COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
Compensation Governance and Best Practices
We supplement our pay for performance program with a number of compensation policies intended to align the interests of management with those of our stockholders.
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ü AT AMERICAN TOWER WE…
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û AT AMERICAN TOWER WE DO NOT…
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Tie a high ratio of our executives’ pay to performance.
As described above, 94% and 88% of the total direct compensation opportunity (assuming target performance) for our CEO and other NEOs, respectively, was in the form of short- and long-term incentive compensation.
Weight incentives toward quantitative metrics.
Our annual performance incentive program is based solely on quantitative metrics relating to pre-established Company financial goals for all our executive officers except the CEO, for whom the program is also heavily weighted in favor of quantitative metrics (80%).
Require significant stock ownership.
We maintain aggressive guidelines to reinforce the importance of stock ownership. This is intended to align the interests of our executive officers and Directors with those of our stockholders and to focus our senior management team on our long-term success.
Subject incentive compensation to claw back provisions.
The terms of our annual performance incentive awards and long-term, equity-based awards allow American Tower in certain circumstances to “claw back” cash and shares received pursuant to such awards or to require the repayment of all gains realized upon disposition of such shares.
Provide a consistent level of severance.
We maintain a competitive and responsible severance program to provide a consistent approach to executive severance and to provide eligible employees with certainty and security. Under this program, severance benefits are available only upon a “Qualifying Termination.”
Use an independent compensation consultant.
The Committee has engaged Meridian Compensation Partners, LLC (Meridian) as its independent compensation consultant. Meridian has no other ties to American Tower or its management and meets stringent selection criteria.
Engage directly with our stockholders.
We maintain direct and open communication with our stockholders throughout the year, conduct active stockholder engagement initiatives and respond to all inquiries in a timely manner.
Use multiple performance metrics.
We use multiple performance metrics in our short- and long-term incentive programs to discourage unnecessary short-term risk taking.
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Permit hedging or pledging of American Tower securities.
Our Anti-Insider Trading Policy and Code of Conduct prohibit short sales and hedging transactions, as well as pledging of our securities, by all of our employees and Directors. In addition, our policies impose limits as to when and how our employees, including our executive officers and Directors, can engage in transactions in our securities.
Encourage excessive or inappropriate risk-taking through our compensation program.
The Committee, together with its independent compensation consultant and management, conducts an annual risk review of American Tower’s compensation programs to determine if any elements of these programs create an inappropriate level of risk and reviews management’s mitigation activities with respect to any significant potential risks.
Provide golden parachute tax gross-ups.
We do not provide excise tax gross-ups to our NEOs.
Reprice stock options or repurchase underwater stock options.
Our equity incentive plan prohibits, without stockholder approval, (i) the amendment of any outstanding stock option to reduce its exercise price or replace it with a new award exercisable for our Common Stock at a lower exercise price; and (ii) the purchase of an underwater stock option for cash.
Provide excessive perquisites.
We do not provide excessive perquisites to our executive officers, nor do we offer them any deferred compensation plans, supplemental executive retirement plans or loans of any kind.
Provide single trigger acceleration of equity.
Our severance program provides acceleration of equity only upon a “double trigger,” meaning that executives are only entitled to acceleration in the event of a “Qualifying Termination” within 14 days before, or two years following a “Change of Control.”
Provide uncapped incentive awards.
Our annual incentive awards cannot exceed 200% of the bonus target.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
37
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
Overview of Our Compensation Program
PHILOSOPHY
Focus on Pay for Performance. The guiding principle of our executive compensation philosophy is to pay for performance. Fundamentally, our program is designed to:
•attract and retain top talent;
•motivate and engage our executive officers; and
•drive sustainable, long-term growth and stockholder value consistent with our values, vision and growth strategy.
Peer Group Review. The Committee believes it is important to understand the relevant market for executive talent to ensure that the executive compensation program supports the attraction and retention of highly qualified leaders. The Committee assesses market conditions annually through a review of peer group compensation data compiled by the Committee’s independent compensation consultant. Due to the unique nature of our business, including its global scope and growth, there are ongoing challenges in developing the most appropriate mix of companies for our peer group. In its annual review of our peer group composition, the Committee takes into account these challenges, which include the following:
•The scope of our business spans two major sectors—wireless communications and real estate—as a result there are very few companies directly comparable to us;
•We have large international operations located in a number of distinctive markets;
•We manage our business with a smaller senior management team than is typically found in the technology, wireless communications or real estate industries; and
•We operate and are classified as an infrastructure REIT and are one of very few global technology REITs.
There were no changes to our peer group in 2019 versus 2018. Our peer group consists of companies in the wireless communications site leasing industry, other REITs, companies with comparable revenues, firms with similar business models and companies from which we would consider recruiting talent. The Committee believes this grouping provides a meaningful perspective of current pay practices and levels as well as overall compensation trends. The peer group used for developing 2019 pay decisions consisted of the following companies:
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Peer Group for 2019 Compensation Decisions
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•Adobe Systems Incorporated
•Alliance Data Systems Corporation
•Broadcom Inc.
•Boston Properties, Inc.
•Crown Castle International Corp.
•Equinix, Inc.
•Fidelity National Financial
•Harris Corporation
•Intuit Inc.
•Juniper Networks, Inc
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•MasterCard Incorporated
•Motorola Solutions, Inc.
•Public Storage
•Rockwell Collins, Inc.
•Salesforce.com, Inc.
•Simon Property Group, Inc.
•Ventas, Inc
•Vornado Realty Trust
•Welltower Inc
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
38
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
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AMERICAN TOWER POSITIONING RELATIVE TO ITS PEER GROUP(1)
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(1)Reflects amounts for fiscal year ended as of December 31, 2019.
Source: S&P Capital IQ
While our total revenues are substantially similar to the peer group median, our market capitalization is significantly higher, which is attributable to the sustained growth of the business that creates value for our stockholders in the long term.
For 2020, we have taken further steps to refine the peer group based on this significant growth in market capitalization, as well as the increased complexity and scope of our business and size of the leadership team. The table below reflects the changes to the peer group to be used in establishing pay recommendations for fiscal year 2020 as a result of inclusion of additional financial and other metrics: average quarterly market capitalization, three-year average Adjusted EBITDA Margin(1), revenue, industry and assets.
(1) Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
Benchmarking Analyses. In addition to data from our peer group, the Committee reviews third-party industry survey data as a general indicator of relevant market conditions and pay practices. The Committee reviews market data at the 25th, 50th and 75th percentiles from a custom peer group, REIT subgroup, and the S&P 250. This data serves as a broader reference point for determining what types and amounts of compensation are appropriate. In determining the appropriate compensation packages necessary to recruit and retain valuable senior executives, the Committee also considers market conditions, relative experience levels, relative executive tenure, special capabilities and global complexity to be significant factors. The Committee generally targets total compensation in a competitive range around the 50th percentile of the market.
Small Management Team. Base salaries are set in recognition of (i) an efficient management structure, where there are few executive officers, each of whom has significant tenure at the Company and experience in a highly specialized and varied business, and (ii) continued attraction and retention of this executive talent. Despite the significant growth in the size of the Company, the size of the senior management team provides a competitive advantage and promotes greater efficiency across the business.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
39
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
Detailed Evaluation by the Committee. In making determinations with respect to all elements and amounts of executive compensation, the Committee reviews the CEO’s assessment of each executive and his contribution to the Company’s financial performance (outlined in “Financial Goals and Performance” below). In addition, the Committee considers the executive’s potential for continued contribution to the Company’s long-term success. For the CEO, the Committee reviews his performance and contribution to the Company’s financial performance and evaluates whether he met his pre-established individual performance goals (outlined in “Review of 2019 CEO Performance” below).
Actual compensation paid to each executive officer may be above or below target pay positioning based solely on actual Company performance, other than for the CEO, for whom actual compensation will be based on Company financial performance (80%) and individual performance (20%). Other factors which affect actual compensation include retention risk, future potential at the Company and internal equity considerations.
Emphasis on Future Pay Opportunity Versus Current Pay. The Committee strives to provide an appropriate mix of compensation elements, with an emphasis on performance-based, long-term compensation. Cash payments primarily reward annual performance, while equity awards incentivize our NEOs to continue to deliver sustained results over a longer period of time and also serve as a retention tool. The Committee believes that a substantial portion of our NEOs’ compensation should be “at-risk,” that is, dependent on our operating and stock-price performance.
Significance of Overall Company Results. The Committee’s evaluation of our NEOs places emphasis on their contributions to overall Company performance, rather than on their individual business or function. The Committee believes that the NEOs share responsibility for supporting the goals and performance of the Company as a whole.
Compensation Determinations for 2019
Below we discuss the Committee’s key compensation decisions for 2019, which were made based on our compensation philosophy and with advice from the Committee’s compensation consultant (see “Other Compensation and Governance Practices and Policies—Role of the Compensation Consultant”). In evaluating Company performance, the Committee considered our overall financial results, as well as peer group and benchmarking analyses. For fiscal year 2019, based on our assessment of all the market data in light of our executive talent, the Committee has concluded that our NEOs in the aggregate are competitively positioned on a target total compensation basis.
The Committee works with its compensation consultant to better understand and continually monitor market competitive pay practices, which it then considers when determining compensation adjustments and changes for the coming year. This annual process includes reviewing the peer group and conducting a competitive market benchmark analysis.
BASE SALARY
The Committee heavily weighs the size of the senior management team relative to the size of the Company. We believe that operating with a small senior management team enables us to leverage the broader capabilities of our executive officers more effectively across a wider range of business and functional responsibilities and fosters a team approach and greater collaboration among our executive officers. As a result, annual base salaries for our NEOs are, and must remain, competitive. Our NEOs have consistently achieved strong Company performance results by working closely as a team. Given this team orientation and collaborative environment, and after considering tenure in their current positions, the salaries reflect historical key contributions and expectations of significant continued contributions to the Company’s long-term success.
Based on review of competitive market data and internal pay equity considerations, the Committee decided to increase the base salaries by the standard market merit increase of 3% for our NEOs other than our CEO. Mr. Taiclet’s base salary has not increased since 2011.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
40
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
BASE SALARIES (2018 AND 2019)
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Name
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2018 Base Salary
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2019 Base Salary
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Percent Change
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James D. Taiclet
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$
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1,100,000
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$
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1,100,000
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0
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%
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Thomas A. Bartlett
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$
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766,500
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$
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789,495
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3
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%
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Edmund DiSanto
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$
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613,200
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$
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631,596
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3
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%
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Amit Sharma
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$
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615,038
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$
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633,489
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3
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%
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Steven O. Vondran(1)
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—
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$
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592,250
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N/A
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(1)Mr. Vondran first qualified to be a NEO in the 2019 fiscal year and, accordingly, compensation information in prior years is not provided.
ANNUAL PERFORMANCE INCENTIVE AWARDS
At the beginning of each year, the CEO works with the Committee to set his individual goals, objectives and performance metrics for the year, as well as Company financial goals. As part of this process:
•The CEO reviews with the Board and Committee how short-term annual performance targets align with and support the strategic priorities and direction of the Company.
•Company financial goals, as well as the CEO’s individual goals, are reviewed by the Committee. As described above in the Executive Summary, 100% of each of our executive officer’s annual bonus opportunity is based on the Company’s achievement of pre-established financial goals, except for the CEO, who has 80% of his goals tied to achievement of such Company financial goals, and 20% tied to achievement of identified individual goals set at the beginning of the year. Individual performance goals are measured based on metrics unique to the CEO’s role and scope of responsibilities and are reviewed and approved by the Committee. The CEO’s individual performance goals are discussed below under “Review of 2019 CEO Performance.”
The annual incentive plan design for our executives demonstrates our commitment to rigor and objectivity in establishing and meeting our compensation goals. Upon review of peer group practices, the Committee noted that the Company’s threshold performance for revenue and Adjusted EBITDA(1) were more challenging than its peers, and that the Company’s revenue and Adjusted EBITDA(1) goals to earn a maximum payout were more stringent than the Company’s peers, further demonstrating that the Company sets rigorous financial goals for its incentive plans.
The target award opportunities (as a percentage of base salary) are also established at the beginning of the year, based on the market competitive benchmarking analyses. The Committee determines actual incentive payouts after assessing Company performance for all NEOs, as well as individual performance for the CEO, relative to pre-established goals and then comparing performance achieved during the current year versus prior years.
(1) Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
41
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
FINANCIAL GOALS AND PERFORMANCE
We use the Stand and Deliver strategic priorities as outlined above under “Our Business” to measure the success of the Company, and these priorities are directly linked to the metrics used by the Company to measure financial performance. Two specific Company financial goals are used to determine the executives’ annual incentive awards: Total property revenue(1) and Adjusted EBITDA.(2) We use these quantitative goals as we believe that making Company financial performance a shared objective encourages alignment and teamwork.
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ANNUAL INCENTIVE AWARD METRICS AND WEIGHTINGS
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CEO
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Other NEOs
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PAYOUTS BASED ON PERFORMANCE LEVELS
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(1)Total property revenue excludes pass-through revenue. For a reconciliation of total property revenue, excluding pass-through revenue, see Appendix A.
(2)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
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WHY THESE PERFORMANCE MEASURES?
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We use total property revenue and Adjusted EBITDA(1) as the two quantitative goals in our annual executive incentive program. We believe these performance metrics are among the most important for our stockholders and therefore enhance the alignment of annual bonuses with stockholder interests, as these goals are used to measure management’s ability to grow our business profitably while also increasing cash generation and controlling costs. Both metrics are reported in our quarterly results and guidance to the market.
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We use the initial Company budget that is set at the beginning of the fiscal year to set Company goals for total property revenue, excluding pass-through revenue, and Adjusted EBITDA(1). Pass-through revenue is primarily based on ground rent and/or power and fuel expense tenant reimbursements. As a result, our total property revenue including pass-through revenue in any given period may fluctuate in a way that is not necessarily representative of the Company’s real estate business or the underlying trends in that business.
Consequently, we adjust total property revenue to exclude pass-through revenue from the goal setting process. We further adjust the financial goals for fluctuations in foreign currency exchange rates and material acquisitions that close during the year.
In addition, we incorporate the prior year’s actual results in our annual goal setting process to (i) ensure that the new performance targets are rigorous but achievable and (ii) challenge the executive team to perform at consistently higher levels during each subsequent year. Accordingly, after adjusting for the impact of certain non-recurring one-time items related to the Company's settlement with Tata and related entities in 2018 and carrier consolidation-driven churn in India, the 2019 target levels for total property revenue, excluding pass-through revenue, and Adjusted EBITDA(1) increased by approximately 6% and 8%, respectively, from the 2018 financial results, evidencing rigorous goals that cannot be achieved without superior performance.
(1)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
42
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
The following table sets forth the targets, as adjusted, for each goal, as well as the performance achieved.
2019 COMPANY FINANCIAL GOALS ($ IN BILLIONS)
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Goal
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Target(1)
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Actual(2)
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Performance
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Total Property Revenue(3)
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$
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6.223
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$
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6.471
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Exceeded
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Adjusted EBITDA(4)
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$
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4.529
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$
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4.745
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Exceeded
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(1)Target adjusted to reflect fluctuations in foreign currency exchange rates and material acquisitions that have closed during 2019.
(2)On February 25, 2020, we issued a press release reporting our actual results for 2019.
(3)2019 Company financial goals for total property revenue exclude pass-through revenue. For a reconciliation of total property revenue, excluding pass-through, see Appendix A.
(4)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
As indicated in the table above, the Company exceeded each of its financial goals, and the achievement percentage reflects a payout slope for each 1% above the adjusted target for each financial goal. The calculation for the weighted achievement for these combined financial goals is outlined in the tables below.
2019 FINANCIAL GOALS FOR THE NEOs (EXCLUDING THE CEO)
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Weighting
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Achievement
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Weighted Achievement
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Total Property Revenue(1)
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40
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%
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166
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%
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174
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%
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Adjusted EBITDA(2)
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60
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%
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179
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%
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(1)2019 Company financial goals for total property revenue exclude pass-through revenue. For a reconciliation of total property revenue, excluding pass-through, see Appendix A.
(2)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
2019 FINANCIAL GOALS FOR THE CEO
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Weighting
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Achievement
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Weighted Achievement
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Total Property Revenue(1)
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30
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%
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166
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%
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140
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%
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Adjusted EBITDA(2)
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50
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%
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179
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%
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(1)2019 Company financial goals for total property revenue exclude pass-through revenue. For a reconciliation of total property revenue, excluding pass-through, see Appendix A.
