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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.)

Filed by the Registrant                                x

Filed by a Party other than the Registrant   ¨

Check the appropriate box:

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Pier 1, Bay 1
San Francisco, California 94111

March 23, 2016

Dear Stockholder,

You are invited to attend our Annual Meeting of Stockholders on May 4, 2016, at our corporate headquarters in San Francisco, California. This proxy statement contains information about our company and our 2016 annual meeting proposals and process. Your vote is important to us, and we ask that you vote in accordance with our board’s recommendations.

Over the past year, we have made tremendous progress with our strategic priorities. We saw 19 percent growth year-over-year in core funds from operations per diluted share, and ended 2015 with a record-breaking occupancy level of 96.9 percent. In addition, we increased rents by an average of 13 percent.

I am proud of what our experienced and dedicated teams across the globe have accomplished and look forward to the year ahead. Thank you for your continued support and interest.

Sincerely,

HAMID R. MOGHADAM

Chairman and Chief Executive Officer

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NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS

March 23, 2016

To our Stockholders:

I invite you to attend the 2016 annual meeting of stockholders of Prologis, Inc.:

1:30 p.m., May 4, 2016

Prologis Corporate Headquarters

Pier 1, Bay 1

San Francisco, California 94111

Items of business. The following items of business will be conducted at our 2016 annual meeting of stockholders:

Record Date. If you are a holder of shares of our common stock at the close of business on March 9, 2016, you are entitled to receive this notice and to vote at the annual meeting and any adjournment(s) or postponement(s) of the annual meeting.

How to Vote. You can vote your shares by proxy through the Internet, by telephone, or by mail using the instructions on the proxy card. Any proxy may be revoked in the manner described in the accompanying proxy statement at any time prior to its exercise at the annual meeting.

Meeting Attendance. If you plan to attend the meeting in person, you must bring proof of current ownership of our common stock to be admitted to and to attend the 2016 annual meeting.

Proxy Materials. On or about March 24, 2016, we intend to distribute to our stockholders:

Proxy materials, including the 2016 Proxy Statement and the 2015 Annual Report to Stockholders, are available at www.proxyvote.com.

On behalf of the Board of Directors,

EDWARD S. NEKRITZ

Chief Legal Officer, General Counsel, and Secretary

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 4, 2016. This proxy statement and accompanying form of proxy are first being made available to you on or about March 23, 2016.

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PROXY STATEMENT: TABLE OF CONTENTS

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PROXY SUMMARY

2015 BUSINESS HIGHLIGHTS

Our business is unique to our industry and presents a key strategic advantage. Our global operations span 20 countries on four continents, and we have a $23.1 billion strategic capital business and a development platform with $3.8 billion of construction in progress. These highly integrated components of our business give us the ability to provide our customers with modern, high-quality logistics facilities in the most vibrant centers of trade around the world.

Our global operations and our strategic capital and development businesses function in tandem to provide unparalleled customer service. We are a global company with a strong local presence and specialized teams on the ground in all of the markets in which we do business. Our exemplary customer service differentiates us from our competitors. Our commitment to excellence in customer service is a strategic advantage. We are global because our customers are global. To operate on a global level, we need a strategic capital business that gives us access to third party capital in global regions, which allows us to grow and enhance our returns while mitigating currency risk. Our development business provides the modern logistics space that our customers need in strategic global locations.

Prologis Business Model⁽¹⁾

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Our business plan is working. Some highlights of our strong operational performance and dividend growth are shown in the graphs below.

We have delivered long-term growth both on a relative and absolute basis. Our weighted annualized FFO and dividend growth from 2012 to 2015 was 2.1 percentage points and 5.2 percentage points, respectively, higher than that of the U.S. public industrial real estate investment trust (“REIT”) index we use in determining our long-term annual equity awards (East Group Properties, First Industrial, DCT Industrial and Duke Realty). Our Core FFO has grown by 28% and our common stock dividends by 36% since 2012, while we were substantially deleveraging our balance sheet. For further detail, please see “Compensation Discussion and Analysis—Prologis Business Model and Strategic Priorities.”

2015 COMPENSATION HIGHLIGHTS

Our compensation program supports our business model and provides incentives to achieve strong TSR performance. Our annual bonus program rewards successful execution of our strategic priorities. Long-term incentive (“LTI”) equity awards represent a significant component of annual compensation and are completely formulaic based on relative 3-year TSR. Our outperformance compensation plans complete the total pay opportunity for our NEOs but only when exceptional levels of performance are reached.

Our compensation program is working. Compensation is heavily aligned with relative TSR performance. Our operational performance in 2015 was strong, so our bonuses (measured by operational metrics) were above target. However, our 3-year TSR underperformed, so our NEOs received only 50% of target value for their annual LTI equity awards in accordance with the established formula. Also, there was no payout under our outperformance compensation plans in 2015. Our core compensation program (annual base salary, annual bonus and annual long-term incentives) is heavily weighted to align with relative TSR performance, which resulted in a decrease in overall compensation from 2014 despite our strong operational performance.

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CEO target core compensation vs. core compensation paid for 2015 performance year

CEO core compensation was 30% less than target. As our core compensation program is heavily weighted to align with relative TSR performance, total core compensation paid to our chief executive officer (“CEO”) for the 2015 performance year was 30% less than target.

2015 CEO Target Total Core Compensation vs. 2015 Actual Core Compensation Paid*

CEO core compensation alignment with TSR

CEO core compensation correlates with relative 3-year TSR. The following graph illustrates the directional relationship between CEO core compensation and company TSR. As a result of lower relative annualized 3-year TSR, our CEO’s core compensation decreased by 25% from the 2014 performance year to the 2015 performance year.

Correlation of CEO Core Compensation and 3-year TSR

For further detail, please see “Compensation Discussion and Analysis—2015 Compensation Highlights.”

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2015 CORPORATE RESPONSIBILITY AND GOVERNANCE HIGHLIGHTS

We continue to take a leadership role in corporate responsibility and governance. We have been named the top REIT in corporate governance by Green Street Advisors for thirteen consecutive years and one of the Global 100 Most Sustainable Corporations in the World by Corporate Knights for eight consecutive years. We were also awarded GRESB’s green star, their highest designation, for outstanding performance in environmental stewardship, social responsibility, and governance.

The following are some key highlights of our corporate responsibility and governance programs:

Stockholder Outreach

During 2015, we conducted significant stockholder outreach to the owners of over 65% of our common stock. During this outreach, our lead independent director and the Chair of the Compensation Committee (the “Compensation Committee”) of the Board met with our stockholders to discuss our unique business plan and our compensation and governance programs.

Our stockholders appreciated hearing about our business and how our compensation program supports our business plan. They also appreciated the changes we made to our annual LTI equity awards to make the process 100% formulaic and transparent.

Our stockholders suggested that we include discussions in CD&A regarding our business, how our compensation program is working and how our compensation correlates with our performance. They also suggested that we make CD&A more reader-friendly. As a result, we have enhanced disclosure in CD&A in response to these suggestions.

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PROPOSALS SUBMITTED TO VOTE AT THE 2016 ANNUAL MEETING

We are asking our stockholders of record on March 9, 2016 to vote on the following matters at our 2016 annual meeting of stockholders to be held on May 4, 2016. Please see the section entitled “Additional Information” for details on how to vote.

Abstentions and broker non-votes are counted for purposes of determining whether a quorum is reached.

References in this proxy statement to “we,” “us,” “our,” the “company,” and “Prologis” refer to Prologis, Inc. and its subsidiaries, unless the context otherwise requires.

This summary highlights information contained in this proxy statement. This summary does not contain all the information you should consider and you should read the entire proxy statement before voting. For more complete information regarding our 2015 performance, please review our Annual Report on Form 10-K for the year ended December 31, 2015. All company operational information in this proxy statement is as of December 31, 2015, unless otherwise noted. See Appendix A for definitions and discussion of non-GAAP measures and reconciliations to GAAP measures and for additional detail regarding definitions of terms as generally explained in the proxy statement.

