DEFA14A: DigitalBridge Group Urges Stockholders to Approve 2024 Omnibus Stock Incentive Plan Amid ISS Disagreement

DigitalBridge Group is addressing concerns raised by ISS regarding the 2024 Omnibus Stock Incentive Plan and urging stockholders to vote in favor of the proposal.

Summary

• DigitalBridge Group is addressing a report by ISS which recommended stockholders vote against Proposal 3, the 2024 Omnibus Stock Incentive Plan.
• ISS's recommendation was based on a calculation that included shares available under the expired 2014 Stock Incentive Plan.
• DigitalBridge argues that the 2014 Plan expired on March 28, 2024, and no further awards can be made under it.
• The company states that if approved, the 2024 Stock Incentive Plan would reserve 5,500,000 shares of Class A common stock.
• DigitalBridge calculates its plan cost (SVT) to be approximately 3.1% using only the available shares under the Omnibus Plan.
• As of March 28, 2024, DigitalBridge had 164,524,660 shares of common stock outstanding.
• If the Omnibus Plan is not approved, the company will be unable to grant equity compensation, potentially leading to increased cash compensation and reduced alignment with investors.
• The company believes the 5,500,000 shares under the Omnibus Plan are necessary to attract, retain, and motivate talent.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While there's a disagreement with ISS, the company is proactively addressing the issue and emphasizing the importance of the Omnibus Plan for attracting and retaining talent. The potential negative impact of not approving the plan is also highlighted.

Positives

• The company is actively addressing concerns raised by ISS regarding the Omnibus Plan.
• DigitalBridge is providing clear information to stockholders regarding the plan and its potential impact.
• The company believes the Omnibus Plan is crucial for attracting and retaining talent.
• The company states that the plan cost (SVT) is approximately 3.1% for available shares.

Negatives

• ISS has recommended that stockholders vote against the Omnibus Plan.
• Failure to approve the Omnibus Plan could lead to increased cash compensation and reduced alignment with investors.
• The company will be unable to grant any new awards unless and until the Omnibus Plan is approved by stockholders at the Annual Meeting.

Risks

• Stockholder rejection of the Omnibus Plan could hinder the company's ability to attract and retain talent.
• Increased cash compensation could reduce cash available to return to stockholders.
• Misunderstanding or miscalculation of plan costs could influence stockholder voting decisions.

Future Outlook

The company anticipates that the pool of 5,500,000 shares under the Omnibus Plan will allow them to continue to attract, retain and motivate the talent required to execute their strategy.

Management Comments

• The Board of Directors recommends a vote FOR Proposal No. 3 to approve the DigitalBridge Group, Inc. 2024 Omnibus Stock Incentive Plan.
• The company believes that the pool of 5,500,000 shares under the Omnibus Plan will allow us to continue to attract, retain and motivate the talent required to execute our strategy.

Industry Context

Equity compensation plans are a common tool used by companies to attract and retain talent, particularly in competitive industries. The size and structure of these plans are often scrutinized by proxy advisory firms like ISS, and companies must justify their plans to stockholders.

Comparison to Industry Standards

• It is difficult to compare the SVT of 3.1% without knowing the specific industry benchmarks for DigitalBridge's sector.
• Companies like American Tower, Crown Castle, and Equinix also utilize equity compensation plans, but the details of those plans would need to be analyzed for a direct comparison.
• Generally, SVT (Shareholder Value Transfer) is compared against industry peers to assess whether the equity compensation is reasonable.

Stakeholder Impact

• Approval of the Omnibus Plan is intended to benefit employees by providing equity compensation.
• Failure to approve the plan could negatively impact employees through increased cash compensation and reduced alignment with investors.
• Stockholders could be impacted by reduced cash available to return to them if cash compensation increases.

Next Steps

• Stockholders will vote on Proposal 3 at the Annual Meeting on April 26, 2024.
• DigitalBridge is seeking to engage with ISS for a change to their recommendation.

Key Dates

Keywords

Omnibus Stock Incentive Plan, DigitalBridge Group, ISS, Proxy Statement, Stockholders, Equity Compensation, Shares, SVT, 2014 Stock Incentive Plan