(2)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
2019 INDIVIDUAL PERFORMANCE GOALS FOR THE CEO
In addition, the Committee determined that the CEO exceeded his individual goals for 2019, as described in more detail below under “Review of 2019 CEO Performance.” In making these determinations, the Committee reflected on the strategic vision and leadership of the CEO and the performance of goals in a complex domestic and international space. The following table sets forth the weighted achievement of individual goals for the CEO.
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Weighting
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Achievement
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Weighted Achievement
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James D. Taiclet
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20
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%
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200
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%
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40
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%
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
43
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
The following table sets forth the target award opportunities and actual incentives paid to our NEOs for the fiscal year 2019 and compares them to the target awards and actual incentive payments for the prior fiscal year. The Committee did not exercise any discretion in setting final bonus payout amounts.
BONUS TARGETS AND PAYOUTS (2018 AND 2019)
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Target Annual Incentive Award
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Actual Annual Incentive Awards
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Name
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Year
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Target Bonus
(%)(1)
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Amount
($)
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% Achievement of Target Bonus
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Amount
($)
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Percentage
Change
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James D. Taiclet
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2018
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130
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%
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$
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1,430,000
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152
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%
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$
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2,173,600
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2019
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150
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%
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$
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1,650,000
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180
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%
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$
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2,961,750
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36
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%
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Thomas A. Bartlett
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2018
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95
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%
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$
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728,175
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140
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%
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$
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1,019,445
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2019
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100
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%
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$
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789,495
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174
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%
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$
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1,374,511
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35
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%
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Edmund DiSanto
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2018
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95
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%
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$
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582,540
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140
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%
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$
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815,556
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2019
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100
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%
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$
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631,596
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174
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%
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$
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1,099,609
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35
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%
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Amit Sharma
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2018
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95
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%
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$
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584,286
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140
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%
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$
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818,001
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2019
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100
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%
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$
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633,489
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174
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%
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$
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1,102,905
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35
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%
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Steven O. Vondran(2)
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2018
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—
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—
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—
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—
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2019
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100
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%
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$
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592,250
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174
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%
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$
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1,031,107
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N/A
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(1)As a percentage of base salary.
(2)Mr. Vondran first qualified to be a NEO in the 2019 fiscal year and, accordingly, compensation information in prior years is not provided.
EQUITY-BASED INCENTIVE AWARDS FOR 2019
Our Approach for 2019
While our management team drives short-term advancements such as cost reduction efforts and process improvements, our long-term lease arrangements with our tenants and additions to our real estate portfolio enable us to generate relatively predictable long-term growth. As a result, the management decisions that have the greatest long-term impact on the Company typically relate to matters such as capital allocation, mergers and acquisitions, long-term contract negotiations with major tenants, financial leverage, capital structure, growth opportunities, expansion into new markets and strategic alliances. Such decisions can sometimes have a negative short-term impact on our performance and/or stock price, but result in greater long-term value.
For these reasons, a substantial majority of our targeted compensation is in the form of long-term incentives. We believe that granting our executive officers meaningful levels of equity-based awards provides them with a greater incentive to focus on long-term results, which ultimately contributes most significantly to stockholder value by enabling us to retain highly experienced executives and sustain long-term Company performance.
Our practice has been to award equity-based incentives in amounts that vary based on the executive’s scope of responsibility, the experience the executive brings to the role, the expected contributions of the executive officer and the executive officer’s operating unit within the Company.
For each of our NEOs, the Committee determined the appropriate allocations based on overall Company performance, the anticipated level of the executive officer’s future contribution, the increasingly more challenging annual business plan as prior year’s objectives are achieved, the experience needed, and the size of equity-based awards to individuals with comparable positions or roles in the competitive market. All equity grants to our executive officers were awarded at the same time as our annual employee grant on March 11, 2019.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
44
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
The following table sets forth the value of equity awards granted to Messrs. Taiclet, Bartlett, DiSanto, Sharma and Vondran. The Committee determined it was appropriate to increase the 2019 award values among the NEOs, taking into account the size of the equity grants in 2018, market data, and the team’s collaborative effort to achieve the Company’s high-performance results. Mr. Vondran's equity award was based on his prior role as Senior Vice President, General Counsel for our U.S. Tower Division, and his contributions and achievements relating to that position. For 2019, the targeted grant date award value for each executive officer, other than the CEO, was allocated 60% to PSUs and 40% to RSUs. Mr. Taiclet's award value was allocated 70% to PSUs and 30% to RSUs. We determined the number of shares subject to each of our awards using the closing price of our Common Stock on the date of grant.
EQUITY-BASED AWARD VALUES (2018 AND 2019)
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Name
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2018 Equity Value
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2019 Equity Value
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Percent Change
(2019 over 2018)
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James D. Taiclet
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$
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11,000,000
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$
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14,000,000
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27
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%
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Thomas A. Bartlett
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$
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4,300,000
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$
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4,750,000
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10
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%
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Edmund DiSanto
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$
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4,050,000
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$
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4,500,000
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11
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%
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Amit Sharma
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$
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3,800,000
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$
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4,250,000
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12
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%
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Steven O. Vondran(1)
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—
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$
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2,800,000
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|
N/A
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(1)Mr. Vondran first qualified to be a NEO in the 2019 fiscal year and, accordingly, compensation information in prior years is not provided.
Each RSU grant vests 25% annually over four years, commencing one year from the date of grant.
Each PSU grant is based on a three-year performance period, with the performance goals set at the beginning of the performance period. The performance goals for the outstanding PSU awards are cumulative Consolidated AFFO per Share(1) and average ROIC(1), which are used by management and investors as key indicators of the Company’s financial performance. As outlined below, the actual number of vested PSUs is based on the performance levels against these target goals as determined by the Committee at the end of the performance period.
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PSU AWARD METRICS AND WEIGHTINGS
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|
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VESTING AMOUNTS BASED ON PERFORMANCE LEVELS
|
|
(1)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
45
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
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WHY THESE PERFORMANCE MEASURES?
|
|
|
We believe that Consolidated AFFO per Share(1) and ROIC(1) are the two performance measures that most closely align with stockholder interests over a multi-year period. Consolidated AFFO(1) is widely used in the telecommunications real estate sector to adjust Nareit FFO (common stockholders) for items that may otherwise cause material fluctuations in Nareit FFO (common stockholders) growth from period to period that would not be representative of the underlying performance of property assets in those periods. Utilizing the per Share Consolidated AFFO metric for compensation purposes reinforces management's discipline around utilizing the stock as a funding mechanism for growth only when it is strategically warranted and accretive over the long term for existing stockholders. We also include a ROIC(1) target as a key performance measure as it helps to ensure that management is focused on growing the business in a manner that enhances its overall return profile. We believe that focusing on growth opportunities that combine long-term Consolidated AFFO per Share(1) accretion with maintaining desired ROIC(1) levels will continue to benefit stockholders.
|
|
As of December 31, 2019, the NEOs had up to three PSU awards outstanding and unvested, granted in March 2017, 2018 and 2019.
For the PSU award granted in March 2017 (2017 PSU Award), the target set by the Committee for cumulative performance was measured against the achievement of established cumulative Consolidated AFFO per Share(1) and average ROIC(1) targets for the three-year performance period of $20.32 and 9.7%, respectively. In February 2020, the Committee determined that the Company outperformed the Consolidated AFFO per Share(1) and average ROIC(1) by 175% and 200%, respectively. Accordingly, the following table sets forth the 2017 PSU Awards for each eligible NEO at the 183% payout performance level, before dividend equivalents and the shares withheld by the Company to cover any taxes due.
(1)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
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|
Name
|
2017 PSU Award Granted
|
% of Target 2017 PSU Award Earned
|
Total Number of PSU Shares Vested
|
James D. Taiclet
|
52,827
|
183
|
%
|
96,674
|
|
Thomas A. Bartlett
|
21,131
|
183
|
%
|
38,670
|
Edmund DiSanto
|
19,810
|
183
|
%
|
36,253
|
Amit Sharma
|
18,490
|
183
|
%
|
33,837
|
Steven O. Vondran(1)
|
—
|
—
|
|
—
|
(1)Mr. Vondran did not become an executive officer until August 2018, and therefore, was not eligible to receive the 2017 PSU Award.
Information on acceleration of equity awards upon certain triggering events is described in “Employment and Severance Arrangements” below.
REVIEW OF 2019 CEO PERFORMANCE
The CEO first provides the Lead Director and Chairperson of the Committee with a report on his own performance as compared to his established goals and objectives. The Lead Director then prepares a written evaluation that includes extensive input from individuals familiar with the CEO’s performance and achievements, including interviews with other Directors and those who report directly to the CEO. The Committee reviews this written evaluation in executive session, while also considering additional factors, including prior years’ compensation trends, prior years’ Company performance and the relative level of rigor and complexity of the CEO’s tasks resulting from circumstances of domestic and international markets.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
46
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
The Committee assessed the CEO’s individual achievements during the year against the following four pillars of the Company’s Stand and Deliver strategy:
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|
PILLAR
|
|
METRICS MEASURED BY COMMITTEE
|
|
CEO PERFORMANCE ACHIEVEMENTS
|
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|
|
Lead wireless connectivity around the globe
|
|
•Advance the Company's position as a global leader in the industry
•Expand business relationships with tenants
|
|
ü
|
The Company's market capitalization crossed the $100 billion threshold and its one-, three- and five-year TSR exceeded the S&P 500
|
|
|
|
|
ü
|
Enhanced relationships with key tenants to drive business initiatives
|
|
|
|
|
ü
|
Elevated the Company’s stature with key government contacts in the U.S. and abroad, including through co-chairing the Department of Commerce's U.S.-India CEO Forum
|
|
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|
|
Innovate for a mobile future
|
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|
•Explore broader opportunities to elevate and extend the Company's growth in shared communications infrastructure
•Participate in development/testing of new technologies and energy alternatives
•Support of regional innovation team pilots/projects
|
|
ü
|
Advocated indoor solutions through industry associations and advanced edge compute solutions to other leading innovative companies
|
|
|
|
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ü
|
Reduced emerging markets’ generator run time below 12% of total operating hours
|
|
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|
|
ü
|
Launched novel pilot innovation projects and pursued new tenant opportunities to use existing and new architecture
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|
Drive efficiency throughout the industry
|
|
•Meet targeted profitability and cost savings goals
•Develop and apply intellectual and organizational capital to maximize performance of asset base
|
|
ü
|
Oversaw efficiency initiatives to maximize financial performance of our asset base as evidenced by exceeding targets for Adjusted EBITDA(1), Selling, General, Administrative and Development Expense and Total Cash Revenue
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Grow our assets and capabilities to meet customer needs
|
|
•Pursue attractive acquisitions in existing and select new markets within a disciplined capital allocation program
•Deliver high-performing core assets
|
|
ü
|
Guided investment committee through acquisition initiatives to drive long-term results, including increasing our portfolios in Africa, Latin America and Europe
|
|
|
|
|
|
|
(1)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
47
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
CEO Pay for Performance Alignment
The graphs below demonstrate the alignment of stockholder value creation and key operational metrics with CEO total annual compensation over the past five years.
|
|
|
|
|
|
CEO COMPENSATION* VS. VALUE OF
$100 INVESTMENT ON 1/1/2015
|
CEO COMPENSATION* VS. REVENUE
|
|
|
*As disclosed in Summary Compensation Table.
Total Annual Direct Compensation
Based on Mr. Taiclet’s 2019 performance and strong track record of success, the Committee awarded Mr. Taiclet total annual compensation of $18.1 million for 2019, consisting of a $1.1 million annual salary and $17.0 million in incentive compensation of which $3.0 million (17.6%) was awarded as a cash incentive and $14.0 million (82.4%) was awarded as long-term equity in the form of PSUs and RSUs.
|
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|
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|
|
|
|
|
|
Total Annual Cash
Compensation
|
+
|
Total Annual LTI
Compensation
|
=
|
Total Compensation
|
(1)30,329 RSUs with a grant date price of $145.08
(2)45,493 PSUs (at target) with a grant date price of $145.08
(3)22,684 RSUs with a grant date price of $185.16
(4)52,928 PSUs (at target) with a grant date price of $185.16
Note: Totals may not add due to rounding.
SUCCESSION PLANNING
On March 16, 2020, pursuant to Mr. Taiclet's transition from his role as Chairman, President and Chief Executive Officer to executive Chairman, the Board named Mr. Bartlett as President and Chief Executive Officer pursuant to the executive succession plan. The details of Mr. Bartlett's compensation for fiscal year 2020 in connection with his new position have not yet been determined by the Committee.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
48
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
Other Compensation and Governance Practices and Policies
ROLE OF THE COMPENSATION CONSULTANT
The Committee’s compensation consultant is Meridian. Meridian reports directly to the Committee, and the Committee can replace Meridian or hire additional consultants at any time. In 2019, Meridian attended all Committee meetings in person or by telephone, including executive sessions as requested and consulted frequently with the Chairperson of the Committee between meetings.
As part of its work in 2019, Meridian assisted the Committee with determining our peer group and benchmarking analyses, which included competitive analyses of Director and executive compensation, financial performance analysis, dilution analysis and realizable pay for performance analysis. Meridian also advised the Committee on the design of the annual and long-term incentive programs, as well as conducted a risk assessment review and audit of each of our compensation practices, programs and policies (see below under “Risk Assessment”). Other than the services that it provides to the Committee, Meridian does not provide services to and receives no additional compensation from the Company.
The Committee has analyzed whether the work of Meridian as its compensation consultant raises any conflicts of interest, taking into consideration the following factors: (i) Meridian does not provide any other services to the Company; (ii) the amount of fees the Company paid to Meridian represents less than 1% of Meridian’s total revenues; (iii) Meridian’s policies and procedures were designed to ensure independence; (iv) Meridian does not have any business or personal relationship with an executive officer of the Company; (v) Meridian does not have any business or personal relationship with any member of the Committee; and (vi) neither Meridian nor any member of its consulting team owns any stock of the Company. The Committee determined, based on its analysis of the above factors, that the work of Meridian and the individual compensation advisors employed by Meridian as compensation consultant to the Committee does not create any conflicts of interest. The Committee will continue to monitor the independence of its compensation consultant on an annual basis.
EMPLOYMENT ARRANGEMENTS AND SEVERANCE PROGRAM
To recruit and retain our executive officers, we periodically enter into employment letters and other arrangements or agreements, which are subject to review by the Committee.
In March 2009, we implemented a severance program (the Severance Program) to provide severance benefits to eligible employees who undergo a termination of employment in certain circumstances. Severance benefits under the Severance Program vary depending on an employee’s position or tenure with the Company. Our CEO and our executives are eligible for benefits under the Severance Program in the case of a Qualifying Termination, which occurs if the officer resigns for Good Reason or if the Company terminates the executive officer other than for Cause or for Performance Reasons (as these terms are defined in the Severance Program). The employment arrangements and agreements with, and benefits to, these executives are further described in “Employment and Severance Arrangements” below.
In July 2018, the Committee approved a new form of award agreement for grants of PSUs to employees, other than the CEO (the Award Agreement), pursuant to the 2007 Equity Incentive Plan, as amended (2007 Equity Incentive Plan). The Award Agreement provides for either a full or pro rata payout of PSUs earned based on the Company’s performance after the scheduled vesting date of the PSUs in the event of a “Separation Event” or “Qualified Retirement” (each as defined in the Award Agreement) subject to certain conditions being met. In addition, the Committee approved an amendment of all outstanding PSU awards, including PSU awards held by the Company’s executive officers, other than the CEO, to conform to the payout methodology in the Award Agreement.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
49
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
RISK ASSESSMENT
The Committee annually assesses, together with its independent compensation consultant and management, the factors and criteria underlying our compensation plans for all employees to determine whether any elements create an inappropriate level of risk, as well as methods to mitigate any identified potential risks. This includes considering, among other things:
•whether each plan provides for an overachievement mechanism or cap on performance;
•incentive award opportunity;
•the existence of discretionary authority;
•whether payouts are linked to overall Company goals;
•the timing of prospective payments;
•the inclusion of certain windfall or “claw back” provisions;
•the contribution of the awards to a participant’s total mix of compensation; and
•any risk-mitigating factors.