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BOARD OF DIRECTORS, BOARD COMMITTEES AND CORPORATE  GOVERNANCE

ELECTION OF DIRECTORS (PROPOSAL 1)

The Board currently consists of ten directors, all of whom are standing to be elected to the Board at the 2016 annual meeting of stockholders to hold office until the 2017 annual meeting and until their successors are duly elected and qualified.

The Board has affirmatively determined that all of the director nominees, other than Hamid Moghadam, are independent directors in accordance with New York Stock Exchange (“NYSE”) rules, our governance guidelines, and our bylaws.

Our bylaws provide for a majority voting standard for the election of directors. See “Additional Information—Majority Voting” below for further detail.

We do not know of any reason why any nominee would be unable or unwilling to serve as a director, if elected. However, if a nominee becomes unable to serve or will not serve, proxies may be voted for the election of such other person nominated by the Board as a substitute or the Board may reduce the number of directors. Each of the director nominees has consented to be named in this proxy statement and to serve as a director if elected. Information about each director nominee’s share ownership is presented below under “Security Ownership.” Certain of the director nominees previously served on the board of ProLogis (the “Trust”). In June 2011, AMB Property Corporation (“AMB”) and the Trust completed a merger transaction (the “Merger”) and, effective with the Merger, our name was changed from AMB to Prologis, Inc.

The shares represented by the proxies received will be voted for the election of each of the ten nominees named below, unless you indicate in the proxy that your vote should be cast against any or all of the director nominees or that you abstain from voting. Each nominee elected as a director will continue in office until his or her successor has been duly elected and qualified, or until the earliest of his or her resignation, retirement, or death. The ten nominees for election to the Board at the 2016 annual meeting, all proposed by the Board, are listed below with brief biographies.

The Board unanimously recommends that the stockholders vote FOR the election of each nominee.

Director Qualifications, Skills, and Experience

Each of the director nominees was chosen to serve on the Board based on his or her qualifications, skills, and experience, as discussed in their biographies, and how those characteristics supplement the resources and talent on the Board and serve the current needs of the Board and the company. For information regarding our business, its strategy and goals, please see “Compensation Discussion and Analysis.”

In making its nominations, the Governance Committee also assessed each director nominee along a number of key characteristics, including integrity, experience, accountability, judgment, courage to voice opinions, supportiveness in working with others and willingness to commit the time needed to satisfy the requirements of Board and committee membership. While the Governance Committee does not have a formal policy regarding diversity, the committee considers diversity in gender, ethnic background, geographic origin, and professional experience in assessing director nominees.

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Board Qualifications

In addition to other attributes, the slate of director nominees possess qualifications in the following areas:

Board Evaluations and Process for Selecting Directors

In the annual Board evaluation process, the Governance Committee evaluates current members of the Board in light of needs of the Board and the company. In addition, during the course of the year, the committee discusses Board succession and reviews potential candidates. The committee may also retain a third party to assist in identifying potential nominees, although it has not done so in the past.

Our annual Board evaluation process involves assessments at the Board, Board committee and individual director levels. These annual evaluations are conducted by the chair of the Governance Committee and our lead independent director and, every other year, by an independent third party. Through this process, the Board determines the best candidates for the chairs of the Board and Board committees and Board and committee membership based on current company and Board needs.

Our governance guidelines provide that directors will not be nominated or appointed to the Board if they are, or would be, 72 years or older at the time of the election or appointment. Term limits on directors’ service have not been instituted.

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Director Nominees

		Hamid R. Moghadam   Chairman of the Board since January 2000; Director since November 1997   u     Board Committees: Executive   u     Other public directorships: None   Mr. Moghadam, 59, has been our chief executive officer since the end of December 2012 and was our co-chief executive officer from June 2011 to December 2012. He is the co-founder of AMB Property Corporation and was AMB’s chief executive officer from November 1997 (from the time of AMB’s initial public offering) to June 2011 when AMB merged with the Trust.   Other relevant qualifications. Mr. Moghadam is a Trustee of Stanford University and served on the Executive Committee of the Board of Directors of the Urban Land Institute. Mr. Moghadam holds Bachelor’s and Master’s degrees in engineering from the Massachusetts Institute of Technology and a Master of Business Administration from the Graduate School of Business at Stanford University.
		Irving F. Lyons III   Lead Independent Director since June 2011 (prior to the Merger served as a trustee of the Trust from September 2009 to June 2011 and from March 1996 to May 2006)   u     Board Committees: Executive   u     Other public directorships: Equinix, Inc. and Essex Property Trust, Inc.   Mr. Lyons, 66, has been a principal with Lyons Asset Management, a private equity firm, since January 2005. In 2004, Mr. Lyons retired from the Trust where he had served as chief investment officer from 1997 until his retirement. He joined the Trust in 1993 and served as president from 1999 to 2001 and vice chairman from 2001 to 2004. Mr. Lyons is a member of the boards of Equinix, Inc., a global data center operator, and Essex Property Trust, Inc., a real estate investment trust investing in apartment communities. Mr. Lyons previously served as chairman of the board of BRE Properties, Inc.   Other relevant qualifications. Mr. Lyons joined the Trust when King & Lyons, an industrial real estate management and development company, was acquired by the Trust in 1993. Mr. Lyons had been the managing general partner in that firm since its inception in 1979 and was one of its principals at the time of the acquisition. Mr. Lyons holds a Master in Business Administration from Stanford University and a Bachelor of Science in industrial engineering and operations research from the University of California at Berkeley.

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		George L. Fotiades   Director since June 2011 (prior to the Merger served as a trustee of the Trust from December 2001 to June 2011)   u     Board Committees: Compensation (Chair)   u     Other public directorships: AptarGroup, Inc. and Cantel Medical Corp.   Mr. Fotiades, 62, has been a partner at Diamond Castle Holdings, a private equity investment firm, since April 2007. Mr. Fotiades was chairman of Catalent Pharma Solutions, Inc., a provider of advanced technologies for pharmaceutical, biotechnology, and consumer health companies, from June 2007 to February 2010. Mr. Fotiades is a member of the board of AptarGroup, Inc., a global dispensing systems company, and is vice chairman of the board of Cantel Medical Corp., a provider of infection prevention and control products. He previously served on the board of Alberto-Culver Company, a consumer products company specializing in hair and skin care products.   Other relevant qualifications. Mr. Fotiades was previously the president and chief operating officer of Cardinal Health, Inc. and also served as president and chief executive officer of Cardinal’s Pharmaceutical Technologies and Services segment. Mr. Fotiades also served as president of Warner-Lambert’s consumer healthcare business, as well as in other senior positions at Bristol-Myers Squibb, Wyeth, and Procter & Gamble. Mr. Fotiades holds a Master of Management from The Kellogg School of Management at Northwestern University and a Bachelor of Arts from Amherst College.
		Christine N. Garvey   Director since June 2011 (prior to the Merger served as a trustee of the Trust from September 2005 to June 2011)   u     Board Committees: Audit, Governance   u     Other public directorships: HCP, Inc., Toll Brothers, Inc., and MUFG Americas Holding Corporation   Ms. Garvey, 70, retired from Deutsche Bank AG, a global investment bank, in May 2004, where she served as global head of corporate real estate services at Deutsche Bank AG London from May 2001 until her retirement. She was a consultant to Deutsche Bank AG from 2004 to 2006. Ms. Garvey is a member of the boards of HCP, Inc., a real estate investment trust investing in health care real estate, Toll Brothers, Inc., a luxury home builder, and MUFG Americas Holding Corporation, whose principal subsidiary is MUFG Union Bank, N.A. Ms. Garvey was previously a member of the board of MPG Office Trust, Inc., a real estate investment trust investing in office properties.   Other relevant qualifications. Ms. Garvey was previously vice president, worldwide real estate and workplace resources for Cisco Systems, Inc. and also held several positions with Bank of America, including group executive vice president and head of national commercial real estate services. Ms. Garvey was a member of the board of Catellus Development Corporation prior to its merger with the Trust in 2005 and was also on the board of Hilton Hotels Corporation, a global hospitality company. Ms. Garvey holds a Juris Doctor degree from Suffolk University Law School and a Bachelor of Arts, magna cum laude, from Immaculate Heart College in Los Angeles.

