Document

DEF 14A 1 clny2021def14aproxy.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )


Filed by the Registrant x
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o			Preliminary Proxy Statement
o			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x			Definitive Proxy Statement
o			Definitive Additional Materials
o			Soliciting Material under §240.14a-12


COLONY CAPITAL, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x	No fee required.

o	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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To the Stockholders of Colony Capital, Inc.:

It is our pleasure to invite you to the 2021 annual meeting of stockholders (the “2021 Annual Meeting”) of Colony Capital, Inc., a Maryland corporation. In light of public health concerns, the 2021 Annual Meeting will be conducted virtually, via live audio webcast, on May 4, 2021, beginning at 11:00 a.m., Eastern Time. You will be able to attend the virtual 2021 Annual Meeting, vote your shares and submit questions during the meeting via live audio webcast by visiting https://web.lumiagm.com/219091430, using the passcode and control number as discussed in the enclosed Notice of Annual Meeting of Stockholders.

The enclosed materials include a notice of meeting, proxy statement, proxy card, self-addressed pre-paid envelope and Annual Report to Stockholders for the fiscal year ended December 31, 2020.

I sincerely hope that you will be able to attend and participate in the virtual meeting. Whether or not you plan to attend the annual meeting via the live webcast, please authorize a proxy to vote your shares as soon as possible. You may authorize a proxy to vote your shares by mail, telephone or Internet. The proxy card materials provide you with details on how to authorize a proxy to vote by these three methods.

We look forward to receiving your proxy and thank you for your continued support.

Sincerely,



NANCY A. CURTIN Lead Independent Director & Chairperson-Elect

March 30, 2021 Boca Raton, Florida


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

May 4, 2021

11:00 a.m., Eastern Time

Via Live Audio Webcast: https://web.lumiagm.com/219091430

Webcast Passcode: colony2021

ITEMS OF BUSINESS

1. Election of Directors: Elect 10 directors nominated by our Board of Directors, each to serve until the 2021 annual meeting of stockholders and until his or her successor is duly elected and qualified;

2. Advisory Vote on Executive Compensation: Approve, on a non-binding, advisory basis, named executive officer compensation as disclosed in the accompanying proxy statement;

3. Ratification of Independent Registered Public Accounting Firm: Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021; and

4. Other Business: Transact any other business that may properly come before the 2021 Annual Meeting or any postponement or adjournment of the 2021 Annual Meeting.

RECORD DATE

You can vote if you are a stockholder of record on March 18, 2021.

ANNUAL REPORT

Our 2020 Annual Report to Stockholders accompanies, but is not part of, these proxy materials.

PROXY VOTING

Your vote is very important. Whether or not you plan to attend the virtual 2021 Annual Meeting via live webcast, you are encouraged to read the proxy statement and submit your proxy card or voting instructions form as soon as possible to ensure that your shares are represented and voted at the 2021 Annual Meeting. If you hold your shares as a record holder, you may vote your shares by proxy via the phone or the Internet by following the instructions provided on the enclosed proxy card or by completing, signing, dating and returning your proxy card in the postage-paid envelope provided. If you hold your shares through a broker or other custodian, please follow the instructions you received from the holder of record to vote your shares.



By Order of the Board of Directors,


RONALD M. SANDERS
Executive Vice President, Chief Legal Officer and Secretary
March 30, 2021 Boca Raton, Florida

____________________________________________________________________________________________

TABLE OF CONTENTS


			Page
PROXY SUMMARY			2

PROPOSAL NO. 1: Election of Directors			14
Board of Directors			15
Corporate Governance			27
Information about our Board of Directors and its Committees			31
Director Compensation			34

EXECUTIVE OFFICERS			36

PROPOSAL NO. 2: Non-Binding, Advisory Vote to Approve Named Executive Officer Compensation			37

COMPENSATION COMMITTEE REPORT			37

COMPENSATION DISCUSSION AND ANALYSIS			38
Executive Summary			38
Compensation Tables and Related Narrative			62
Equity Compensation Plan Information			69

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			70

PROPOSAL NO. 3: Ratification of Appointment of our Independent Registered Public Accounting Firm			73

AUDIT COMMITTEE REPORT			73

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			74

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			75

FREQUENTLY ASKED QUESTIONS AND ANSWERS			78

OTHER INFORMATION			82
Incorporation by Reference			83

APPENDIX A–PROXY CARD			A-1

Table of Contents

PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. This Proxy Statement and the enclosed form of proxy are first being mailed to stockholders of Colony Capital, Inc., a Maryland corporation (the “Company,” “Colony Capital,” “Colony,” “CLNY,” “we,” “our” or “us”), on or about April 1, 2021.

