Digital Realty Trust Inc

This management proposal asks stockholders to cast a non-binding, advisory vote approving the compensation paid to the Company’s named executive officers as disclosed in the Proxy Statement. Management seeks this vote to reaffirm that its pay program — which combines base salary, annual incentive bonuses, and performance- and time-based long-term equity awards (including PIUs and Class D Units) — is aligned with stockholder interests and supports retention and long-term value creation. The program emphasizes pay-for-performance through multi-year performance-based equity awards tied to relative total stockholder return versus the MSCI US REIT Index and Same Store Cash NOI growth, and uses annual incentive metrics (Core FFO per share, Same Store Cash NOI, and ≤1MW & interconnection signings) to drive short-term results. The Talent and Compensation Committee engaged an independent consultant (Semler Brossy) and used peer benchmarking when setting targets and award design, and management highlights governance safeguards including a clawback policy, stock ownership guidelines, and no uncapped bonus payouts. The Company reports strong 2025 performance (Core FFO and awards achievements) and notes that prior Say-on-Pay support was high (approximately 87% in 2025), which management cites as validation of its approach. The Board recommends a FOR vote, arguing that the compensation structure appropriately balances short- and long-term incentives, aligns pay with performance, and includes oversight mechanisms; it also commits to considering the advisory vote outcomes in future compensation decisions. Because the proposal is advisory, it does not change pay directly but serves as a signal to the Board and Compensation Committee about investor sentiment and may influence future plan design and disclosures.

The shareholder proponents request that Digital Realty annually disclose region-level metrics on exposure to water-related risks and operational water intensity specifically in water-stressed areas, arguing that aggregated company-wide water metrics obscure local vulnerabilities that matter to investors. Their core argument is that water is a material operational and strategic risk for data centers, that AI-driven demand and acquisition practices could increase water usage in stressed regions, and that peer companies already provide more granular, site- or region-level disclosures, creating a precedent and comparability expectation. They seek a disclosure change (region-level metrics) aimed at enabling investors to assess where the portfolio is most vulnerable, to better anticipate operational, regulatory and social-license risks, and to evaluate resilience and long-term value creation. Management and the Board oppose the proposal, asserting existing design standards, operational practices (air-cooled and water-free designs), recycling and reuse initiatives, targeted conservation projects, partnerships (e.g., with Ecolab) and existing Impact Report disclosures already provide meaningful transparency and materially mitigate risks. The Board emphasizes that only a small portion of evaporative cooling capacity is located in extremely high water stress areas by MW-IT, that many cooling innovations use non-potable or non-water liquids, and that the proposed additional reporting would impose significant management time and expense without delivering commensurate stockholder benefit. In evaluating the merits, investors should weigh the proponents’ desire for granular, comparable regional data against the Company’s claim of substantial existing mitigation and disclosure, the operational complexity of producing consistent region-level metrics across jurisdictions, and the potential competitive or proprietary sensitivities. The question for governance and ESG-focused investors is whether incremental granularity materially improves risk assessment and capital allocation decisions relative to the costs and potential operational disclosure risks the Company cites. Given broader industry attention to water impacts of data center expansion, the proposal highlights a plausible risk vector even if the Company argues mitigations are in place; the investor decision should factor in the Company’s historical water-intensity trends, local regulatory exposures in key metros, and precedent disclosure practices by peers.