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		Lydia H. Kennard   Director since August 2004   u     Board Committees: Governance (Chair)   u     Other public directorships: Freeport-McMoRan Copper & Gold Inc.   Ms. Kennard, 61, is the founder and chief executive officer of KDG Construction Consulting, a provider of project and construction management services, a principal of Airport Property Ventures, LLC, an aviation focused real estate operating and development company, and a principal with 3801-3825 N. Mission Rd, LA, LLC, a single-purpose real estate entity. Ms. Kennard is a member of the board of Freeport-McMoRan Copper & Gold Inc., a natural resource company. Ms. Kennard was previously a member of the board of URS Corporation, a provider of engineering, construction, and technical services, and Intermec, Inc., an automated identification and data collection company.   Other relevant qualifications. Ms. Kennard served as executive director of Los Angeles World Airports, a system of airports comprising Los Angeles International, Palmdale Regional, and Van Nuys General Aviation Airports from 1999 to 2003 and again from 2005 to 2007. From 1994 to 1999, she served as the system’s deputy executive for design and construction. She has also previously served on the board of Indymac Bancorp, Inc., a thrift/mortgage bank holding company. Ms. Kennard holds a Juris Doctor degree from Harvard University, a Master’s degree in city planning from Massachusetts Institute of Technology, and a Bachelor of Science in urban planning and management from Stanford University.
		J. Michael Losh   Director since January 2003   u     Board Committees: Audit (Chair)   u     Other public directorships: AON Corporation, Masco Corporation, and H.B. Fuller Company   Mr. Losh, 69, was interim chief financial officer of Cardinal Health, Inc., a health care products and services company, from July 2004 to May 2005 and served on its board from 1996 until September 2009. Mr. Losh is a member of the boards of AON Corporation, a global provider of risk management services, insurance and re-insurance, and human resource consulting and outsourcing, Masco Corporation, a home improvement and building products company, and H.B. Fuller Company, a global formulator, manufacturer, and marketer of chemical products. Mr. Losh previously served on the boards of TRW Automotive Holdings Inc., a global automotive supply company and CareFusion Corporation, a global medical technology company.   Other relevant qualifications. Mr. Losh spent 36 years with General Motors Corporation, an automobile manufacturer, most recently as executive vice president and chief financial officer from July 1994 to August 2000 and as chairman of GMAC, General Motors’ financial services group, from July 1994 to April 1999. Mr. Losh holds a Master in Business Administration from Harvard University and a Bachelor of Science in mechanical engineering from Kettering University.

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		David P. O’Connor   Director since January 2015   u     Board Committees: Compensation   u     Other public directorships: Regency Centers, Inc. and Paramount Group, Inc.   Mr. O’Connor, 51, is a private investor and managing partner of High Rise Capital Partners, LLC, a real estate investment firm. He was the co-founder and senior managing partner of High Rise Capital Management LP, a real estate securities hedge fund manager that operated from 2001 to 2011. Mr. O’Connor is a member of the boards of Regency Centers, Inc., a publicly traded real estate investment trust specializing in shopping centers, and Paramount Group, Inc., a publicly traded real estate investment and management company specializing in office buildings. He previously served on the board of Songbird Estates plc, the former majority owner of Canary Wharf in London, UK.   Other relevant qualifications. Mr. O’Connor was previously a principal, co-portfolio manager, and investment committee member of European Investors, Inc., a large dedicated real estate investment trust investor, from 1994 to 2000. Mr. O’Connor received a Master of Science in real estate from New York University and holds a Bachelor of Science degree from the Carroll School of Management at Boston College.
		Jeffrey L. Skelton   Director since November 1997   u     Board Committees: Governance, Executive (Chair)   u     Other public directorships: None   Mr. Skelton, 66, retired in 2009 as president and chief executive officer of Symphony Asset Management, a subsidiary of Nuveen Investments, Inc., an investment management firm. After his retirement in 2009 and until 2013, Mr. Skelton was a co-founder and managing partner of Resultant Capital Partners, an investment management firm.   Other relevant qualifications. Prior to founding Symphony Asset Management in 1994, Mr. Skelton was with Wells Fargo Nikko Investment Advisors from 1984 to 1993, where he served in a variety of capacities, including chief research officer, vice chairman, co-chief investment officer, and chief executive officer of Wells Fargo Nikko Investment Advisors Limited in London. Previously, Mr. Skelton was also an assistant professor of finance at the University of California at Berkeley, Walter A. Haas School of Business. Mr. Skelton holds a Ph.D. in mathematical economics and finance and a Master of Business Administration from the University of Chicago.

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		Carl B. Webb   Director since August 2007   u     Board Committees: Audit   u     Other public directorships: Hilltop Holdings Inc.   Mr. Webb, 66, is currently the co-managing member of Ford Financial Fund II, L.P. a private equity firm focusing on equity investments in financial services, a position he has held since February 2012. In April 2015, Ford Financial Fund II, L.P. purchased a controlling interest in Mechanics Bank, a California-based banking institution, and Mr. Webb has served as chairman of the Mechanics Bank board since that time. From June 2008 until December 2012, Mr. Webb was a senior partner of Ford Management, L.P., a private equity firm that owned substantially all of Pacific Capital Bancorp. Mr. Webb was the chief executive officer and a board member of Pacific Capital Bancorp and chairman and chief executive officer of Pacific Capital Bank, N.A. from August 2010 until December 2012 when these companies were merged with UnionBanCal Corporation. Mr. Webb has also served as a consultant to Hunter’s Glen/Ford, Ltd., a private investment partnership, since November 2002. Additionally, Mr. Webb is a member of the board of Hilltop Holdings Inc., a publicly traded financial services holding company.   Other relevant qualifications. Mr. Webb previously served on the boards of Plum Creek Timber Company, M & F Worldwide Corp., and Triad Financial SM LLC, where he was co-chairman from July 2007 to October 2009 and served as interim president and chief executive officer from August 2005 to June 2007. Since 1983, Mr. Webb held executive positions at banking institutions, including Golden State Bancorp, Inc. and its subsidiary, California Federal Bank, FSB, First Madison Bank, FSB, First Gibraltar Bank, FSB, and First National Bank at Lubbock. Mr. Webb holds a Bachelor of Business Administration from West Texas A&M University and a graduate banking degree from Southwestern Graduate School of Banking at Southern Methodist University.
		William D. Zollars   Director since June 2011 (prior to the Merger served as a trustee of the Trust from December 2001 to May 2010)   u     Board Committees: Governance, Compensation   u     Other public directorships: Cerner Corporation and CIGNA Corporation   Mr. Zollars, 68, retired from YRC Worldwide, Inc., a global transportation service provider, in July 2011 where he served as chairman, president, and chief executive officer from 1999 until his retirement. He was president of Yellow Transportation, Inc. from 1996 to 1999. Mr. Zollars is a member of the boards of Cerner Corporation, a supplier of healthcare information technology solutions, healthcare devices, and related services, and CIGNA Corporation, a global health service organization.   Other relevant qualifications. Mr. Zollars was previously a senior vice president of Ryder Integrated Logistics, a division of Ryder System, Inc. and he spent 24 years in various executive positions, including eight years in international locations, at Eastman Kodak. Mr. Zollars holds a Bachelor of Arts in economics from the University of Minnesota.

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Director Independence

We require that a majority of the Board be independent in accordance with NYSE rules. To determine whether a director is independent, the Board must affirmatively determine that there is no direct or indirect material relationship between the company and the director.

90% of the Board is independent. The Board has determined that all of our directors, other than our chairman, Mr. Moghadam, are independent. The Board reached this determination after considering all relevant facts and circumstances, reviewing director questionnaires and considering transactions and relationships, if any, between us, our affiliates, our executive officers and their affiliates, and each of the directors, members of each director’s immediate family, and each director’s affiliates.

Audit, Compensation, and Governance Committees are 100% independent. The Board has also determined that all members of the Audit, Compensation, and Governance Committees of the Board are independent in accordance with NYSE and Securities and Exchange Commission (“SEC”) rules.

