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Incentive Plans

9 Months Ended

Sep. 30, 2025

Incentive Plans

Incentive Plans

12. Incentive Plans

2014 Incentive Award Plan

The Company provides incentive awards in the form of common stock or awards convertible into common stock pursuant to the Digital Realty Trust, Inc., Digital Services, Inc. and Digital Realty Trust, L.P. 2014 Incentive Award Plan, as amended (the “Incentive Plan”). The major categories of awards that have been issued under the Incentive Plan include:

Long-Term Incentive Units (“LTIP Units”): LTIP Units, in the form of profits interest units of the Operating Partnership, may be issued to eligible participants for the performance of services to or for the benefit of the Operating Partnership. LTIP Units (other than Class D units), whether vested or not, receive the same quarterly per-unit distributions as Operating Partnership common units. Initially, LTIP Units do not have full parity with common units with respect to liquidating distributions. However, if such parity is reached, vested LTIP Units may be converted into an equal number of common units of the Operating Partnership at any time. The awards generally vest over periods between two and four years.

Service-Based Restricted Stock Units: Service-based Restricted Stock Units covering shares of Digital Realty Trust, Inc. common stock, which vest over periods between two and four years, are settled in shares of Digital Realty Trust, Inc.’s common stock upon vesting.

Performance-Based Awards (the “Performance Awards”): Performance-based Class D units of the Operating Partnership and performance-based Restricted Stock Units of Digital Realty Trust, Inc.’s common stock may be issued to officers and employees of the Company. The Performance Awards include performance-based and time-based vesting criteria. Depending on the type of award, the total number of units that qualify to fully vest is determined based on either a market performance criterion (“Market-Based Performance Awards”) or financial performance criterion (“Financial-Based Performance Awards”), in each case, subject to time-based vesting.

Market-Based Performance Awards.

The market performance criterion compares Digital Realty Trust, Inc.’s total shareholder return (“TSR”) relative to the MSCI US REIT Index (“RMS”) over a three-year performance period (“Market Performance Period”), subject to continued service, in order to determine the percentage of the total eligible pool of units that qualifies to be awarded. Following the completion of the Market Performance Period, the awards then have a time-based vesting element pursuant to which 50% of the performance-vested units will fully vest in the February immediately following the end of the Market Performance Period and 50% of the performance-vested units will fully vest in the subsequent February.

Vesting with respect to the market condition is measured based on the difference between Digital Realty Trust, Inc.’s TSR percentage and the TSR percentage of the RMS as is shown in the subsequent table (the “RMS Relative Market Performance”).


			Market
			Performance
	RMS Relative		Vesting
Level	Market Performance		Percentage
Below Threshold Level	≤ -500 basis points		0	%
Threshold Level	-500 basis points		25	%
Target Level	0 basis points		50	%
High Level	≥ 500 basis points		100	%

If the RMS Relative Market Performance falls between the levels specified in the above table, the percentage of the award that will vest with respect to the market condition will be determined using straight-line linear interpolation between such levels.

2022 Awards

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In January 2025, the RMS Relative Market Performance was achieved at the high level of performance for the 2022 awards and, accordingly, 61,661 Class D units and 5,654 Restricted Stock Units performance vested and qualified for time-based vesting.

●

The Class D units included 6,997 distribution equivalent units that immediately vested on December 31, 2024.

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On February 27, 2025, 50% of the 2022 awards vested and the remaining 50% will vest on February 27, 2026, subject to continued employment through the vesting date.

The grant date fair value of the Market-Based Performance Awards was approximately $12.3 million and $9.8 million for the nine months ended September 30, 2025 and 2024, respectively. This amount will be recognized as compensation expense on a straight-line basis over the expected service period of approximately four years.

Financial-Based Performance Awards.

On January 1, 2025, the Company granted Financial-Based Performance Awards, which vest based on growth in same-store cash net operating income during the three-year period commencing on January 1, 2025. The awards have a time-based vesting element consistent with the Market-Based Performance Awards discussed above. For these awards, fair value is based on market value on the date of grant and compensation cost is recognized based on the probable achievement of the performance condition at each reporting period. The grant date fair value of these awards was $12.3 million, based on Digital Realty Trust, Inc.’s closing stock price at the grant date.

As of September 30, 2025, approximately 3.0 million shares of common stock, including awards that can be converted to or exchanged for shares of common stock, remained available for future issuance under the Incentive Plan.

Each LTIP unit and each Class D unit issued under the Incentive Plan counts as one share of common stock for purposes of calculating the limit on shares that may be issued under the Incentive Plan and the individual award limits set forth therein.

