of incentive fee allocations, $937,992 in connection with services provided to a DBH portfolio company during 2020, $1,532,933
received pursuant to the allocation of 50% of the contingent consideration received from Wafra as additional bonus compensation to management
to be paid on behalf of certain employees to fund a portion of their share of capital contributions to the DigitalBridge funds, as approved
by the Compensation Committee, and $491,379 in reimbursements for private air travel, (ii) $1,390,000 and $173,750 paid to Messrs. Ganzi
and Wu, respectively, in respect of the MIP, (iii) $68,353 in relocation expenses paid to Mr. Wu, and (iv) matching contributions in connection
with the Company’s 401(k) plan, the standard Company-paid portion of premiums toward the cost of health coverage under our group
health insurance plan, premiums toward the cost of our standard life insurance coverage. See “Certain Relationships and Related
Transactions—MIP” for a discussion of the MIP, which was terminated by the Board on March 27, 2023. Amounts with respect to
incentive fee allocations (which could be used to fund potential future clawback obligations if any were to arise) and the MIP include
amounts retained and allocated for distribution to the respective NEO, but not yet distributed to the NEO as of December 31, 2022. |
| (4) |
Represents (i) $885,009 paid to Mr. Sanders
in respect of incentive fee allocations, (ii) for Mr. Ganzi, $430,448 in connection with services provided to a DBH portfolio company
during 2019, and (iii) matching contributions in connection with the Company’s 401(k) plan, the standard Company-paid portion of
premiums toward the cost of health coverage under our group health insurance plan and premiums toward the cost of our standard life insurance
coverage. Amounts with respect to incentive fee allocations (which could be used to fund potential future clawback obligations if any
were to arise) include amounts retained and allocated for distribution to the respective NEO, but not yet distributed to the NEO as of
December 31, 2022. |
| (5) |
Includes incremental value resulting
from the modification of certain equity awards outstanding as of December 9, 2022, in the case of Mr. Sanders, and September 27, 2022,
in the case of Mr. Wu, in connection with amendments to their respective employment agreements. See “Employment Agreements”
below. |
| (6) |
Represents the pro rata portion of
Mr. Wu’s annual base salary based on the commencement of his employment with the Company on March 23, 2020.
|
DIGITALBRIDGE
2023 PROXY STATEMENT | 49
COMPENSATION
DISCUSSION AND ANALYSIS
2022
Grants of Plan-Based Awards Table
The
following table provides information about awards granted in 2022 to each of our NEOs. There were no option awards in 2022.
| |
|
|
Estimated Possible Payouts
Under
Non-Equity Incentive
Plan Awards |
|
Estimated Possible Payouts
Under
Equity Incentive
Plan Awards |
All Other Stock
Awards: Number
of Shares of
Stock or Units(3)
(#)
|
Grant
Date
Fair Value
($) |
| Name |
Approval
Date |
Grant
Date |
Threshold
($) |
Target(1)
($) |
Maximum
($) |
|
Threshold
(#) |
Target(2)
(#) |
Maximum(2)
(#) |
| Marc
C. Ganzi |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
— |
— |
— |
125,278 |
3,427,606 |
| |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
62,639 |
125,278 |
250,556 |
— |
3,818,473 |
| |
3/25/2022
|
3/25/2022 |
— |
1,440,000 |
6,120,000 |
|
— |
— |
— |
— |
— |
| Benjamin
J. |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
— |
— |
— |
15,517 |
424,545 |
| Jenkins |
3/25/2022
|
3/25/2022 |
— |
700,000 |
1,400,000 |
|
— |
— |
— |
— |
— |
| Jacky
Wu |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
— |
— |
— |
25,862 |
707,584 |
| |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
12,931 |
25,862 |
51,724 |
— |
788,274 |
| |
3/25/2022
|
3/25/2022 |
— |
900,000 |
1,800,000 |
|
— |
— |
— |
— |
— |
| Ronald
M. |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
— |
— |
— |
29,104 |
796,285 |
| Sanders |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
14,552 |
29,104 |
58,208 |
— |
887,090 |
| |
3/25/2022
|
3/25/2022 |
— |
1,425,000 |
2,850,000 |
|
— |
— |
— |
— |
— |
| Liam
Stewart |
2/15/2022
|
3/15/2022 |
— |
— |
— |
|
— |
— |
— |
41,379 |
1,132,129 |
| |
3/25/2022
|
3/25/2022 |
— |
765,000 |
1,530,000 |
|
— |
— |
— |
— |
— |
| (1) |
Represents the target cash bonuses approved
by the Compensation Committee on March 25, 2022 under the 2022 Annual Incentive Plan for our NEOs. For information about the cash bonus
amounts actually earned by each of our NEOs, please refer to the “Non-Equity Incentive Plan Compensation” column of the Summary
Compensation Table above. Amounts are considered earned in fiscal year 2022, although they were not paid until 2023. For additional information
about the 2022 Annual Incentive Plan, see “Compensation Discussion and Analysis-Elements of Compensation-Annual Cash Bonus.” |
|
(2) |
Represents awards of restricted stock
units, which are subject to vesting based on the achievement of performance goals for the three-year period ending March 15, 2025 and,
other than for Messrs. Wu and Sanders as a result of their employment agreements with the Company, are generally subject to continued
employment through such date. Dividends (if any) are accrued with respect to these equity awards, and are paid only if and when the restricted
stock units are earned. For additional information about the 2022 performance-based awards, see “Compensation Discussion and Analysis-Elements
of Compensation-Long-Term Incentive Equity Awards.” Other than with respect to Messrs. Jenkins and Stewart, represents 50% of the
long-term equity incentive award for 2022 granted by the Company to our NEOs. |
|
(3) |
Represents awards of restricted shares
of our Class A common stock, which are subject to time-based vesting in three equal installments beginning on March 15, 2022 and, other
than for Messrs. Wu and Sanders as a result of their employment agreements with the Company, are generally subject to continued employment.
Dividends (if any) are paid currently with respect to these equity awards prior to vesting, including all dividends with a record date
on or after March 15, 2022. Other than with respect to Messrs. Jenkins and Stewart, represents 50% of the long-term equity incentive award
for 2022 granted by the Company to our NEOs. |
50 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Discussion
of Summary Compensation and Grants of Plan-Based Awards Tables
The
terms of the awards set forth in the 2022 Grants of Plan-Based Awards Table relating to the manner in which these awards are treated in
connection with a termination of employment or change of control are described below in “Compensation Tables and Related Narrative-Potential
Payments on Termination or Change of Control.”
Outstanding
Equity Awards at Fiscal Year End 2022
The
following table sets forth certain information with respect to outstanding equity awards as of December 31, 2022 with respect to our NEOs.
No option awards were outstanding as of December 31, 2022.
| Name |
Stock
Awards |
Number
of Shares or
Units of Stock that
Have Not Vested(1)
(#) |
Market
Value of Shares or
Units of Stock that Have
Not Vested(2)
($) |
Equity
Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights that
Have Not Vested(3)
(#) |
Equity
Incentive Plan Awards:
Market or Payout Value of
Unearned Shares, Units or
Other Rights that Have Not
Vested(2)
($) |
| Marc
C. Ganzi |
257,636 |
2,818,538 |
2,829,926 |
30,959,390 |
| Benjamin
J. Jenkins |
21,675 |
237,125 |
470,492 |
5,147,182 |
| Jacky
Wu |
156,520 |
1,712,329 |
34,637 |
378,929 |
| Ronald
M. Sanders |
70,721 |
773,688 |
119,307 |
1,305,219 |
| Liam
Stewart |
77,489 |
847,730 |
4,952 |
54,175 |
| (1) |
Includes the following restricted
shares of Class A common stock with respect to such NEO: |
| Name |
Vesting
Date: |
Total |
|
March
15,
2025 |
August
9,
2024 |
March
15,
2024 |
September
14,
2023 |
August
9,
2023 |
March
23,
2023 |
March
15,
2023 |
| Marc
C. Ganzi |
41,760 |
— |
105,901 |
— |
— |
— |
109,975 |
257,636 |
| Benjamin
J. Jenkins |
5,173 |
— |
8,251 |
— |
— |
— |
8,251 |
21,675 |
| Jacky
Wu |
8,621 |
29,509 |
11,546 |
— |
29,509 |
65,790 |
11,545 |
156,520 |
| Ronald
M. Sanders |
9,702 |
— |
21,250 |
— |
— |
— |
39,769 |
70,721 |
| Liam
Stewart |
13,793 |
— |
15,444 |
32,809 |
— |
— |
15,443 |
77,489 |
| (2) |
The value of the awards reflected in the table is based on a price
per share or unit of $10.94, which was the closing price of our common stock as of December 30, 2022. |
| (3) |
Except as described in the Footnotes
to the following table, includes the following restricted stock units (representing a target amount) that are subject to vesting based
on the achievement of performance goals over a three-year period and generally subject to continued employment through such date, with
respect to such NEO. See “Compensation Discussion and Analysis-Elements of Compensation-Long-Term Incentive Equity Awards”
for a description of the performance-based awards. |
| Name |
Performance
End Date |
Total |
| March
14, 2025 |
July
25, 2024 |
March
14, 2024 |
March
15, 2023 |
| Marc
C. Ganzi |
125,278 |
2,500,000(A) |
192,426 |
12,222 |
2,829,926 |
| Benjamin
J. Jenkins |
— |
— |
9,237 |
— |
9,237 |
| Jacky
Wu |
25,862 |
— |
8,775 |
— |
34,637 |
| Ronald
M. Sanders |
29,104 |
— |
34,647 |
55,556 |
119,307 |
| Liam
Stewart |
— |
— |
4,952 |
— |
4,952 |
|
(A) |
Reflects a sign-on performance-based equity award, granted to Mr. Ganzi in connection with the commencement of
his employment with the Company and designation as our CEO-elect in July 2019, in the amount of 2,500,000 LTIP Units. The LTIP Units will
vest if the closing price of the Company’s Class A common stock is at |
DIGITALBRIDGE
2023 PROXY STATEMENT | 51
COMPENSATION
DISCUSSION AND ANALYSIS
or
above $40.00 during regular trading on the New York Stock Exchange over any 90 consecutive trading days during the five-year performance
period ending on July 25, 2024.
Option
Exercises and Stock Vested in 2022
The
following table sets forth certain information with respect to stock awards vesting during the year ended December 31, 2022 with respect
to our NEOs.
| |
Restricted
Stock Awards |
Performance-Based
Equity Awards |
| Name |
Number
of
Shares
Acquired
on Vesting
(#) |
Value
Realized
on Vesting
($)(1) |
Number
of
Shares
Acquired
on Vesting
(#) |
Value
Realized
on Vesting
($)(1) |
| Marc
C. Ganzi |
68,216 |
1,866,390 |
— |
— |
| Benjamin
J. Jenkins |
3,079 |
84,241 |
— |
— |
| Jacky
Wu |
98,223 |
2,522,943 |
— |
— |
| Ronald
M. Sanders |
38,492 |
1,053,141 |
15,165 |
429,473 |
| Liam
Stewart |
1,651 |
45,171 |
— |
— |
| (1) |
Based on the closing price of our
Class A common stock on the NYSE on the date of vesting. |
Potential
Payments on Termination or Change of Control
TERMINATION/CHANGE
OF CONTROL COMPENSATION TABLE
The
following table shows the potential payments to our NEOs upon a termination of employment without cause or for good reason, upon a change
of control of DigitalBridge and upon the death or disability of the executive officer based on agreements and plans in effect as of December
31, 2022.
The
types of events constituting cause, good reason, disability and a change of control differed in some respects among the different arrangements
providing for benefits to the NEOs; however, for consistency in presentation, our executive compensation arrangements have been grouped
together based on these concepts without regard for any such differences. Our NEOs were not entitled to any payments if they were terminated
for cause or resigned without good reason. In preparing the tables below, we assumed the applicable event (i.e., termination, change of
control or death or disability) occurred on December 31, 2022. Market values of equity awards were determined by multiplying the applicable
number of shares or units by $10.94, the per share closing price of our Class A common stock as of December 31, 2022.