Board Leadership Structure

Our governance guidelines do not specify a leadership structure for the Board, allowing the Board the flexibility to choose the best option for the company as circumstances warrant. The Board believes that strong independent leadership ensures effective oversight over the company. Such independent oversight is maintained through:

All of our independent directors have the ability to provide input for meeting agendas and are encouraged to raise topics for discussion by the Board. In addition, the Board and each Board committee has complete and open access to any member of management and the authority to retain independent legal, financial and other advisors as they deem appropriate without consulting or obtaining the approval of any member of management. The Board also holds regularly scheduled executive sessions of only independent directors in order to promote free and open discussion among the independent directors.

Chairman and CEO assessment

Our chairman and CEO and our lead independent director act together in a system of checks and balances, providing both strong oversight and operational insight. Our CEO, Mr. Moghadam, serves as chairman of the Board. The lead independent director role is focused on ensuring independent oversight of the company. Mr. Moghadam’s roles as both CEO and chairman enable him to act as a bridge between management and the Board, ensuring that the Board understands the business when making its decisions.

Mr. Moghadam has the breadth of experience to execute our unique business plan and provide special insight to the Board. Very few have experience running a public company with extensive global operations and substantial strategic capital and development businesses. Mr. Moghadam co-founded the company and has served on the Board since the company’s initial public offering in November 1997. As one of our founders, Mr. Moghadam has extensive knowledge and expertise in the real estate and REIT industries, as well as history and knowledge of our company.

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Considering all of these factors, the Board believes that a structure that combines the roles of CEO and chairman, along with an independent lead director, independent chairs for each of the Board committees, and independent non-employee directors, provides the best leadership for the company at this time and places the company in a competitive position to provide long-term value to our stockholders.

Lead independent director

If the offices of chairman and CEO are held by the same person, the independent members of the Board will annually elect an independent director to serve in a lead capacity. The lead independent director is generally expected to serve for more than one year. Mr. Lyons has been selected as the lead independent director by our Governance Committee and the independent members of our Board and has served in that capacity for 5 years.

The lead independent director coordinates the activities of the other independent directors, and performs such other duties and responsibilities as the Board may determine.

The specific responsibilities of the lead independent director are currently as follows:

Board Committees

Pursuant to the Maryland General Corporation Law and our bylaws, our business, property, and affairs are managed under the direction of the Board. Members of the Board are kept informed of our business through our executive management team.

The four standing committees of the Board are: Audit, Governance, Compensation, and Executive Committee (the “Executive Committee”). The Board has determined that each member of the Audit, Governance, and Compensation Committees is an independent director in accordance with NYSE rules.

Membership information for our Board committees is presented below. The current membership has been in effect since April 2015, at which time Mr. O’Connor replaced Mr. Webb on the Compensation Committee.

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Each committee has a charter which generally states the purpose of the committee and outlines the committee’s structure and responsibilities. The committees, other than the Executive Committee, must review the adequacy of their charter on an annual basis.

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Other Governance Matters

Board’s role in risk oversight

The Board has the primary responsibility for overseeing risk management of the company, and our management team provides the Board with a regular report highlighting their risk assessments and recommendations. Oversight for certain specific risks falls under the responsibilities of our Board committees.

These committees regularly advise the full Board of their risk oversight activities. In addition, the Audit Committee and our full Board regularly hold discussions with our risk management group and other members of management regarding the risks that may affect the company, including those risks identified by an internal risk measurement tool that management uses to monitor risks associated with our real estate assets, such as levels of occupancy, non-income producing assets, leverage levels, foreign currency exposure, and other factors.

CEO and management succession planning

The Board is responsible for ensuring that we have a high-performing management team in place. The Board, with the assistance of the Compensation Committee, regularly conducts a detailed review of management development and succession planning activities to ensure that top management positions, including the CEO position, can be filled without undue interruption.

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Communications with directors

We appreciate your input. You can communicate with any of the directors, individually or as a group, by writing to them in care of Edward S. Nekritz, Secretary, Prologis, Inc., Pier 1, Bay 1, San Francisco, California 94111. Such communications will be reviewed and forwarded to the appropriate director. Each communication intended for the Board and received by the secretary that is related to the operation of the company and is not otherwise commercial in nature will be forwarded to the specified party following its clearance through normal security procedures. The directors will be advised of any communications that were excluded through normal security procedures and they will be made available to any director who wishes to review them.

Director attendance

The Board held seven meetings in 2015, including telephonic meetings, and all of the directors attended 75% or more of the aggregate number of Board and applicable committee meetings on which he or she served during 2015 (held during the periods they served). Each director standing for election in 2016 is expected to attend the annual meeting of stockholders, either in person or telephonically, absent cause, and eight directors attended the annual meeting last year, in person or telephonically.

Director compensation

Please see “Director Compensation Matters” and the table entitled “Directors Compensation for Fiscal Year 2015.”

Stock ownership guidelines and prohibition on hedging/pledging

Our directors must comply with our stock ownership guidelines which require the director to maintain an ownership level in our common stock equal to five times the annual cash retainer ($500,000 as of December 31, 2015). Shares included as owned by directors for purposes of the guidelines include common stock owned, vested or unvested equity awards (restricted stock, restricted stock units, shares, and share units deferred under the terms of the Director Deferred Fee Plan or the applicable non-qualified deferred compensation plan, deferred share units, and dividend equivalent units) and operating partnership or other partnership units exchangeable or redeemable for common stock. Until such time as the guidelines are met, we will require directors to retain and hold 50% of any net shares of our common stock issued to our directors under our equity compensation plans.

Additionally, our insider trading policy prohibits our directors and employees from hedging the economic risk of ownership of our common stock and from pledging shares of our common stock.

All of our directors are currently in compliance with the stock ownership guidelines and the prohibition on hedging and pledging our common stock.

Independent compensation consultant

The Compensation Committee directly engages an outside compensation consulting firm, Frederic W. Cook & Co., Inc. (“FW Cook”) to assist the committee in assessing our compensation programs for our Board, our CEO and other members of executive management. FW Cook, has been engaged by the committee since June 2011 and reports directly to the Compensation Committee. FW Cook receives no compensation from the company other than for its work in advising the Compensation Committee and maintains no other economic relationships with the company. FW Cook interacts directly with members of our management only on matters under the Compensation Committee’s oversight.

FW Cook conducted a comprehensive competitive review of the compensation program for our executive officers and our non-employee directors in 2015, which was used by the Compensation Committee to assist it in making compensation recommendations to the Board. Our CEO makes separate recommendations to the Compensation Committee concerning the form and amount of the compensation of our executive officers (excluding his own compensation). FW Cook has also assisted the Compensation Committee in evaluating the design of certain outperformance compensation plans implemented in 2012.

During its December 2015 meeting, the Compensation Committee considered the independence of FW Cook in light of the rules regarding compensation committee advisor independence mandated under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The Compensation Committee reviewed factors, facts, and circumstances

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regarding compensation consultant independence, including a letter from FW Cook addressing FW Cook’s and their consulting team’s independent status with respect to the following factors: (i) other services provided to us by FW Cook; (ii) fees we pay to FW Cook as a percentage of their total revenues; (iii) FW Cook’s policies and procedures that are designed to prevent conflicts of interest; (iv) any business or personal relationship between FW Cook or members of their consulting team that serves the Compensation Committee and a member of the Compensation Committee; (v) any shares of our stock owned by FW Cook or members of their consulting team that serves the Compensation Committee; and (vi) any business or personal relationships between our executive officers and FW Cook or members of their consulting team that serves the Compensation Committee. After discussing these factors, facts, and circumstances, the Compensation Committee affirmed the independent status of FW Cook and concluded that there are no conflicts of interest with respect to FW Cook.

Compensation Committee interlocks and insider participation

No member of the Compensation Committee: (i) was, during the year ended December 31, 2015, or had previously been, an officer or employee of the company or (ii) had any material interest in a transaction with the company or a business relationship with, or any indebtedness to, the company. No interlocking relationships existed during the year ended December 31, 2015, between any member of the Board or the Compensation Committee and an executive officer of the company.

Code of Ethics and Business Conduct and Governance Guidelines

The Board has adopted a code of ethics and business conduct that applies to all employees and directors. The Board has formalized policies, procedures, and standards of corporate governance that are reflected in our Governance Guidelines.