2021 ANNUAL MEETING

• Date and Time: May 4, 2021, at 11:00 a.m., Eastern Time

• Place: Via live audio webcast at https://web.lumiagm.com/219091430; passcode: colony2021 (unique 11-digit control number required)

• Voting: Only holders of record of the Company’s Class A common stock, $0.01 par value per share (“Class A common stock”) and Class B common stock, $0.01 par value per share (“Class B common stock,” and together with Class A common stock, our “common stock”), as of the close of business on March 18, 2021, the record date, will be entitled to notice of the annual meeting and entitled to vote at the 2021 Annual Meeting. Each share of Class A common stock entitles its holder to one vote. Each share of Class B common stock entitles its holder to 36.5 votes.

• Technical Support for the 2021 Annual Meeting: If you have difficulty accessing the virtual 2021 Annual Meeting, technicians will be available to assist you via the toll free phone number listed at https://web.lumiagm.com/286413441

PROPOSALS AND BOARD RECOMMENDATIONS


PROPOSAL		BOARD RECOMMENDATION	FOR MORE INFORMATION
1	Election of Directors	FOR each of the nominees listed on the enclosed proxy card	Page 14
2	To adopt a resolution approving, on a non-binding, advisory basis, named executive officer compensation	FOR	Page 37
3	To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021	FOR	Page 74

HOW TO CAST YOUR VOTE

We have provided you with three different methods for you to vote your proxy. Please see the enclosed proxy card or voting instruction form for additional details regarding each voting method.

BY INTERNET USING A COMPUTER

BY TELEPHONE

BY MAIL

Vote 24/7

Dial toll-free 24/7

Cast your ballot, sign your proxy card

and send by pre-paid mail

2 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

Table of Contents

PROXY SUMMARY

2020 YEAR IN REVIEW: Promises Made, Promises Kept

We have made transformational progress during 2020 towards our digital rotation. With Colony’s global scale and operating platform, and the foundational work implemented in 2020, we believe we are well positioned to capitalize on the powerful secular tailwinds supporting the continued growth and investment in digital infrastructure.

Built Liquidity and Strengthened Capital Structure:

•Amended and repaid corporate revolver and fully repaid January 2021 convertible notes resolving near-term corporate debt maturities

•Finalized strategic investment from Wafra, which has boosted its overall investment and commitment from $400 million to over $500 million

•Ended the year with $737 million of liquidity between corporate cash-on-hand and the Company’s corporate revolver

Harvested Legacy Assets and Streamlined the Organization:

•Reached an agreement to sell its hospitality portfolios in a transaction valued at $2.8 billion, including $67.5 million of gross proceeds on a consolidated basis and the reduction of $2.7 billion in consolidated debt

•Monetized $698 million of Other Equity & Debt (OED) assets, achieving the high end of the Company's monetization guidance of $600 to $700 million

•Eliminated $55 million of annualized run-rate legacy costs significantly exceeding the $40 million target

Invested in High Quality Digital Assets:

•Anchored by key strategic investments in DataBank and Vantage Stabilized Data Centers (Vantage SDC), the Company now owns or has committed approximately $900 million of equity capital in digital operating and GP co-investments

•Annualized fourth quarter 2020 Consolidated Digital Operating Adjusted EBITDA of $244 million, or $39 million CLNY OP share (which excludes noncontrolling interests in investment entities), which is expected to ramp through a combination of organic and external growth

Rapidly Grew Digital Investment Management:

•Raised $7.4 billion of new fee-bearing third-party capital through flagship equity, co-invest, and liquid securities strategies representing net growth of 90% of December 31, 2019 FEEUM, far exceeding original 2020 guidance of 15%

•Significant contribution from the successful $4.2 billion first closing of the Company's second flagship digital equity fund, DCP II

Executive Leadership and Board of Director Updates:

•Marc Ganzi assumed the role of President and CEO and Jacky Wu assumed the role of CFO on July 1, 2020, finalizing the transition to a digital-focused management team

•Appointed/nominated four distinguished independent board members to the Company's Board with significant experience in technology and telecommunications with the addition of Jeannie Diefenderfer (2020), Gregory McCray (2021), J. Braxton Carter (effective March 2, 2021) and Sháka Rasheed (independent director nominee for 2021 Annual Meeting)