| Name |
|
Payments/Benefits |
|
Termination
Without Cause or for Good Reason
($) |
|
Change
of Control Without Termination
($) |
|
Change
of Control
With Termination
($) |
|
Death
or
Disability
($) |
| Marc
C. Ganzi |
|
Severance
Payment |
|
|
9,443,454 |
(1) |
|
|
— |
|
|
|
9,443,454 |
(1) |
|
|
1,440,000 |
(2) |
| |
|
Equity
Award Acceleration(3) |
|
|
2,818,538 |
|
|
|
2,818,538 |
|
|
|
2,818,538 |
|
|
|
2,818,538 |
|
| Benjamin
J. Jenkins |
|
Severance
Payment |
|
|
3,244,821 |
(1) |
|
|
— |
|
|
|
3,244,821 |
(1) |
|
|
700,000 |
(2) |
| |
|
Equity
Award Acceleration(3) |
|
|
237,125 |
|
|
|
— |
|
|
|
237,125 |
|
|
|
237,125 |
|
| Jacky
Wu |
|
Severance
Payment |
|
|
9,550,000 |
(4) |
|
|
— |
|
|
|
9,550,000 |
(4) |
|
|
3,540,217 |
(5) |
| |
|
Equity
Award Acceleration(3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,712,329 |
|
| Ronald
M. Sanders |
|
Severance
Payment |
|
|
8,403,273 |
(6) |
|
|
— |
|
|
|
8,403,273 |
(6) |
|
|
3,757,796 |
(7) |
| |
|
Equity
Award Acceleration(3) |
|
|
773,688 |
|
|
|
— |
|
|
|
773,688 |
|
|
|
773,688 |
|
| Liam
Stewart |
|
Severance
Payment |
|
|
3,578,454 |
(1) |
|
|
— |
|
|
|
3,578,454 |
(1) |
|
|
765,000 |
(2) |
| |
|
Equity
Award Acceleration(3) |
|
|
847,730 |
|
|
|
— |
|
|
|
847,730 |
|
|
|
847,730 |
|
52 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
|
(1) |
Pursuant to the employment agreements discussed under “Employment
Agreements,” represents (i) a lump sum cash payment equal to two times (or, for Mr. Ganzi, three times) the sum of the executive’s
average base salary and the target bonus in effect, (ii) lump sum payment of any unpaid bonus for 2021, if any, (iii) the lump sum pro-rata
target bonus for the effective period of employment for the year ended December 31, 2022, assuming the bonus was not paid in calendar
year 2022, (iv) continued medical, dental and vision benefits at active employee rates for 24 months and (v) the continuation of certain
benefits for 24 months following termination, but excludes any perquisites and other personal benefits or property, if any, with an aggregate
value less than $10,000. For Mr. Ganzi, also includes the continued use of his office and the services of a personal assistant, in each
case, commensurate with those provided prior to the date of termination, for 18 months following termination. |
|
(2) |
Pursuant to the employment agreements discussed under “Employment
Agreements,” represents (i) any unpaid bonus for 2021, if any, and (ii) the pro-rata target bonus for the effective period of employment
for the year ended December 31, 2022, assuming the bonus was not paid in calendar year 2022, in either case, which is payable in lump
sum by the Company upon termination of the NEO’s employment by us due to their death or disability. For purposes of the employment
agreements, “disability” is defined as physical or mental incapacity that substantially prevents the NEO from performing their
duties and that has continued for at least 180 consecutive days. |
|
(3) |
Pursuant to the employment agreements discussed under “Employment
Agreements,” represents the value of all equity awards of the Company that would fully vest upon termination of the NEO’s
employment by us without cause, by the NEO with good reason or upon death or disability. Amount excludes (i) the value of performance-based
restricted stock units, which are subject to performance-based conditions over a three-year period ending March 14, 2023, March 14, 2024
and March 14, 2025, and (ii) for Mr. Ganzi, excludes the value of performance-based LTIP Units, subject to performance based conditions
over a five-year period ending July 25, 2024, all as set forth in Footnote 3 to the “Outstanding Equity Awards at Fiscal Year End
2022” table above. Following the conclusion of the performance period of the performance-based restricted stock units, the NEO would
be entitled to the number of units (with a potential payout percentage between 0 and 200% for the units subject to the performance period
ending March 14, 2023, March 14, 2024 and March 14, 2025 that would have been earned had the NEO been an employee of the Company at such
time. Following the conclusion of the performance period of the performance-based LTIP Units, Mr. Ganzi would be entitled to the number
of LTIP Units (with a potential payout percentage of 0% or 100%) that would have been earned had Mr. Ganzi been an employee of the Company
at such time. In addition, amounts exclude carried interests, which are subject to achievement of minimum return hurdles in accordance
with the terms set out in the respective governing agreements for the Company’s managed private funds and other investment vehicles. |
|
(4) |
Mr. Wu’s amended and restated employment agreement does
not provide for payments upon termination of employment for good reason. Represents the “CFO Expiration Date Items” with certain
modifications that would apply if the Board moved the CFO Expiration Date to December 31, 2022, as described under Employment Agreements—Employment
Agreements with Other Named Executive Officers—Jacky Wu.” |
|
(5) |
Represents a lump sum payment equal to $1,540,217 (determined
pursuant to the provisions in Mr. Wu’s amended and restated employment agreement, as described under “Employment Agreements—Employment
Agreements with Other Named Executive Officers—Jacky Wu”) and issuance of the 2022 Target LTIP Award. |
|
(6) |
Mr. Sanders’ amended and restated employment agreement does
not provide for payments upon termination of employment for good reason. Represents the “CLO Expiration Date Items” with certain
modifications that would apply if the Board moved the CLO Expiration Date to December 31, 2022, as described under Employment Agreements—Employment
Agreements with Other Named Executive Officers—Ronald M. Sanders.” |
|
(7) |
Represents a lump sum payment equal to $644,796 (determined pursuant
to the provisions in Mr. Sanders’ amended and restated employment agreement, as described under “Employment Agreements—Employment
Agreements with Other Named Executive Officers—Ronald M. Sanders”) and issuance of the 2022 Target LTIP Award. |
The
tables above do not include payments and benefits to the extent we generally provide them on a non-discriminatory basis to salaried employees
upon termination of employment, including: (i) life insurance upon death in the amount of two times the employee’s annual salary
but not exceeding a total of $750,000; and (ii) disability benefits. As a result of provisions in each of our NEOs’ employment agreements,
in the event that any payment or benefit to be paid or provided to such an executive set forth above would have been subject to the excise
tax under Section 4999 of the Code, the payments and benefits to such executive would have been reduced to the extent necessary to avoid
the imposition of such excise tax, but only if such reduction would result in a greater after-tax benefit to the executive. The amounts
set forth in the table above have not been adjusted to reflect any such reduction that might be applicable.
DIGITALBRIDGE
2023 PROXY STATEMENT | 53
COMPENSATION
DISCUSSION AND ANALYSIS
Employment
Agreements
The
Company has employment agreements with Messrs. Ganzi, Jenkins, Wu, Sanders and Stewart which set forth the terms and conditions of their
roles with, and their oversight and management of the day-to-day business operations, of the Company. The employment agreements of Messrs.
Jenkins and Stewart were amended and restated on March 28, 2022, in connection with their appointments as President and Chief Investment
Officer of the Company and Chief Operating Officer, of the Company respectively. In addition, the Company amended and restated the employment
agreement of Mr. Wu on September 27, 2022 and Mr. Sanders on December 9, 2022. Below is a summary of the terms of these employment agreements.
EMPLOYMENT
AGREEMENT WITH MARC C. GANZI
Mr.
Ganzi’s employment agreement sets forth the terms and conditions of Mr. Ganzi’s service as our Chief Executive Officer. The
agreement became effective on July 25, 2019 and has an initial term of five years following such date, subject to automatic renewals of
additional successive one-year periods unless either party provides at least 180 days’ advance notice of non-renewal. The agreement
provides that Mr. Ganzi will devote his full business time (other than vacation time, holidays, sick days and periods of disability) and
attention to the performance of his duties to the Company, but will be permitted to engage in certain other outside activities, so long
as those duties and activities do not unreasonably interfere with the performance of his duties to the Company under the agreement.
In
addition, the agreement provides that Mr. Ganzi’s principal place of business during the term of the agreement will be in Boca Raton,
Florida; however, if Mr. Ganzi is required to engage in travel during the term of the agreement that results in him having to perform
a significant portion of his duties at a location other than Boca Raton, Florida, and Mr. Ganzi determines to relocate his principal place
of residence to a city in proximity to that other location, then the Company will pay for all reasonable relocation and return expenses
that he incurs on a basis which is grossed up for taxes, with such payments subject to the approval of the Board, not to be unreasonably
withheld.
The
agreement further provides that Mr. Ganzi will receive an annual base salary of not less than $1,060,000 and will be eligible to receive
an annual cash bonus with a target amount of no less than $1,200,000, which will be based on achievement of specified performance measures
as set forth in the agreement or as otherwise mutually agreed by Mr. Ganzi and the Board. In addition, Mr. Ganzi will also be eligible
to receive annual grants of equity and equity-based awards with a target value initially set at $1,800,000, subject to annual review by
the Board (or a committee thereof). In addition, at least 50% of such grants made by the Company will vest based on time-based vesting
conditions in no more than three equal annual installments and up to 50% will vest subject to both time-based and performance-based vesting
conditions over a vesting period no longer than three years. The portion of any such annual grant subject, in part, to performance-based
vesting conditions will be structured to provide an additional opportunity to earn up to 200% of the target amount of such award in the
event the performance thresholds established by the Board (or committee thereof) are met. The employment agreement also provides that,
for the 2021 performance year, Mr. Ganzi’s annual gross compensation (i.e., base salary, cash bonus and equity and equity-based
awards) shall be no less than $2,500,000. In addition, Mr. Ganzi will receive allocations in respect of carried interests in respect of
funds managed by the Company as follows: (1) for any carried interest allocated during the term of Mr. Ganzi’s employment with respect
to a successor fund to Digital Colony Partners or other fund related to digital infrastructure (the “DBP Funds”), Mr. Ganzi
will be allocated 15% of the carried interest earned from such funds, and (2) for any carried interest allocated during the term of Mr.
Ganzi’s employment as the Company’s Chief Executive Officer with respect to any fund or similar vehicle managed by the Company
(other than the DBP Funds, the Company’s fifth distressed credit fund and any product that has completed raising capital prior to
July 1, 2020), Mr. Ganzi will be allocated 10% of the carried interest earned from such funds. A product will be considered to have completed
raising capital even if, after July 1, 2020, such product raises capital for follow-on investments.
54 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Mr.
Ganzi will also be eligible to participate in our benefit plans made available to our senior executive officers from time to time and
to receive reimbursement for certain dues and other business expenses, each as described in the employment agreement.
The
employment agreement provides that, if Mr. Ganzi’s employment is terminated by the Company without “cause” (as defined
in the employment agreement and including non-renewal of the agreement by the Company) or by Mr. Ganzi for “good reason” (as
defined in the employment agreement and described below), and Mr. Ganzi executes, and does not revoke, a general release of claims, he
will be eligible to receive (i) a lump sum cash payment equal to three times the sum of his base salary and average annual bonus with
respect to the three prior calendar years (or, if any such termination of employment occurs prior to Mr. Ganzi receiving his annual bonus
in respect of calendar year 2022, then his target annual bonus that is then in effect), (ii) a lump sum cash payment equal to the annual
bonus payable in respect of the year prior to the year of termination, if unpaid as of the date of termination, (iii) a pro-rated target
bonus for the year of termination, (iv) continued medical, dental and vision benefits at active employee rates for 24 months following
termination, (v) the continuation of certain benefits for 24 months following termination, and (vi) full vesting of all equity and equity-based
awards of the Company, carried interests and other like compensation that he holds, to the extent unvested immediately prior to the date
of termination. In addition, for 18 months following the date of such termination, Mr. Ganzi will receive continued use of his office
and the services of a personal assistant, in each case, commensurate with those provided prior to the date of termination.
The
employment agreement also provides that if Mr. Ganzi provides notice to the Company of his intention not to renew the agreement upon the
scheduled expiration of the initial term or any renewal term, then he will receive (i) a lump sum cash payment equal to the annual bonus
payable in respect of the year prior to the year of termination, if unpaid as of the date of termination and (ii) a pro-rated target bonus
for the year of termination.
In
addition, the employment agreement provides for full vesting of all of Mr. Ganzi’s equity and equity-based awards of the Company
(other than as specified in the terms of the Sign-On Award (as defined below)), carried interests and other like compensation that he
holds, to the extent unvested upon a change in control (as such term is defined in the Company’s 2014 Omnibus Stock Incentive Plan).
For
purposes of the employment agreement, “good reason” means, in summary, (i) a material diminution in Mr. Ganzi’s duties,
authority or responsibilities or a diminution in his title (including (A) modifying Mr. Ganzi’s title and (B) after July 1, 2020,
failing to nominate or maintain Mr. Ganzi as a member of the Board) or causing Mr. Ganzi to no longer report to the Board, (ii) a reduction
in Mr. Ganzi’s base salary, target annual cash bonus or target annual equity incentive grant as set forth in the employment agreement,
(iii) a 25-mile relocation of Mr. Ganzi’s principal place of business from Boca Raton, Florida or, if Mr. Ganzi agrees in writing
to establish another location as his principal place of business, such other location, or (iv) a material breach of the agreement by the
Company (including, without limitation, failure to timely pay or award Mr. Ganzi’s base salary, target annual cash bonus or target
annual equity incentive grant) or any other material agreement between Mr. Ganzi and the Company.
In
the event of termination due to death or disability, Mr. Ganzi will receive (i) a lump sum cash payment equal to the annual bonus payable
in respect of the year prior to the year of termination, if unpaid as of the date of termination, (ii) a pro-rated target bonus for the
year of termination, (iii) full vesting of all equity-based awards of the company (other than as specified in the terms of the Sign-On
Award), carried interests and other like compensation that such executive holds, to the extent unvested upon such termination.
If
any payments to be made to Mr. Ganzi, whether under the employment agreement or otherwise, would subject Mr. Ganzi to the excise tax on
so-called “golden parachute payments” in accordance with Sections 280G or 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”), then the payments will be reduced to the extent necessary to avoid the excise tax, but only if the amount of
the
DIGITALBRIDGE
2023 PROXY STATEMENT | 55
COMPENSATION
DISCUSSION AND ANALYSIS
payments
after such reduction would result in Mr. Ganzi receiving a greater net after-tax benefit than if all of the payments were provided and
the excise tax were imposed.
The
employment agreement, through a restrictive covenant agreement which was amended and restated on July 17, 2020, also provides that Mr.
Ganzi will not, subject to certain listed exceptions for permitted and personal activities, compete with the Company, or solicit the Company’s
investors or customers or employees or those of the Company’s subsidiaries during his employment with the Company and, unless his
employment is terminated by the Company without cause (as defined in the agreement), by Mr. Ganzi for “good reason” (as defined
in the agreement and described above), or by the Company or Mr. Ganzi following a change in control (as such term is defined in the Company’s
equity incentive plan), for the two-year period following the termination of his employment with the Company. The restrictive covenant
agreement also contains covenants relating to the treatment of confidential information and intellectual property matters and restrictions
on the ability of Mr. Ganzi and the Company to disparage the other.
In
addition, in connection with entering into the employment agreement, the Company granted Mr. Ganzi a sign-on performance-based equity
grant (the “Sign-On Award”) in the amount of 2,500,000 LTIP Units. The LTIP Units will vest if the closing price of shares
of the Company’s Class A common stock, par value $0.04 (the “Class A common stock”) is at or above $40.00 during regular
trading on the New York Stock Exchange over any 90 consecutive trading days during the five-year period beginning on July 25, 2019. The
Sign-On Award is generally conditioned on Mr. Ganzi’s continued employment until the performance-based condition is satisfied.
EMPLOYMENT
AGREEMENTS WITH OTHER NAMED EXECUTIVE OFFICERS
Jacky
Wu
Mr.
Wu’s employment agreement sets forth the terms and conditions of Mr. Wu’s service as our Chief Financial Officer. The agreement
became effective on September 27, 2022 and provides for Mr. Wu’s term of employment to conclude on December 31, 2023. The agreement
provides that if a successor chief financial officer of the Company is not satisfactorily established by December 31, 2023, the Board
may request that Mr. Wu’s last day of employment be extended, with any such extension being subject to the consent of Mr. Wu (such
end date, as may be extended as described above, or accelerated by the Board, as described below, the “CFO Expiration Date”).
The
agreement provides that Mr. Wu will devote his full business time and attention to the performance of his duties to us, but will be permitted
to engage in certain other outside activities so long as such activities do not unreasonably interfere with the performance of his duties
to us. The agreement provides for the payment of a specified base salary of $650,000, an annual cash bonus target of $900,000 and an annual
grant of equity-based awards with a target value of $2,000,000, consistent with the terms of Mr. Wu’s prior agreement.
The
agreement provides that if Mr. Wu’s employment is terminated by reason of expiration of the employment term on the CFO Expiration
Date and Mr. Wu executes a release of claims, he will be eligible to receive: (i) a lump sum cash payment equal to $3,100,000, (ii) to
the extent unpaid, the target bonus amount in respect of the 2023 calendar year, (iii) to the extent not issued, the issuance of the target
value of annual equity-based awards (the “CFO Target LTIP Award”) in respect of the 2023 calendar year, (iv) full vesting
of certain fund incentives that are outstanding and unvested, and (v) all equity or equity-based awards relating to the securities of
the Company issued to Mr. Wu that are outstanding and unvested, whether subject to time-based vesting or performance-based vesting, will
remain outstanding and, notwithstanding the expiration of the employment term, will continue to vest based on the then existing vesting
schedule (and, in the case of performance-based awards, based on the level of actual achievement of such performance goals or metrics)
(collectively, the “CFO Expiration Date Items”). Mr. Wu’s non-compete
56 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
and non-solicitation obligations will continue for one year after the CFO Expiration Date. If Mr. Wu departs prior to the CFO Expiration
Date or is terminated for Cause (as defined in the agreement), Mr. Wu will not receive the CFO Expiration Date Items.