Our Code of Ethics and Business Conduct outlines in great detail the key principles of ethical conduct expected of our employees, officers, and directors, including matters related to conflicts of interest, use of company resources, fair dealing, and financial reporting and disclosure. The code establishes formal procedures for reporting illegal or unethical behavior to the company’s internal ethics committee. These procedures permit employees to report any concerns, including concerns about the company’s accounting, internal accounting controls, or auditing matters, on a confidential or anonymous basis if desired. Employees may contact the ethics committee by e-mail, in writing, by web-based report, or by calling a toll-free telephone number. Any significant concerns are reported to the Audit Committee in accordance with the code.

Simultaneous Board service

Our governance guidelines require that, if a director serves on three or more public company boards simultaneously, including our Board, a determination is made by our Board as to whether such simultaneous service impairs the ability of such member to effectively serve the company. Messrs. Fotiades, Losh, Lyons, O’Connor and Zollars and Ms. Garvey currently serve on at least three public company boards, including our Board. In each case, our Board has determined that such simultaneous board service does not impair the Board member’s ability to be an effective member of our Board. None of our directors currently serve on more than four public company boards (including our Board).

Certain relationships and related party transactions

We do not have any related party transactions to report under relevant SEC rules and regulations. According to our Articles of Incorporation, the Board may authorize any agreement or other transaction with any party even though one or more of our directors or officers may be a party to such an agreement or is an officer, director, stockholder, member, or partner of the other party if: (i) the existence of the relationship is disclosed or known to the Board, and the contract or transaction is authorized, approved, or ratified by the affirmative vote of not less than a majority of the disinterested directors, even if they constitute less than a quorum of the Board; (ii) the existence is disclosed to the stockholders entitled to vote, and the contract or transaction is authorized, approved, or ratified by a majority of the votes cast by the stockholders entitled to vote (excluding shares owned by any interested director or officer or the organization in which such person is a director or has a material financial interest); or (iii) the contract or transaction is fair and reasonable to the company.

We recognize that transactions between us and related parties can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations other than the company’s best interests and the best interests of our stockholders. Related parties may include our directors, executives, significant stockholders, and immediate family members and affiliates of such persons. Accordingly, several provisions of our code of ethics and business conduct are

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intended to help us avoid the conflicts and other issues that may arise in transactions between us and related parties, prescribing that:

These provisions of our code of ethics and business conduct may be amended, modified, or waived by the Board or the Governance Committee, subject to the disclosure requirements and other provisions of the rules and regulations of the SEC and the NYSE.

No waivers of our code of ethics and business conduct were granted in 2015.

Although we do not have detailed written procedures concerning the waiver of the application of our code of ethics and business conduct or the review and approval of transactions with directors or their affiliates, our directors would consider all relevant facts and circumstances in considering any such waiver or review and approval.

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CERTAIN INFORMATION WITH RESPECT TO OUR EXECUTIVE OFFICERS

Biographical summaries of the experience of our executive officers as of December 31, 2015, other than Mr. Moghadam, are presented below. Information for Mr. Moghadam is included above under “Board of Directors, Board Committees and Corporate Governance—Election of Directors (Proposal 1).”

Thomas S. Olinger: Chief Financial Officer

Mr. Olinger, 49, has been our chief financial officer since May 2012 and was our chief integration officer from June 2011 to May 2012. Mr. Olinger was the chief financial officer of AMB from March 2007 to June 2011. Prior to joining AMB in February 2007, Mr. Olinger was the vice president and corporate controller at Oracle Corporation, an enterprise software company and provider of computer hardware products and services. Prior to his employment with Oracle, Mr. Olinger was an accountant and partner at Arthur Andersen LLP, where he served as the lead partner on our account from 1999 to 2002. Since January 2011, Mr. Olinger has served as a director of American Assets Trust, a real estate investment trust investing in retail, office, and residential properties. Mr. Olinger holds a Bachelor of Science degree in finance from the Kelley School of Business at Indiana University.

Eugene F. Reilly: CEO, The Americas

Mr. Reilly, 54, has been CEO, the Americas, since the Merger in June 2011 and he served as president, the Americas, as well as a number of other executive positions, at AMB from October 2003 until the Merger in June 2011. Mr. Reilly serves on the technical committee of FIBRA Prologis, a publicly traded Mexican REIT that is sponsored and managed by the company. Prior to joining AMB in October 2003, Mr. Reilly was chief investment officer of Cabot Properties, Inc., a private equity industrial real estate firm of which he was also a founding partner. From August 2009 until December 2015, Mr. Reilly served as a director of Strategic Hotels and Resorts, an owner and asset manager of high-end hotels and resorts. Mr. Reilly holds an A.B. degree in economics from Harvard College.

Edward S. Nekritz: Chief Legal Officer, General Counsel, and Secretary

Mr. Nekritz, 50, has been our chief legal officer, general counsel, and secretary since the Merger in June 2011. Mr. Nekritz was general counsel of the Trust from December 1998 to June 2011, secretary of the Trust from March 1999 to June 2011, and the Trust’s head of global strategic risk management from March 2009 to June 2011. Mr. Nekritz serves on the technical committee of FIBRA Prologis. Prior to joining the Trust in September 1995, Mr. Nekritz was an attorney with Mayer, Brown & Platt (now Mayer Brown LLP). Mr. Nekritz holds a Juris Doctor degree from the University of Chicago Law School and an A.B. degree in government from Harvard College.

Gary E. Anderson: CEO, Europe and Asia

Mr. Anderson, 50 has been our CEO, Europe and Asia, since the Merger in June 2011. Mr. Anderson held various positions with the Trust from August 1994 to June 2011, including head of the Trust’s global operations and fund business from March 2009 to June 2011 and president, Europe and Asia, from November 2006 to March 2009. Prior to joining the Trust, Mr. Anderson held various positions with Security Capital Group Incorporated, a diversified real estate investment company. Mr. Anderson holds a Master of Business Administration in finance and real estate from the Anderson Graduate School of Management at the University of California at Los Angeles and a Bachelor of Arts in marketing from Washington State University.

Michael S. Curless: Chief Investment Officer

Mr. Curless, 52, has been our chief investment officer since the Merger in June 2011. Mr. Curless was chief investment officer of the Trust from September 2010 to June 2011, and he was with the Trust in various capacities from August 1995 through February 2000. Mr. Curless was president and a principal at Lauth, a privately held national construction and development firm, from March 2000 until rejoining the Trust in September 2010. Prior thereto, he was a marketing director with the Trammell Crow Company. Mr. Curless holds a Master of Business Administration in finance and marketing and a Bachelor of Science in finance from the Kelley School of Business at Indiana University.

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EXECUTIVE COMPENSATION MATTERS

COMPENSATION DISCUSSION AND ANALYSIS

Summary of Compensation Discussion and Analysis

The Compensation Committee is committed to provide compensation opportunities that drive our business plan to create long-term value for our stockholders. It is of fundamental importance to us that our compensation program aligns the interests of our named executive officers (the “NEOs”) with the interests of our stockholders.

Prologis NEOs

Hamid Moghadam, Chief Executive Officer

Thomas Olinger, Chief Financial Officer

Eugene Reilly, CEO, the Americas

Edward Nekritz, Chief Legal Officer and General Counsel

Gary Anderson, CEO, Europe and Asia

Michael Curless, Chief Investment Officer

Key points of Compensation Discussion and Analysis

All company operational information in CD&A is as of December 31, 2015, unless otherwise noted. See Appendix A for definitions and discussion of non-GAAP measurements and reconciliations to GAAP measures and for additional detail regarding definitions of terms as generally explained in CD&A.

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Prologis Business Model and Strategic Priorities

Our business is unique in the REIT industry

Our global operations and strategic capital and development businesses make us unique. The formidable combination of our global reach, strategic capital business and development platform places us in a unique category that sets us apart from other REITs. Our global operations in 20 countries, our $23.1 billion strategic capital business and our $3.8 billion development program are essential to our business model. These highly integrated components of our business give us the ability to provide high-quality logistics facilities in strategic locations that our customers need globally.