STOCK OWNERSHIP GUIDELINES
We believe that holding shares of our Common Stock, RSUs, PSUs and options to purchase our Common Stock closely aligns the interests of our executive officers with those of our stockholders. Accordingly, we maintain a formal stock ownership policy for our executive officers and Directors so that they may share in the risks and rewards of our stockholders as our stock price increases or decreases.
The current stock ownership guidelines are based on a multiple of base salary for executive officers and a multiple of the annual cash retainer for non-employee Directors. The ownership guidelines are as follows:
•six (6) times annual base salary for the CEO;
•three (3) times annual base salary for executive officers directly reporting to the CEO; and
•five (5) times annual retainer for Directors.
In determining compliance with these guidelines, in addition to actual shares held, we count unvested RSUs, unvested PSUs at target and the in-the-money value of vested options. Executives have five years from the date of hire to reach their required ownership levels and are required to retain 50% of equity award shares received net of tax obligations until they meet the ownership requirements.
All of our NEOs employed as of December 31, 2019, were in compliance with our stock ownership guidelines:
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Stock Ownership Guideline
|
Ownership as of December 31, 2019(1)
|
|
James D. Taiclet
|
6x Base Salary
|
243x
|
Base Salary
|
Thomas A. Bartlett (2)
|
3x Base Salary
|
64x
|
Base Salary
|
Edmund DiSanto
|
3x Base Salary
|
128x
|
Base Salary
|
Amit Sharma
|
3x Base Salary
|
183x
|
Base Salary
|
Steven O. Vondran
|
3x Base Salary
|
27x
|
Base Salary
|
(1)Based on a per share price of $229.82, the closing price of our Common Stock on December 31, 2019.
(2)Mr. Bartlett, our new President and Chief Executive Officer, was in compliance with the stock ownership guideline for the CEO using a per share price of $179.09, the closing price of our Common Stock on March 23, 2020.
For additional information on our stock ownership guidelines and our Directors, see above under “Corporate Governance—Stock Ownership Guidelines.”
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
50
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Discussion and Analysis
POLICIES ON TRANSACTIONS IN COMPANY STOCK; ANTI-HEDGING AND PLEDGING POLICY
Our Anti-Insider Trading Policy imposes limits as to when and how Company employees, including our executive officers, and Directors can engage in transactions in our securities, and prohibits hedging transactions, short selling, or any other type of arrangement that is designed, or may reasonably be expected, to have the effect of hedging or offsetting a decrease in the market value of our Common Stock. Our Code of Conduct similarly provides a formal policy that prohibits our executive officers and Directors from entering into hedging transactions with respect to our Common Stock. It also prohibits our executive officers, Directors and certain other key employees from pledging shares of our Common Stock as security.
CLAW BACK POLICY
The terms of our annual performance incentive awards and long-term, equity-based awards allow the Company to “claw back” cash and shares received pursuant to such awards, respectively, or, in the latter case, require the payment to the Company of all gains realized upon disposition of such shares in certain circumstances, such as the executive’s termination by the Company for cause or following termination of employment for any reason if: (1) the executive officer engaged in conduct while an employee that would have justified termination for cause; (2) the executive officer violates any applicable confidentiality or non-competition agreement; (3) upon determination that a claw back is appropriate in the event of restatement of the Company’s financial statements; or (4) as required by law.
OTHER BENEFITS
We do not believe in providing excessive perquisites to our executive officers, who participate in the same healthcare, insurance and other welfare and retirement programs as other eligible employees. These programs include health and dental coverage, group term life insurance, disability programs, our broad-based employee stock purchase program (under which we give a 15% discount to all employees on the purchase price of our stock) and matching contributions to our 401(k) plan. We share the cost of health and welfare benefits with our employees, including our executive officers, a cost that depends on the level of benefits coverage that each employee or executive officer elects.
We do not offer our executive officers any deferred compensation plans, supplemental executive retirement plans or loans of any kind.
As shown in the “All Other Compensation” column in the Summary Compensation Table on page 53, perquisites to executive officers include an annual car allowance; reimbursement for related auto insurance premiums; and amounts for parking at our corporate offices in Boston, a benefit we also provide to a number of other corporate employees.
Under limited circumstances, we provide certain perquisites to individuals recruited to key positions and to officers who move from their home countries at our request. Accordingly, in addition to the general perquisites to executive officers, Mr. Sharma is an expatriate from the United States who works in India as our Executive Vice President and President, Asia, and he receives housing and certain other allowances, tax equalization, a driver, fuel, security, utilities and other tax support. The amount of Mr. Sharma’s expatriate benefits is shown in the Summary Compensation Table and is consistent with packages typically offered to expatriated employees at global companies.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
As part of its role, the Committee considers to what extent the Company can deduct any of its executive compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (Section 162(m)). As amended in December 2017 by the Tax Cuts and Jobs Act of 2017 (Tax Act), under Section 162(m), a public company cannot deduct compensation in excess of $1 million paid in any year to its chief executive officer, chief financial officer and the three other most highly compensated officers. Historically, qualified “performance based compensation” was not subject to this $1 million limitation, but this exception was removed as part of the Tax Act. In designing our compensation programs and in making awards to our executive officers, the Committee has been
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
51
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation Committee Report
mindful of whether compensation would be deductible, but has always retained the flexibility to award compensation that was not deductible in order to meet the objectives of our compensation philosophy.
Compensation Committee Report
The Compensation Committee of the Company’s Board of Directors reviewed the Compensation Discussion and Analysis for the year ended December 31, 2019 and discussed it with the Company’s management. Based on this review and its discussions with management, the Committee recommended to the Company’s Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for the 2020 Annual Meeting of Stockholders.
By the Compensation Committee of the Board of Directors of American Tower Corporation.
COMPENSATION COMMITTEE
Craig Macnab, Chairperson
Gustavo Lara Cantu
Raymond P. Dolan
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
52
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
Executive Compensation
The following table provides information concerning compensation earned by each of our NEOs for the years ended December 31, 2019, 2018 and 2017.
SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position (a)
|
Year
(b)
|
Salary
($)
(c)
|
Stock Awards
($)(1)
(e)
|
Non-Equity
Incentive Plan
Compensation
($)(2)
(g)
|
All Other
Compensation
($)(3)
(i)
|
Total
($)
(j)
|
James D. Taiclet
Chairman of the Board, President and Chief Executive Officer
|
2019
|
$
|
1,100,000
|
|
$
|
14,000,318
|
|
$
|
2,961,750
|
|
$
|
33,220
|
|
$
|
18,095,288
|
|
|
2018
|
$
|
1,100,000
|
|
$
|
11,000,256
|
|
$
|
2,173,600
|
|
$
|
34,080
|
|
$
|
14,307,936
|
|
|
2017
|
$
|
1,100,000
|
|
$
|
10,000,151
|
|
$
|
1,987,700
|
|
$
|
31,566
|
|
$
|
13,119,417
|
|
Thomas A. Bartlett
Executive Vice President and
Chief Financial Officer
|
2019
|
$
|
789,495
|
|
$
|
4,750,280
|
|
$
|
1,374,511
|
|
$
|
34,969
|
|
$
|
6,949,255
|
|
|
2018
|
$
|
766,500
|
|
$
|
4,300,171
|
|
$
|
1,019,445
|
|
$
|
33,415
|
|
$
|
6,119,531
|
|
|
2017
|
$
|
766,500
|
|
$
|
4,000,060
|
|
$
|
997,600
|
|
$
|
31,583
|
|
$
|
5,795,743
|
|
Edmund DiSanto
Executive Vice President, Chief Administrative Officer, General Counsel and Secretary
|
2019
|
$
|
631,596
|
|
$
|
4,500,129
|
|
$
|
1,099,609
|
|
$
|
33,880
|
|
$
|
6,265,214
|
|
|
2018
|
$
|
613,200
|
|
$
|
4,050,198
|
|
$
|
815,556
|
|
$
|
33,146
|
|
$
|
5,512,100
|
|
|
2017
|
$
|
613,200
|
|
$
|
3,750,071
|
|
$
|
792,254
|
|
$
|
31,325
|
|
$
|
5,186,850
|
|
Amit Sharma (4)
Executive Vice President and President,
Asia
|
2019
|
$
|
633,489
|
|
$
|
4,250,163
|
|
$
|
1,102,905
|
|
$
|
697,734
|
|
$
|
6,684,291
|
|
|
2018
|
$
|
615,038
|
|
$
|
3,800,080
|
|
$
|
818,001
|
|
$
|
905,524
|
|
$
|
6,138,643
|
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Steven O. Vondran(5)
Executive Vice President and President, U.S. Tower Division
|
2019
|
$
|
592,250
|
|
$
|
2,800,175
|
|
$
|
1,031,107
|
|
$
|
32,215
|
|
$
|
4,455,747
|
|
|
2018
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)The amounts in column (e) reflect the aggregate grant date fair value of RSUs and PSUs (valued assuming target performance) granted pursuant to our 2007 Equity Incentive Plan. The aggregate grant date fair value of the awards was calculated by multiplying the number of shares of Common Stock underlying the RSU and PSU awards (at target) by the closing market price of shares of our Common Stock on the grant date. Assuming maximum performance levels are achieved, the aggregate grant date fair value of PSUs would be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Granted in 2019
|
Granted in 2018
|
Granted in 2017
|
James D. Taiclet
|
$
|
19,600,297
|
|
$
|
13,200,249
|
|
$
|
12,000,181
|
|
Thomas A. Bartlett
|
$
|
5,700,336
|
|
$
|
5,160,205
|
|
$
|
4,800,118
|
|
Edmund DiSanto
|
$
|
5,400,006
|
|
$
|
4,860,180
|
|
$
|
4,500,040
|
|
Amit Sharma(4)
|
$
|
5,100,047
|
|
$
|
4,560,155
|
|
—
|
|
Steven O. Vondran(5)
|
$
|
3,360,284
|
|
—
|
|
—
|
|
(2)The amounts in column (g) reflect, for the year ended December 31, 2019, cash payments made in 2020 with respect to annual performance incentive awards for services performed in 2019; for the year ended December 31, 2018, cash payments made in 2019 with respect to annual performance incentive awards for services performed in 2018; and for the year ended December 31, 2017, cash payments made in 2018 with respect to annual performance incentive awards for services performed in 2017.
(3)Details about the amounts in column (i) for 2019 are set forth in the table below. In accordance with SEC rules, the amounts in column (i) do not include payments for group term life insurance and other welfare benefits that are generally available to all salaried employees.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Retirement Match(a)
|
Car Expenses(b)
|
Ex-Pat(c)
|
Other(d)
|
Total
|
James D. Taiclet
|
$
|
14,000
|
|
$
|
16,379
|
|
—
|
|
$
|
2,841
|
|
$
|
33,220
|
|
Thomas A. Bartlett
|
$
|
14,000
|
|
$
|
16,991
|
|
—
|
|
$
|
3,978
|
|
$
|
34,969
|
|
Edmund DiSanto
|
$
|
14,000
|
|
$
|
16,385
|
|
—
|
|
$
|
3,495
|
|
$
|
33,880
|
|
Amit Sharma
|
$
|
13,850
|
|
$
|
15,366
|
|
$
|
290,827
|
|
$
|
377,691
|
|
$
|
697,734
|
|
Steven O. Vondran
|
$
|
14,167
|
|
$
|
15,366
|
|
—
|
|
$
|
2,682
|
|
$
|
32,215
|
|
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
53
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
(a)Includes matching contributions pursuant to our 401(k) plan.
(b)Includes an annual car allowance of $12,000 and additional amounts for related auto insurance premiums. Except for Mr. Sharma, these amounts also reflect reimbursement for parking expenses at our corporate offices in Boston, which is a benefit we offer to a number of our employees who work in that office.
(c)Includes certain benefits related to Mr. Sharma’s status as an expatriate including contributions to an India designated retirement fund ($151,779), housing allowance ($119,340), a driver, fuel, security, utilities and tax preparation. For more information regarding these benefits to Mr. Sharma, see “—Employment and Severance Arrangements” below. Payments made to Mr. Sharma are converted from Indian rupees to U.S. dollars at the average foreign exchange rate for the month in which payments are made.
(d)Mr. Sharma received an aggregate of $377,691 in gross payments on taxes owed with respect to allowances or other personal benefits as a result of his status as an expatriate. The amount for Mr. Sharma excludes a net amount of approximately $0.6 million for estimated foreign tax payments made on his behalf related to his international assignment. Pursuant to the Company’s tax equalization process, this amount will be finally determined upon completion of his tax return and will be reconciled against the amount previously withheld by Mr. Sharma. Any actual benefits received by Mr. Sharma will be disclosed in a subsequent proxy statement, to the extent required. Payments made to Mr. Sharma are converted from Indian rupees to U.S. dollars at the average foreign exchange rate for the month in which payments are made.
(4)Mr. Sharma was not a NEO prior to the 2018 fiscal year and, accordingly, compensation information in 2017 is not provided.
(5)Mr. Vondran was not a NEO prior to the 2019 fiscal year and, accordingly, compensation information in prior years is not provided.
GRANTS OF PLAN-BASED AWARDS FOR 2019
The following table sets forth information relating to RSUs and PSUs granted pursuant to the 2007 Equity Incentive Plan and annual incentive award opportunity for each of our NEOs during the year ended December 31, 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
(a)
|
Grant Date
(b)
|
Approval
Date
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)
|
|
|
Estimated Future Payouts
Under Equity Incentive Plan Awards(2)(3)
|
|
|
All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)(3)
(i)
|
Grant Date
Fair Value
of Stock
and Option
Awards(4)
(l)
|
|
|
|
Threshold
($)
(c)
|
Target
($)
(d)
|
Maximum
($)
(e)
|
Threshold
(#)
(f)
|
Target
(#)
(g)
|
Maximum
(#)
(h)
|
|
|
James D. Taiclet
|
|
|
|
|
|
|
|
|
|
|
Annual incentive awards
|
|
|
$
|
825,000
|
|
$
|
1,650,000
|
|
$
|
3,300,000
|
|
|
|
|
|
|
RSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
|
|
|
22,684
|
$
|
4,200,169
|
|
PSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
26,464
|
52,928
|
105,856
|
|
$
|
9,800,148
|
|
Thomas A. Bartlett
|
|
|
|
|
|
|
|
|
|
|
Annual incentive awards
|
|
|
$
|
394,748
|
|
$
|
789,495
|
|
$
|
1,578,990
|
|
|
|
|
|
|
RSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
|
|
|
10,262
|
$
|
1,900,112
|
|
PSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
7,697
|
15,393
|
30,786
|
|
$
|
2,850,168
|
|
Edmund DiSanto
|
|
|
|
|
|
|
|
|
|
|
Annual incentive awards
|
|
|
$
|
315,798
|
|
$
|
631,596
|
|
$
|
1,263,192
|
|
|
|
|
|
|
RSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
|
|
|
9,722
|
$
|
1,800,126
|
|
PSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
7,291
|
14,582
|
29,164
|
|
$
|
2,700,003
|
|
Amit Sharma
|
|
|
|
|
|
|
|
|
|
|
Annual incentive awards
|
|
|
$
|
316,745
|
|
$
|
633,489
|
|
$
|
1,266,978
|
|
|
|
|
|
|
RSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
|
|
|
9,182
|
$
|
1,700,139
|
|
PSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
6,886
|
13,772
|
27,544
|
|
$
|
2,550,024
|
|
Steven O. Vondran
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive
|
|
|
$
|
296,125
|
|
$
|
592,250
|
|
$
|
1,184,500
|
|
|
|
|
|
|
RSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
|
|
|
6,049
|
$
|
1,120,033
|
|
PSUs
|
3/11/2019
|
2/27/2019
|
|
|
|
4,537
|
9,074
|
18,148
|
|
$
|
1,680,142
|
|
(1)For 2019, the bonus target for Mr. Taiclet was 150% of base salary and for each of Messrs. Bartlett, DiSanto, Sharma and Vondran was 100% of base salary. The annual incentive awards cannot exceed 200% of the bonus target, and typically the Compensation Committee does not award annual incentive awards below 50% of the bonus target. The amounts in column (c), (d) and (e) are based on 50%, 100% and 200% of the bonus target, respectively. The actual amounts we paid in connection with our annual performance incentive awards are reflected in the Summary Compensation Table under the column captioned “Non-Equity Incentive Plan Compensation.” For more information regarding our annual performance incentive awards, see above under the caption
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
54
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
“Compensation Determinations for 2019—Annual Performance Incentive Awards” in our Compensation Discussion and Analysis included in this Proxy Statement.