Below is a summary of our compensation expense and our unearned compensation (in millions):


																				Expected
																				period to
		Deferred Compensation												Unearned Compensation						recognize
		Expensed						Capitalized						As of			As of			unearned

		Three Months Ended September 30,												September 30,			December 31,			compensation
Type of incentive award		2025			2024			2025			2024			2025			2024			(in years)
Long-term incentive units		$	5.0		$	4.0		$	0.1		$	—		$	33.9		$	22.1		2.4
Performance-based awards			3.8			3.5			0.1			—			34.9			24.1		2.5
Service-based restricted stock units			10.0			9.2			2.2			0.8			95.9			70.3		2.6

		Nine Months Ended September 30,
		2025			2024			2025			2024
Long-term incentive units		$	15.0		$	11.5		$	0.1		$	0.1
Performance-based awards			11.2			9.2			0.3			0.1
Service-based restricted stock units			29.8			25.6			5.7			3.7

Activity for LTIP Units and Service-based Restricted Stock Units for the nine months ended September 30, 2025 is shown below.


				Weighted-Average
				Grant Date Fair
Unvested LTIP Units		Units		Value
Unvested, beginning of period		263,130		$	129.93
Granted		164,138			167.04
Vested		(117,288)			129.34
Cancelled or expired		(3,628)			130.14
Unvested, end of period		306,352		$	148.11


				Weighted-Average
				Grant Date Fair
Unvested Restricted Stock Units		Shares		Value
Unvested, beginning of period		591,797		$	145.15
Granted		419,164			159.06
Vested		(249,580)			131.80
Cancelled or expired		(34,939)			132.75
Unvested, end of period		726,442		$	144.61

2025 Carried Interest Plan

On August 27, 2025, the Board of Directors (the “Board”) of the Parent approved the Digital Realty 2025 Carried Interest Plan (the “Carried Interest Plan”), pursuant to which certain employees of the Company, including our named executive officers, will be eligible to receive certain awards with respect to certain strategic capital ventures of the Company (each, a “Vehicle”). The purpose of the Carried Interest Plan is to attract, retain and incentivize certain executives and other employees of the Company in connection with, and to recognize the success of, such investments.

Types of Awards. The Carried Interest Plan provides for the grant of carried interest awards and appreciation interest awards.

●

Carried Interest Awards. Awards of carried interests under the Carried Interest Plan consist of interests in one or more Vehicles (a “carry vehicle”) holding the right to receive a portion of the carried interest or promote distributions generated from each of the Vehicles. When a carry vehicle receives, directly or indirectly, a distribution of the carried interest or promote (a “Carried Interest Payment Date”), the carry vehicle will distribute the net proceeds to participants holding fully vested carried interest awards in accordance with the Carried Interest Plan and applicable award agreement. The carried interest awards are intended to be treated as “profits interests” for U.S. federal income tax purposes.

●

Appreciation Interest Awards. Awards of appreciation interests are notional interests granted under the Carried Interest Plan that track the value of a corresponding carried interest award.

Vesting. Awards under the Plan will vest in full upon the satisfaction of both a service condition and a performance condition.

The service condition will be satisfied with respect to 25% of an award on each of the first four anniversaries of the applicable vesting commencement date, subject to the participant’s continued service through the applicable vesting date. The performance condition will be satisfied with respect to 100% of an award on the first Carried Interest Payment Date on which the applicable performance hurdles for the Vehicle are satisfied (the “Initial Carried Interest Payment Date”).

In the event that the performance condition is satisfied prior to the full satisfaction of the service condition, (i) with respect to any carried interest award, the service condition will accelerate and be deemed fully satisfied upon the date the performance condition is satisfied, subject to the participant’s continued service through such date; and (ii) with respect to any appreciation interest award, the service condition will continue to be eligible to be satisfied on the applicable service condition satisfaction date(s) following the Initial Carried Interest Payment Date, subject to the participant’s continued service through the applicable vesting date.

Payment. Any participant holding a fully vested carried interest award on any Carried Interest Payment Date that occurs with respect to the carry vehicle to which the award relates will be entitled to cash distributions of the carried interest or promote from such carry vehicle. Payments in respect of fully vested appreciation interest awards may be in the form of cash, fully-vested shares of our common stock, fully-vested units in our Operating Partnership or a combination thereof, as determined by the plan administrator. Any shares issued may (or, to the extent required by applicable stock exchange rules, will) be issued under the Incentive Plan or any successor plan. As of September 30, 2025, no amount is anticipated to be paid in the next 12 months.

Individual Payment Limit. In no event may any participant receive aggregate payments or distributions pursuant to awards under the Carried Interest Plan in any calendar year in excess of three times the sum of the participant’s annual base salary rate, target annual bonus and target annual equity award value at the time of payment (or, if a participant is not employed on the payment date, three times the participant’s annual base salary rate, target annual bonus and target annual equity award value as of the day immediately prior to the date on which the participant’s employment terminated).

Award Limit. In no event will more than 50% of the aggregate carried interest or promote distributions made with respect to any Vehicle be paid to participants in respect of awards in the applicable carry vehicle under the Carried Interest Plan. During the three months ended September 30, 2025, we have granted 9% of the 50% permitted to be granted under the Carried Interest Plan.