In
the event of termination due to death or disability prior to the CFO Expiration Date, Mr. Wu will receive (i) a cash payment equal to
a pro rata portion of the $3,100,000, (ii) the target annual bonus for 2022 if such termination occurs on or after January 1, 2023 and
prior to the payment of the annual bonus for 2022, (iii) a pro-rated target bonus for the year of termination, (iv) the CFO Target LTIP
Award for 2022 if such termination occurs on or after January 1, 2023 and prior to issuance of the LTIP Award for 2022, (v) a pro-rated
LTIP Award for the year of termination, and (vi) full vesting of all equity-based awards of the company, carried interests and other like
compensation that such executive holds, to the extent unvested upon such termination.
The
agreement also provides that the Board may change the CFO Expiration Date to a date that is earlier than December 31, 2023. At such time,
the employment term will end, and after Mr. Wu executes a release of claims, he will be eligible to receive the CFO Expiration Date Items
with the following modifications: (i) to the extent unpaid, payment of the target bonus amount in respect of the 2022 calendar year, (ii)
to the extent not issued, issuance of the CFO Target LTIP Award in respect of the 2022 calendar year, (iii) certain fund incentives will
vest as if Mr. Wu had remained employed through December 31, 2023, and (iv) Mr. Wu will receive an amount equal to the base salary that
would have been paid to executive from the CFO Expiration Date through December 31, 2023.
The
agreement also includes a provision providing that if any payments to be made to Mr. Wu, whether under the agreement or otherwise, would
subject the executive to the excise tax on so-called “golden parachute payments” in accordance with Sections 280G or 4999
of the Code, then the payments will be reduced to the extent necessary to avoid the excise tax, but only if the amount of the payments
after such reduction would result in Mr. Wu receiving a greater net after-tax benefit than if all of the payments were provided and the
excise tax were imposed.
In
addition, the agreement, through a restrictive covenant agreement that is included as an exhibit to the agreement, provides that Mr. Wu
will not, subject to certain exceptions, compete with us, or solicit our investors or customers or employees or those of our subsidiaries
during his employment with us and for the one-year period following the termination of his employment with us. The agreement also contains
covenants relating to the treatment of confidential information and intellectual property matters and restrictions on disparagement.
Ronald
M. Sanders
Mr.
Sanders’ employment agreement sets forth the terms and conditions of Mr. Sanders’ service as our Chief Legal Officer. The
agreement became effective on December 9, 2022, and provides for Mr. Sanders’ term of employment to conclude on December 31, 2023.
The agreement provides that if a successor chief legal officer of the Company is not satisfactorily established by April 27, 2023, the
Board may request that Mr. Sanders’ last day of employment be extended, with any such extension being subject to the consent of
Mr. Sanders (such end date, as may be extended as described above, or accelerated by the Board, as described below, the “CLO Expiration
Date”).
The
agreement provides that Mr. Sanders will devote his full business time and attention to the performance of his duties to us, but will
be permitted to engage in certain other outside activities so long as such activities do not unreasonably interfere with the performance
of his duties to us. The agreement provides for the payment of a specified base salary of $475,000, an annual cash bonus target of $1,425,000
and an annual grant of equity-based awards with a target value of $1,688,000, consistent with terms previously approved by the Compensation
Committee.
DIGITALBRIDGE
2023 PROXY STATEMENT | 57
COMPENSATION
DISCUSSION AND ANALYSIS
The
agreement provides that if Mr. Sanders’ employment is terminated by reason of expiration of the employment term on the CLO Expiration
Date and Mr. Sanders executes a release of claims, he will be eligible to receive: (i) a cash payment equal to the product of (A) two
and (B) the sum of (1) Mr. Sanders’ base salary in effect immediately prior to the CLO Expiration Date and (2) the average annual
bonus paid in respect of each of the three calendar years prior to the CLO Expiration Date (provided that for these purposes Mr. Sanders’
annual bonus for 2022 shall not be less than target), (ii) to the extent unpaid, the annual bonus in respect of the 2022 calendar year,
(iii) to the extent not issued, the issuance of the target value of annual equity-based awards (the “CLO Target LTIP Award”)
in respect of the 2022 calendar year (the “2022 LTIP Award”), (iv) a cash payment equal to the product of (A) the target bonus
in effect for the 2023 calendar year, and (B) 32% (the “Pro-Rated Percentage”), unless the CLO Expiration Date is extended
past April 27, 2023, in which case the payment will be pro-rated based on the period of service in 2023, (v) issuance of LTIP Awards,
subject to time-based vesting, equal to the product of (A) the CLO Target LTIP Award in effect for the 2023 and (B) the Pro-Rated Percentage,
unless the CLO Expiration Date is extended past April 27, 2023, in which case the payment will be pro-rated based on the period of service
in 2023, (vi) full vesting of all fund incentives that are outstanding and unvested, (vii) full vesting of all equity or equity-based
awards relating to the securities of the Company issued to Mr. Sanders that are outstanding and unvested, provided that any equity awards
subject to performance-based vesting, will remain outstanding and, notwithstanding the expiration of the employment term, will continue
to vest based on the level of actual achievement of such performance goals or metrics and (viii) continuation of the Company’s contributions
necessary to maintain the Executive’s coverage for the 24 calendar months immediately following the end of the calendar month in
which the Expiration Date occurs under the medical, dental and vision programs in which the Executive participated immediately prior to
his termination of employment (and such coverage shall include the Executive’s eligible dependents) (collectively, the “CLO
Expiration Date Items”). If Mr. Sanders departs prior to the CLO Expiration Date or is terminated for Cause (as defined in the agreement),
Mr. Sanders will not receive the CLO Expiration Date Items.
In
the event of termination due to death or disability prior to the CLO Expiration Date, Mr. Sanders will receive (i) a cash payment equal
to the payment described in clause (i) of the preceding paragraph, adjusted pro rata for the period served from December 9, 2022 through
the CLO Expiration Date, (ii) the 2022 annual bonus (or target annual bonus for 2022 if the 2022 annual bonus has not been established)
if such termination occurs on or after January 1, 2023 and prior to the payment of the annual bonus for 2022, (iii) a cash payment equal
to the target bonus amount in effect for the calendar year in which the termination occurs, pro-rated for the period of service in such
year, (iv) the 2022 LTIP Award if such termination occurs on or after January 1, 2023 and prior to issuance of the LTIP Award for 2022,
(v) an LTIP Award equal to the CLO Target LTIP Award in effect for the calendar year in which the termination occurs, pro-rated for the
period of service in such year, and (vi) full vesting of all equity-based awards of the company, carried interests and other like compensation
that such executive holds, to the extent unvested upon such termination.
The
agreement also provides that the Board may change the CLO Expiration Date to a date that is earlier than April 27, 2023. At such time,
the employment term will end, and after Mr. Sanders executes a release of claims, he will be eligible to receive the CLO Expiration Date
Items with certain modifications.
The
agreement also includes a provision providing that if any payments to be made to Mr. Sanders, whether under the agreement or otherwise,
would subject the executive to the excise tax on so-called “golden parachute payments” in accordance with Sections 280G or
4999 of the Code, then the payments will be reduced to the extent necessary to avoid the excise tax, but only if the amount of the payments
after such reduction would result in Mr. Sanders receiving a greater net after-tax benefit than if all of the payments were provided and
the excise tax were imposed.
In
addition, the agreement, through a restrictive covenant agreement that is included as an exhibit to the agreement, provides that Mr. Sanders
will not, subject to certain exceptions, compete with us, or solicit our investors or customers or employees or those of our subsidiaries
during his employment with us and for the
58 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
one-year
period following the termination of his employment with us. If Mr. Sanders’ employment with us terminates by reason of the expiration
of the employment term on the CLO Expiration Date, Mr. Sanders will not thereafter be subject to such non-compete or non-solicitation
covenants. The agreement also contains covenants relating to the treatment of confidential information and intellectual property matters
and restrictions on disparagement.
Other
NEOs
These
employment agreements provided for an initial term of three years for Mr. Jenkins and two years for Mr. Stewart, which began on March
28, 2022, with each initial term subject to automatic renewals of additional successive one-year periods unless either party provides
at least 180 days’ advance notice of non-renewal.
Each
agreement requires that the executive will devote his full business time and attention to the performance of his duties to us, but will
be permitted to engage in certain other outside activities so long as such activities do not unreasonably interfere with the performance
of the executive’s duties to us.
The
agreements provide for the payment of a specified base salary to each executive, which is equal to no less than $700,000 for Mr. Jenkins
and $600,000 for Mr. Stewart. The agreements also provide that each executive will be eligible to receive an annual cash bonus with a
target amount initially set at $700,000 for Mr. Jenkins and $700,000 for Mr. Stewart and annual grants of equity-based awards with a target
value initially set at $1,600,000 for Mr. Jenkins and $1,600,000 for Mr. Stewart, with such amounts subject to annual review by the Board
(or a committee thereof).
Each
executive is eligible to be granted new allocations in respect of carried interests in respect of funds managed by us as is determined
by the Board (or a committee thereof) from time to time in consultation with the applicable executive. In addition, during his employment
term, Mr. Jenkins will be allocated (i) a 27.5% interest in the management incentive equity plan (the “MIP”) for the joint
venture between the Company and Wafra during such time that the MIP is in effect and (ii) specified carried interest allocations ranging
from 3.5% to 9% for DBP II and certain other funds. The executives will be eligible to participate in certain of our benefit plans made
available to our senior executive officers from time to time.
The
agreements provide that if the executive’s employment is terminated by us without “cause” (as defined in the agreements
and including non-renewal of the employment agreements by us) or by the executive for “good reason” (as defined in the agreement
and described below), and the executive executes a release of claims, such executive will be eligible to receive (i) a lump sum cash payment
equal to two times the sum of base salary and average annual bonus with respect to the three prior calendar years (or target bonus then
in effect for such executive in the case of a termination of employment of Mr. Jenkins that occurs prior to payment of his annual bonus
in respect of calendar year 2022 or a termination of employment of Mr. Stewart that occurs prior to payment of his respective annual bonus
in calendar year 2023), (ii) a lump sum cash payment equal to the annual bonus payable in respect of the year prior to the year of termination,
if unpaid as of the date of termination, (iii) a pro-rated target bonus for the year of termination, (iv) full vesting of all equity-based
awards of the company, carried interests and other like compensation that such executive holds, to the extent unvested upon such termination,
and (v) for Mr. Jenkins, continued medical, dental and vision benefits at active employee rates for 24 months following termination.
The
agreements provide that if an executive provides notice to us of his intention not to renew the agreement upon the scheduled expiration
of the initial term or any renewal term, then such executive will receive (i) a lump sum cash payment in respect of the annual bonus payable
in respect of the year prior to the year of termination, if unpaid as of the date of termination, and (ii) a pro-rated target bonus for
the year of termination. Upon a change in control (as such term is defined in the Company’s 2014 Omnibus Stock Incentive Plan),
Mr. Jenkins’ employment agreement also provides for full vesting of all of Mr. Jenkins’ equity
DIGITALBRIDGE
2023 PROXY STATEMENT | 59
COMPENSATION
DISCUSSION AND ANALYSIS
and equity-based awards of the Company, carried interests and other like compensation that he holds, to the extent unvested.
For
purposes of the agreements, “good reason” includes, in summary, (i) a material diminution in the executive’s duties,
authority or responsibilities or a diminution in the executive’s title or position, (ii) a requirement that the executive report
to any person other than the Company’s Chief Executive Officer, (iii) a reduction in the executive’s base salary, target annual
cash bonus or target annual equity incentive grant then in effect, (iv) a 25-mile relocation of the executive’s principal place
of business, or (v) a material breach of the agreement by us or a material breach of any other material agreement with the executive by
us.
In
the event of termination due to death or disability, the executive will receive (i) a lump sum cash payment equal to the annual bonus
payable in respect of the year prior to the year of termination, if unpaid as of the date of termination, (ii) a pro-rated target bonus
for the year of termination, (iii) full vesting of all equity-based awards of the company, carried interests and other like compensation
that such executive holds, to the extent unvested upon such termination.
The
agreements include a provision providing that if any payments to be made to the executive, whether under the agreement or otherwise, would
subject the executive to the excise tax on so-called “golden parachute payments” in accordance with Sections 280G or 4999
of the Code, then the payments will be reduced to the extent necessary to avoid the excise tax, but only if the amount of the payments
after such reduction would result in the executive receiving a greater net after-tax benefit than if all of the payments were provided
and the excise tax were imposed.
In
addition, the agreements, through a restrictive covenant agreement that is included as an exhibit to the agreements, provide that the
executives will not, subject to certain exceptions, compete with us, or solicit our investors or customers or employees or those of our
subsidiaries during their employment with us and for the one-year period (or in the case of Mr. Jenkins, the two-year period) following
the termination of their employment with us unless their employment is terminated by us without cause (as defined in the agreement and
including non-renewal of the employment agreement by us) or by the executive for “good reason” (as defined in the agreement
and described above). The agreements contain covenants relating to the treatment of confidential information and intellectual property
matters and restrictions on the ability of the executives and us to disparage the other.
Equity
Compensation Plan Information
The
following table provides summary information on the securities issuable under our equity compensation plans as of December 31, 2022.
| Plan
Category |
Number
of Securities to
Be Issued Upon Exercise
of Outstanding Options,
Warrants and Rights(1)
(a) |
Weighted-Average
Exercise
Price of
Outstanding Options,
Warrants and Rights
(b) |
Number
of Securities Remaining
Available for Future Issuance Under
Equity Incentive Plans (Excluding
Securities Reflected in Column
(a))
(c) |
| Equity
compensation plans approved by security holders |
|
|
|
| DBRG
Equity Incentive Plan |
10,172,499(2) |
N/A |
2,727,882 |
| Pre-merger
equity awards |
2,510(3) |
N/A |
— |
| Total |
10,175,009 |
|
2,727,882(4) |
|
(1) |
As of December 31, 2022, represents shares
of the Company’s Class A common stock issuable pursuant to awards of restricted stock units, LTIP units and deferred stock units
and for redemption of OP units, as noted below. Conditioned on minimum allocation to the capital accounts of the LTIP unit for federal
income tax purposes, each LTIP unit could |
60 | DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
|
|
have been converted, at the election
of the holder, into one OP Unit. Each of the OP Units underlying these LTIP units was redeemable at the election of the holder, at the
Company’s option in its capacity as general partner of our Operating Company, for: (i) cash equal to the then fair value of one
share of the Company’s Class A common stock; or (ii) one share of the Company’s Class A common stock. Deferred stock units
are held by certain of our non-executive directors and are payable in shares of the Company’s Class A common stock either upon a
director’s departure from our board of directors or in annual installments over three years following departure. Except as set forth
in footnote (4) below, does not include securities issuable pursuant to NorthStar Realty Finance Corp’s Third Amended and Restated
2004 Omnibus Stock Incentive Plan, which our company assumed on January 10, 2017 in accordance with the merger agreement. |
|
(2) |
Includes the maximum number of shares of our Class A common stock
issuable pursuant to (i) awards of 2,397,391 restricted stock units subject to performance-based conditions at the maximum payout of 100%,
(ii) awards of 1,916,106 restricted stock units subject to performance-based conditions at the maximum payout of 200%, (iii) 3,768,411
LTIP units, of which 2,625,000 LTIP units are subject to performance-based conditions, and (iv) 174,485 deferred stock units issued to
our non-executive directors pursuant to the deferred compensation program, in each case, that were outstanding as of December 31, 2022. |
|
(3) |
Represents shares of the Company’s Class A common stock
issuable pursuant to outstanding OP Units originally granted by, or issued with respect to awards that were originally granted by, NorthStar
Realty Finance Corp’s (“NRF”) prior to the merger among the Company, NorthStar Asset Management Group Inc. and NRF on
January 10, 2017 (“Merger”), which were outstanding as a result of anti-dilution adjustments made in connection with the Merger.