Our global operations and our strategic capital and development businesses function in tandem to provide unparalleled customer service. We provide a level of customer service to our global customers that differentiates us from our competitors. Our focus on customer service as a strategic advantage shapes our business model. We are global because our customers are global. To operate on a global level, we need a strategic capital business that gives us access to third party capital in global regions, which allows us to grow and enhance our returns while mitigating currency risk. Our development business provides the modern logistics space that our customers need in strategic global locations.

Prologis Business Model⁽¹⁾

Our global portfolio serves the needs of our customers around the world

We are the world leader in logistics real estate, with approximately 669 million square feet in assets under management across 20 countries. Logistics real estate fulfills a specific role in the ever-evolving global supply chain. We provide high-quality logistics real estate that facilitates the seamless flow of goods across a variety of sectors and interests.

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Logistics real estate is much more than industrial buildings—it is a crucial component of our customers’ individual business strategies. We strive to give our valued customers unparalleled service and uncompromised quality. We work closely with our customers to provide them with the best space for their specific logistics needs so they, in turn, can realize the efficiencies of moving products in a timely manner.

We are global because our customers are global. Our customers, such as FedEx, DHL, and Amazon, are multinational companies with logistics needs that span four continents. 18 out of our top 20 customers lease from us in multiple countries. Our customers need to move products efficiently to serve their customers’ needs. Our strategy is to locate our high-quality logistics facilities in and near global metropolitan areas through which companies can move goods faster.

Our scale and reach allow us to provide consistent quality and customer service globally. Real estate companies tend to be focused on one market. Prologis is different. We fill a niche as a real estate company that truly understands how to do business on a global level. Our understanding of our customers’ global strategies and logistics requirements allow us to anticipate our customers’ distribution center needs. We provide unparalleled customer service that we believe sets us apart from the typical real estate company. We employ a combination of local teams with regional expertise and global customer service teams specifically devoted to meeting our customers’ needs for logistics properties across international regions.

Our strategic capital business helps us serve our global customers while giving us access to third party capital

Our strategic capital business gives us scale in global metropolitan areas where our customers need space. Our strategic capital business comprises 39.5% of our assets under management (“AUM”), and 62.4% of the AUM of our strategic capital business is located outside of the U.S.

Our strategic capital business gives us access to third party capital. Our strategic capital business allows us to diversify our sources of capital so we have a broader range of choices to fund our operations. We do not have to rely only on the public markets or debt financing.

Our strategic capital business generates a higher return on equity and mitigates currency risk. Recurring management fees and incentive fees from strategic capital ventures give our stockholders a higher return on equity than assets held directly on our balance sheet. Placing assets in ventures that function in the local currency enables us to manage our foreign currency exposure largely using a natural hedging approach. These vehicles source their capital primarily in the local currency and borrow in the local currency, which mitigates our foreign currency exposure.

Our development business creates significant value while meeting the evolving needs of our customers

Our development business creates significant value while serving our customers. We use our bank of land located in strategic global locations to build the logistics facilities that our global customers need. Our development strategy monetizes land through sales to our customers and contributions to our strategic capital ventures. In 2015, we completed development projects totaling $1.8 billion, creating approximately $586 million in value over our total expected investment in the properties.

Our development business capitalizes on the changing needs of our customers and refreshes our portfolio. The growth of e-commerce makes the right facility in the right location even more critical to many of our customers. We are seeing our customers consolidate from older buildings into larger, modern facilities in more strategic locations. Through our development platform, we provide the modern facilities our customers need while refreshing our portfolio and keeping us at the forefront of the supply chain modernization trend.

In response to increased customer demand, we build many of our properties to sustainable certification standards such as LEED, BREEAM, and CASBEE. We have installed solar panels generating rooftop rental income with an aggregate of over 141 MW of solar capacity and energy efficient lighting in approximately 71% of our buildings across our global portfolio.

We are proud of our innovations in sustainable building and have been recognized for our cutting-edge approach. Recently, we were named one of the Global 100 Most Sustainable Corporations in the World by Corporate Knights for the eighth consecutive year.

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Our development innovations have value across global markets to our customers. In space-constrained, earthquake-prone areas of Japan, for example, we pioneered the development of multi-story logistics facilities equipped with seismic resistance technology. Our customers have shown interest in replicating this innovation in other global markets with similar characteristics.

Achieving our strategic priorities drives long-term value

Our business plan is working

Our 2011 merger made us the logistics REIT of choice. The 2011 merger between AMB and the Trust brought together two complementary businesses with high-quality assets; the result was a strengthening of our presence in all major global markets allowing us to scale our business in an increasingly cost effective manner.

We have strengthened our foundation to create long-term value for our stockholders. We are positioning ourselves to be ready for opportunities throughout the economic cycle. Since the 2011 merger, we have improved our credit ratings by one to two levels and have significantly improved the strength of our balance sheet positioning the company for an “A” credit rating. We have also created a currency risk management program that has significantly lowered the level of our foreign currency exposure across our portfolio.

Over the last four years, we have accomplished our strategic priorities. Our growth is driving long-term value to our stockholders by creating a high-quality and sustainable investment, as shown in the graphs below.

Strategic priorities and long-term performance

The Compensation Committee reviews management’s performance against key company performance measures, such as Core FFO, average occupancy, rent change on rollover, same-store NOI growth, development stabilizations and margins, our debt to adjusted EBITDA ratio and G&A/AUM as discussed below. Some of these performance measures are non-GAAP measures and are further described in Appendix A. See “Annual Bonus for the 2015 Performance Year” below for more information about our key performance measures and targets.

We are capitalizing on the global rent recovery

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We are utilizing our land bank and development expertise to drive value creation

We are targeting an “A” credit rating

We use our existing scale to drive bottom-line growth

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Achievement of our strategic priorities is driving long-term growth

2015 Compensation Highlights

Our 2015 compensation demonstrates that our compensation program works. The annual compensation for the 2015 performance year appropriately reflected our operational performance for 2015, as well as our relative TSR.

We changed our LTI equity awards to be 100% formulaic—resulting in a payout of 50% of target. For the performance year 2015, our LTI equity awards were determined completely by formula. While there was no formula in place in prior years, prior awards were similar to what they would have been had they been calculated using the 2015 formula. As discussed above, in accordance with the formula for the LTI equity awards, our NEOs earned only 50% of target for their LTI equity awards for the 2015 performance year.

Our long-term incentives as a whole are working. Our annual LTI equity awards and outperformance compensation plans work together as long-term incentives. Target annual LTI equity awards are generally set at levels such that total core compensation is in the median range of our comparison group. Our outperformance compensation plans pay out only when high reach formulaic performance hurdles are achieved. While our operational performance was strong, our 3-year TSR performance resulted in an overall long-term incentive payout of 50% of target of our annual LTI equity awards and no payout under our outperformance plans.

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Summary of Compensation Awards for 2015 Performance Year

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Target Core Compensation Opportunities vs. Core Compensation Paid for 2015 Performance Year

Core Compensation Paid for the 2014 Performance Year vs. 2015 Performance Year

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Analysis of CEO compensation

CEO target core compensation vs. core compensation paid for 2015 performance year

CEO core compensation was 30% less than target. As our core compensation program is heavily weighted to align with relative TSR performance, total core compensation paid to our CEO for the 2015 performance year was 30% less than target.

2015 CEO Target Total Core Compensation vs. 2015 Actual Core Compensation Paid*

CEO core compensation alignment with TSR

CEO compensation correlates with relative 3-year TSR. The following graph illustrates the directional relationship between CEO core compensation and company TSR. As a result of lower relative annualized 3-year TSR, our CEO’s core compensation decreased by 25% from the 2014 performance year to the 2015 performance year.

Correlation of CEO Core Compensation and 3-year TSR

CEO Summary Compensation Table reported vs. paid compensation

Our Summary Compensation Table includes significant compensation amounts that were never paid. Summary Compensation Table rules require POP awards to be reported in the table at their grant date fair value whether or not these awards are ever earned. As we discuss later, POP awards are extremely difficult to earn as the hurdles are set at high reach levels. POP has not paid out in its first two performance cycles and is tracking at a zero payout for the next two cycles.