3 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY

RECENT OPERATIONAL AND DIGITAL TRANSFORMATION HIGHLIGHTS


+$1.9B Liquidity			During 2020, in the face of the COVID-19 pandemic, we overcame capital constraints by generating almost $2 billion of liquidity to extend debt maturities, reduce leverage and invest substantial capital into digital infrastructure: •Amended Corporate Revolver (+$450M) •Issued New 2025 Exchangeable Notes (+$300M) •Strategic Investment with Wafra (initial $400M increased to +$500M) •Executed Legacy Asset Monetizations (+$700M)
>350% Common Stock Price Increase			Our common stock price has increased by more than 350% from its trough in March 2020 (the month in which the effective date of Mr. Ganzi’s appointment as our CEO was announced) with management’s decisive actions taken in 2020 to stabilize CLNY’s capital structure
~90% Y-o-Y Growth in Digital FEEUM			•Raised $2.2B of net co-investment capital around Zayo, Vantage SDC, Vantage Europe and zColo •Raised ~$400M of FEEUM across two digital liquid strategies •Successful $4.2B first closing of our second flagship digital fund, DCP II (exceeding total raised of our first flagship digital fund, DCP I)
+22B Invested in High Quality Digital Assets			Executed on $22B in transaction value in 2020 across all digital infrastructure sectors, deploying over $5B of FEEUM

4 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY

BOARD COMPOSITION AND REFRESHMENT

Our Board recognizes the importance of having the right mix of skills, expertise and experience and is committed to continuously reviewing its capabilities and ongoing refreshment. In 2020, our Board committed to reducing the Board size to no more than 10 members by the 2021 Annual Meeting. In keeping with this commitment, our Board has nominated 10 highly qualified and diverse directors, five of whom have digital infrastructure and communications experience (with four of such director nominees being independent).

Our Board is transforming along with our Company’s digital transformation. In the last year, our Board has appointed three new independent directors with digital experience, and has nominated an additional independent director for election at the 2021 Annual Meeting, Sháka Rasheed:

Our Nominating and Corporate Governance Committee has prioritized diversity in its refreshment over the past several years. As a result, our 10 director nominees for the 2021 Annual Meeting consist of three females (one of whom is also ethnically diverse) and two African American males.

5 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY

Colony Capital Board of Directors - At-A-Glance

Following our 2021 Annual Meeting, our Board of Directors will be:

BOARD NOMINEES

The following table provides information about the 10 candidates who have been nominated by our Board of Directors for election to our Board of Directors. For additional information about our director nominees, see page 15.


		DIRECTOR	INDEPENDENCE		STANDING COMMITTEE MEMBERSHIPS(2)
NAME	AGE	SINCE	STATUS(1)	OCCUPATION	AC	CC	NG
Sháka Rasheed	49	n/a	Yes	Managing Director, General Manager - Capital Markets at Microsoft	—	—	—
J. Braxton Carter	62	2021	Yes	Former Chief Financial Officer, T-Mobile US, Inc. (NASDAQ: TMUS)	C, E	M	—
Gregory J. McCray	58	2021	Yes	CEO, FDH Infrastructure Services	—	M	M
Jeannie H. Diefenderfer	60	2020	Yes	Founder/CEO of courageNpurpose, LLC	M	—	M
Marc C. Ganzi	49	2020	No (Employed by the Company)	CEO & President of CLNY	—	—	—
Dale Anne Reiss	73	2019	Yes	Global and Americas Director of Real Estate, Hospitality and Construction, Ernst & Young LLP (retired)	M, E	—	C
Jon A. Fosheim	70	2017	Yes	Former CEO of Oak Hill REIT Management	M, E	C	—
Nancy A. Curtin(3)	63	2014	Yes	CIO and Head of Investment Advisory of Alvarium Investments	—	—	—
Thomas J. Barrack, Jr.	73	2009	No (Employed by the Company)(4)	Executive Chairman of CLNY(4)	—	—	—
John L. Steffens	79	2009	Yes	Founder of Spring Mountain Capital, LP	—	M	M

(1) Independence is determined by the Board of Directors in accordance with the applicable New York Stock Exchange listing standards.

(2) Effective May 3, 2021.

(3) Effective April 1, 2021, Ms. Curtin will transition from Lead Independent Director of the Board of Directors to independent, non-executive Chairperson of the Board of Directors.