(2)PSUs granted under the 2007 Equity Incentive Plan.
(3)We typically grant equity-based incentive awards to our employees, including our executive officers, as part of our annual employee performance review program conducted each February or March. On March 10, 2020, in connection with annual performance reviews and the Company’s annual employee equity grant, we awarded Messrs. Taiclet, Bartlett, DiSanto, Sharma and Vondran RSUs and PSUs pursuant to the 2007 Equity Incentive Plan, in the amounts set forth below based on their performance for 2019 and expected future contributions to the Company. In determining the size of these awards, the Committee established a targeted award value for each executive officer and then allocated 40% to RSUs and 60% to PSUs for each executive officer, other than Mr. Taiclet, whose target award value was 30% to RSUs and 70% to PSUs.
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
RSUs
|
PSUs
|
Grant Date Fair Value Per Share
|
James D. Taiclet
|
$
|
4,200,000
|
|
$
|
9,800,000
|
|
$
|
243.87
|
|
Thomas A. Bartlett
|
$
|
2,080,000
|
|
$
|
3,120,000
|
|
$
|
243.87
|
|
Edmund DiSanto
|
$
|
1,920,000
|
|
$
|
2,880,000
|
|
$
|
243.87
|
|
Amit Sharma
|
$
|
1,840,000
|
|
$
|
2,760,000
|
|
$
|
243.87
|
|
Steven O. Vondran
|
$
|
1,400,000
|
|
$
|
2,100,000
|
|
$
|
243.87
|
|
RSU awards vest in 25% cumulative annual increments commencing one year from the date of grant, subject to earlier vesting under the death, disability and retirement benefits program. PSU awards vest at the end of the three-year performance period based on achievement against pre-established financial performance goals of the Company determined at the date of grant, subject to the terms of our death, disability and retirement benefits program.
(4)The amounts in column (l) reflect the grant date fair value of the stock awards granted during the fiscal year ended December 31, 2019. The aggregate grant date fair value of the awards is calculated using the closing market price of shares of our Common Stock on the grant date, March 11, 2019. All PSUs are valued assuming the target number of shares in column (g).
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN-BASED AWARDS TABLE
The compensation we paid our NEOs in 2019, 2018 and 2017 as summarized in the Summary Compensation Table is determined in accordance with employment letters and other arrangements or agreements with our executive officers, which the Compensation Committee reviews. For more information about these agreements, please see below under “Employment and Severance Arrangements.” For more information about the elements of the compensation packages paid to our executive officers, please see above under “Compensation Determinations for 2019” in the Compensation Discussion and Analysis.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
55
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2019
The following table sets forth information relating to stock options, PSUs and RSUs outstanding as of December 31, 2019 that were granted to our NEOs pursuant to the 2007 Equity Incentive Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(1)
|
|
|
|
Stock Awards(2)
|
|
|
|
Name
(a)
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(3)
(c)
|
Option
Exercise
Price
($)
(e)
|
Option
Expiration
Date
(f)
|
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(4)(6)
(g)
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)(5)(6)
(h)
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(6)
(i)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(5)(6)
(j)
|
|
|
|
|
|
|
|
|
|
James D. Taiclet
|
233,161
|
—
|
|
$
|
76.90
|
|
3/11/2023
|
—
|
|
—
|
|
—
|
|
—
|
|
|
303,235
|
—
|
|
$
|
81.18
|
|
3/10/2024
|
—
|
|
—
|
|
—
|
|
—
|
|
|
298,211
|
—
|
$
|
94.57
|
|
3/10/2025
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,502
|
$
|
2,183,750
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,608
|
$
|
4,046,671
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22,746
|
$
|
5,227,486
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22,684
|
$
|
5,213,237
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
96,674
|
$
|
22,217,619
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
22,747
|
$
|
5,227,716
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
26,464
|
$
|
6,081,956
|
|
Thomas A. Bartlett
|
30,401
|
—
|
$
|
94.57
|
|
3/10/2025
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,875
|
$
|
890,553
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,043
|
$
|
1,618,622
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,892
|
$
|
2,043,559
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,262
|
$
|
2,358,413
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
38,670
|
$
|
8,887,139
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,892
|
$
|
2,043,559
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,697
|
$
|
1,768,925
|
|
Edmund DiSanto
|
35,000
|
—
|
|
$
|
76.90
|
|
3/11/2023
|
—
|
|
—
|
|
—
|
|
—
|
|
|
101,079
|
—
|
|
$
|
81.18
|
|
3/10/2024
|
—
|
|
—
|
|
—
|
|
—
|
|
|
114,977
|
—
|
$
|
94.57
|
|
3/10/2025
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,664
|
$
|
842,060
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,603
|
$
|
1,517,501
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,375
|
$
|
1,924,743
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,722
|
$
|
2,234,310
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
36,253
|
$
|
8,331,664
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,375
|
$
|
1,924,743
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,291
|
$
|
1,675,618
|
|
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
56
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Executive Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(1)
|
|
|
|
Stock Awards(2)
|
|
|
|
Name
(a)
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(3)
(c)
|
Option
Exercise
Price
($)
(e)
|
Option
Expiration
Date
(f)
|
Number
of Shares
or Units of
Stock That
Have Not
Vested
(#)(4)(6)
(g)
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)(5)(6)
(h)
|
Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)(6)
(i)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(5)(6)
(j)
|
|
|
|
|
|
|
|
|
|
Amit Sharma
|
52,601
|
—
|
|
$
|
50.78
|
|
3/10/2021
|
—
|
|
—
|
|
—
|
|
—
|
|
|
63,183
|
—
|
|
$
|
62.00
|
|
3/12/2022
|
—
|
|
—
|
|
—
|
|
—
|
|
|
64,767
|
—
|
|
$
|
76.90
|
|
3/11/2023
|
—
|
|
—
|
|
—
|
|
—
|
|
|
90,971
|
—
|
|
$
|
81.18
|
|
3/10/2024
|
—
|
|
—
|
|
—
|
|
—
|
|
|
101,061
|
—
|
$
|
94.57
|
|
3/10/2025
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,431
|
$
|
788,512
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,163
|
$
|
1,416,381
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,857
|
$
|
1,805,696
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,182
|
$
|
2,110,207
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
33,837
|
$
|
7,776,419
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
7,858
|
$
|
1,805,926
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,886
|
$
|
1,582,541
|
|
Steven O. Vondran
|
9,265
|
|
—
|
|
$
|
81.18
|
|
3/10/2024
|
—
|
|
—
|
|
—
|
—
|
|
|
21,537
|
|
—
|
|
$
|
94.57
|
|
3/10/2025
|
—
|
|
—
|
|
—
|
—
|
|
|
22,322
|
|
11,160
|
|
$
|
94.71
|
|
3/10/2026
|
—
|
|
—
|
|
—
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
|
1,716
|
|
$
|
394,371
|
|
—
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,842
|
|
$
|
1,112,788
|
|
—
|
—
|
|
|
—
|
|
—
|
|
—
|
—
|
5,687
|
|
$
|
1,306,986
|
|
—
|
—
|
|
|
—
|
|
—
|
|
—
|
—
|
1,392
|
|
$
|
319,909
|
|
—
|
—
|
|
|
—
|
|
—
|
|
—
|
—
|
6,049
|
|
$
|
1,390,181
|
|
—
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,537
|
$
|
1,042,693
|
|
(1)Stock options vest in 25% cumulative annual increments commencing one year from the date of grant, subject to earlier vesting under the death, disability and retirement benefits program, and have a term of 10 years.
(2)Stock awards consist of RSUs and PSUs granted under the 2007 Equity Incentive Plan.
(3)For each option grant identified as unexercisable in part or in full, the following table sets forth information regarding such option grant as of December 31, 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
Number of Securities
Underlying Unexercised
Options (#) Exercisable
|
Number of Securities
Underlying Unexercised
Options (#) Unexercisable
|
Option
Grant
Date
|
Original Option
Grant Amount
(#)
|
Steven O. Vondran
|
22,322
|
11,160
|
3/10/2016
|
44,643
|
(4)Each of the unvested RSUs was granted on March 10, 2016; March 10, 2017; March 12, 2018 or March 11, 2019 (in descending chronological order as to the date of grant in the table for each NEO) and each vests in 25% cumulative annual increments commencing one year from the date of grant, subject to earlier vesting under the death, disability and retirement benefits program.
(5)The market value of the RSU and PSU awards was determined using a stock price of $229.82, which was the closing price of our Common Stock on the NYSE on December 31, 2019. PSU awards granted in 2017 are reflected at a 183% payout performance level and the PSU awards granted in 2018 and 2019 are reflected at a threshold 50% payout performance level.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
57
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
CEO Pay Ratio
(6)The unvested PSUs were granted on March 10, 2017, March 12, 2018 and March 11, 2019 and vest at the end of the three-year performance period based on achievement against pre-established performance goals determined at the date of grant, subject to the terms of the death, disability and retirement benefits program. On March 10, 2020, the 2017 PSU Awards vested. The following table sets forth the vested amounts of such PSU awards before dividend equivalents and the shares withheld by the Company to cover any taxes due.
|
|
|
|
|
|
Name
|
PSUs
|
James D. Taiclet
|
96,674
|
Thomas A. Bartlett
|
38,670
|
Edmund DiSanto
|
36,253
|
Amit Sharma
|
33,837
|
Steven O. Vondran(1)
|
—
|
(1)Mr. Vondran did not become an executive officer until August 2018, and therefore, was not eligible to receive the 2017 PSU Award.
OPTION EXERCISES AND STOCK VESTED FOR 2019
The following table sets forth information relating to options exercised and RSUs and PSUs vested during the year ended December 31, 2019 for each NEO.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
Number of Shares
Acquired on Exercise
(#)
(b)
|
Value Realized
Upon Exercise
($)(1)
(c)
|
Number of Shares
Acquired on Vesting
(#)
(d)
|
Value Realized
on Vesting
($)(2)
(e)
|
James D. Taiclet
|
229,754
|
$
|
32,619,893
|
|
145,873
|
$
|
26,523,389
|
|
Thomas A. Bartlett
|
51,203
|
$
|
3,589,330
|
|
59,286
|
$
|
10,779,201
|
|
Edmund DiSanto
|
98,635
|
$
|
15,655,400
|
|
56,017
|
$
|
10,184,806
|
|
Amit Sharma
|
50,000
|
$
|
7,497,000
|
|
52,329
|
$
|
9,514,316
|
|
Steven O. Vondran
|
—
|
—
|
|
8,216
|
$
|
1,527,606
|
|
(1)Column (c) reflects the excess of the market price of the underlying securities at exercise over the exercise price.
(2)Column (e) reflects the market value of RSU and PSU awards using stock prices of $181.61, $185.75 and $241.07, as applicable, which were the closing prices of our Common Stock on the NYSE on the last business day prior to the vesting date of each RSU and PSU.
CEO Pay Ratio
As required by Item 402(u) of Regulation S-K, we are providing the following information about the relationship between the annual total compensation of our median employee and James D. Taiclet, our former CEO:
For 2019, our last completed fiscal year:
•the annual total compensation of the employee identified as the median employee of our Company (other than our former CEO), was $62,745; and
•the annual total compensation of our former CEO was $18,095,288.
Based on this information, for 2019 the ratio of the annual total compensation of Mr. Taiclet, our former CEO, to the median employee was estimated to be approximately 288 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records using the methodology described below. The SEC rules for identifying the “median employee” allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions to reflect their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported by us, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in determining their median employee.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
58
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Employment and Severance Arrangements
CEO PAY RATIO METHODOLOGY
Item 402(u) of Regulation S-K requires us to identify the Company’s median employee once every three years, unless a change in employee population or compensation arrangements is likely to result in a significant change in our CEO pay ratio disclosures. The Company determined that no such change occurred during 2019. Accordingly, for the 2019 pay ratio calculation, we used the same median employee identified during our 2017 analysis of our employee population.
To identify our median employee in 2017, the methodology and the material assumptions, adjustments and estimates that we used were as follows:
•We determined that, as of October 31, 2017, our employee population, excluding our former CEO, consisted of approximately 5,037 individuals. We selected October 31, 2017, which is within the last three months of 2017, as the date upon which we would identify the “median employee” to allow sufficient time to identify the median employee given the global scope of our operations.
•As permitted by SEC rules, we excluded a total of 68 employees of two companies that we acquired during 2017, consisting of 60 employees of FPS Towers and eight employees of Tigo Paraguay.
•Our employee population, after taking into consideration the foregoing exclusions, consisted of approximately 4,969 individuals. Of the 4,969 employees included in the calculation, 3,322, or 67%, of them are outside the U.S.
•To identify the “median employee” from our employee population, we selected actual cash compensation (salary and bonus) paid in 2017. Foreign exchange rates were translated to the U.S. dollar equivalent based on rates as of October 31, 2017.
Finally, to determine the annual total compensation of the “median employee” for 2019, we identified and calculated the elements of such employee’s compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. Foreign exchange rates were translated to the U.S. dollar equivalent based on the 2019 average. With respect to the annual total compensation of our former CEO, we used the amount reported in the “Total” column for 2019 in our Summary Compensation Table in this Proxy Statement.
Employment and Severance Arrangements
As discussed above in our Compensation Discussion and Analysis, to recruit and retain our executive officers, we periodically enter into employment letters and other arrangements or agreements, which the Compensation Committee reviews. Our NEOs are also subject to the terms of the Severance Program. The table below, “Potential Payments Upon Termination or Change of Control for 2019,” summarizes the severance benefits that would be payable to each of our NEOs if his employment had been terminated as of December 31, 2019, with respect to the different termination scenarios set forth in their agreements with us. Under the Severance Program, our executive officers are entitled to the following severance benefits upon a Qualifying Termination:
•Cash Severance: The CEO is entitled to receive 104 weeks of base earnings and each Executive Vice President is entitled to receive 78 weeks of base earnings. In addition, each executive would be entitled to a prorated portion of his or her target incentive for the portion of the year prior to termination, assuming 100% satisfaction of goals or objectives related to that incentive.
•Equity Acceleration/Vesting Provisions: If a Qualifying Termination occurs within 14 days prior to, or up to two years following, a Change of Control, each executive is entitled to full acceleration of vesting of all outstanding stock options, RSUs and PSUs, as further described below.
•Benefits Continuation: Each executive is eligible for continued health and welfare benefits, for which the Company will pay the employer share of the cost of coverage for a period equal to the number of weeks of base earnings payable under the Severance Program and, subject to eligibility, is entitled to benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
59
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Employment and Severance Arrangements
•Release of Claims, Non-Compete: To receive benefits under the Severance Program, the executive must sign a separation and release agreement and a limited confidentiality and restrictive covenant agreement in forms satisfactory to the Company. In addition, at our discretion, we may require the deposit of a portion of the after-tax payments to each executive in a restricted account to serve as security for the executive’s compliance with the ongoing covenants, restrictions and obligations contained in such agreements, with restrictions on distribution up to and including forfeiture in the event of non-compliance.
Under the Severance Program, equity awards to our executive officers are subject to a double-trigger standard, whereby the executive is entitled to acceleration of his or her equity awards only in the event of a “Qualifying Termination” within 14 days before, or two years following, a “Change of Control.” In such an event, the executive is entitled to acceleration of all unvested equity-based awards (including stock options and RSUs). With respect to the grant of PSUs, the value of those PSUs would be determined based on target performance, prorated for the executive’s term of employment during the performance period prior to the Qualifying Termination and paid out within 60 days of the Qualifying Termination unless such executive is a “specified employee” as defined in the Treasury Regulation Section 1.409A-1(i). If there is no Qualifying Termination or if the termination is a Qualifying Termination not in connection with a Change of Control, the executive is not entitled to any acceleration or continued vesting of his or her equity-based awards, except in connection with a “Qualified Retirement” (as defined in the Award Agreement). The Severance Program does not provide for tax gross-ups.
In addition, the Compensation Committee adopted a death, disability and retirement benefits program in connection with equity awards granted to our employees, including executives, similar to that of our peer group companies. The program’s benefits provide for the acceleration of vesting and exercise periods for stock options, RSUs and PSUs granted on or after January 1, 2013, upon an employee’s death or permanent disability, or upon an employee’s qualified retirement provided certain eligibility criteria are met.