The issuance of shares of the Company’s Class A common stock pursuant to these awards was approved by NRF’s stockholders prior
to the Merger and, as disclosed in connection with the Merger, the shares of the Company’s Class A common stock to be issued pursuant
to these awards will not be issued pursuant to, and will not reduce availability under, the DBRG Equity Incentive Plan. |
|
(4) |
Pursuant to the terms of the DBRG Equity Incentive Plan, the number
of shares of common stock reserved for issuance thereunder automatically increases on January 1st of each year by 2% of the outstanding
number of shares of our common stock on the immediately preceding December 31st. In addition, with respect to the performance-based restricted
stock units, the Company is permitted to withhold shares, in its discretion, to satisfy the grantee’s tax withholding obligations,
and such shares are included in the common stock reserved for future issuance. |
CEO
Pay Ratio
The
ratio of our Chief Executive Officer’s annual total compensation for 2022 to that of the median employee’s annual total compensation
for 2022 is 177x. This ratio is based on the 2022 annual total compensation of $38,321,508 for Mr. Ganzi, as our Chief Executive Officer
as of December 31, 2022 (the “Measurement Date”), as reported in the Summary Compensation Table above and the 2022 annual
total compensation of $216,626 for the median employee, using the same components of compensation as used in the Summary Compensation
Table for the Chief Executive Officer. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC
rules based on our internal records and the methodology described below.
The
median employee was determined using annual total compensation paid by our company during 2022 to our employees (other than our Chief
Executive Officer) as of the Measurement Date, which was consistent with the methodology used for last year’s determination as of
December 31, 2021. Any compensation paid to employees in foreign currencies was converted to U.S. dollars as of the Measurement Date.
DIGITALBRIDGE
2023 PROXY STATEMENT | 61
COMPENSATION
DISCUSSION AND ANALYSIS
Pay Versus Performance
As required by Section
953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following
information about the relationship between executive compensation actually paid and certain financial performance of the Company. The
disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation
Committee views the link between the Company’s performance and its NEO’s pay. For a discussion of how the Company views its
executive compensation structure, including alignment with Company performance, see “Compensation Discussion and Analysis”
beginning on page 35. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions
for any of the years shown.
| |
|
|
|
|
|
|
|
Value
of Initial Fixed |
|
|
|
| |
|
|
|
|
|
|
Average |
|
|
$100
Investment |
|
|
|
| |
|
|
|
|
|
|
Summary |
Average |
|
Based
On: |
|
|
|
| |
|
|
|
|
|
|
Compensation |
Compensation |
|
|
Peer |
|
|
|
| |
Summary
Compensation |
|
Compensation
Actually |
|
Table |
Actually |
|
|
Group |
|
|
|
| |
Table
Total for PEO1 |
|
Paid
to PEO2 |
|
Total
for |
Paid
to |
|
Total |
Total |
|
|
FEEUM |
| |
($) |
|
($) |
|
Non-PEO |
Non-PEO |
|
Shareholder |
Shareholder |
|
Net |
Capital |
| |
Marc
C. |
Thomas |
|
Marc
C. |
Thomas
J. |
|
NEOs3 |
NEOs4 |
|
Return5 |
Return6 |
|
Income |
Raise |
| Year |
Ganzi |
Barrack,
Jr. |
|
Ganzi |
Barrack,
Jr. |
|
($) |
($) |
|
($) |
($) |
|
($
millions)7 |
($
millions)8 |
| (a) |
(b)(i) |
(b)(ii) |
|
(c)(i) |
(c)(ii) |
|
(d) |
(e) |
|
(f) |
(g) |
|
(h) |
(i) |
| 2022 |
38,321,508 |
— |
|
(23,388,454) |
— |
|
7,646,528 |
3,902,589 |
|
60.68 |
111.72 |
|
(570) |
4,618 |
| 2021 |
22,459,034 |
— |
|
63,324,484 |
— |
|
9,614,818 |
14,986,393 |
|
184.51 |
153.75 |
|
(817) |
6,810 |
| 2020 |
4,815,779 |
10,200,262 |
|
10,390,831 |
28,177,174 |
|
4,573,017 |
6,045,206 |
|
106.54 |
117.15 |
|
(3,790) |
7,246 |
| (1) |
The
dollar amounts in columns (b)(i) and (b)(ii) are the amounts of total compensation reported for each principal executive officer (“PEO”)
as reported in the “Total” column of the Summary Compensation Table for each year in which they served as PEO, and we refer
to Mr. Barrack as our “Prior PEO.” Refer to “Executive Compensation—Executive Compensation Tables—Summary
Compensation Table.” |
| |
|
| (2) |
The
dollar amounts in columns (c)(i) and (c)(ii) represent the amount of “compensation actually paid” to each PEO as computed
in accordance with Item 402(v) of Regulation S-K for each corresponding year in which they served as PEO. The dollar amounts do not reflect
the actual amount of compensation earned by or paid to Mr. Ganzi or our Prior PEO during the applicable year. In accordance with the requirements
of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Ganzi’s
total compensation for each year to determine the compensation actually paid: |
| |
|
Reported |
|
|
|
| |
|
Summary |
Reported |
|
|
| |
|
Compensation |
Value
of |
Equity |
Compensation |
| |
|
Table
Total |
Equity |
Award |
Actually |
| |
|
for
PEO |
Awards(a) |
Adjustments(b) |
Paid
to PEO |
| |
Year |
($) |
($) |
($) |
($) |
| |
2022 |
38,321,508 |
(7,246,051) |
(54,463,911) |
(23,388,454) |
| |
2021 |
22,459,034 |
(10,922,100) |
51,787,549 |
63,324,484 |
| |
2020 |
4,815,779 |
(176,489) |
5,751,542 |
10,390,831 |
In accordance with the
requirements of Item 402(v) of Regulation S-K, the following adjustments were made to our Prior PEOs total compensation to determine the
compensation actually paid in 2020:
| |
|
Reported |
|
|
|
| |
|
Summary |
Reported |
|
|
| |
|
Compensation |
Value
of |
Equity |
Compensation |
| |
|
Table
Total |
Equity |
Award |
Actually |
| |
|
for
PEO |
Awards(a) |
Adjustments(b) |
Paid
to PEO |
| |
Year |
($) |
($) |
($) |
($) |
| |
2020 |
10,200,262 |
(3,565,431) |
21,542,342 |
28,177,174 |
62
| DIGITALBRIDGE
2023 PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
| (a) |
The grant date fair value of equity awards represents the total of the amounts
reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |
| |
|
| (b) |
The equity award adjustments for each applicable year include the addition
(or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that
are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of
the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable
year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted
in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal
year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during
the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value
of any dividends or other earnings paid on stock awards in the applicable year prior to the vesting date that are not otherwise reflected
in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions
used to calculate fair values did not materially differ from those disclosed at the time of grant. |
The amounts deducted or added in calculating the equity
award adjustments for Mr. Ganzi are as follows:
| |
|
|
|
|
|
Fair |
Value |
|
| |
|
|
|
|
Year |
Value
at the |
of
Dividends |
|
| |
|
|
|
|
over
Year |
End
of the |
or
other |
|
| |
|
|
|
Fair |
Change
in |
Prior |
Earnings |
|
| |
|
|
Year |
Value
as of |
Fair
Value |
Year
of Equity |
Paid
on |
|
| |
|
|
over
Year |
Vesting
Date |
of
Equity |
Awards
that |
Stock
not |
|
| |
|
|
Change
in |
of
Equity |
Awards |
Failed |
Otherwise |
|
| |
|
Year
End |
Fair
Value of |
Awards |
Granted |
to
Meet |
Reflected
in |
Total |
| |
|
Fair
Value |
Outstanding |
Granted |
in
Prior Years |
Vesting |
Fair
Value or |
Equity |
| |
|
of
Equity |
and
Unvested |
and
Vested |
that
Vested |
Conditions |
Total |
Award |
| |
|
Awards |
Equity
Awards |
in
the Year |
in
the Year |
in
the Year |
Compensation |
Adjustments |
| |
Year |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
| |
2022 |
1,671,856 |
(55,660,831) |
— |
(477,512) |
— |
2,576 |
(54,463,911) |
| |
2021 |
12,141,070 |
39,611,280 |
— |
35,199 |
— |
— |
51,787,549 |
| |
2020 |
648,535 |
5,097,629 |
— |
— |
— |
5,378 |
5,751,542 |
The amounts deducted
or added in calculating the equity award adjustments for our Prior PEO in 2020 are as follows:
| |
|
|
|
|
|
Fair |
Value |
|
| |
|
|
|
|
Year |
Value
at the |
of
Dividends |
|
| |
|
|
|
|
over
Year |
End
of the |
or
other |
|
| |
|
|
|
Fair |
Change
in |
Prior |
Earnings |
|
| |
|
|
Year |
Value
as of |
Fair
Value |
Year
of Equity |
Paid
on |
|
| |
|
|
over
Year |
Vesting
Date |
of
Equity |
Awards
that |
Stock
not |
|
| |
|
|
Change
in |
of
Equity |
Awards |
Failed |
Otherwise |
|
| |
|
Year
End |
Fair
Value of |
Awards |
Granted |
to
Meet |
Reflected
in |
Total |
| |
|
Fair
Value |
Outstanding |
Granted |
in
Prior Years |
Vesting |
Fair
Value or |
Equity |
| |
|
of
Equity |
and
Unvested |
and
Vested |
that
Vested |
Conditions |
Total |
Award |
| |
|
Awards |
Equity
Awards |
in
the Year |
in
the Year |
in
the Year |
Compensation |
Adjustments |
| |
Year |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
| |
2020 |
13,101,786 |
1,239,403 |
5,448,922 |
(744,577) |
— |
2,496,808 |
21,542,342 |
| (3) |
The dollar
amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group excluding the PEO
(the “Non-PEO NEOs”) in the “Total” column of the Summary Compensation Table in each applicable year. The names
of each of the Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022,
Benjamin J. Jenkins, Jacky Wu, Ronald M. Sanders and Liam Stewart; (ii) for 2021, Jacky Wu, Ronald M. Sanders, Sonia Kim and Thomas J.
Barrack, Jr.; and (iii) for 2020, Jacky Wu, Ronald M. Sanders, Neale W. Redington, Mark M. Hedstrom, Darren J. Tangen and Kevin P. Traenkle. |
| |
|
| (4) |
The
dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the Non-PEO NEOs, as
computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the |
DIGITALBRIDGE
2023 PROXY STATEMENT | 63
COMPENSATION
DISCUSSION AND ANALYSIS
|
actual average amount of compensation earned by or paid to the Non-PEO NEOs
during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made
to average total compensation for the Non-PEO NEOs for each year to determine the compensation actually paid, using the same methodology
described above in Note 2: |
| |
|
Average |
|
|
|
| |
|
Reported
Summary |
Average |
|
Average |
| |
|
Compensation |
Reported |
Average
Equity |
Compensation |
| |
|
Table
Total for |
Value
of Equity |
Award |
Actually
Paid |
| |
|
Non-PEO
NEOs |
Awards |
Adjustments(a) |
to
Non-PEO NEOs |
| |
Year |
($) |
($) |
($) |
($) |
| |
2022 |
7,646,528 |
(1,212,185) |
(2,531,754) |
3,902,589 |
| |
2021 |
9,614,818 |
(2,623,760) |
7,995,335 |
14,986,393 |
| |
2020 |
4,573,017 |
(722,530) |
2,194,719 |
6,045,206 |
| (a) |
The amounts deducted or added in calculating the total average equity award
adjustments are as follows: |
| |
|
|
|
|
|
Average
Fair |
Average
Value |
|
| |
|
|
|
|
Year
over Year |
Value
at the |
of
Dividends |
|
| |
|
|
|
Average |
Average |
End
of the |
or
other |
|
| |
|
|
|
Fair |
Change
in |
Prior |
Earnings |
|
| |
|
|
Year
over |
Value
as of |
Fair
Value |
Year
of Equity |
Paid
on |
|
| |
|
|
Year
Average |
Vesting
Date |
of
Equity |
Awards
that |
Stock
not |
|
| |
|
Average |
Change
in |
of
Equity |
Awards |
Failed |
Otherwise |
Total |
| |
|
Year
End |
Fair
Value of |
Awards |
Granted |
to
Meet |
Reflected
in |
Average |
| |
|
Fair
Value |
Outstanding |
Granted |
in
Prior Years |
Vesting |
Fair
Value or |
Equity |
| |
|
of
Equity |
and
Unvested |
and
Vested |
that
Vested |
Conditions |
Total |
Award |
| |
|
Awards |
Equity
Awards |
in
the Year |
in
the Year |
in
the Year |
Compensation |
Adjustments |
| |
Year |
($) |
($) |
($) |
($) |
($) |
($) |
($) |
| |
2022 |
338,993 |
(2,375,753) |
— |
(495,810) |
— |
816 |
(2,531,754) |
| |
2021 |
2,296,938 |
3,969,682 |
602,441 |
1,126,274 |
— |
— |
7,995,335 |
| |
2020 |
2,110,144 |
89,316 |
352,189 |
(404,145) |
— |
47,215 |
2,194,719 |
| (5) |
Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the applicable
fiscal year, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of
such fiscal year by the Company’s share price at the beginning of such fiscal year. |
| |
|
| (6) |
Represents the Dow Jones U.S. Asset Managers
Index peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period
for which a return is indicated. |
| |
|
| (7) |
The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial
statements for the applicable year. |
| |
|
| (8) |
FEEUM Capital Raise is defined as the
gross increase in FEEUM resulting from capital commitments closed during the applicable fiscal year. While the Company uses numerous financial
and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company
has determined that FEEUM Capital Raise is the financial performance measure that, in the Company’s assessment, represents the most
important performance measure (that is not otherwise required to be disclosed in the table) used by the company to link compensation actually
paid to the company’s NEOs, for the most recently completed fiscal year, to company performance. |
Financial
Performance Measures
As described in greater
detail in “Executive Compensation—Compensation Discussion and Analysis,” the Company’s executive compensation
program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term
incentive awards are selected based on an objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders.