(4) Effective April 1, 2021, the Executive Chairman role will be eliminated and Mr. Barrack will be a non-executive member of the Board of Directors.

AC Audit Committee CC Compensation Committee NG Nominating & Corporate Governance Committee

C Committee Chair M Committee Member E Audit Committee Financial Expert

6 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY

CORPORATE GOVERNANCE HIGHLIGHTS


No Classified Board	Majority Voting Standard for Election of Directors	Anti-Hedging/Pledging Policy
Opted out of MUTA(1)	Favorable Stockholder Rights(2)	Stock Ownership Guidelines for Directors and Officers

(1) Stockholder approval required for CLNY board to adopt a classified board structure and other anti-takeover provisions.

(2) CLNY stockholders have the ability to call special stockholders meetings, remove and replace directors, amend bylaws, approve increases in the number of shares authorized for issuance.

STOCKHOLDER ENGAGEMENT

Our Board believes in listening to and communicating with stockholders. We believe stockholder insight and recommendations should be an integral part of Board discussions on many matters. The input we receive from stockholders as part of our regular engagement efforts impacts our compensation and corporate governance policies in a meaningful way. The Board, senior management and our investor relations team maintain a robust dialogue with investors to gain their perspectives on current issues and address any questions or concerns.

Most recently, the Chairman of our Compensation Committee directly engaged with most of our larger institutional investors, some of whom voted against the resolution, to solicit feedback and better understand their individual concerns on our overall executive compensation program and corporate governance. Following outreach with stockholders representing more than 50% of our outstanding shares, during February 2021, the Chair of our Compensation Committee (John L. Steffens) met with nine of our top 15 stockholders, representing approximately 35% of our outstanding shares. Neither our Executive Chairman, Chief Executive Officer, nor any other named executive officer, participated in any of these meetings with stockholders. All of the feedback received was shared with the full Board of Directors.

The feedback we received from our stockholder outreach campaign was overwhelmingly positive regarding the meaningful changes implemented in the Company’s 2020 executive compensation program and the enhanced transparency around certain compensation matters in the Company’s 2020 proxy statement. In addition, some stockholders praised our dedication to ESG initiatives, including our Board’s recent prioritization of diversity in its refreshment.

We also had constructive dialogue with stockholders regarding our executive compensation program. The majority of the feedback related to the corporate financial metrics in our annual incentive plan for determining annual cash bonuses, including how these metrics may change as the Company completes its digital transformation. In addition, we received feedback from some stockholders that our use of incentive fee allocations as an element of compensation should be more prominently discussed in our Compensation Discussion & Analysis.

We strongly considered the feedback received on our executive compensation program from stockholders in implementing our executive compensation program for 2021.

7 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY


What We Heard From Stockholders						How our Compensation Committee Responded
Performance goals related to the digital business and legacy businesses should be separated						Implemented a 2021 Annual Incentive Plan with specific and separate performance goals tied to digital performance
Peer group used for compensation benchmarking should be updated to better reflect the Company’s digital transformation						Re-balanced 2021 peer group to add digital-focused companies and eliminate peers in legacy businesses that the Company no longer engages in
Compensation should be more heavily weighted towards long-term equity in order to align; however, equity compensation should be used efficiently, with consideration given to dilution						For 2021, 75% of the CEO’s bonus opportunity was paid in long-term incentive equity, with 50% of such equity tied to performance-based vesting conditions related to relative TSR. In considering long-term incentive equity awards for 2021, the Compensation Committee reviewed and considered the Company’s historical and anticipated burn-rate and that its burn-rate is below ISS burn rate benchmarks for both Real Estate and Diversified Financial companies
Enhance disclosure of incentive fee allocations						Presented enhanced disclosure in this Proxy Statement regarding incentive fee allocations
The 2020 meaningful changes made to the structure of the Annual Incentive Plan should be maintained						Implemented the 2021 Annual Incentive Plan with 75% (up from 60% in prior years) of payout tied to corporate financial metrics and 25% (down from 40% in prior years) of payout tied to individual goals & objectives
The 2020 meaningful changes made to increase the rigor of relative TSR goals should all be maintained						Maintained for 2021 performance-based LTIP awards that (1) increased threshold for minimum payout from 10th percentile to 25th percentile; (2) increased target payout from 50th percentile to 55th percentile performance ranking; and (3) policy to cap payouts at 100% of target when absolute TSR is negative

For further information, see “Executive Compensation Highlights” below.