In February 2018, we entered into a letter agreement with Mr. Sharma in connection with his service as Executive Vice President and President, Asia. Consistent with the benefits we provide our other executive officers and our expatriate program, Mr. Sharma has been provided with housing and certain other allowances, tax equalization, a driver, fuel, security, utilities and other tax support.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL FOR 2019
The table below sets forth the potential estimated payments pursuant to our Severance Program to each NEO as if the individual’s employment had been terminated as of December 31, 2019. While our executive officers are entitled to certain severance benefits upon a Qualifying Termination pursuant to the terms of the Severance Program, full acceleration of vesting of outstanding equity-based awards is limited to a Qualifying Termination upon a change of control, subject to earlier vesting under the death, disability and retirement program.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Type of Payment/Benefit
|
Termination on
12/31/19: “for
Cause”
|
Termination on
12/31/19: voluntary
or retirement
|
Qualifying Termination
on 12/31/19: with
no Change of Control
|
Qualifying Termination
on 12/31/19: with
Change of Control
|
James D. Taiclet
|
|
|
|
|
Base salary(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
2,200,000
|
|
$
|
2,200,000
|
|
Annual incentive awards(2)
|
—
|
|
—
|
|
1,650,000
|
|
1,650,000
|
|
Value of accelerated equity awards(3)(4)(5)
|
—
|
|
49,913,687
|
|
49,913,687
|
|
49,913,687
|
|
Health benefits(6)
|
—
|
|
—
|
|
48,126
|
|
48,126
|
|
Total
|
$
|
—
|
|
$
|
49,913,687
|
|
$
|
53,811,813
|
|
$
|
53,811,813
|
|
Thomas A. Bartlett
|
|
|
|
|
Base salary(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
1,184,243
|
|
$
|
1,184,243
|
|
Annual incentive awards(2)
|
—
|
|
—
|
|
789,495
|
|
789,495
|
|
Value of accelerated equity awards(3)(4)(5)
|
—
|
|
23,423,025
|
|
23,423,025
|
|
23,423,025
|
|
Health benefits(6)
|
—
|
|
—
|
|
26,250
|
|
26,250
|
|
Total
|
$
|
—
|
|
$
|
23,423,025
|
|
$
|
25,423,013
|
|
$
|
25,423,013
|
|
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
60
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Employment and Severance Arrangements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Type of Payment/Benefit
|
Termination on
12/31/19: “for
Cause”
|
Termination on
12/31/19: voluntary
or retirement
|
Qualifying Termination
on 12/31/19: with
no Change of Control
|
Qualifying Termination
on 12/31/19: with
Change of Control
|
Edmund DiSanto
|
|
|
|
|
Base salary(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
947,394
|
|
$
|
947,394
|
|
Annual incentive awards(2)
|
—
|
|
—
|
|
631,596
|
|
631,596
|
|
Value of accelerated equity awards(3)(4)(5)
|
—
|
|
22,050,999
|
|
22,050,999
|
|
22,050,999
|
|
Health benefits(6)
|
—
|
|
—
|
|
26,250
|
|
26,250
|
|
Total
|
$
|
—
|
|
$
|
22,050,999
|
|
$
|
23,656,239
|
|
$
|
23,656,239
|
|
Amit Sharma
|
|
|
|
|
Base salary(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
950,234
|
|
$
|
950,234
|
|
Annual incentive awards(2)
|
—
|
|
—
|
|
633,489
|
|
633,489
|
|
Value of accelerated equity awards(3)(4)(5)
|
—
|
|
20,674,148
|
|
20,674,148
|
|
20,674,148
|
|
Health benefits(6)
|
—
|
|
—
|
|
26,250
|
|
26,250
|
|
Total
|
$
|
—
|
|
$
|
20,674,148
|
|
$
|
22,284,121
|
|
$
|
22,284,121
|
|
Steven O. Vondran
|
|
|
|
|
Base salary(1)
|
$
|
—
|
|
$
|
—
|
|
$
|
888,375
|
|
$
|
888,375
|
|
Annual incentive awards(2)
|
—
|
|
—
|
|
592,250
|
|
592,250
|
|
Value of accelerated equity awards(3)(4)
|
—
|
|
—
|
|
—
|
|
6,727,270
|
|
Health benefits(6)
|
—
|
|
—
|
|
26,250
|
|
26,250
|
|
Total
|
$
|
—
|
|
$
|
—
|
|
$
|
1,506,875
|
|
$
|
8,234,145
|
|
(1)For Mr. Taiclet, the amount reflects salary continuation for 104 weeks, based on Mr. Taiclet’s base salary as of December 31, 2019. For Messrs. Bartlett, DiSanto, Sharma and Vondran, the amount reflects salary continuation for 78 weeks, based on base salary as of December 31, 2019. The Severance Program specifies that continuation of salary is to be paid bi-weekly.
(2)This amount reflects an incentive award opportunity with respect to a full year of service for the year ended December 31, 2019 and assumes that a bonus target of 100% is met. Actual incentive award payments upon separation are calculated pro-rata. For the year ended December 31, 2019, the bonus target for Mr. Taiclet was 150% of base salary and for Messrs. Bartlett, DiSanto, Sharma and Vondran was 100% of base salary.
(3)Value of stock options reflects the excess of the closing market price of $229.82 of our Common Stock on December 31, 2019 over the exercise price of the stock option. Value of RSUs and PSUs is determined using the closing market price of $229.82 of our Common Stock on December 31, 2019.
(4)As of December 31, 2019, under the Severance Program, each executive is entitled to acceleration of vesting of all outstanding equity-based awards, including, but not limited to, stock options, RSUs and PSUs, upon a Qualifying Termination that occurs within 14 days prior to, or up to two years following, a Change of Control, as described above.
(5)In addition to the acceleration of vesting of all outstanding equity-based awards upon a Qualifying Termination under the Severance Program, Messrs. Taiclet, Bartlett, DiSanto and Sharma's equity-based awards that were granted after January 1, 2013 will vest upon their “qualifying retirement,” pursuant to the terms of the Company’s death, disability and retirement program, as described above. In accordance with the revised executive retirement benefits, the values of the PSU awards for Messrs. Bartlett, DiSanto and Sharma assume successful completion of a transition plan and reflect full payout of PSUs at target, while the value of the PSU awards for Mr. Taiclet reflect a prorated payout of the PSUs.
(6)For Mr. Taiclet, this amount reflects a continuation of health and dental insurance for 104 weeks, based on the employer share of the cost of coverage for this time period. For Messrs. Bartlett, DiSanto, Sharma and Vondran, this amount reflects a continuation of health and dental insurance for 78 weeks, based on the employer share of the cost of coverage for this time period. All amounts are estimates based on current rates and benefits elections made by each executive for the year ended December 31, 2019.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
61
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Securities Authorized for Issuance under Equity Compensation Plans
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information about the securities authorized for issuance under our equity compensation plans as of December 31, 2019.
EQUITY COMPENSATION PLAN INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
Plan Category
|
Number of Securities
to Be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights(2)
(a)
|
Weighted-average
Exercise Price of
Outstanding
Options,
Warrants and
Rights
(b)
|
Number of Securities
Remaining Available
for Future Issuance
under Equity
Compensation Plans
(Excluding Securities
Reflected in Column
(a)(3)
(c)
|
Equity compensation plans/arrangements approved by the stockholders(1)
|
5,321,770
|
$85.90
|
|
9,925,973
|
Equity compensation plans/arrangements not approved by the stockholders
|
N/A
|
N/A
|
N/A
|
Total
|
5,321,770
|
$85.90
|
|
9,925,973
|
(1)Includes the 2007 Equity Incentive Plan and the 2000 Employee Stock Purchase Plan (ESPP).
(2)Column (a) includes (i) 1,454,350 shares underlying outstanding unvested RSUs, (ii) 801,308 shares underlying outstanding unvested PSUs based on the maximum amount of PSUs that can be earned under the award agreements for the March 2017, March 2018 and March 2019 grants, (iii) 3,060,242 shares underlying outstanding stock options and (iv) an estimated 5,870 shares relating to expected purchases under the ESPP. Because there is no exercise price for RSUs, PSUs or shares purchased under the ESPP, such awards are not included in the weighted-average exercise price in column (b).
(3)Includes 2,938,849 shares available for issuance under the ESPP and 6,987,124 shares available for grant under the 2007 Equity Incentive Plan, as of December 31, 2019. Under the 2007 Equity Incentive Plan, we are authorized to grant various types of stock-based awards, including stock options, restricted stock, stock equivalents and awards of shares of Common Stock that are not subject to restrictions or forfeiture.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
62
Proposal 1 Election of Directors
Under our By-Laws, the number of members of our Board is fixed from time to time by the Board and may be increased or decreased by a vote of the stockholders or by the majority of Directors then in office.
Ten of our eleven directors are standing for re-election at the Annual Meeting. Mr. Bartlett is standing for election for the first time. The Board has nominated for election at the Annual Meeting the eleven Directors listed below, all of whom were recommended for nomination to the Board by the Nominating Committee.
Each Director elected at the Annual Meeting will hold office until the 2021 Annual Meeting or until his or her successor is elected and qualified, subject to earlier retirement, resignation or removal. Unless otherwise instructed, we will vote all proxies we receive FOR each nominee listed below. If a nominee becomes unavailable to serve, we will vote the shares represented by proxies for the election of such other person as the Board may recommend.
Required Vote
Our By-Laws require that each Director receive a majority of the votes properly cast with respect to such Director in uncontested elections (i.e., the number of shares voted “for” a Director nominee must exceed the number of votes cast “against” that nominee). As the election of Directors at the Annual Meeting is uncontested, it requires a majority of the votes cast by, or on behalf of, the holders of Common Stock at the Annual Meeting. Abstentions and broker non-votes are not considered as votes cast “for” or “against” a Director and have no effect on the election results.
If stockholders do not re-elect a nominee who is already a Director, Delaware law provides that the Director continue to serve on the Board as a “holdover director.” Under our By-Laws and Corporate Governance Guidelines, each Director must submit an irrevocable advance resignation that will be effective if the stockholders do not re-elect him or her and the Board accepts his or her resignation. In that situation, within 90 days from the date the election results are certified, the Nominating Committee will recommend to the Board whether to accept or reject the resignation, with the Board then taking action and promptly disclosing its decision and underlying rationale in a filing with the SEC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Board of Directors unanimously recommends that you vote FOR the election of each nominee listed below to serve as Director until the next Annual Meeting or until his or her successor is duly elected and qualified.
|
|
|
|
|
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
63
PROPOSAL 1 ELECTION OF DIRECTORS
Relevant information about each Director nominee appears below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas A. Bartlett
|
|
|
|
|
|
|
|
|
|
|
|
|
Career
Mr. Bartlett is American Tower Corporation’s President and Chief Executive Officer. From April 2009 through March 2020, he served as Executive Vice President and Chief Financial Officer and assumed the role of Treasurer from February 2012 until December 2013 and again from July 2017 until August 2018. Prior to joining American Tower, Mr. Bartlett served as Senior Vice President and Corporate Controller with Verizon Communications. During his 25-year career with Verizon Communications and its predecessor companies and affiliates, he served in numerous operations and business development roles, including President and Chief Executive Officer of Bell Atlantic International Wireless from 1995 through 2000, where he was responsible for wireless activities in North America, Latin America, Europe and Asia.
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Qualifications
•Effective leadership and executive experience, including as our Executive Vice President and Chief Financial Officer
•Seasoned financial expert with operational, international and strategic experience with global large-cap companies
Other Public Company Boards
•Equinix, Inc. (April 2013–present)
Other Positions
•Advisor, Rutgers Business School
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President & CEO
American Tower Corporation
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Director Since - N/A
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Age 61
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
64
PROPOSAL 1 ELECTION OF DIRECTORS
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Raymond P. Dolan
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Career
Mr. Dolan is the Chairman and CEO of Cohere Technologies, Inc., a wireless communications and solutions company. He previously served as the President and CEO of Sonus Networks, Inc., a supplier of voice, video and data infrastructure solutions for wireline and wireless telephone service providers, from October 2010 to December 2017. Prior to that, he served as CEO of QUALCOMM Flarion Technologies and Senior Vice President at QUALCOMM until January 2008. He was Chairman and CEO of Flarion Technologies, Inc., a provider of mobile broadband communications systems, from May 2000 until its acquisition by QUALCOMM in 2006. Before that, he served as Chief Operating Officer of NextWave Telecom and as Executive Vice President of marketing of Bell Atlantic/ NYNEX Mobile.
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Qualifications
•Extensive leadership experience in the wireless communications industry
•Experience with thought leaders help further our strategic vision
•International, operational and strategic expertise
•Strong management and board experience
Other Public Company Boards
•Sonus Networks, Inc. (October 2010–December 2017)
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Chairman and CEO
Cohere Technologies, Inc.
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Director Since February 2003
•Compensation Committee (February 2003-May 2011; June 2016-present)
•Nominating and Corporate Governance Committee (January 2004-June 2016; Chair, February 2005-May 2015)
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Age 62
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Robert D. Hormats
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Career
Mr. Hormats was appointed Managing Director of Tiedemann Advisors in March 2020 following his five year tenure as a member of Tiedemann's Investment Advisory Committee. He served as Vice Chairman of Kissinger Associates, Inc., a strategic international consulting firm, from 2013 to 2019. From 2009 to 2013, he served as Under Secretary of State for Economic Growth, Energy and the Environment. Prior to that, he was Vice Chairman, Goldman Sachs (International) and a managing director of Goldman, Sachs & Co., which he joined in 1982. Mr. Hormats formerly served as Assistant Secretary of State for Economic and Business Affairs, Ambassador and Deputy U.S. Trade Representative, and Senior Deputy Assistant Secretary for Economic and Business Affairs. He also served as a senior staff member for International Economic Affairs on the National Security Council.
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Qualifications
•Significant international experience in both the public and private sectors, including key business and trade positions with the U.S. Federal government
•Extensive knowledge of global capital markets
•Well-developed leadership skills and financial acumen
Other Public Company Boards
•None
Other Positions
•Director, Grace Therapeutics, LLC, a private biopharmaceutical company
•Member, the Council on Foreign Relations
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Managing Director
Tiedemann Advisors
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Director Since October 2015
•Nominating and Corporate Governance Committee (February 2016-present)
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Age 76
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
65
PROPOSAL 1 ELECTION OF DIRECTORS
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Gustavo Lara Cantu
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Career
Mr. Lara is a retired business executive who most recently served as CEO of Monsanto Company’s Latin America North division. Prior to retiring in 2004, Mr. Lara had worked for the Monsanto Company in various capacities for more than 24 years.
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Qualifications
•Executive and governance experience with a global company
•Insight into business operations in Latin America
•Extensive knowledge of financial and business developments in Mexico
Other Public Company Boards
•None
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Former CEO
Monsanto Company, Latin America North Division
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Director Since November 2004
•Compensation Committee (May 2009-present)
•Nominating and Corporate Governance Committee (February 2005-May 2009)
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Age 70
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Grace D. Lieblein
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Career
Ms. Lieblein most recently served as Vice President, Global Quality of General Motors Company, a multinational corporation that designs, manufactures, markets and distributes vehicles, from November 2014 to December 2015. Ms. Lieblein joined GM in 1978 and has held a variety of leadership positions at GM in engineering, supply chain management and international operations. Ms. Lieblein’s leadership positions have included serving as Vice President, Global Purchasing and Supply Chain from 2012 to 2014, GM Brazil President from 2011 to 2012, GM Mexico President from 2008 to 2011 and Vehicle Chief Engineer from 2004 to 2008.
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Qualifications
•Extensive management and international experience in a global large-cap company
•Experience in working with industry leaders to help further our innovation initiatives
•Financial expertise
•International experience in Latin America
Other Public Company Boards
•Southwest Airlines Co. (January 2016– present)
•Honeywell International Inc. (December 2012–present)
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Former VP, Global Quality General Motors
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Director Since June 2017
•Audit Committee (June 2017-present)
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Age 59
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
66
PROPOSAL 1 ELECTION OF DIRECTORS
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Craig Macnab
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Career
Mr. Macnab served as CEO of National Retail Properties, Inc., a publicly traded REIT, from February 2004, and as that company’s Chairman of the board from February 2008, until April 2017. Prior to joining National Retail Properties, Mr. Macnab was the CEO, President and a director of JDN Realty Corporation, also a publicly traded REIT, from April 2000 through March 2003.