The most important financial performance measures used by the Company to link executive compensation actually
64
| DIGITALBRIDGE 2023
PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
paid to the Company’s
NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
| ■ |
Digital
FEEUM Capital Raise |
| ■ |
Digital
IM Revenues |
| ■ |
Digital
Operating Revenues |
| ■ |
Digital
IM FRE |
| ■ |
Digital
Operating adjusted EBITDA |
| ■ |
Relative
TSR (the Company’s TSR as compared to a peer group established by the Compensation Committee) |
Analysis
of the Information Presented in the Pay versus Performance Table
As described in more detail
in the section “Executive Compensation—Compensation Discussion and Analysis,” the Company’s executive compensation
program reflects a variable pay-for-performance philosophy. While the Company utilizes several performance measures to align executive
compensation with Company performance, all of those Company measures are not presented in the Pay versus Performance table. Moreover,
the Company generally seeks to incentivize long-term performance, and therefore does not specifically align the Company’s performance
measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year.
In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information
presented in the Pay versus Performance table.
Compensation
Actually Paid and Cumulative TSR
DIGITALBRIDGE
2023 PROXY STATEMENT | 65
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Actually Paid and Net Income (Loss)
Compensation
Actually Paid and FEEUM Capital Raise
66
| DIGITALBRIDGE 2023
PROXY STATEMENT
COMPENSATION
DISCUSSION AND ANALYSIS
Cumulative
TSR of the Company and Cumulative TSR of the Peer Group
DIGITALBRIDGE
2023 PROXY STATEMENT | 67
SECURITY
OWNERSHIP OF
CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Ownership
of Equity Securities of the Company by Directors and Executive Officers
The
following table sets forth, as of March 15, 2023, the total number and the percentage of shares of our common stock beneficially owned
by:
| ■ |
each of our directors and each nominee
for director; |
| ■ |
each of our named executive officers;
and |
| ■ |
all of our directors and named executive
officers as a group. |
|
Name
and Address of
Beneficial
Owner(1) |
Common
Share Equivalents(2) |
Class
A Common
Stock(2) |
Class
B Common Stock |
|
Number
of Shares
Beneficially
Owned |
%
of Common
Share
Equivalents |
%
of Class A
Shares |
Number
of Shares Beneficially Owned |
%
of Class B
Shares |
| Marc
Ganzi(3) |
2,805,776 |
1.61% |
* |
— |
— |
| Benjamin
J. Jenkins(3) |
2,404,402 |
1.38% |
* |
— |
— |
| Jacky
Wu(3) |
342,047 |
* |
* |
— |
— |
| Ronald
M. Sanders(3) |
301,684 |
* |
* |
— |
— |
| Liam
Stewart(3) |
171,957 |
* |
* |
— |
— |
| James
Keith Brown |
— |
— |
— |
— |
— |
| J.
Braxton Carter(5) |
21,765 |
* |
* |
— |
— |
| Nancy
A. Curtin(4) |
84,736 |
* |
* |
— |
— |
| Jeannie
H. Diefenderfer(5) |
33,344 |
* |
* |
— |
— |
| Jon
A. Fosheim(4) |
76,199 |
* |
* |
— |
— |
| Gregory
J. McCray(5) |
16,021 |
* |
* |
— |
— |
| Sháka
Rasheed(4)(5) |
13,063 |
* |
* |
— |
— |
| Dale
Anne Reiss(5) |
40,096 |
* |
* |
— |
— |
| David
M. Tolley(4)(5) |
6,267 |
* |
* |
— |
— |
| All
directors and executive officers as a group (14 persons) |
6,379,368 |
3.65% |
0.95% |
— |
— |
|
(1) |
The address of each of beneficial owner
is c/o DigitalBridge Group, Inc., 750 Park of Commerce Drive, Suite 210, Boca Raton, FL 33487. |
|
(2) |
Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. “Common Share
Equivalents” includes (A) 161,632,617 shares of our Class A common stock and 166,494 shares of Class B common stock, in each case
where (i) the investor actually owns beneficially or of record, (ii) over which the investor has or shares direct or indirect voting or
dispositive control (such as in the capacity as a general partner of an investment fund); and (iii) over which the investor has the right
to acquire direct or indirect voting or dispositive control within 60 days, (B) 163,193 deferred stock units held by certain |
68 | DIGITALBRIDGE
2023 PROXY STATEMENT
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
of our non-executive directors, which
will be automatically settled in shares of our Class A common stock following each such director’s departure from our Board, and
(C) 12,628,873 OP units and LTIP units which may be redeemed for cash or, at our option, shares of Class A common stock, subject to certain
conditions, and in accordance with the limited liability company agreement of our Operating Company, in each case, as of March 15, 2023.
The percentages presented in the table are based on (i) 174,591,177 common share equivalents, (ii) 161,632,617 shares of our Class A common
stock and (iii) 166,494 shares of Class B common stock outstanding, in each case, as of March 15, 2023. |
|
(3) |
Includes shares of restricted Class A
common stock subject to time-based vesting for Messrs. Ganzi, Jenkins, Wu, Sanders and Stewart and Ms. Kim. Excludes restricted stock
units subject to performance-based vesting. |
|
(4) |
Includes deferred stock units as follows:
Ms. Curtin—79,221; Mr. Fosheim—70,343; and Mr. Rasheed—13,063. |
|
(5) |
Includes shares of restricted Class A
common stock subject to time-based vesting for Messrs. Carter, McCray, Rasheed and Tolley and Mses. Diefenderfer and Reiss. |
None
of our named executive officers or directors owns any shares of our preferred stock, other than Mr. Fosheim, who beneficially owned 4,400
shares of our Series J preferred stock as of March 15, 2023.
Ownership
of Equity Securities of the Company by 5% Stockholders
The
following table sets forth how many shares of our Class A common stock are beneficially owned by each person known to us to be the beneficial
owner of more than five percent (5%) of the outstanding shares of our Class A common stock, in each case, based solely on, and as of the
date of, such person’s filing of a Schedule 13D or Schedule 13G with the SEC.
| |
Amount
and Nature of Beneficial Ownership of
Class A Common Stock |
| Name
and Address of Beneficial Owner |
Number |
Percentage(1) |
| The
Vanguard Group(2) |
24,459,059
|
15.3% |
| Wafra
Inc.(3) |
15,785,759
|
9.8% |
| BlackRock,
Inc.(4) |
10,913,382
|
6.8% |
| Capital
International Investors(5) |
8,363,593
|
5.2% |
|
(1) |
The percentages presented in the table is based on 161,632,617
shares of our Class A common stock outstanding as of March 15, 2023. |
|
(2) |
Based solely on information provided in a Schedule 13G/A filed
on February 9, 2023, The Vanguard Group, Inc. has sole voting power with respect to 0 shares of our Class A common stock, sole dispositive
power with respect to 24,046,087 shares of our Class A common stock, shared voting power with respect to 256,905 shares of our Class A
common stock, and shared dispositive power with respect to 412,972 shares. The address of The Vanguard Group, Inc., as reported by it
in the Schedule 13G/A, is 100 Vanguard Blvd., Malvern, PA 19355. |
|
(3) |
Based solely on information provided in a Schedule 13G/A filed
on November 29, 2022, Wafra Strategic Holdings LP, WSH GP LLC, Wafra Inc. and Wafra Funds GP Inc. (the “Wafra Reporting Persons”),
and The Public Institution of Social Security, a public pension plan that is indirectly owned and controlled by the government of the
State of Kuwait (“PIFSS”), have sole voting and dispositive power with respect to 15,785,759 shares of our Class A common
stock. The address of the Wafra Reporting Persons, as reported in the Schedule 13G/A, is 345 Park Avenue, 41st Floor New York, New York
10154-0101 and the address of PIFSS is AlMurqab, Al-Soor St, Ta’aminat Building, Kuwait City 13104 Kuwait. |
|
(4) |
Based solely on information provided
in a Schedule 13G/A filed on February 3, 2023, BlackRock, Inc. has sole voting power with respect to 10,702,145 shares of our Class A
common stock, sole dispositive power with respect to 10,913,832 shares of our Class A common stock, shared voting power with respect to
0 shares of our Class A common stock, and shared dispositive power with respect to 0 shares. The address of BlackRock, Inc., as reported
by it in the Schedule 13G/A, is 55 East 52nd Street, New York, NY 10055. |
DIGITALBRIDGE
2023 PROXY STATEMENT | 69
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
(5) |
Based solely on information provided
in a Schedule 13G/A filed on February 13, 2023, Capital International Investors has sole voting and dispositive power with respect to
8,363,593 shares of our Class A common stock. The address of Capital International Investors, as reported by it in the Schedule 13G/A,
is 333 South Hope Street, 55th Fl, Los Angeles, CA 90071. |
70 | DIGITALBRIDGE
2023 PROXY STATEMENT
PROPOSAL
NO. 3:
ADVISORY
VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
We
are seeking an advisory vote on the frequency with which say-on-pay votes should be held in the future. This advisory vote is commonly
referred to as “say-on-frequency.” Stockholders may vote to indicate their preference for conducting a say-on-pay vote as
follows:
| ■ |
Abstain from voting on this proposal. |
The
Board of Directors has determined that holding a say-on-pay vote every year is the most appropriate alternative for the Company. In recommending
an annual advisory vote on executive compensation, the Board considered that an annual vote will allow our stockholders to provide us
with timely feedback on our compensation policies and practices as disclosed in the proxy statement every year, which will allow us to
take action, if appropriate, on a real-time basis. Additionally, an annual say-on-pay vote is consistent with our general policy of seeking
regular input from, and engaging in discussions with, our stockholders on corporate governance matters and our executive compensation
policies and practices.
Because
this proposal is advisory, it will not be binding on the Company, and the Board of Directors may determine to hold an advisory vote on
executive compensation more or less frequently than the option selected by our stockholders. However, the Board of Directors values our
stockholders’ opinions, and the Board will consider the outcome of the vote when determining the frequency of future advisory votes
on executive compensation.
|
Our
Board of Directors Recommends a Vote, on a Non-binding, Advisory Basis, for “ONE YEAR”
for the Frequency of the of the Advisory Vote On Named Executive Officer Compensation. |
DIGITALBRIDGE
2022 PROXY STATEMENT | 71
PROPOSAL
NO. 4:
AMENDMENT
TO OUR CHARTER TO DECREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The
Board has approved and is requesting stockholder approval to amend the Charter to decrease (i) the number of authorized shares of Class
A common stock from 949,000,000 to 237,250,000, (ii) the number of authorized shares of Class B common stock from 1,000,000 to 250,000
and (iii) the number of authorized shares of Performance common stock from 50,000,000 to 12,500,000. Consistent with the foregoing, the
number of overall shares of capital stock would be reduced from 1,250,000,000 to 500,000,000, inclusive of 250,000,000 authorized shares
of preferred stock (such amendments collectively, the “Authorized Share Decrease Amendment”). A copy of the proposed amendment
is attached to this Proxy Statement as Exhibit A. The Board has determined that it is
advisable and in the best interests of the Company and its stockholders to amend the Charter to reduce the number of authorized common
shares in a manner that is proportional to the Company’s August 2022 reverse stock split as discussed below.
Reason
for the Authorized Share Decrease Amendment
On
August 18, 2022, the Company filed Articles of Amendment to the Company’s Charter to effect a 1-for-4 reverse stock split of the
outstanding shares of Class A common stock and Class B common stock of the Company (the “Reverse Stock Split”). Pursuant to
the Articles of Amendment, each outstanding share of the Company’s Class A common stock, par value $0.01 per share, and Class B
common stock, par value $0.01 per share, automatically combined into 1/4th of a share of Class A common stock or Class B common
stock, respectively, par value $0.04 per share, and any resulting fractional shares were paid out in cash.
Under
Maryland law and our Charter, implementation of the Reverse Stock Split did not automatically proportionally decrease the total number
of common shares authorized under the Charter, and such change was not required. The primary purpose of the Authorized Share Decrease
Amendment is to reduce the total number of common shares that we are authorized to issue in a manner that is proportional to the Reverse
Stock Split so that we do not have what some might view as an unreasonably high number of authorized common shares that are unissued or
not reserved for issuance. The Board believes that, even after such amendment, we will continue to have sufficient authorized but unissued
shares of stock in an amount adequate to provide for our future needs, which may include possible future equity financings, future opportunities
for expanding our business through investments or acquisitions, management incentives and employee benefit plans, stock dividends or stock
splits, and for other general corporate purposes. If, in the future, our Board determines that it would be in the best interests of the
Company and its stockholders to issue a number of shares of stock in excess of the number of then authorized but unissued and unreserved
shares, we would be required to seek the approval of our stockholders to increase the number of shares of authorized stock.
As
of March 15, 2023, we had (i) 161,632,617 shares of Class A common stock issued and outstanding, (ii) 166,494 shares of Class B common
stock issued and outstanding, (iii) 0 shares of Performance common stock issued and outstanding and (iv) 33,111,195 shares of preferred
stock issued and outstanding.
72 | DIGITALBRIDGE
2022 PROXY STATEMENT
Effects
of the Amendment
The
Authorized Share Decrease Amendment will not change any rights of any holder of our common or preferred stock.
The
proposed amendment would decrease (i) the number of authorized shares of Class A common stock from 949,000,000 to 237,250,000, (ii) the
number of authorized shares of Class B common stock from 1,000,000 to 250,000 and (iii) the number of authorized shares of Performance
common stock from 50,000,000 to 12,500,000. Consistent with the foregoing, the number of overall shares of capital stock would be reduced
from 1,250,000,000 to 500,000,000, inclusive of 250,000,000 authorized shares of preferred stock.
If
the Authorized Share Decrease Amendment is approved by our stockholders, the Authorized Share Decrease Amendment would become effective
when the Authorized Share Decrease Amendment is accepted and recorded by the State Department of Assessments and Taxation of Maryland.
If the amendment is not approved, our current authorized stock will remain unchanged.
Vote
Required
The
affirmative vote of a majority of all the votes entitled to be cast on the matter is required to approve the Authorized Share Decrease
Amendment. Each holder of our common shares is entitled to cast a vote on the Authorized Share Decrease Amendment. Pursuant to our Charter,
including the applicable articles supplementary, no holders of our preferred stock are entitled to vote on this Authorized Share Decrease
Amendment.
Amendment
to Change Par Value
Prior
to or concurrently with the filing of the Authorized Share Decrease Amendment, the Company intends to file an amendment to reduce the
par value of our common stock from $0.04 per share to $0.01 per share. Pursuant to Section 2-605 of the Maryland General Corporation Law
and our Charter, the majority of the entire board of directors, without action by the stockholders, may amend the charter of a corporation
to change the par value of any class or series of stock of the corporation and the aggregate par value of the stock of the corporation.