If the POP awards are not earned, they are forfeited and not paid. However, equity awards are required to be reported in the Summary Compensation Table even if they are subsequently forfeited. For example, POP awards for the 2013-2015 performance period were not earned and were forfeited in their entirety but the Summary Compensation Table must still include the $3.6 million forfeited award as 2013 compensation for our CEO.

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The following graphic illustrates the impact of POP awards (that were not earned, or are not yet earned) on the total compensation of our CEO in the Summary Compensation Table for the past three years:

CEO Summary Compensation Table Reported vs. Paid Compensation ($M)⁽¹⁾

Impact of Non-binding Advisory Say-on-Pay Vote related to Executive Compensation for 2014 and Stockholder Outreach

At our 2015 annual meeting, our stockholders approved our 2014 executive compensation, with 78.5% of the voting interests present in favor of our proposal. Although we received majority support, we were disappointed that the support level was not higher and, therefore, expanded our normal stockholder outreach process to better understand our stockholders’ concerns.

Outreach by our directors to 65% of our stockholder base. In fall 2015, we launched an extensive outreach program covering over 25 of our top stockholders, or approximately 65% of our stockholder base by ownership percentage. During this outreach process, the chair of the Compensation Committee and our lead independent director met with our stockholders to discuss our compensation and corporate governance philosophies.

Our stockholders appreciated hearing about the uniqueness of our business and how our compensation program supports our business plan. They also appreciated the changes we made to our annual LTI equity awards to make the process 100% formulaic and transparent.

Our stockholders suggested that we make CD&A more reader-friendly and include further discussion of the company’s business and the Compensation Committee’s thought process in designing the program. They also suggested including further analysis of whether the program is working as intended. In response, we revamped CD&A and enhanced disclosure to address these requests.

We also discussed how compensation should correlate with stockholder value. In analyzing our program, we believe our 2015 compensation aligns with our 2015 performance. Our overall core compensation for the 2015 performance year was below target and lower than core compensation for the 2014 performance year, reflecting lower relative TSR performance in 2015. Although our operational performance was strong, our program is heavily weighted to align with relative TSR performance, which resulted in a decrease in compensation from 2014 despite our exceptional operating performance.

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Discussion of Compensation Comparison Group

The Compensation Committee believes we should compensate our NEOs competitively but reasonably. The Compensation Committee sets a competitive reference point for the elements of target total core compensation (annual base salary, annual bonus and annual LTI equity awards) at the market median of a comparison group of large-cap REITs. Target compensation is positioned within a reasonable range of the competitive reference point based on the NEO’s level of experience, past performance, and anticipated future contribution.

In April 2015, FW Cook, our independent compensation consultant, conducted its annual competitive analysis of target compensation levels for our NEOs on behalf of the Compensation Committee. The comparison group used by FW Cook comprised 10 large-cap REITs that are generally the largest internally-managed U.S. publicly traded equity REITs by market capitalization.

No REITs represent a true comparison to Prologis. FW Cook used size, scope, and breadth of operations to determine which companies would accurately gauge competitive pay. Although the following REITs were among the closest in comparison to us, the combination of our global reach, significant development platform, and size and scope of our strategic capital business put us in a unique category. Such companies may individually demonstrate strength in one or two of these categories, but not in all. The comparison group did not include any industrial REITs because they were too small relative to us.

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Assets Under Management of our Compensation Comparison Group

AUM is the most appropriate measure for assessing size and scope of comparison group REITs. Our consolidated revenue understates the revenue that we generate from all assets we manage by 45%. Assets under management captures an additional $27.1 billion in assets that we manage but which are not included in our consolidated balance sheet. The scale below shows that our AUM is at the 90th percentile of the AUM of companies in our compensation comparison group.

Assets Under Management of our Compensation Comparison Group*

Compensation Elements and Decisions

Compensation components achieve long-term value through incentives to achieve strong TSR and operating performance. Our core compensation program is structured into three main components: annual base salary, annual bonus, and LTI awards (annual LTI equity awards and outperformance incentives). Each component plays a specific role in supporting our business model and strategic priorities to achieve long-term value creation.

Even if no other REITs directly compare to us, target core compensation is aimed at market median of our comparison group. Target compensation from core compensation elements (annual base salary, annual bonus, and annual LTI equity awards) is targeted at a reasonable range of the market median.

Together, annual LTI equity and outperformance opportunities result in aggregate long-term compensation that is aligned with company performance levels. The annual LTI equity formula was set at market levels to ensure that market levels of overall target core compensation are paid. Outperformance opportunities are set at high reach hurdles to drive exceptional performance beyond market levels. If we perform at market levels, our NEOs will receive market levels of LTI compensation. However, if we outperform, then they will receive total LTI compensation that reflects the level of outperformance.

The outperformance compensation plans only pay out in the case of extraordinary performance. The outperformance compensation plans are additional long-term incentive opportunities commensurate with the size and scope of our business, but they only go into effect when outperformance levels are reached. For further detail, please see “Outperformance compensation plans.”

Our NEOs are especially qualified to execute our unique business plan. Relatively few individuals have extensive experience with managing a publicly-traded REIT that involves a substantial scope of global operations, as well as development and strategic capital businesses. Our NEOs have honed their expertise at our company. Our CEO’s tenure is 33 years and the NEO average tenure is 18 years. To put it into perspective, each of our regional NEOs manages an average of $25.8 billion in assets, more than three times larger than the entire platform of the next largest U.S. industrial public REIT in AUM.

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Components of Compensation Program

Annual base salary for 2015 performance year

Based on FW Cook’s competitive analysis discussed above, the Compensation Committee adjusted annual base salaries of the NEOs in 2015 to fall within a reasonable range of market median based on the NEO’s level of experience, past performance and anticipated future contribution. See above “Discussion of Compensation Comparison Group” and “2015 Compensation Highlights.”

Annual bonus for 2015 performance year

The annual bonus rewards successful execution of our strategic priorities. The Compensation Committee establishes annual bonus metrics based on a scorecard of our performance against our strategic priorities, which are weighted according to their significance. This practice aligns bonuses with the successful execution of our business plan.

Annual targets are rigorous and they support strategic priorities designed to create long-term value. Annual objectives are set to support our business plan, which is to create long-term value versus short-term growth. In some years, certain bonus metrics will demonstrate growth year-over-year. In other years, they will not, reflecting deliberate decisions.

To illustrate, the opportunity to acquire assets from KTR Capital Partners (“KTR”) required us to deliberately delay our goal of obtaining an “A” credit rating. The strength of our balance sheet gave us the ability to purchase a large portfolio of high-quality assets from KTR in 2015. We decided to fund this acquisition with the proceeds from the sale of non-strategic assets. As we were executing these sales, we incurred short-term debt to fund the acquisition, which temporarily increased our debt profile and delayed our efforts to obtain an “A” rating.

Intentionally delaying our goal of becoming an “A” credit-rated company in 2015 and establishing the same goal in 2016 does not mean we did not set a rigorous target for 2016. Rather, it shows that our priorities changed in the context of our overall business plan, which has positioned us to seize opportunities like the KTR acquisition when they arise.

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Annual Bonus Opportunity Scorecard

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Annual Bonus determinations for 2015 performance year

Annual bonuses are based on corporate and individual scores tied to bonus metrics. The Compensation Committee determined the corporate score based on an assessment of corporate and individual performance against the bonus metrics tied to our strategic priorities as outlined in the scorecard above. Corporate performance determines 80% of our CEO’s bonus and 60% of the bonus for our other NEOs. To assess performance against a dynamic operating environment, the Compensation Committee considered the many factors that played a role in the performance of the NEOs and, as such, exercised its judgment to determine the level of overall corporate performance against the bonus metrics and where an individual’s performance stood in relation to corporate performance.