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Qualifications
•Extensive management experience with publicly traded REITs and global large-cap companies
•Financial expertise
•Experience as a director of other public companies
Other Public Company Boards
•VICI Properties, Inc. (October 2017–present)
•Forest City Realty Trust, Inc. (June 2017–May 2018)
•National Retail Properties, Inc. (February 2008–April 2017)
•DDR Corp. (March 2003–May 2015)
Other Positions
•Trustee of the Cadillac Fairview Corporation Limited, a private company and a wholly-owned subsidiary of the Ontario Teachers’ Pension Plan
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Former Chief Executive Officer National Retail Properties, Inc.
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Director Since December 2014
•Compensation Committee (May 2018-present; Chair since May 2019)
•Audit Committee (December 2014-December 2019)
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Age 64
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JoAnn A. Reed
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Career
Before becoming a healthcare services consultant, Ms. Reed served as CFO and SVP of Finance at Medco Health Solutions, a leading pharmacy benefit manager. After joining Medco in 1988, she spent 20 years with the company, serving in finance and accounting roles of increasing responsibility; she was appointed SVP of Finance in 1992 and CFO in 1996. Prior to joining Medco, Ms. Reed held finance roles at Aetna/ American Re-Insurance Co., CBS Inc., Standard and Poor’s Corp. and Unisys/ Timeplex Inc.
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Qualifications
•Financial and accounting expertise
•Extensive board experience
•More than 25 years of leadership experience with multinational companies in financial, strategic and business development initiatives
Other Public Company Boards
•Waters Corporation (May 2006–present)
•Mallinckrodt plc (June 2013–present)
•Health Management Associates, Inc. (August 2013–January 2014)
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Healthcare Services Consultant
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Director Since May 2007
•Audit Committee (November 2007-present; Chair since May 2015)
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Age 64
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
67
PROPOSAL 1 ELECTION OF DIRECTORS
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Pamela D.A. Reeve
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Career
A retired business executive, Ms. Reeve served from November 1989 to August 2004 as the President and CEO and a director of Lightbridge, Inc., a public company and a global provider of mobile business solutions to the wireless communications industry. Prior to joining Lightbridge in 1989, Ms. Reeve spent 11 years as a consultant and in a series of executive positions at the Boston Consulting Group, Inc.
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Qualifications
•Operational, strategic and corporate governance expertise, particularly in the communications and technology industries
•Financial expertise
•Extensive institutional knowledge and effective leadership as Lead Director
Other Public Company Boards
•Frontier Communications Corporation (May 2010–present and Chairperson since April 2016)
•Sonus Networks, Inc. (August 2013–May 2017)
Other Positions
•Chairman of the Board, The Commonwealth Institute (June 2004-present)
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Former President and CEO Lightbridge, Inc.
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Director Since March 2002
•Lead Director (May 2004-present)
•Nominating and Corporate Governance Committee (May 2009-present; August 2002-February 2005)
•Compensation Committee (April 2004-June 2016; Chair, April 2004-May 2009)
•Audit Committee (August 2002-July 2007)
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Age 70
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
68
PROPOSAL 1 ELECTION OF DIRECTORS
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David E. Sharbutt
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Career
Mr. Sharbutt is a retired business executive who most recently served as CEO and Chairman of Alamosa Holdings, Inc., a provider of wireless communications services, which was acquired by Sprint Nextel Corporation in February 2006. Mr. Sharbutt had been Alamosa’s Chairman and a director since the company was founded in July 1998 and was named CEO in October 1999. Before joining Alamosa, Mr. Sharbutt was President and CEO of Hicks & Ragland Engineering Co., an engineering consulting company (now known as CHR Solutions).
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Qualifications
•Board experience with wireless communications companies
•Financial expertise
•Strategic, operational and advisory roles in leading complex telecommunications enterprises
Other Public Company Boards
•None
Other Positions
•Director of private companies, Flat Wireless, LLC, Smartfield Inc., MicroZap Inc. and Edit TX LLC
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Former CEO and Chairman Alamosa Holdings, Inc.
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Director Since July 2006
•Nominating and Corporate Governance Committee (May 2007-present; Chair since May 2015)
•Audit Committee (April 2017-May 2018; May 2007-November 2007)
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Age 70
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Bruce L. Tanner
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Career
Mr. Tanner served as the Executive Vice President and CFO of Lockheed Martin Corporation from September 2007 until February 2019. Mr. Tanner joined Lockheed Martin Corporation in 1982 and prior to being appointed CFO, he held a variety of leadership positions at Lockheed Martin in finance, including as Vice President of Finance and Business Operations, Lockheed Martin Aeronautics, from April 2006 to September 2007 and Vice President of Finance and Business Operations, Lockheed Martin Electronic Systems, from May 2002 to March 2006.
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Qualifications
•Extensive executive experience with global large-cap company
•Financial expertise
•Strategic, operational and advisory roles in complex financial transactions
Other Public Company Boards
•Truist Financial Corporation (formerly SunTrust Banks, Inc.) (November 2015 –present)
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Former EVP and CFO Lockheed Martin Corporation
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Director Since September 2019
•Audit Committee (December 2019-present)
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Age 61
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
69
PROPOSAL 1 ELECTION OF DIRECTORS
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Samme L. Thompson
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Career
A business executive with more than 35 years of management experience, Mr. Thompson has served as president of Telit Associates, Inc., a financial and strategic advisory firm, since joining the firm in 2002. From 1999 to 2002, he served as SVP and Director of Strategy and Corporate Development for Motorola, Inc. Mr. Thompson also served as director of Strategic Planning and Development with AT&T Information Systems; as an SVP with Kidder, Peabody & Co.; and as a strategy consultant with McKinsey & Company.
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Qualifications
•Significant strategic and global advisory experience
•Comprehensive board experience with companies in the wireless communications industry
•Strong leadership skills, including managing business operations
Other Public Company Boards
•Spok Holdings, Inc. (November 2004-present)
Other Positions
•Board of Visitors, Joseph M. Katz Graduate School of Business
•Member, Global Affairs Council of Chicago
•Trustee, University of Chicago, Marine Biological Laboratory
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President
Telit Associates, Inc.
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Director Since August 2005 (served as director of SpectraSite, Inc. from June 2004 until our acquisition in August 2005)
•Nominating and Corporate Governance Committee (May 2019-present)
•Compensation Committee (May 2006-May 2019; Chair, May 2009-May 2019)
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Age 74
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
70
Proposal 2 Ratification of Selection of Independent Registered Public Accounting Firm
The Audit Committee has selected, and the Audit Committee and the Board of Directors recommend stockholder ratification of, Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2020.
The Audit Committee of the Board of Directors is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit our consolidated financial statements.
Deloitte & Touche LLP has served as our independent registered public accounting firm since our inception. In order to ensure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the independent registered public accounting firm and conducted a formal auditor solicitation process approximately five years ago. Further, in conjunction with the mandated rotation of Deloitte & Touche LLP’s lead engagement partner, the Audit Committee and its Chair were directly involved in the selection of Deloitte & Touche LLP’s lead engagement partner. The members of the Audit Committee and the Board of Directors believe that the continued retention of Deloitte & Touche LLP to serve as our independent registered public accounting firm is in the best interests of the Company and its stockholders.
Although ratification by stockholders is not required by law or by our By-Laws, the Audit Committee believes that submission of its selection to stockholders is a matter of good corporate governance. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if the Audit Committee believes that such a change would be in the best interests of the Company and its stockholders. If our stockholders do not ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm, the Audit Committee will reconsider their selection.
Representatives of Deloitte & Touche LLP are expected to be present at the Annual Meeting. They will have the opportunity to make a statement if they choose and will also be available to respond to appropriate questions from stockholders.
Required Vote
Approval of this resolution requires the affirmative vote of a majority of the votes cast by or on behalf of stockholders at the Annual Meeting. Abstentions and broker non-votes are not considered as votes cast “for” or “against” this proposal and have no effect on the results.
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The Audit Committee and the Board of Directors unanimously recommend that you vote FOR the ratification of the selection of Deloitte & Touche LLP to serve as our independent registered public accounting firm for the current fiscal year.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
71
Proposal 3 Advisory Vote on Executive Compensation
We are providing our stockholders the opportunity to approve, on an advisory basis (a “say on pay” vote), the compensation of our named executive officers as described in “Compensation Discussion and Analysis” and related tabular and narrative disclosures in this Proxy Statement in accordance with Section 14A of the Exchange Act. We intend to submit our executive compensation to an advisory vote annually, consistent with the advisory vote of our stockholders on the frequency of the say on pay vote at our 2017 Annual Meeting of Stockholders. The next advisory say on pay vote of our stockholders will be held at our 2021 Annual Meeting of Stockholders.
We believe that our executive officers play a critical role in our financial, strategic and operational performance and in creating long-term stockholder value. Accordingly, our executive compensation philosophy is to create a balance that achieves our executive retention objectives while rewarding our executive officers under a pay for performance philosophy through an appropriate combination of base salary, annual performance incentive awards and long-term, equity-based compensation. The objectives of our executive compensation program include:
•attracting and retaining top talent;
•motivating and engaging our executive officers; and
•driving sustainable, long-term growth and stockholder value consistent with our vision and growth strategy.
We continually review our executive compensation program. We also seek the input of our stockholders and based on such engagement made several changes to our executive compensation program over the last few years (see page 34).
We urge you to read the “Compensation Discussion and Analysis,” the accompanying compensation tables and related narrative disclosures in this Proxy Statement, as they provide greater detail on our compensation philosophy and determinations. The Compensation Committee and the Board believe that our executive compensation program and policies are consistent with, and help us achieve the goals of, our compensation philosophy.
HIGHLIGHTS OF OUR EXECUTIVE COMPENSATION PROGRAM AND POLICIES
•The vast majority of our executives’ targeted compensation consists of at-risk pay elements. As described in the “Compensation Discussion and Analysis,” 94% and 88% of the total direct compensation opportunity (assuming target performance) for our CEO and other NEOs, respectively, was in the form of short- and long-term incentive compensation, as of December 31, 2019.
•We weight our target compensation packages toward equity-based incentive awards to focus executives on long-term value creation and provide an appropriate balance with the short-term performance-driven incentive awards.
•Our long-term equity incentive award does not include stock options and is more heavily weighted to PSUs.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
72
PROPOSAL 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION
•We tie our annual bonus incentive awards directly to performance:
•100% of the target award for each of the NEOs, other than the CEO, is tied to achievement of pre-established Company financial goals (total property revenue, excluding pass-through revenue, and Adjusted EBITDA(1)).
•The CEO’s target award is 80% tied to achievement of pre-established Company financial goals (total property revenue, excluding pass-through revenue, and Adjusted EBITDA(1)) and 20% tied to achievement of pre-established individual performance goals based on the four pillars of the Company’s Stand and Deliver strategy: (i) lead wireless connectivity around the globe, (ii) innovate for a mobile future, (iii) drive efficiency throughout the industry and (iv) grow our assets and capabilities to meet customer needs.
•Vesting of our PSUs is determined by achievement of pre-established goals for cumulative Consolidated AFFO per Share(1) and average ROIC(1) for a three-year performance period.
•We provide equity vesting upon a change of control only upon a termination of employment (a “double-trigger”), with no tax gross-ups.
•Our retirement and welfare benefits are consistent for all employees, with no pension or deferred compensation plans for executive officers and limited perquisites.
•Our annual performance incentive awards and long-term, equity-based awards have terms that, in certain circumstances, allow us to “claw back” cash and shares received pursuant to such awards or require the payment of gains realized upon disposition of such shares.
•Our stock ownership guidelines require each executive to own a number of shares at a multiple of his or her annual base salary (six times base salary for our CEO and three times base salary for our other executive officers who report directly to our CEO), and each executive is required to retain at least 50% of shares net of tax obligations until he or she meets the ownership requirements.
•We conduct a risk review of our compensation programs each year to determine if any elements of the programs create an inappropriate level of risk.
(1)Definitions of non-GAAP financial measures and reconciliations to GAAP can be found in Appendix A.
Required Vote
Approval of this resolution requires the affirmative vote of a majority of the votes cast by or on behalf of stockholders at the Annual Meeting. Abstentions and broker non-votes are not considered as votes cast “for” or “against” this proposal and have no effect on the results.
Although the advisory vote on this proposal is non-binding, meaning that our Board is not required to adjust our executives’ compensation or our compensation programs or policies as a result of the vote, we encourage all stockholders to vote their shares on this matter, as the Board and the Compensation Committee will consider the voting results when determining compensation policies and decisions, including future executive-compensation decisions.
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The Board of Directors unanimously recommends that you vote FOR the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
73
Proposal 4 Stockholder Proposal to Require Periodic Reports on Political Contributions and Expenditures
Myra K. Young, 9295 Yorkship Court, Elk Grove, CA 95758, the beneficial owner of at least 100 shares of Common Stock, has notified us that she intends to present a proposal at the Annual Meeting. The proposal appears as we received it, and we accept no responsibility for the accuracy of the proposal or the proponent’s statements below. The Board of Directors unanimously recommends that you vote AGAINST this proposal.
STOCKHOLDER PROPOSAL:
Proposal 4 — Political Disclosures
Resolved: Shareholders of American Tower Corporation ("American Tower" or "Company") hereby request that the Company provide a report, updated semiannually, disclosing the Company's:
1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
a.The identity of the recipient as well as the amount paid to each; and
b.The title(s) of the person(s) in the Company responsible for decision-making.
The report shall be presented to the board of directors or relevant board committee and posted on the Company's website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term shareholders of American Tower, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, "[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages."
Relying on publicly available data does not provide a complete picture of the Company's electoral spending. For example, the Company's payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including MasterCard Inc., Intuit Inc., and Salesforce.com, Inc., which present this information on their websites.
Proposals on this topic at Alliant Energy and Cognizant Technology Solutions passed last year, despite board opposition. The Company's Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.
Increase Long-Term Shareholder Value
Vote for Political Disclosures - Proposal 4
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
74
PROPOSAL 4 STOCKHOLDER PROPOSAL TO REQUIRE PERIODIC REPORTS ON POLITICAL CONTRIBUTIONS AND EXPENDITURES
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Board's Statement in Opposition
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The Board of Directors has carefully considered the foregoing stockholder proposal and unanimously recommends that stockholders vote “AGAINST” this proposal. This position was supported by our stockholders at the 2019 Annual Meeting of Stockholders, when approximately 65% of the shares voted were cast against an almost identical proposal by the same proponent.
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Our policies prohibit the use of corporate funds or assets to participate in any campaign, election or referendum.
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Our Code of Conduct, which can be found in the “Corporate Responsibility—Ethics” section of our website, clearly states that as a matter of policy, we do not make political contributions in support of any party or candidate in any election, whether federal, state or local. In addition, our Code of Conduct prohibits any employee or Director from directing or requiring any other employee or Director to contribute to any political party, cause, organization or candidate. Further, as a matter of policy, we do not have, nor do we believe it is necessary to establish, a Political Action Committee (PAC). Consistent with these policies, we also do not use corporate funds to support “Super PACs” or political organizations known as “Section 527 organizations.” Accordingly, producing semi-annual reports on this topic would constitute a meaningless compliance burden for us and would not be a productive use of company resources.
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Our industry group and trade association memberships serve multiple objectives.
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We participate in certain industry groups and trade associations as a business strategy to ensure that the interests of our stakeholders are appropriately represented. Our memberships provide us with insight into core issues for the industry, the opportunity to share expertise that leads to more efficiency and long-term success and the ability to build a consensus among organizations with similar interests and advocate in favor of those interests that support an efficient, healthy and competitive industry. American Tower does not join industry groups and trade associations to advance political purposes, and our memberships do not represent our agreement with all of the positions or views of such organizations. In addition, industry groups and trade associations operate independently from us, and we do not individually direct how dues are utilized. Thus, disclosure of our dues would not provide our stockholders with a greater understanding of our business, initiatives or values, and instead may result in misunderstanding as to what our strategic priorities are, thus placing us at a competitive disadvantage. We believe reporting those dues would not provide meaningful disclosure, could be potentially misleading as the Company may not agree with every position taken by those organizations and would be susceptible to misuse.
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We have practices in place to ensure appropriate disclosure and oversight.
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The Board regularly receives governmental affairs briefings, including updates from our public affairs group and information on changes to regulatory landscape. In an effort to provide greater transparency to our stockholders, we also took the following steps subsequent to last year’s annual meeting:
•We enhanced our disclosure and created a new page on our website entitled “Public Policy” under the “Investor Relations” section. The enhanced disclosure includes a list of key industry groups and trade associations to which we belong and specifies our policy to decline to pay trade associations for special assessments for political spending.