The Authorized Share Decrease Amendment reflects this intended change in par value.
|
Our
Board of Directors Recommends a Vote “FOR” Approval of the Amendment to our Charter
to Decrease the Number of Authorized Shares of Common Stock. |
DIGITALBRIDGE
2022 PROXY STATEMENT | 73
PROPOSAL
NO. 5:
RATIFICATION
OF APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of our Board of Directors has appointed Ernst & Young LLP as our independent registered public accounting firm for
the fiscal year ending December 31, 2023. A representative of Ernst & Young LLP is expected to be present at the 2023 Annual Meeting
and will be available to respond to appropriate questions from our stockholders and will be given an opportunity to make a statement if
he or she desires to do so.
Stockholder
ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm is not required by our bylaws
or otherwise. However, our Board is submitting the appointment of Ernst & Young LLP to the stockholders for ratification as a matter
of good corporate governance.
If
this selection is not ratified by our stockholders, the Audit Committee may, but need not, reconsider its appointment and endorsement.
Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered
public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company.
|
Our
Board of Directors Recommends a Vote “FOR” Ratification of the Selection of Ernst
& Young LLP as our Independent Registered Public Accounting Firm for the fiscal year ending December 31, 2023. |
74 | DIGITALBRIDGE
2022 PROXY STATEMENT
AUDIT
COMMITTEE
REPORT
The
Audit Committee is currently composed of Messrs. Carter (Chairman), Fosheim, Rasheed and Tolley and Ms. Reiss. The members of the Audit
Committee are appointed by and serve at the discretion of the Board of Directors. The Audit Committee operates under a written charter
adopted by our Board of Directors.
One
of the principal purposes of the Audit Committee is to assist the Board of Directors in the oversight of the integrity of the Company’s
financial statements. The Company’s management team has the primary responsibility for the financial statements and the reporting
process, including the system of internal controls and disclosure controls and procedures. In fulfilling its oversight responsibilities,
the Audit Committee reviewed and discussed the audited financial statements in the Annual Report on Form 10-K for the year ended December
31, 2022 with our management.
The
Audit Committee also is responsible for assisting the Board of Directors in the oversight of the qualification, independence and performance
of the Company’s independent auditors. The Audit Committee reviewed and discussed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, its judgments
as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to
be discussed with the Audit Committee under generally accepted auditing standards and those matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board Auditing and the SEC.
The
Audit Committee has received both the written disclosures and the letter from Ernst & Young LLP required by applicable requirements
of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee
concerning independence, and has discussed with Ernst & Young LLP its independence. In addition, the Audit Committee has considered
whether the provision of non-audit services, and the fees charged for such non-audit services, by Ernst & Young LLP are compatible
with maintaining the independence of Ernst & Young LLP from management and the Company.
Based
on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that our audited financial
statements for 2022 be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for filing with the SEC.
Audit
Committee:
DIGITALBRIDGE
2023 PROXY STATEMENT | 75
INDEPENDENT
REGISTERED
PUBLIC
ACCOUNTING FIRM’S FEES
Aggregate
fees billed and expected to be billed by Ernst & Young LLP for the fiscal years ended December 31, 2022 and 2021 were as follows:
| Type
of Fee |
2022
($) |
2021
($) |
| Audit
Fees(1) |
5,269,860 |
5,949,345 |
| Audit-Related
Fees(2) |
— |
100,000 |
| Tax
Fees(3) |
1,077,102 |
2,825,478 |
| All
Other Fees(4) |
2,000 |
2,000 |
| Total |
6,348,962 |
8,876,823 |
| (1) |
Fees for audit services for the fiscal
years ended December 31, 2022 and 2021 include fees associated with the annual audits for such years, for the Company and those audits
required by statute or regulation, including the audit of the Company’s internal control over financial reporting, the quarterly
review of the financial statements included in the Company’s quarterly reports on Form 10-Q, consultations with the Company’s
management on technical accounting and regulatory issues and services provided for assistance with and review of other regulatory filings. |
|
(2) |
Audit-related fees include fees for transaction
advisory services in connection with the Company’s potential acquisitions for the year ended December 31, 2021. |
|
(3) |
Tax fees represent fees and expenses
related to the review and assistance with the preparation of tax returns, tax consulting and structuring, and general federal, state and
foreign tax consulting. Tax compliance fees comprise $0.6 million and $1.8 million of this total for the years ended December 31, 2022
and 2021, respectively. |
|
(4) |
Other fees represent the annual subscription
fee for EY’s accounting research tool. |
Audit
Committee Pre-Approval Policy
The
Audit Committee’s policy is to review and pre-approve, either pursuant to the Audit Committee’s Audit and Non-Audit Services
Pre-Approval Policy or through a separate pre-approval by the Audit Committee, any engagement of the Company’s independent auditor
to provide any audit or permissible non-audit service to the Company. Pursuant to the Audit and Non-Audit Services Pre-Approval Policy,
which will be reviewed and reassessed annually by the Audit Committee, a list of specific services within certain categories of services,
including audit, audit-related, tax and other services, are specifically pre-approved for the upcoming or current fiscal year, subject
to an aggregate maximum annual fee payable by the Company for each category of pre-approved services. Any service that is not included
in the approved list of services must be separately pre-approved by the Audit Committee. In addition, all audit and permissible non-audit
services in excess of the pre-approved fee level, whether or not included on the pre-approved list of services, must be separately pre-approved
by the Audit Committee. The Audit Committee has delegated authority to its chairman to specifically pre-approve engagements for the performance
of audit and permissible non-audit services, provided that the estimated cost for such services shall not exceed $250,000. The chairman
must report all pre-approval decisions to the Audit Committee at its next scheduled meeting and provide a description of the terms of
the engagement, including (1) the type of services covered by the engagement, (2) the dates the engagement is scheduled to commence and
terminate, (3) the estimated fees payable by the Company pursuant to the engagement, (4) other material terms of the engagement, and (5)
such other information as the Audit Committee may request. All of the audit fees shown above were pre-approved by the Audit Committee.
76 | DIGITALBRIDGE
2022 PROXY STATEMENT
CERTAIN
RELATIONSHIPS
AND
RELATED TRANSACTIONS
Policy
for Review of Related Party Transactions
Our
Board of Directors has adopted a written Related Party Transaction Policy in order to ensure that related party transactions are properly
reviewed and fully disclosed in accordance with the rules and regulations of the SEC and NYSE. All related party transactions, including
transactions between us and any executive officer, director, director nominee or more than 5% stockholder of the Company, or any of their
immediate family members, where the amount involved exceeds $120,000 and in which such related person has a direct or indirect material
interest, must be approved or ratified by either our Audit Committee or a majority of the disinterested members of our Board of Directors.
For purposes of the policy, a related party transaction does not include any co-investments made by and between the Company (or its subsidiaries)
and one or more investment vehicles formed, sponsored and managed by the Company or its subsidiaries, regardless of when such co-investment
is made, or any transactions related to any such co-investment. As a general rule, all related party transactions should be on terms reasonably
comparable to those that could be obtained by the Company in arm’s length dealings with an unrelated third party; however, in such
cases where it may be impractical or unnecessary to make such a comparison, the Audit Committee or a majority of the disinterested members
of the Board may approve any such transaction at their discretion in accordance with the Related Party Transaction Policy.
In
preparation of the Company’s proxy statement, each director and executive officer completes a director and officer questionnaire,
which requires disclosure of any transactions with us in which the director or executive officer or any member of his or her immediate
family, has an interest.
Pursuant
to our Audit Committee’s charter, in addition to conducting a review of all related party transactions in accordance with the Related
Party Transaction Policy, the Audit Committee must review the Related Party Transaction Policy periodically and reports the results of
such reviews to Board.
Arrangements
with Company-Sponsored Private Funds
The
Company co-invests alongside Company sponsored private funds through joint ventures between the Company and the sponsored private fund.
These co-investment joint ventures are consolidated by the Company. The Company has capital commitments, as general partner, directly
into private funds and as an affiliate of the general partner, capital commitments satisfied through co-investment joint ventures. In
connection with the Company’s commitments as an affiliate of the general partner, the Company is allocated a proportionate share
of the costs of the private fund such as financing and administrative costs. Such costs expensed during the year ended December 31, 2022
were immaterial and they relate primarily to the Company’s share of deferred financing costs on borrowings of such funds.
Investment
in Managed Investment Vehicles
Subject
to the Company’s related party policies and procedures, senior management, investment professionals and certain other employees
may invest on a discretionary basis in investment vehicles sponsored by the Company, either directly in the vehicle or indirectly through
the general partner entity. These investments are generally not subject to management fees, but otherwise bear their proportionate share
of other operating expenses of the investment vehicles. During the year ended December 31, 2022, our executive officers (and, in some cases, certain investment trusts or other vehicles or charitable organizations controlled by them or their immediate family members) had the following gross contributions relating to their personal investments (and the investments of any such trusts) in Company sponsored investment vehicles and general partner entities: Mr. Ganzi, Mr. Jenkins, Mr. Wu and Mr. Stewart made gross contributions of $32.6 million, $23.0 million, $0.1 million and $0.2 million, respectively.
DIGITALBRIDGE
2023 PROXY STATEMENT | 77
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Incentive
Fee Allocations
The
Company may earn incentive fees from its managed private funds and investment companies. Incentive fees are determined based on the performance
of the investment vehicles subject to the achievement of minimum return hurdles in accordance with the terms set out in the respective
governing agreements. A portion of the incentive fees earned by the Company is allocated to senior management, investment professionals
and certain other employees of the Company, generally at 60%-65%, consistent with market terms. In 2022, our executive officers were allocated
an aggregate of 21.6% of the carried interest earned or to be earned from various funds and co-investment vehicles, all managed or previously
managed by affiliates of the Company.
MIP
In
connection with Wafra’s strategic investment in the Company, the Company established a performance-based management incentive equity
plan (the “MIP”) for the joint venture between the Company and Wafra (“DBMH”), with costs of such plan (including
any dilution of equity ownership in DBMH) borne ratably by the Company and Wafra. Allocations of MIP interests in DBMH were in the form
of base awards, subject to time-based vesting conditions, and performance awards, subject to performance-based vesting conditions. Vested
MIP interests (representing up to 5% of DBMH for base awards and up to 5% of DBMH for performance awards) are entitled to distributions
of DBMH’s available cash and participation in capital events (if any). In February 2022, Messrs. Ganzi, Jenkins, Stewart and Wu
were allocated an aggregate of 77.5% for the MIP. In May 2022, the Company purchased Wafra’s interest in DBMH. Messrs. Ganzi, Jenkins,
Stewart and Wu received awards valued at $1,707,721, $1,174,058, $213,465 and $ 213,465, respectively, in 2022 under the MIP. In the first
quarter of 2023, the Company accrued or paid $480,000, $330,000, $60,000 and $60,000 to Messrs. Ganzi, Jenkins, Stewart and Wu, respectively,
pursuant to their entitlements under the MIP, which is a component of their 2023 compensation. The Board then terminated the MIP and paid
out all deferred amounts that were being held by the Company for future distribution.
Aircraft
Reimbursement
In
November 2020, the Board approved an amendment to the employment agreement, dated as of July 25, 2019, between the Company and Mr. Ganzi
to provide for the reimbursement by the Company of certain defined fixed costs of any aircraft owned by Mr. Ganzi. The fixed cost reimbursements
will be made based on an allocable portion of an aircraft’s annual budgeted cash fixed operating costs, based on the number of hours
the aircraft will be used for business purposes. At least once a year, the Company will reconcile the budgeted fixed operating costs with
the actual fixed operating costs of the aircraft, and the Company or Mr. Ganzi, as applicable, will make a true-up payment for any difference.
The fixed cost reimbursement will be in addition to the Company’s reimbursement of certain variable operational costs of business
travel on a chartered or private jet, as provided in Mr. Ganzi’s employment agreement. The Company reimbursed Mr. Ganzi $712,251
in 2022.
Digital
Real Estate Acquisitions
Messrs.
Ganzi and Jenkins were former owners of Digital Bridge Holdings, LLC (“DBH”) prior to its merger into the Company in July
2019. Messrs. Ganzi and Jenkins had retained their equity investments and general partner interests in the portfolio companies of DBH,
which include DataBank and Vantage. As a result of the personal investments made by Messrs. Ganzi and Jenkins in DataBank and Vantage
SDC prior to the Company’s acquisition of DBH, additional investments made by the Company in DataBank and Vantage SDC subsequent
to their initial acquisitions may trigger future carried interest payments to
78 | DIGITALBRIDGE
2022 PROXY STATEMENT
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Messrs.
Ganzi and Jenkins upon the occurrence of future realization events. Such investments made by the Company include ongoing payments for
the build-out of expansion capacity, including lease-up of the expanded capacity and existing inventory, in Vantage SDC and the acquisition
of additional interest in DataBank from an existing investor in January 2022.
In
addition, the day-to-day operations of Vantage SDC continue to be managed by the existing management company of Vantage, in which Messrs.
Ganzi and Jenkins own an approximate 2% interest in the aggregate. Fees paid to the Vantage management company for Vantage SDC was $16.7
million for 2022.
Carried
Interest Allocation from Sponsored Investment Vehicles
With
respect to investment vehicles sponsored by the Company for which Messrs. Ganzi and Jenkins are invested in their capacity as former owners
of DBH, and not in their capacity as employees of the Company, any carried interest entitlement attributed to such investments by Messrs.
Ganzi and Jenkins as general partner are not subject to continuing vesting provisions and do not represent compensatory arrangements to
the Company. Such carried interest allocation to Messrs. Ganzi and Jenkins that are unrealized or realized but unpaid are included in
noncontrolling interests on the balance sheet, in the amount of $70.4 million at December 31, 2022 and $20.8 million at December 31, 2021.
Additionally, in connection with the DataBank recapitalization, Messrs. Ganzi and Jenkins received realized carried interest in amounts
of $43.3 million and $42.8 million, respectively, which are not deemed a compensatory arrangement. A portion of the carried interest received
by Mr. Ganzi and Mr. Jenkins from the transaction was reinvested into DataBank entities.
In
the aforementioned transactions, the Company took a series of steps to mitigate conflicts in the transactions, including, for certain
transactions, receiving fairness opinions on the purchase price from a nationally recognized third- party valuation firm. Additionally,
the transactions, specifically the related party aspects of the transactions, were approved by either the Board of Directors or the Audit
Committee of the Board of Directors.
DIGITALBRIDGE
2022 PROXY STATEMENT | 79
FREQUENTLY
ASKED
QUESTIONS
AND ANSWERS
Questions
and Answers about the 2023 Annual Meeting and Voting
What
is a proxy?
A
proxy is your legal designation of another person to vote on your behalf. By completing and returning the enclosed proxy card, you are
giving each of the persons named in the proxy card, Jacky Wu and Geoffrey Goldschein, the authority to vote your shares in the manner
you indicate on your proxy card. If you sign and return a proxy card without indicating how you want your shares to be voted, the persons
named as proxies will vote your shares in accordance with the Board’s recommendations on each proposal.
Who
is qualified to vote?