COMMITMENT TO ENVIRONMENTAL, SOCIAL & GOVERNMENTAL (ESG) INITIATIVES

In our 28 year history, Colony has had a long standing commitment to integrating environmental, social and governance principles throughout its business, both at the firm/corporate level and across its owned and managed investments. In connection with our digital transformation, we seek to improve the operating performance of both our company and the digital companies in which we invest by helping to sustainably connect the world’s leading mobile communications and technology companies with enterprises and consumers at the lowest possible cost with the lowest possible carbon footprint.

Focusing on What Matters Most

At our company and across our investment portfolio, we strategically focus on our most material ESG issues. Through a materiality mapping process, we identified a host of relevant ESG issues and then prioritize them according to two criteria: those that have the greatest impact on our business and those that are the most important to our stakeholders. As a result of this process, we have identified the following five core ESG issues, on which we will focus our efforts.

8 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY

Our Approach to Integration

ESG integration plays a critical role at each stage of our investment and value-creation process. The Responsible Investment Policy of Digital Colony, Colony Capital’s global digital infrastructure investment arm, details its vision to build a sustainable future by creating economic value, preserving resources, and improving the communities in which our organization operates. Digital Colony has developed a thorough approach to integrating the most material ESG issues across each phase of the investment life cycle.

•Pre-Investment – Screen potential acquisitions in accordance with Digital Colony’s responsible investing policy

•Portfolio Monitoring and Engagement – Collaborate with portfolio companies to develop company-specific ESG metrics and targets; monitor and measure performance; and help improve outcomes

9 COLONY CAPITAL, INC. 2021 PROXY STATEMENT

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PROXY SUMMARY

•Reporting and Transparency - Expect portfolio companies to identify material core and company-specific key performance indicators (KPIs), track performance, and report quarterly

PEOPLE: Driving Diversity, Equity and Inclusion (DEI)

Involving people from a wide variety of backgrounds and perspectives drives business results for Colony Capital, improves outcomes for our investors and shareholders, and builds stronger communities. This area was a priority for Colony over the past year as we focused on improving diversity and inclusion practices inside our company, while also extending those initiatives throughout our portfolio companies. Diversity, equity and inclusion is a central part of our holistic concern for employee well-being, including employee engagement and health and safety.

Key 2020 Accomplishments:

•DEI Steering Committee: Established a Diversity, Equity and Inclusion Steering Committee and developed a strategy addressing four key areas: mentorships; internships; recruiting and career paths; incentives and promotion

•Education & Partnerships: Educated more than 90 professionals, including senior executives and CEOs, from 14 Digital Colony portfolio companies, through training on building a successful DEI program, conducted in partnership with our partners at BSR, a global sustainability nonprofit organization

•Mentorships & Internships: Hired 75% of our summer analysts through the Alternative Investment Fellowship Program of Seizing Every Opportunity (SEO), a nonprofit providing career support for aspiring professionals from underrepresented backgrounds

Key 2021 Goals:

•Build Awareness: Hold live, firm-wide employee trainings on diversity and inclusion with experts in the field

•Build Relationships: Continue to build relationships with and source talent from SEO and other NGOs in the field

•Build Accountability: Institute the first full year of portfolio company reporting on key DEI metrics and provide templates to improve diversity and inclusion policies and practices

•Senior Management-level Diversity: Foster diversity at the senior management level

See “-Board Composition and Refreshment” above for information regarding how our Board of Directors considers diversity in its refreshment initiatives. Also, see “Human Capital Resources” beginning on page 17 of our Annual Report to Stockholders for a more detailed discussion on DEI initiatives at Colony Capital.

Governance

A culture of ethics and commitment to the highest levels of behavior provide the foundation on which our organization was built. We seek to instill a spirit of integrity throughout Colony Capital, Digital Colony and our portfolio companies to guide their interactions with employees and the communities in which we operate. At the Colony Capital level, our employees are guided by a comprehensive Code of Business Conduct and Ethics, which outlines our expectations for adherence to our own company values as well as established standards such as the Foreign Corrupt Practices Act. We monitor global investor expectations for digital platforms and telecommunications such as those of the Ranking Digital Rights Index and share this information with our portfolio companies so that they remain current on and address key human rights issues of governance, freedom of expression and information, and privacy.

SEC Form DEF 14A filed by Colony Capital, Inc.