•We established a global public affairs committee composed of senior leaders from our regions to monitor and assess all industry group and trade association memberships, as well as the related dues and expenditures. This committee meets on an annual basis to conduct a cost-benefit analysis of each membership.
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In addition, we are subject to federal, state and local lobbying registration and public disclosure requirements. For example, we file quarterly reports with the United States House of Representatives and Senate that disclose our lobbying activities and total amounts expended, and these reports are publicly available at http://lobbyingdisclosure.house.gov/. Any consultants that lobby on our behalf also file those quarterly reports. We have effective reporting and compliance procedures in place to closely monitor and appropriately record our expenditures. As a result, the report requested by this proposal is not necessary.
For the reasons discussed above, the Board believes that this proposal is not in the best interests of the Company or its stockholders.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
75
PROPOSAL 4 STOCKHOLDER PROPOSAL TO REQUIRE PERIODIC REPORTS ON POLITICAL CONTRIBUTIONS AND EXPENDITURES
Required Vote
Approval of this resolution requires the affirmative vote of a majority of the votes cast by or on behalf of stockholders at the Annual Meeting. Abstentions and broker non-votes are not considered as votes cast “for” or “against” this proposal and have no effect on the results.
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The Board of Directors unanimously recommends that you vote AGAINST the proposal.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
76
Proposal 5 Stockholder Proposal Regarding the Ownership Threshold Required to Call a Special Meeting
John Chevedden, 2215 Nelson Ave., No. 205 Redondo Beach, CA 90278, the beneficial owner of at least 100 shares of Common Stock, has notified us that he intends to present a proposal at the Annual Meeting. The proposal appears as we received it, and we accept no responsibility for the accuracy of the proposal or the proponent’s statements below. The Board of Directors unanimously recommends that you vote AGAINST this proposal.
STOCKHOLDER PROPOSAL:
Proposal 5 - Special Shareholder Meeting Improvement
Resolved, Shareowners ask our board to take the steps necessary (unilaterally if possible) to amend our bylaws and each appropriate governing document to give holders in the aggregate of I0% of our outstanding common stock the power to call a special shareholder meeting.
This proposal includes the removal of the current exclusion from participation in calling for a special meeting that applies to all shares owned for less than one continuous year.
This proposal does not impact our board's current power to call a special meeting.
Special meetings allow shareowners to vote on important matters, such as electing new directors that can arise between annual meetings. This proposal topic won more than 70%-support at Edwards Lifesciences and SunEdison in 2013.
Scores of Fortune 500 companies allow a more practical 10% of shares to call a special meeting compared to the current next-to-impossible American Tower version in regard to shareholders calling a special meeting.
The current stock ownership threshold of 25% combined with the disqualification of all shares held for less than one continuous year can mean that 75% of shareholders must be contacted during a short window of time to simply call a special meeting. One-third of the 75% of shares could be disqualified due to stock ownership of less than one-year. Another third of the 75% could be disqualified because of a paperwork error or an inadvertent sale of stock that management will have a sharp eye for.
This proposal topic won 46%-support at the 2016 American Tower annual meeting. This 46% support represented majority support from the American Tower shares that have access to independent proxy voting advice.
After a 45%-vote (less than a majority vote) for a shareholder proposal The Bank of New York Mellon Corporation (BK) said it adopted written consent in 2019.
Perhaps BK is starting a new trend in recognizing that a 45%-vote represents a majority vote from the shares that have access to independent proxy voting advice.
Since special shareholder meetings allow shareholders to vote on important matters, such as electing new directors, adoption of this proposal might accelerate refreshment for our Board of Directors. For instance our Lead Director, Pamela Reeve, had 17-years long-tenure - the longest tenure on the Board. Long tenure erodes the independence of a director and independence is the greatest attribute in a director - especially a director who is elevated to the position of Lead Director. And Robert Hormats is one of 2 directors beyond age 73.
Please vote yes:
Special Shareholder Meeting Improvement- Proposal 5
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
77
PROPOSAL 5 STOCKHOLDER PROPOSAL TO REQUIRE PERIODIC REPORTS ON POLITICAL CONTRIBUTIONS AND EXPENDITURES
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Board's Statement in Opposition
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The Board of Directors has carefully considered the foregoing stockholder proposal and unanimously recommends that stockholders vote “AGAINST” this proposal for the following reasons:
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The current special meeting threshold, along with stockholders’ ability to act by written consent, protects against narrow or short-term interests, as well as the financial and administrative burdens associated with conducting a special meeting of stockholders. Moreover, the Company maintains a portfolio of strong governance practices and protocols that allow stockholders to communicate effectively with the Board and management and to hold them accountable.
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We provide stockholders with the right to call a special meeting and act by written consent, the terms of which reflect the mainstream of current market practice. The current special meeting ownership threshold of 25% strikes the appropriate balance between providing stockholders with a meaningful right to call a special meeting while protecting against the risk that a single large stockholder or small minority of stockholders could trigger the misuse of Company resources on business items that may not reflect the interests of the Company and its broader stockholder base. Under Rule 14a-8 of the Exchange Act, stockholders with even minimal holdings can already present proposals, such as this one, at annual meetings. Furthermore, as of the end of February 2020, only approximately 25% of the 467 S&P 500 companies surveyed by FactSet provide stockholders with a special meeting right at a level below our current special meeting threshold.
Special stockholder meetings cost millions of dollars, demand significant attention from the Board and senior management, and can disrupt normal business operations. As a result, these meetings should be limited to when there are special or extraordinary events or when fiduciary, strategic or similar considerations dictate that a matter be addressed urgently. We continue to believe that either the Board, which has a fiduciary duty under the law to act in the best interests of the Company and its stockholders as a whole, or at least 25% of our stockholders should agree that a matter requires urgent discussion before a special meeting is called. If the proposal were adopted at the proposed threshold, a single large stockholder or a relatively small minority of stockholders, potentially with narrow or short-term interests and who has no duty to act in the best interests of the Company or its stockholders as a whole, would have the unilateral power to call special meetings, without regard to how the direct costs and other burdens might disrupt our business or impact the interests of our broader stockholder base.
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We are committed to governance best practices and stockholder engagement.
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We have long supported and continue to support various means for our stockholders to effectively communicate with the Board and management to hold them accountable, as we believe such communication is imperative to the success of our business. The following current governance policies and practices protect stockholder rights and ensure Board accountability without the expense and risk associated with a lower special meeting threshold:
•existing stockholders’ right to call special meetings
•existing stockholders’ right to act by written consent instead of a meeting
•a market-standard proxy access right for nominating directors
•annual election of all directors
•majority voting for directors
•no supermajority voting provisions
•annual say-on-pay vote
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We also conduct robust stockholder engagement throughout the year in order to allow stockholders to provide feedback or raise important matters with the Board and management on an ongoing basis. Our leaders meet regularly with stockholders to discuss strategy, operational performance and governance. For additional information about the Company’s stockholder engagement program and actions it has taken in response to these discussions, please see page 33 of this Proxy Statement. We believe that this commitment to ongoing dialogue has resulted in a high level of support from our stockholders and has strengthened the relationship between our directors, management and stockholders.
For the reasons discussed above, the Board believes that this proposal is not in the best interests of the Company or its stockholders.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
78
PROPOSAL 5 STOCKHOLDER REGARDING THE OWNERSHIP THRESHOLD REQUIRED TO CALL A SPECIAL MEETING
Required Vote
Approval of this resolution requires the affirmative vote of a majority of the votes cast by or on behalf of stockholders at the Annual Meeting. Abstentions and broker non-votes are not considered as votes cast “for” or “against” this proposal and have no effect on the results.
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The Board of Directors unanimously recommends that you vote AGAINST the proposal.
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
79
Questions & Answers
Q. Why did I receive these proxy materials?
A. You received these materials because you were a stockholder as of March 23, 2020, the record date fixed by the Board, and are therefore entitled to receive notice of the Annual Meeting (Notice) and to vote on matters presented at the Annual Meeting, which will be held virtually on May 18, 2020.
Q. Why did I receive a Notice instead of a full set of proxy materials?
A. The SEC allows us to make this Proxy Statement and our Annual Report to Stockholders, which includes a copy of our Form 10-K, available electronically through the internet at www.proxyvote.com. On or about April 6, 2020, we mailed you a Notice containing instructions for accessing this Proxy Statement and our Annual Report and for voting (i.e., submitting your proxy) over the internet. If you received the Notice by mail, you will not receive a printed copy of the proxy materials in the mail. If you would like a printed copy of our proxy materials, please follow the instructions for requesting those materials included in the Notice.
Q. When and where is the Annual Meeting being held?
A. The Annual Meeting will be held on Monday, May 18, 2020 at 11:00 a.m., Eastern Time. As part of our effort to maintain a safe and healthy environment at our Annual Meeting and after closely monitoring statements issued by the World Health Organization (who.int), the Centers for Disease Control and Prevention (cdc.gov) and the Massachusetts Department of Public Health (mass.gov/orgs/department-of-public-health) regarding the COVID-19 outbreak, we have decided to hold the Annual Meeting virtually this year, as allowed by applicable law. We are sensitive to the public health and travel concerns our stockholders may have and restrictions and recommendations that public health and other governmental officials may issue. Note that the decision to proceed with a virtual-only meeting this year will not mean we will utilize a virtual-only format or any means of remote communication for future annual meetings.
Q. How do I attend the Annual Meeting?
A. You will be able to attend the Annual Meeting online through live audio webcast at www.virtualshareholdermeeting.com/AMT2020. You may login with your 16-digit control number included on your notice of internet availability of the proxy materials, on your proxy card, or on the instructions that accompanied your proxy materials (if applicable).
You will be able to vote and submit live questions during the Annual Meeting online at www.virtualshareholdermeeting.com/AMT2020, however, all live questions will be subject to time restrictions and we will do our best to accommodate as many as possible.
Q. What if I have trouble accessing the Annual Meeting virtually?
A. The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome and Safari) and devices (desktops, laptops, tablets and cell phones) running the most updated version of applicable software and plugins. Participants should ensure that they have a strong Wi-Fi connection wherever they intend to participate in the Annual Meeting. We encourage you to access the virtual meeting platform prior to the start time. Please allow ample time for online check-in, which will begin at 10:30 a.m. Eastern Time. If you encounter any difficulties accessing the virtual meeting platform during the check-in time or during the Annual Meeting, please call the technical support number that will be posted on www.virtualshareholdermeeting.com/AMT2020.
Q. Who is entitled to vote at the Annual Meeting?
A. Holders of American Tower’s Common Stock at the close of business on March 23, 2020, the record date fixed by the Board, may vote at the Annual Meeting.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
80
Q. How many votes may I cast?
A. Each share of Common Stock is entitled to one vote with respect to each of the matters submitted for vote. On March 23, 2020, there were 443,451,843 shares of Common Stock outstanding and entitled to vote.
Q. What constitutes a quorum for the Annual Meeting?
A. The presence, at the annual meeting or by proxy, of the holders of a majority of the shares of Common Stock issued and outstanding on March 23, 2020 constitutes a quorum for the transaction of business at the Annual Meeting. We will count abstentions and shares held by brokers or nominees who have not received instructions from the beneficial owner (broker non-votes) as present for purposes of determining the presence or absence of a quorum. Attendance at the virtual Annual Meeting will be considered "present."
Q. What items will be voted on at the Annual Meeting, and what is the required vote to approve each item?
A. All stockholders are entitled to vote on the following proposals:
•Proposal 1—To elect to the Board of Directors the eleven nominees named in this Proxy Statement;
•Proposal 2—To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2020;
•Proposal 3—To approve, on an advisory basis, our executive compensation;
•Proposal 4—To consider a stockholder proposal to require periodic reports on political contributions and expenditures; and
•Proposal 5—To consider a stockholder proposal regarding the ownership threshold required to call a special meeting.
To be elected, a Director must receive an affirmative majority of votes cast—i.e., the number of “for” votes must exceed the number of “against” votes. Similarly, each of Proposals 2, 3, 4 and 5 also requires an affirmative majority of the votes cast. We will not count shares that abstain from voting on a particular matter as votes cast “for” or “against” such matter, and therefore, they will have no effect on the outcome of the vote or any of the Proposals.
Although the advisory vote on executive compensation is non-binding, our Compensation Committee will consider and take into account the voting results when making future executive compensation determinations.
Q. Are there other items to be voted on at the Annual Meeting?
A. We do not know of any other matters that may come before the Annual Meeting. If any other matters are properly presented at the Annual Meeting, your proxy authorizes the individuals named as proxies to vote, or otherwise act, in accordance with their best judgment.
Q. How will proxies be voted at the Annual Meeting?
A. If you hold shares through a broker or nominee and do not provide the broker or nominee with specific voting instructions, under the rules that govern brokers or nominees in such circumstances, your broker or nominee will have the discretion to vote such shares on routine matters, but not on non-routine matters. As a result:
•Your broker or nominee will not have the authority to vote such shares with respect to Proposals 1, 3, 4 or 5 because the NYSE rules treat these matters as non-routine. Accordingly, such broker non-votes will have no effect on the outcome of the vote on these proposals.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
81
•Your broker or nominee will have the authority to vote such shares with respect to Proposal 2, because that matter is treated as routine under the NYSE rules.
Broker non-votes will be counted as present for purposes of determining the presence of a quorum.
If you are a registered stockholder and no instructions are indicated on a properly executed proxy card submitted by you, the shares represented by the proxy will be voted FOR each of Proposals 1, 2, 3, 4 and 5 and in accordance with the proxy holder’s judgment for any other matter that may be properly brought before the Annual Meeting, or any adjournments or postponements thereof.
Q. How do I cast a vote?
A. You may vote by any one of the following means:
•By internet. If you received a Notice about the internet availability of proxy materials, you may submit your proxy over the internet by following the instructions on the Notice. If you received a paper copy of a proxy card or voting instruction card by mail, you may submit your proxy over the internet by following the instructions on the proxy card or voting instruction card.
•By telephone. You may submit your vote by telephone by following the instructions on the Notice or proxy card or voting instruction card if you received such materials by mail.
•By mail. If you received a paper copy of a proxy card or voting instruction card by mail, you may submit your proxy by completing, signing and dating your proxy card or voting instruction card and mailing it in the accompanying self-addressed envelope. No postage is necessary if mailed in the United States.
• At the virtual Annual Meeting. You may vote at the Annual Meeting online at: www.virtualshareholdermeeting.com/AMT2020.
Properly completed and submitted proxy cards and voting instruction cards, as well as proxies properly completed and submitted over the internet prior to the Annual Meeting, will be voted at the Annual Meeting in accordance with the instructions provided as long as they are received in time for voting and not revoked.
Q. Can I change my mind after I vote?
A. Yes, you can change your vote at any time before the Annual Meeting. To revoke your proxy, you must:
•file an instrument of revocation with our Secretary, at our principal executive offices: 116 Huntington Avenue, Boston, Massachusetts 02116;
•mail a new proxy card dated after the date of the proxy you wish to revoke to our Secretary at our principal executive offices;
•submit a later-dated proxy over the internet in accordance with the instructions on the internet voting website; or
•attend the Annual Meeting and vote online at www.virtualshareholdermeeting.com/AMT2020. Please see "How do I attend the Annual Meeting?" and "How do I cast a vote?" for more information.
If your proxy is not revoked, we will vote it at the virtual Annual Meeting in accordance with your instructions indicated on the proxy card or voting instruction card or, if submitted over the internet, as indicated on the submission.
Q. Where can I find the voting results after the Annual Meeting?
A. We will announce the preliminary voting results at the Annual Meeting and will report the final voting results in a Current Report on Form 8-K, which we will file with the SEC within four business days after the meeting.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
82
Q. Who bears the cost of this proxy solicitation?
A. American Tower Corporation bears all proxy solicitation costs. In addition to solicitations by mail, our Board, our officers and our regular employees, without additional remuneration, may solicit proxies by telephone, fax, electronic transmission and personal interviews. We have retained Morrow Sodali LLC to assist in the solicitation of proxies for a fee of $12,500 plus reimbursement of expenses. We will request brokers, banks, custodians and other fiduciaries to forward proxy-soliciting materials to the beneficial owners of Common Stock and will reimburse them for their reasonable out-of-pocket expenses incurred in connection with distributing proxy materials.
