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Long-Term Compensation | 3 Months Ended
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Mar. 31, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Long-Term Compensation | NOTE 8. LONG-TERM COMPENSATION Equity-Based Compensation Plans and Programs Prologis Outperformance Plan (“POP”) We allocate participation points to participants under our POP corresponding to three-year performance periods beginning January 1. The fair value of the awards is measured at the grant date and amortized over the period from the grant date to the date at which the awards vest, which ranges from three to ten years. The performance hurdle (“Outperformance Hurdle”) at the end of the initial three-year performance period requires our three-year compound annualized total stockholder return (“TSR”) to exceed a threshold set at the three-year compound annualized TSR for the Morgan Stanley Capital International (“MSCI”) US REIT Index for the same period plus 100 basis points. If the Outperformance Hurdle is met, a compensation pool will be formed equal to 3% of the excess value created, subject to a maximum as defined for each performance period. POP awards cannot be paid at a time when our absolute TSR is negative. If after seven years our absolute TSR has not been positive, the awards will be forfeited. We granted participation points for the 2019 – 2021 performance period in January 2019, with a fair value of $21.2 million using a Monte Carlo valuation model that assumed a risk-free interest rate of 2.6% and an expected volatility of 20.0%. The 2019 – 2021 performance period has an absolute maximum cap of $100 million. If an award is earned at the end of the initial three-year performance period, then 20% of the POP award is paid and the remaining 80% is subject to additional seven-year cliff vesting. The 20% that is paid at the end of the three-year performance period is subject to an additional three-year holding requirement. The Outperformance Hurdle was met for the 2016 – 2018 performance period, which resulted in awards being earned at December 31, 2018. Initial awards of $75.0 million in aggregate were awarded in January 2019 in the form of 0.4 million shares of common stock and 0.8 million POP LTIP Units and LTIP Units. Participants are not able to sell or transfer equity awards received until three years after the end of the initial period. One-third of the remaining compensation pool in excess of the $75.0 million aggregate initial award amounts can be earned at the end of each of the three years following the end of the initial three-year performance period if our performance meets or exceeds the MSCI US REIT Index. Vesting for the 2016 – 2018 performance period for our Named Executive Officers (“NEOs”) follows the construct of the 2019 – 2021 performance period as described above, such that 20% of any amounts earned were awarded subject to a three-year holding period, and 80% of any amounts earned will cliff vest at the end of the seventh year following the initial three-year performance period. At March 31, 2019 there were 0.4 million unvested POP LTIP Units associated with the POP. Other Equity-Based Compensation Plans and Programs Our other equity-based compensation plans and programs include (i) the Prologis Promote Plan (“PPP”); (ii) the annual long-term incentive (“LTI”) equity award program (“Annual LTI Award”); and (iii) the annual bonus exchange program. Awards under these plans and programs may be issued in the form of restricted stock units (“RSUs”) or LTIP Units at the participant’s election. RSUs and LTIP Units are valued based on the market price of the Parent’s common stock on the date the award is granted and the grant date value is charged to compensation expense over the service period, which beginning in February 2018 was lengthened from three to four years for PPP and Annual LTI Awards and three years for bonus exchange awards offering a premium upon exchange. As our NEOs do not receive a bonus exchange premium for participating in the bonus exchange program, the equity they receive upon exchange for their cash bonuses does not have a vesting period. Summary of Award Activity RSUs The following table summarizes the activity for RSUs for the three months ended March 31, 2019 (units in thousands):
|  |  |  |  |  | Weighted Average |
|  | Unvested RSUs |  |  | Grant Date Fair Value |
Balance at January 1, 2019 |  |  | 1,255 |  |  | $ | 54.48 |
Granted |  |  | 503 |  |  |  | 70.95 |
Vested and distributed |  |  | (575 | ) |  |  | 50.08 |
Forfeited |  |  | (9 | ) |  |  | 62.01 |
Balance at March 31, 2019 |  |  | 1,174 |  |  | $ | 63.64 |
LTIP Units The following table summarizes the activity for LTIP Units for the three months ended March 31, 2019 (units in thousands):
|  | Vested |  |  | Unvested |  |  | Unvested Weighted Average |
|  | LTIP Units |  |  | LTIP Units |  |  | Grant Date Fair Value |
Balance at January 1, 2019 |  |  | 3,293 |  |  |  | 2,177 |  |  | $ | 56.05 |
Granted |  |  | - |  |  |  | 911 |  |  |  | 70.87 |
Vested LTIP Units |  |  | 964 |  |  |  | (964 | ) |  |  | 54.44 |
Vested POP LTIP Units (1) |  |  | 391 |  |  |  | - |  |  | N/A |
Conversion to common limited partnership units |  |  | (198 | ) |  |  | - |  |  | N/A |
Balance at March 31, 2019 |  |  | 4,450 |  |  |  | 2,124 |  |  | $ | 63.14 |
(1) | Vested units were based on the POP performance criteria being met for the 2016 – 2018 performance period and represented the earned award amount. See above for further discussion on the POP.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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