You
are qualified to vote on all matters presented to the stockholders at the meeting if you own shares of our Class A common stock, par value
$0.04 per share, or our Class B common stock, par value $0.04 per share, at the close of business on March 15, 2023, the record date for
the 2023 Annual Meeting.
How
many shares may vote at the meeting?
On
March 15, 2023, there were approximately 161,632,617 shares of Class A common stock outstanding and eligible to vote and 166,494 shares
of Class B common stock outstanding and eligible to vote. Each Class A common share is entitled to one vote and each Class B common share
is entitled to 36.5 votes. As a result, we expect that a total of 167,709,648 votes will be entitled to be cast (which we refer to in
this Proxy Statement as the “voting shares”) on all matters presented to stockholders at the meeting.
How
many shares must be present to hold the meeting?
The
presence at the 2023 Annual Meeting in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be
cast at the meeting will constitute a quorum for the transaction of business. Abstentions and broker non-votes, if any, will be counted
as present at the meeting for the purpose of determining a quorum. A broker non-vote occurs with respect to a proposal when a broker,
trustee, or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of stockholders but
is not permitted to vote on other proposals without instructions from the beneficial owner and the beneficial owner fails to provide the
nominee with such instructions. If a quorum is not present, the 2023 Annual Meeting may be adjourned by the chairman of the meeting to
a time and date not more than 120 days after the original record date without notice other than announcement at the meeting.
What
is the difference between a “stockholder of record” and a “street name” holder?
These
terms describe how your shares are held. If your shares are registered directly in your name with American Stock Transfer & Trust
Company, LLC, our transfer agent, you are a “stockholder of record.” If your shares are held in the name of a brokerage, bank,
trust or other nominee as a custodian, you are a “street name” holder.
80 | DIGITALBRIDGE
2022 PROXY STATEMENT
FREQUENTLY
ASKED QUESTIONS AND ANSWERS
How
do I vote my shares?
If
you are a “stockholder of record,” you have several choices. You can vote your shares by proxy:
| ■ |
By mailing your proxy card. |
Please
refer to the specific instructions set forth on the enclosed printed proxy card or voting instruction form. For security reasons, our
electronic voting system has been designed to authenticate your identity as a stockholder. As such, please have readily available the
control number provided to you on your proxy form when voting via the Internet or by telephone. If you hold your shares in “street
name,” your broker/bank/trustee/nominee will provide you with materials and instructions for voting your shares.
Can
I vote my shares in person at the meeting?
If
you are a “stockholder of record,” you may vote your shares in person at the virtual meeting by visiting https://web.lumiagm.com/286413441;
passcode: digitalbridge2023 (unique 11-digit control number required). To vote, you will need your control number included in your
proxy materials, on your proxy card, or on the instructions that accompanied your proxy materials. Please note that even if you plan to
virtually attend the 2023 Annual Meeting, we encourage you to submit a proxy in advance to ensure your shares are represented. Your voting
in person (virtually) at the 2023 Annual Meeting will automatically result in the revocation of any previously submitted proxy.
If
you hold your shares in “street name,” you must obtain a legal proxy from your broker, bank, trustee or nominee, giving
you the right to vote the shares at the meeting, and you will be assigned a virtual control number in order to vote your shares during
the 2023 Annual Meeting.
What
are the Board’s recommendations on how I should vote my shares?
The
Board recommends that you vote your shares as follows:
| ■ |
Proposal 1: FOR all of the nominees for election
as directors named on the enclosed proxy card. |
| ■ |
Proposal 2: FOR the advisory vote to approve
executive compensation. |
| ■ |
Proposal 3: ONE YEAR as the frequency of future
advisory votes on executive compensation. |
| ■ |
Proposal 4: FOR the amendment to our Charter
to reduce the number of authorized shares of common stock. |
| ■ |
Proposal 5: FOR ratification of the appointment
of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023. |
What
are broker non-votes and how will they affect voting?
Under
applicable NYSE rules, brokers holding shares of our Class A common stock for beneficial owners in nominee or “street name”
must vote those shares according to the specific instructions they receive from the beneficial owners. However, brokers or nominees holding
shares for a beneficial owner who do not receive voting instructions from the beneficial owner may not under the NYSE’s rules have
discretionary voting power on non-routine matters. In these cases, if no specific voting instructions are provided by the beneficial owner,
the broker may not vote on non-routine proposals. This results in what is known as a “broker non-vote.” Broker non-votes may
arise in the context of voting for the proposals related to the election of directors, approval of executive compensation, the frequency
of the advisory vote on named executive officer compensation and the amendment to our Charter as described in this Proxy Statement, because
such proposals are considered non-routine matters. Unless specific voting instructions are
DIGITALBRIDGE
2022 PROXY STATEMENT | 81
FREQUENTLY
ASKED QUESTIONS AND ANSWERS
provided
by the beneficial owner, the broker will be unable to vote for these proposals. Accordingly, we urge stockholders who hold their shares
through a broker or other nominee to provide voting instructions so that your shares of common stock may be voted on these proposals.
The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending
December 31, 2023 is a matter considered routine under applicable NYSE rules. A broker or other nominee may generally vote on routine
matters and, therefore, no broker non-votes are expected to exist in connection with this proposal.
Broker
non-votes will not be counted as votes cast and, as a result, will have no impact on the outcome of the election of directors or the advisory
votes to approve executive compensation and the frequency of holding the say-on-pay vote in the future. Abstentions and broker non-votes
will have the effect of votes against the approval of the amendment to our Charter to decrease the number of authorized shares of common
stock.
If
you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If you vote by
proxy card and sign the proxy card without giving specific instructions, your shares will be voted in accordance with the recommendations
of the Board (FOR all of our nominees to the Board, FOR the approval on a non-binding, advisory basis, of the compensation of our named
executive officers, ONE YEAR for the frequency of the advisory vote on named executive officer compensation in the future, FOR the amendment
to our Charter to decrease the number of authorized shares of common stock and FOR ratification of the appointment of our independent
registered public accounting firm).
What
vote is required to approve each proposal?
To
approve each of the proposals, the following votes are required from the holders of voting shares.
| Proposal
Number |
Vote
Required |
Impact
of Abstentions and
Broker Non-Votes,
if Any |
| 1 |
Each
director nominee will be elected by a majority of the votes cast. Stockholders may not cumulate votes. |
Abstentions/broker
non-votes will not be counted as votes cast and will have no impact on the outcome. |
| 2 |
This
proposal is advisory and not binding. We will consider stockholders to have approved the proposal if it is approved by a majority of the
votes cast. |
Abstentions/broker
non-votes will not be counted as votes cast and will have no impact on the outcome. |
| 3 |
This
proposal is advisory and not binding. We will consider stockholders to have approved the proposal if it is approved by a majority of the
votes cast. In the event no option receives a majority of the votes cast, the option receiving a plurality of the votes cast on the proposal
will be deemed the preferred option of stockholders. |
Abstentions/broker
non-votes will not be counted as votes cast and will have no impact on the outcome. |
| 4 |
A
majority of all votes entitled to be cast. |
Abstentions/broker
non-votes will have the effect of votes against the proposal. |
| 5 |
A
majority of the votes cast. |
Abstentions
will not be counted as votes cast and will have no impact on the outcome. |
Why
did I receive more than one Notice or proxy card?
You
will receive multiple notices or proxy cards if you hold your shares in different ways (e.g., joint tenancy, trusts, custodial accounts)
or in multiple accounts. If your shares are held by a broker (i.e., in “street name”), you will receive your proxy card or
other voting information from your broker, and you will return your proxy card(s) to your broker. You should vote on and sign each proxy
card you receive.
82 | DIGITALBRIDGE
2022 PROXY STATEMENT
FREQUENTLY
ASKED QUESTIONS AND ANSWERS
Can
I change my vote after I have mailed in my proxy card?
If
you are a “stockholder of record,” you may revoke your proxy by doing one of the following:
| ■ |
By authorizing a new proxy via telephone or Internet
and submitting it so that it is received by 11:59 p.m. (Eastern Time) on May 10, 2023; |
| ■ |
By sending written notice of revocation to our
Chief Legal Officer and Secretary at 750 Park of Commerce Drive, Suite 210, Boca Raton, FL 33487, which notice must be received by 5:00
p.m. (Eastern Time) on May 10, 2023; |
| ■ |
By signing a later-dated proxy card and submitting
it to our Chief Legal Officer and Secretary at 750 Park of Commerce Drive, Suite 210, Boca Raton, FL 33487, so that it is received by
5:00 p.m. (Eastern Time) on May 10, 2023; or |
| ■ |
By attending the meeting and voting your shares
in person. |
If
you require assistance in changing or revoking your proxy, please contact the Company’s proxy solicitor:
D.F.
King & Co., Inc.
48
Wall Street, 22nd Floor
New
York, NY 10005
Banks
and Brokers Call Collect: (212) 269-5550
All
Others Call Toll-Free: (866) 342-4882
Email:
DBRG@dfking.com
What
happens if additional matters are presented at the 2023 Annual Meeting?
We
know of no other matters other than the items of business described in this Proxy Statement that can be considered at the 2023 Annual
Meeting. If other matters requiring a vote do properly come before the 2023 Annual Meeting, any proxies received by us will be voted in
the discretion of the proxy holders.
Who
will count the votes?
A
representative of American Stock Transfer & Trust Company, LLC will be present at the meeting to count the votes and act as the independent
inspector of election. We will publish the voting results in a filing with the SEC by the fourth business day after the 2023 Annual Meeting.
Who
pays the cost of this proxy solicitation?
As
this proxy solicitation is by and on behalf of the Board of Directors, the Company will pay the cost of preparing, assembling and mailing
the proxy materials. We will also request banks, brokers and other holders of record to send the proxy materials to, and obtain proxies
from, beneficial owners and will reimburse them for their reasonable expenses in doing so. The Company has retained D.F. King to provide
proxy solicitation services. Under our agreement with D.F. King, D.F. King will receive a fee of up to $12,500 plus the reimbursement
of reasonable expenses. D.F. King will solicit proxies by mail, telephone, facsimile or email.
Is
this Proxy Statement the only way that proxies are being solicited?
Certain
officers, directors, employees or other representatives of the Company may also solicit proxies by telephone, facsimile, e-mail or personal
contact. They will not be specifically compensated for doing so.
DIGITALBRIDGE
2022 PROXY STATEMENT | 83
FREQUENTLY
ASKED QUESTIONS AND ANSWERS
Attend
Our 2023 Annual Meeting of Stockholders
 |
Date
and Time |
|
 |
Location |
|
 |
Record
Date |
|
May 11, 2023,
at 11:00 a.m.,
Eastern Time |
|
https://web.lumiagm.com/286413441 |
|
March 15, 2023 |
The
2023 Annual Meeting will be held on Tuesday, May 11, 2023 commencing at 11:00 a.m. Eastern Time. The 2023 Annual Meeting will be held
in a virtual meeting format only and can be accessed online at https://web.lumiagm.com/286413441.
There is no physical location for the 2023 Annual Meeting.
To
attend and participate in the virtual Annual Meeting, please visit https://web.lumiagm.com/286413441.
Click on “I have a control number” enter the control number found on your notice of meeting or proxy card you previously received
and enter the password digitalbridge2023 (the password is case sensitive). You will be able to submit questions during the meeting via
live audio webcast. During the 2023 Annual Meeting, we will attempt to answer as many questions submitted by stockholders as time permits.
We reserve the right to exclude questions regarding topics that are not pertinent to meeting matters or company business. Additionally,
if we receive substantially similar questions, we may group such questions together and provide a single response for efficiency and to
avoid repetition.
If
your shares are held in “street name” through a broker, bank or other nominee, in order to participate in the live webcast
of the 2023 Annual Meeting you must first obtain a legal proxy from your bank, broker or other nominee reflecting the number of shares
you held as of the record date for the 2023 Annual Meeting, your name and email address. You must then submit a request for registration
to American Stock Transfer & Trust Company, LLC:
|
(1) |
by email to proxy@astfinancial.com; |
|
(2) |
by facsimile to 718-765-8730; or |
|
(3) |
by mail to American Stock Transfer & Trust Company, LLC,
Attn: Proxy Tabulation Department, 6201 15th Avenue, Brooklyn, NY 11219. Requests for registration must be labeled as “Legal Proxy”
and be received by American Stock Transfer & Trust Company, LLC by no later than 5:00 p.m. Eastern Standard Time on May 4, 2023. |
Online
access to the webcast will open 30 minutes prior to the start of the 2023 Annual Meeting to allow time for you to log-in and test your
device. We encourage you to access the website in advance of the designated start time.
84 | DIGITALBRIDGE
2022 PROXY STATEMENT
OTHER
INFORMATION
Stockholder
Proposals and Director Nominations for 2024
Proposals
received from stockholders in accordance with Rule 14a-8 under the Exchange Act are eligible for consideration for inclusion in the proxy
statement for the 2024 Annual Meeting of Stockholders if they are received at our principal executive office, on or before December 9,
2023.
In
addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules under the Exchange Act, shareholders
who intend to solicit proxies in support of trustee nominees other than the Company’s nominees must provide notice that sets forth
the information required by Rule 14a-19 under the Exchange Act.
Proposals
received from stockholders submitted outside of Rule 14a-8 under the Exchange Act or for a director nomination must comply with the advance
notice and other requirements set forth in our bylaws in order to be presented at an annual meeting. These requirements currently include,
in part, the requirement that any such proposal or nomination must, with certain exceptions if the date of the 2024 annual meeting of
stockholders is advanced or delayed more than 30 days from the first anniversary of the date of this year’s annual meeting, be submitted
to the Secretary of the Company at our principal executive office at least 120 and not more than 150 days prior to the first anniversary
of the date of this year’s Proxy Statement (or between November 9, 2023 and 5:00 p.m., Eastern Time, on December 9, 2023, based
on the date of this year’s Proxy Statement, as defined in our bylaws, of April 7, 2023).
Annual
Report
A
copy of our Annual Report to Stockholders for the fiscal year ended December 31, 2022 is being mailed with these proxy materials to stockholders
entitled to vote at the annual meeting. In addition, a copy of our Annual Report on Form 10-K for the year ended December 31, 2022, will
be sent to any stockholder without charge (except for exhibits, if requested, for which a reasonable fee will be charged), upon written
request to:
DigitalBridge
Group, Inc.,
Attn:
Chief Legal Officer and Secretary.
750
Park of Commerce Drive,
Suite 210,
Boca
Raton, FL 33487
If
you would like to receive future stockholder communications via the Internet exclusively, and no longer receive any material by mail,
please visit http://www.astfinancial.com and click on “Login” to enroll. Please enter your account number and tax identification
number to log in, then select “Receive Company Mailings via E-Mail” and provide your e-mail address.
DIGITALBRIDGE
2022 PROXY STATEMENT | 85
OTHER
INFORMATION
Where
You Can Find More Information
We
make available free of charge through our website at www.digitalbridge.com under the heading “Shareholders—SEC Filings”
the periodic reports and other information we file with the SEC, as required by the Exchange Act. Copies may also be accessed electronically
by means of the SEC home page on the Internet, at www.sec.gov.