Q. What do I need to do now?
A. You should carefully read and consider the information contained in this Proxy Statement. It contains important information about American Tower that you should consider before voting.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
83
Additional Information
Proposals of Stockholders
Pursuant to Rule 14a-8 of the Exchange Act, we must receive any stockholder proposal intended to be presented at our 2021 Annual Meeting of Stockholders by no later than December 8, 2020, if it is to be included in the proxy statement and form of proxy relating to the meeting. Any such proposal must also comply with the other requirements of Rule 14a-8.
Under the advance notice provisions in our By-Laws, if you want to submit a proposal for the 2021 Annual Meeting for presentation at the meeting pursuant to Delaware corporate law (as opposed to inclusion in the proxy statement under Rule 14a-8) or intend to nominate a person as a candidate for election to the Board directly, the Secretary must receive the proposal or nomination between January 19, 2021, and the close of business on February 18, 2021, which are 120 days and 90 days, respectively, before the one-year anniversary of the 2020 Annual Meeting.
If the 2021 Annual Meeting is held more than 30 days before or more than 70 days after the one-year anniversary of the 2020 Annual Meeting, the Secretary must receive any such proposal or nomination no earlier than the 120th day before the 2021 Annual Meeting and by the later of the close of business of (a) the 90th day before the 2021 Annual Meeting; or (b) the tenth day following the day on which the date of the 2021 Annual Meeting is first disclosed publicly by the Company. In addition, any proposals must comply with the other requirements of our By-Laws.
If you want to present a proposal before the 2021 Annual Meeting but do not wish to have it included in the proxy statement and proxy card, you must also give us written notice. Please address such correspondence to: American Tower Corporation, 116 Huntington Avenue, Boston, Massachusetts 02116, Attention: Secretary. If the Secretary does not receive your written notice on or before February 22, 2021, then proxies designated by the Board will have discretionary authority to vote on any such proposal.
Proxy Access
Under the proxy access provisions in our By-Laws, if you wish to nominate any person for election to our Board at the 2021 Annual Meeting, and have your nominee included in the proxy statement, the Secretary must receive your nomination notice between November 8, 2020, which is 150 days before the one-year anniversary of the issuance of this Proxy Statement, and December 8, 2020, which is 120 days before the issuance of this Proxy Statement.
If the 2021 Annual Meeting is held more than 30 days before or more than 70 days after the one-year anniversary of the 2020 Annual Meeting, the Secretary must receive your nomination notice by the later of (a) the 120th day before the 2020 Annual Meeting; or (b) the tenth day following the day on which the date of the 2021 Annual Meeting is first disclosed publicly by the Company.
Householding of Annual Meeting Materials
The SEC has also adopted a “householding” rule, which we have implemented for current and future stockholder communications, that permits us to deliver a single set of proxy materials to a household even if two or more stockholders live under the same roof or a stockholder has shares registered in multiple accounts. This rule enables us to reduce printing and mailing expenses associated with proxy materials and reduces the amount of duplicative information you might receive. Your consent will continue for as long as you remain a stockholder of the Company, unless you revoke it, which you may do at any time by writing or calling Broadridge at the following address or phone number: Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York 11717
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
84
(800-542-1061). If you revoke your consent, we will begin sending separate copies within 30 days of receiving your revocation.
Some banks, brokers and other nominee record holders may participate in the practice of householding notices, proxy statements and annual reports. We will promptly deliver a separate copy of each document to you if you write or call us at the following address or phone number: American Tower Corporation, 116 Huntington Avenue, Boston, Massachusetts 02116, Attention: Investor Relations (617-375-7500). If you wish to receive separate copies of the notice, proxy statement or annual report in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker or other nominee record holder, or you may contact us at the above address and phone number.
Annual Report on Form 10-K
If you would like to receive, free of charge, a copy of our Form 10-K for the year ended December 31, 2019—as filed with the SEC, excluding exhibits—please write or call us at the following address or phone number: American Tower Corporation, 116 Huntington Avenue, Boston, Massachusetts 02116, Attention: Investor Relations (617-375-7500).
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By Order of the Board of Directors,
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Thomas A. Bartlett
President and Chief Executive Officer
Boston, Massachusetts
April 6, 2020
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AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
85
Appendix A
Definitions, Reconciliations to Measures under GAAP and Calculation of Defined Measures
Adjusted EBITDA is defined as net income before income (loss) from equity method investments, income tax benefit (provision), other income (expense), gain (loss) on retirement of long-term obligations, interest expense, interest income, other operating income (expense), depreciation, amortization and accretion and stock-based compensation expense.
Adjusted EBITDA Margin is defined as the percentage that results from dividing Adjusted EBITDA by total revenues.
Consolidated Adjusted Funds From Operations (Consolidated AFFO) is defined as Funds From Operations, as defined by the National Association of Real Estate Investment Trusts (Nareit FFO) attributable to American Tower Corporation common stockholders before (i) straight-line revenue and expense, (ii) stock-based compensation expense, (iii) the deferred portion of income tax, (iv) non-real estate related depreciation, amortization and accretion, (v) amortization of deferred financing costs, capitalized interest, debt discounts and premiums and long-term deferred interest charges, (vi) other income (expense), (vii) gain (loss) on retirement of long-term obligations, (viii) other operating income (expense), and adjustments for (ix) unconsolidated affiliates and (x) noncontrolling interests, less cash payments related to capital improvements and cash payments related to corporate capital expenditures.
Consolidated AFFO per Share is defined as Consolidated AFFO divided by the diluted weighted average common shares outstanding.
International Pass-through Revenue is defined as the revenue the Company records as a result of the reimbursement of certain operating expenses by its tenants in several of its international markets. This includes markets in Latin America where the Company primarily passes through ground rent expenses, and in India and South Africa, where the Company primarily passes through power and fuel costs.
Nareit FFO Attributable to American Tower Corporation Common Stockholders is defined as net income before gains or losses from the sale or disposal of real estate, real estate related impairment charges, real estate related depreciation, amortization and accretion and dividends on preferred stock, and including adjustments for (i) unconsolidated affiliates and (ii) noncontrolling interests.
Net Debt is defined as total long-term debt, including current portion and finance lease liabilities, less cash and cash equivalents.
Net Leverage Ratio is defined as Net Debt divided by the quarter’s annualized Adjusted EBITDA (the quarter’s Adjusted EBITDA multiplied by four).
Return on Invested Capital (ROIC) is defined as Adjusted EBITDA less maintenance capital expenditures and corporate capital expenditures and cash taxes, divided by gross property, plant and equipment, intangible assets and goodwill (excluding the impact of recording deferred tax adjustments related to valuation).
For more information regarding these measures, see “Non-GAAP Financial Measures” under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
A-1
APPENDIX A
Reconciliation to Historical Results
Reconciliations to Historical Results(1)
($ in millions, except per share amounts. Totals may not add due to rounding)
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Reconciliation of Net Income to Adjusted EBITDA
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2009
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2010
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2011
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2012
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2013
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2014
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2015
|
2016
|
2017
|
2018(1)
|
2019
|
Net income
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$
|
247
|
|
$
|
374
|
|
$
|
382
|
|
$
|
594
|
|
$
|
482
|
|
$
|
803
|
|
$
|
672
|
|
$
|
970
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|
$
|
1,225
|
|
$
|
1,265
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|
$
|
1,917
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|
(Income) Loss from discontinued operations, net
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(8)
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(0)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
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Income from continuing operations
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$
|
239
|
|
$
|
374
|
|
$
|
382
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|
$
|
594
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|
$
|
482
|
|
$
|
803
|
|
$
|
672
|
|
$
|
970
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|
$
|
1,225
|
|
$
|
1,265
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|
$
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1,917
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Income from equity method investments
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(0)
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(0)
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(0)
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(0)
|
—
|
—
|
—
|
—
|
—
|
—
|
—
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Income tax provision (benefit)
|
183
|
182
|
125
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107
|
60
|
63
|
158
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156
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31
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(110)
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(0)
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Other (income) expense
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(1)
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(0)
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123
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38
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207
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62
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135
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48
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(31)
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(24)
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(18)
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Loss (gain) on retirement of long-term obligations
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18
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2
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—
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0
|
39
|
3
|
80
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(1)
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70
|
3
|
22
|
Interest expense
|
250
|
246
|
312
|
402
|
458
|
580
|
596
|
717
|
750
|
826
|
814
|
Interest income
|
(2)
|
(5)
|
(7)
|
(8)
|
(10)
|
(14)
|
(16)
|
(26)
|
(35)
|
(55)
|
(47)
|
Other operating expenses
|
19
|
36
|
58
|
62
|
72
|
69
|
67
|
73
|
256
|
513
|
166
|
Depreciation, amortization and accretion
|
415
|
461
|
556
|
644
|
800
|
1,004
|
1,285
|
1,526
|
1,716
|
2,111
|
1,778
|
Stock-based compensation expense
|
61
|
53
|
47
|
52
|
68
|
80
|
91
|
90
|
109
|
138
|
111
|
ADJUSTED EBITDA
|
$
|
1,181
|
|
$
|
1,348
|
|
$
|
1,595
|
|
$
|
1,892
|
|
$
|
2,176
|
|
$
|
2,650
|
|
$
|
3,067
|
|
$
|
3,553
|
|
$
|
4,090
|
|
$
|
4,667
|
|
$
|
4,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated AFFO
Reconciliation
|
2009
|
2010
|
2011
|
2012
|
2013
|
2014
|
2015
|
2016
|
2017
|
2018(1)
|
2019
|
Adjusted EBITDA (from above)
|
$
|
1,181
|
|
$
|
1,348
|
|
$
|
1,595
|
|
$
|
1,892
|
|
$
|
2,176
|
|
$
|
2,650
|
|
$
|
3,067
|
|
$
|
3,553
|
|
$
|
4,090
|
|
$
|
4,667
|
|
$
|
4,745
|
|
Straight-line revenue
|
(36)
|
(105)
|
(144)
|
(166)
|
(148)
|
(124)
|
(155)
|
(132)
|
(194)
|
(88)
|
(184)
|
Straight-line expense
|
27
|
22
|
31
|
34
|
30
|
38
|
56
|
68
|
62
|
58
|
44
|
Cash interest
|
(240)
|
(238)
|
(301)
|
(381)
|
(435)
|
(572)
|
(573)
|
(694)
|
(723)
|
(807)
|
(800)
|
Interest income
|
2
|
5
|
7
|
8
|
10
|
14
|
16
|
26
|
35
|
55
|
47
|
Cash paid for income taxes(2)
|
(40)
|
(36)
|
(54)
|
(69)
|
(52)
|
(69)
|
(64)
|
(96)
|
(137)
|
(164)
|
(147)
|
Dividends on preferred stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(24)
|
|
(90)
|
|
(107)
|
|
(87)
|
|
(9)
|
|
—
|
|
Dividend to noncontrolling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(13)
|
|
(14)
|
|
(13)
|
|
Capital improvement capital expenditures
|
(33)
|
(31)
|
(61)
|
(75)
|
(81)
|
(75)
|
(90)
|
(110)
|
(114)
|
(150)
|
(160)
|
Corporate capital expenditures
|
(8)
|
(12)
|
(19)
|
(20)
|
(30)
|
(24)
|
(16)
|
(16)
|
(17)
|
(9)
|
(11)
|
Consolidated AFFO
|
$
|
852
|
|
$
|
953
|
|
$
|
1,055
|
|
$
|
1,223
|
|
$
|
1,470
|
|
$
|
1,815
|
|
$
|
2,150
|
|
$
|
2,490
|
|
$
|
2,902
|
|
$
|
3,539
|
|
$
|
3,521
|
|
Divided by: Weighted Average Diluted Shares
|
406.9
|
404.1
|
400.2
|
399.6
|
399.1
|
400.1
|
423.0
|
429.3
|
431.7
|
443.0
|
445.5
|
Consolidated AFFO Per Share
|
$
|
2.09
|
|
$
|
2.36
|
|
$
|
2.64
|
|
$
|
3.06
|
|
$
|
3.68
|
|
$
|
4.54
|
|
$
|
5.08
|
|
$
|
5.80
|
|
$
|
6.72
|
|
$
|
7.99
|
|
$
|
7.90
|
|
(1)These results are inclusive of the positive impacts of the Company’s settlement with Tata.
(2)Consolidated AFFO for 2015 excludes one-time cash tax charge incurred during the third quarter of 2015, as we do not believe it is an indication of operating performance.
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
A-2
APPENDIX A
Reconciliation to Historical Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on
Invested
Capital(3)
|
2009
|
2010
|
2011
|
2012
|
2013(4)
|
2014
|
2015(4)
|
2016(4)
|
2017(5)
|
2018(5)
|
2019(5)
|
Adjusted EBITDA
|
$
|
1,181
|
|
$
|
1,348
|
|
$
|
1,595
|
|
$
|
1,892
|
|
$
|
2,401
|
|
$
|
2,650
|
|
$
|
3,206
|
|
$
|
3,743
|
|
$
|
4,149
|
|
$
|
4,725
|
|
$
|
4,917
|
|
Cash Taxes
|
(40)
|
(36)
|
(54)
|
(69)
|
(114)
|
(69)
|
(107)
|
(98)
|
(137)
|
(172)
|
(168)
|
Maintenance Capital Expenditures
|
(33)
|
(31)
|
(61)
|
(75)
|
(81)
|
(75)
|
(124)
|
(159)
|
(115)
|
(150)
|
(160)
|
Corporate Capital Expenditures
|
(8)
|
(12)
|
(19)
|
(20)
|
(23)
|
(24)
|
(26)
|
(27)
|
(17)
|
(9)
|
(11)
|
Numerator
|
$
|
1,100
|
|
$
|
1,268
|
|
$
|
1,462
|
|
$
|
1,728
|
|
$
|
2,183
|
|
$
|
2,482
|
|
$
|
2,948
|
|
$
|
3,459
|
|
$
|
3,880
|
|
$
|
4,394
|
|
$
|
4,579
|
|
Gross property and equipment
|
$
|
5,621
|
|
$
|
6,376
|
|
$
|
7,889
|
|
$
|
9,047
|
|
$
|
10,844
|
|
$
|
11,659
|
|
$
|
14,397
|
|
$
|
15,652
|
|
$
|
16,950
|
|
$
|
17,717
|
|
$
|
19,326
|
|
Gross Intangibles
|
2,790
|
3,213
|
3,978
|
4,892
|
8,471
|
9,172
|
12,671
|
14,795
|
16,183
|
16,323
|
18,474
|
Gross Goodwill(6)
|
2,399
|
2,660
|
2,824
|
2,991
|
3,928
|
4,180
|
4,240
|
4,363
|
4,879
|
4,797
|
5,492
|
Denominator
|
$
|
10,810
|
|
$
|
12,249
|
|
$
|
14,691
|
|
$
|
16,930
|
|
$
|
23,243
|
|
$
|
25,011
|
|
$
|
31,308
|
|
$
|
34,809
|
|
$
|
38,012
|
|
$
|
38,837
|
|
$
|
43,292
|
|
ROIC
|
10.2
|
%
|
10.4
|
%
|
10.0
|
%
|
10.2
|
%
|
9.4
|
%
|
9.9
|
%
|
9.4
|
%
|
9.9
|
%
|
10.2
|
%
|
11.3
|
%
|
10.6
|
%
|
(3)Historical denominator balances reflect purchase accounting adjustments.
(4)2013 reflects Q4 2013 annualized numbers to account for full year impact of GTP transaction, 2015 reflects Q4 2015 annualized numbers to account for full year impact of Verizon transaction and 2016 reflects Q4 2016 annualized numbers to account for full year impact of Viom transaction.
(5)Adjusted to annualize impacts of acquisitions closed throughout the year.
(6)Excludes the impact of deferred tax adjustments related to valuation.
|
|
|
|
|
|
|
2019
|
Property Revenue
|
$
|
7,465
|
|
Pass-Through Revenue
|
$
|
(994)
|
|
Property Revenue Excluding Pass-Through Revenue
|
$
|
6,471
|
|
|
|
Net Leverage Ratio
|
4Q19
|
Total debt
|
$
|
24,055
|
|
Cash and cash equivalents
|
1,501
|
|
Net debt
|
22,554
|
|
The quarter’s annualized (LQA) Adjusted EBITDA
|
4,870
|
|
LQA Net Leverage Ratio
|
4.6
|
x
|
AMERICAN TOWER CORPORATION 2020 PROXY STATEMENT
A-3
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