Eliminating
Duplicate Mailings
If
you share an address with one or more other stockholders, you may have received notification that you will receive only a single copy
of the Annual Report or this Proxy Statement for your entire household unless you or another stockholder at that address notifies our
transfer agent that they wish to continue receiving individual copies. This practice, known as “householding,” is designed
to reduce printing and mailing costs.
If
you wish to receive free of charge a separate Annual Report or Proxy Statement this year or in the future, or if you are receiving multiple
copies at your address and would like to enroll in “householding,” please contact our transfer agent, American Stock Transfer
& Trust Company, LLC, our transfer agent, at 1-800-937-5449 or by mail to American Stock Transfer & Trust Company, LLC, Attn:
Shareholder Services, 6201 15th Avenue, Brooklyn, NY 11219. If you own your shares in “street name,” please contact your broker,
bank, trustee or other intermediary to make your request.
Incorporation
by Reference
In
our filings with the SEC, information is sometimes “incorporated by reference.” This means that we are referring you to information
that has previously been filed with the SEC and the information should be considered as part of the particular filing. As provided under
SEC regulations, the “Audit Committee Report” and the “Compensation Committee Report” contained in this Proxy
Statement specifically are not incorporated by reference into any other filings with the SEC. In addition, this Proxy Statement includes
several website addresses. These website addresses are intended to provide inactive, textual references only. The information on or accessible
through these websites is not part of this Proxy Statement.
Non-GAAP
Financial Measures and Certain Other Definitions
We
refer to non-GAAP financial measures and certain other metrics within this Proxy Statement. The below provides definitions for these measures
and metrics and reconciliations to GAAP measures.
Assets
Under Management (AUM)
AUM
is composed of (a) third party managed capital for which the Company and its affiliates provide investment management services, including
assets for which the Company may or may not charge management fees and/or performance allocations; and (b) assets invested using the Company’s
own balance sheet capital and managed on behalf of the Company’s shareholders. Third party AUM is based upon the cost basis of managed
investments as reported by each underlying vehicle as of the reporting date and may include uncalled capital commitments. Balance sheet
AUM is based upon the undepreciated carrying value of the Company’s balance sheet investments as of the reporting date. The Company’s
calculation of AUM may differ from other investment managers, and as a result, may not be comparable to similar measures presented by
other investment managers.
86 | DIGITALBRIDGE
2022 PROXY STATEMENT
OTHER
INFORMATION
Fee
Earning Equity Under Management (FEEUM)
FEEUM
is equity for which the Company and its affiliates provide investment management services and derive management fees and/or incentives.
FEEUM generally represents the basis used to derive fees, which may be based upon invested equity, stockholders’ equity, or fair
value, pursuant to the terms of each underlying investment management agreement. The Company’s calculation of FEEUM may differ from
other investment managers, and as a result, may not be comparable to similar measures presented by other investment managers.
Distributable
Earnings
Distributable
Earnings is an after-tax measure that differs from GAAP net income or loss from continuing operations as a result of the following adjustments,
including adjustment for our share of similar items recognized by our equity method investments: transaction-related costs; restructuring
charges (primarily severance and retention costs); realized and unrealized gains and losses, except realized gains and losses related
to digital assets, including fund investments, in Corporate and Other; depreciation, amortization and impairment charges; debt prepayment
penalties and amortization of deferred financing costs, debt premiums and debt discounts; our share of unrealized carried interest, net
of associated compensation expense; equity-based compensation expense; equity method earnings, except fund investments, to reflect only
cash dividends declared by BRSP; effect of straight-line lease income and expense; impairment of equity investments directly attributable
to decrease in value of depreciable real estate held by the investee; non-revenue enhancing capital expenditures necessary to maintain
operating real estate; and income tax effect on certain of the foregoing adjustments. Income taxes included in DE reflect the benefit
of deductions arising from certain expenses that are excluded from the calculation of DE, such as equity-based compensation, as these
deductions do decrease actual income tax paid or payable by the Company in any one period.
We
believe that DE is a meaningful supplemental measure as it reflects the ongoing operating performance of our core business by generally
excluding items that are non-core in nature, and allows for better comparability of operating results period-over-period and to other
companies in similar lines of business.
Adjusted
EBITDA
Adjusted
EBITDA represents DE adjusted to exclude: interest expense as included in DE, income tax expense or benefit as included in DE, preferred
stock dividends, equity method earnings as included in DE, placement fee expense, our share of realized carried interest and incentive
fees net of associated compensation expense, certain investment costs for capital raising that are not reimbursable by our sponsored funds,
and capital expenditures as deducted in DE.
We
believe that Adjusted EBITDA is a meaningful supplemental measure of performance because it presents the Company’s operating performance
independent of its capital structure, leverage and non-cash items, which allows for better comparability against entities with different
capital structures and income tax rates. However, because Adjusted EBITDA is calculated before recurring cash charges including interest
expense and taxes and does not deduct capital expenditures or other recurring cash requirements, its usefulness as a performance measure
may be limited.
DIGITALBRIDGE
2022 PROXY STATEMENT | 87
OTHER
INFORMATION
Distributable
Earnings and Adjusted EBITDA reconciliation
|
(In
thousands) |
Year
Ended December 31,
2022 |
| Net
loss attributable to common stockholders |
$(382,266) |
|
| Net
loss attributable to noncontrolling interests in Operating Company |
(32,369) |
|
| Net
loss attributable to Operating Company |
(414,635) |
|
| Transaction-related
and restructuring charges |
100,989 |
|
| Other
(gains) losses, net (excluding realized gains or losses related to digital assets and fund investments in Corporate and Other) |
178,769 |
|
| Unrealized
carried interest, net of associated compensation expense |
(117,466) |
|
| Equity-based
compensation expense |
54,232 |
|
| Depreciation
and amortization |
589,582 |
|
| Straight-line
rent (revenue) and expense, net |
(21,462) |
|
| Amortization
of acquired above- and below-market lease values, net |
(78) |
|
| Impairment
loss |
35,985 |
|
| Non-revenue
enhancing capital expenditures |
(40,515) |
|
| Debt
prepayment penalties and amortization of deferred financing costs, debt premiums and debt discounts |
114,902 |
|
|
Adjustment
to equity method earnings, excluding fund investments, to reflect BRSP cash dividend declared |
574 |
|
| Income
tax effect on certain of the foregoing adjustments |
(534) |
|
| Adjustments
attributable to noncontrolling interests in investment entities(1) |
(430,061) |
|
| DE
of discontinued operations |
(13,222) |
|
| Distributable
Earnings, after tax—attributable to Operating Company |
37,060 |
|
| Adjustments
attributable to Operating Company: |
|
| Interest
expense included in DE |
57,525 |
|
| Income
tax expense included in DE |
13,266 |
|
| Preferred
stock dividends |
61,567 |
|
| Equity
method earnings included in DE |
(38,800) |
|
| Realized
carried interest, net of associated compensation expense |
(31,463) |
|
| Non-revenue
enhancing capital expenditures deducted from DE |
8,892 |
|
| Non
pro-rata allocation of income (loss) to noncontrolling interests |
231 |
|
| Adjusted
EBITDA—attributable to Operating Company |
$
108,278 |
|
| (1) |
Noncontrolling interests’ share
of adjustments pertain largely to depreciation and amortization and unrealized carried interest, net of associated compensation expense. |
Investment
Management FRE
Investment
Management FRE is calculated as recurring fee income and other income inclusive of cost reimbursements associated with administrative
expenses, and net of compensation expense (excluding equity-based compensation, carried interest and incentive compensation) and administrative
expense (excluding placement fees and straight-line rent expense). Investment Management FRE is used to assess the extent to which direct
base compensation and operating expenses are covered by recurring fee revenues in the investment management business. We believe that
Investment Management FRE is a useful supplemental performance measure because it may provide additional insight into the profitability
of the overall investment management business.
88 | DIGITALBRIDGE
2022 PROXY STATEMENT
OTHER
INFORMATION
Investment
Management FRE is measured as Adjusted EBITDA for the Investment Management segment, adjusted to reflect the Company’s Investment
Management segment as a stabilized business by excluding FRE associated with new investment strategies that have 1) not yet held a first
close raising FEEUM; or 2) not yet achieved break-even Adjusted EBITDA only for investment products that may be terminated solely at the
Company’s discretion, collectively referred to as “Start-up FRE.” The Company evaluates new investment strategies on
a regular basis and excludes Start-Up FRE from Investment Management FRE until such time a new strategy is determined to form part of
the Company’s core investment management business.
Investment
Management FRE reconciliation
|
(In
thousands) |
Year
Ended December 31,
2022 |
| Investment
Management |
|
| Net
income |
$
186,084 |
|
| Interest
expense, net of interest income |
10,377 |
|
| Investment
expense, net of reimbursement |
324 |
|
| Depreciation
and amortization |
22,155 |
|
| Equity-based
compensation |
15,845 |
|
| Incentive
fee and carried interest, net of associated compensation expense |
(207,095) |
|
| Straight-line
rent expense |
1,844 |
|
| Transaction-related
and restructuring charges |
18,402 |
|
| Equity
method earnings, excluding carried interest |
26,958 |
|
| Other
loss, net |
3,341 |
|
| Income
tax expense |
7,815 |
|
| Investment
Management Adjusted EBITDA |
86,050 |
|
| Start-up
FRE |
9,739 |
|
| Investment
Management FRE |
95,789 |
|
| Attributable
to redeemable noncontrolling interests |
(12,315) |
|
| Investment
Management FRE—attributable to Operating Company |
$ 83,474 |
|
DIGITALBRIDGE
2022 PROXY STATEMENT | 89
EXHIBIT
A:
AUTHORIZED
SHARE DECREASE AMENDMENT
If
Proposal 4 is approved by stockholders, Section 6.1 of our Articles of Amendment and Restatement, as amended and supplemented, would be
deleted and replaced it in its entirety with the following:
“Section
6.1 Authorized Shares. The Corporation has authority to issue 500,000,000 shares of stock, consisting of 237,250,000 shares of Class A
Common Stock, $0.01 par value per share (“Class A Common Stock”), 250,000 shares of Class B Common Stock, $0.01 par value
per share (“Class B Common Stock”), 12,500,000 shares of Performance Common Stock, $0.01 par value per share (“Performance
Common Stock” and together with the Class A Common Stock and Class B Common Stock, the “Common Stock”), and 250,000,000
shares of Preferred Stock, $0.01 par value per share (“Preferred Stock”), including those shares of Preferred Stock described
in the Exhibits attached hereto. The aggregate par value of all authorized shares of stock having par value is $5,000,000. If shares of
one class of stock are classified or reclassified into shares of another class of stock pursuant to Section 6.2, 6.3, 6.4, 6.5 or 6.6
of this Article VI, the number of authorized shares of the former class shall be automatically decreased and the number of shares of the
latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate
number of shares of stock of all classes that the Corporation has authority to issue shall not be more than the total number of shares
of stock set forth in the first sentence of this paragraph.”
90 | DIGITALBRIDGE
2022 PROXY STATEMENT
APPENDIX
A:
PROXY
CARD
DIGITALBRIDGE
2023 PROXY STATEMENT | A-1
APPENDIX
A: PROXY CARD
A-2
| DIGITALBRIDGE
2023 PROXY STATEMENT
APPENDIX
A: PROXY CARD
DIGITALBRIDGE
2023 PROXY STATEMENT | A-3
DEF 14A
false
0001679688
0001679688
2022-01-01
2022-12-31
0001679688
dbrg:MarcCGanziMember
2022-01-01
2022-12-31
0001679688
dbrg:MarcCGanziMember
2021-01-01
2021-12-31
0001679688
2021-01-01
2021-12-31
0001679688
dbrg:MarcCGanziMember
2020-01-01
2020-12-31
0001679688
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
dbrg:MarcCGanziMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
dbrg:MarcCGanziMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
dbrg:MarcCGanziMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
dbrg:MarcCGanziMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
dbrg:MarcCGanziMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfCurrentAwardsVestedDuringCurrentYearMember
dbrg:MarcCGanziMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsDividendsOrOtherEarningsPaidOnEquityAwardsNotOtherwiseReflectedInFairValueMember
dbrg:MarcCGanziMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
dbrg:MarcCGanziMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
dbrg:MarcCGanziMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfCurrentAwardsVestedDuringCurrentYearMember
dbrg:MarcCGanziMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
dbrg:MarcCGanziMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
dbrg:MarcCGanziMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsDividendsOrOtherEarningsPaidOnEquityAwardsNotOtherwiseReflectedInFairValueMember
dbrg:MarcCGanziMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfCurrentAwardsVestedDuringCurrentYearMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfPriorYearAwardsVestedDuringCurrentYearMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsDividendsOrOtherEarningsPaidOnEquityAwardsNotOtherwiseReflectedInFairValueMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:NetAdjustmentsForEquityAwardsMember
dbrg:ThomasBarrackJrMember
2020-01-01
2020-12-31
0001679688
dbrg:ReportedValueOfEquityAwardsMember
ecd:NonPeoNeoMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
ecd:NonPeoNeoMember
2022-01-01
2022-12-31
0001679688
dbrg:ReportedValueOfEquityAwardsMember
ecd:NonPeoNeoMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
ecd:NonPeoNeoMember
2021-01-01
2021-12-31
0001679688
dbrg:ReportedValueOfEquityAwardsMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
ecd:NonPeoNeoMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
ecd:NonPeoNeoMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfPriorYearAwardsVestedDuringCurrentYearMember
ecd:NonPeoNeoMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsDividendsOrOtherEarningsPaidOnEquityAwardsNotOtherwiseReflectedInFairValueMember
ecd:NonPeoNeoMember
2022-01-01
2022-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
ecd:NonPeoNeoMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
ecd:NonPeoNeoMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfCurrentAwardsVestedDuringCurrentYearMember
ecd:NonPeoNeoMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfPriorYearAwardsVestedDuringCurrentYearMember
ecd:NonPeoNeoMember
2021-01-01
2021-12-31
0001679688
dbrg:EquityAwardsAdjustmentsYearEndFairValueOfAwardsGrantedInCurrentYearMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfYearEndOfOutstandingAndUnvestedAwardsGrantedInPriorYearsMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfCurrentAwardsVestedDuringCurrentYearMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsChangeInFairValueAsOfVestingDateOfPriorYearAwardsVestedDuringCurrentYearMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
dbrg:EquityAwardsAdjustmentsDividendsOrOtherEarningsPaidOnEquityAwardsNotOtherwiseReflectedInFairValueMember
ecd:NonPeoNeoMember
2020-01-01
2020-12-31
0001679688
1
2022-01-01
2022-12-31
0001679688
2
2022-01-01
2022-12-31
0001679688
3
2022-01-01
2022-12-31
0001679688
4
2022-01-01
2022-12-31
0001679688
5
2022-01-01
2022-12-31
0001679688
6
2022-01-01
2022-12-31
iso4217:USD
xbrli:pure