Individual NEO performance scores

Individual performance determines 20% of the bonus for our CEO and 40% of the bonus for each other NEO. All NEOs received an “above target” individual score for the 2015 performance year. All NEOs were assessed, to the extent applicable, with respect to their individual contributions to the completion of our large strategic transactions, such as the highly accretive KTR acquisition and our $809 million acquisition of assets from Morris Realty Associates LLC. Other key highlights of each NEO’s individual performance for 2015 considered by the Compensation Committee were as follows:

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2015 Annual Bonus Decisions

Our bonus exchange program—further aligns NEOs with stockholders

Under our bonus exchange program, certain executives, including all NEOs, may elect to receive all or a portion of their cash bonus in the form of restricted stock units (the “RSUs”) of the company or LTIP units of Prologis, L.P. (the “LTIP Units”). Equity awards granted as a result of the bonus exchange are valued at 125% of cash bonus exchanged. Bonus exchange awards have a 3-year vesting period (40% after first year, 40% after second year, and 20% after third year). Our NEOs elected to receive all of their 2015 cash bonus in LTIP Units. For further detail regarding LTIP Units, please see the section below entitled “LTIP Units.”

Annual Bonus Exchange Equity Value for 2015 Performance Year

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LTI equity awards for 2015 performance year (granted in 2016)

LTI equity awards are 100% formulaic. As we discussed earlier, we heard from our stockholders that a formulaic process for determining LTI equity awards was optimal for transparency. In 2015, we restructured our LTI equity awards to be 100% formulaic and eliminated discretion from the process.

Multiple benchmarks required for more comprehensive assessment of company performance given our unique business model. We use two industrial REIT indices (one domestic and one global) to compare against companies operating in our same asset class. However, the companies in these indices are much smaller than we are. Therefore, we also use a large-cap REIT index, to compare our performance against similarly-sized companies. The Compensation Committee selected these indices because they are a balanced representation of investment alternatives for our stockholders (i.e., other industrial REITs and other large-cap REITs.) As previously discussed, even among the large-cap REITs, none has the same overall global reach, substantial development business and size and scope of strategic capital business.

Very few industrial REITs and even fewer global industrial REITs exist. Our industrial REIT indices include only seven companies in total. Weightings between the domestic and global industrial REIT indices generally reflect the relative breakdown between our global and domestic assets under management.

Cohen & Steers index as an additional benchmark mitigates volatility of small index of industrial REITs. The Cohen & Steers index includes approximately 30 strongly-managed and well-capitalized REITs, mitigating volatility of our smaller industrial REIT indices. The Compensation Committee believed it was important to our stockholders to use a measure of our performance against other REITs in our general REIT category. To compensate for the limitations of the industrial REIT index and stabilize the overall benchmark, the Compensation Committee included the Cohen & Steers index and weighted it at 50%. The larger Cohen & Steers index mitigates any aberrations and wide variances and is a better reflection of the steady performance of large-cap companies.

LTI Equity Award Indices

Formula payout scale aligned with market practices. Prior to 2015, the Compensation Committee used the same indices to evaluate our performance and determine annual LTI equity award grants. However, no formula applied. Beginning with the 2015 performance year, the Compensation Committee used a formula to determine annual LTI equity awards, as outlined below. The Compensation Committee intended for 50% of the LTI equity awards to be tied directly to performance and the other 50% to promote retention and alignment with our stockholders. This mix between performance and service vesting LTI awards is consistent with the average mix of our comparison group.

This formula substantiates the Compensation Committee’s previous approach to LTI equity awards. The Compensation Committee “back-tested” this formula against prior performance years’ results and compared the result to actual LTI equity grant values each year. This analysis confirmed that prior years’ grant values were generally consistent with what the formula would have generated.

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Long-Term Equity Incentives=100% Formulaic Approach

50% of target annual equity grant value is based on the linear payout scale set forth below (with interpolation between levels). The other 50% of annual LTI equity grant value comprises service vesting equity. TSR assessed in payout scale is 3-year annualized TSR.

2015 Company Performance against Industrial REIT and Cohen & Steers Indices

Company 3-year annualized TSR at December 31, 2015 was 0.5% below the floor of equity payout formula.

The global industrial REIT index has limitations as a performance measure due to differences in currency rates. While the 3-year TSR of the global industrial REIT index was greater than ours, these measurements are calculated without the impact of changes in foreign exchange rates. From the perspective of a US dollar functional investor making an investment decision between us and the non-US dollar functional companies in our global industrial REIT index, the 3-year TSR of the global industrial REITs should be discounted for the strengthening of the US dollar over the last three years (as a US dollar investment in such non-USD functional companies would be discounted).

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LTI Equity Awards Granted in 2016 for 2015 Performance Year

Awarded at 50% of target: NEOs only received their 50% service vesting equity grants and received zero payout under the payout scale above.

Demonstrates that compensation program is working: Bulk of target core compensation, represented by the LTI equity awards, appropriately aligns with TSR performance.

LTI equity awards for the 2014 performance year (granted in 2015)

LTI equity awards granted in 2015 are part of compensation for performance year 2014. Although the Summary Compensation Table presentation requires disclosure of LTI equity awards granted in 2015 to be included in aggregate compensation for 2015, the Compensation Committee considers these awards to be compensation for the 2014 performance year. As such, LTI equity awards granted in 2015 are part of the Compensation Committee’s assessment of compensation for the 2014 performance year, not the 2015 performance year.

2014 LTI equity awards are based on a look-back of the 3-year TSR relative to industrial and general REIT indices. The Compensation Committee used the same indices as discussed above to evaluate our 3-year TSR performance: the Cohen & Steers Realty Majors Index and domestic/international industrial REIT group indices.

We awarded LTI equity at 90% of target—this reduced award reflects underperformance when measured against industrial REIT indices. For our 3-year TSR as of December 31, 2014, we performed better than the Cohen & Steers index but below the industrial REIT indices. Based on this relative performance, the Compensation Committee awarded each NEO 90% of their LTI target. Although no formula applied, the result would have been similar had the formula applied to the 2015 performance year awards been in effect for the 2014 performance year awards.

2014 Company 3-year TSR Performance against Industrial REIT and Cohen & Steers Indices

* Annualized 3-year TSR performance for three years ended December 31, 2014

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LTI Equity Awards Granted in 2015 for 2014 Performance Year

Outperformance compensation plans

The outperformance compensation plans are working: no awards were issued under the plans in 2015.

Outperformance compensation opportunities complete our pay package. Outperformance compensation and annual LTI awards are long-term incentives that play specific roles in our program. Annual LTI equity is part of core compensation that is aimed at the market median to ensure competitive compensation opportunities. Outperformance compensation plans complete the total pay opportunity for our NEOs when exceptional levels of performance are reached.

Our outperformance compensation plans provide incentives to teams beyond our NEOs. The Compensation Committee reviewed similar REIT outperformance compensation plans at the inception of the plans. They found that our plans include more participants (more than 100 participants in each plan on average) and allocated a smaller portion of the aggregate award pool to the NEOs than in similar plans of the other REITs.

Our POP hurdles are more challenging than in outperformance plans of other REITs: FW Cook analyzed the outperformance plans of other REITs using relative TSR. FW Cook determined that most plans they reviewed paid out starting at index performance or the median return of the applicable peer group, compared to our hurdle of 100 basis points above the index.

POP

POP uses appropriate performance measures to deliver long-term value. We measure our performance using metrics that demonstrate the company’s delivery of long-term value. As such, we created POP to drive long-term relative TSR outperformance.

POP plan hurdles are high reach and formulaic. The Compensation Committee intended that the performance hurdles under POP would be so difficult to exceed that it is unlikely to pay out regularly. The POP compensation pool only funds if and to the extent our 3-year, compound annualized TSR exceeds the MSCI US REIT Index TSR by 100 basis points. Monte Carlo simulations show no payout in 65% of the scenarios modeled. In fact, POP awards have not been paid out for the first two performance cycles and is tracking at a zero payout for the next two cycles.

Our POP plan award payouts are a fraction of the value created for our investors. POP awards are a small percentage of the overall value to stockholders. If we simply achieve the threshold, no POP compensation pool will fund. If we exceed the threshold, only 3% of our outperformance (subject to a cap) funds the POP compensation pool.

Additional absolute TSR performance hurdle and award cap are safety measures. POP is designed such that the awards can be earned but cannot be paid at a time when our absolute TSR is negative. If a pool funds because our relative TSR outperforms the index and exceeds the hurdle, but our absolute 3-year TSR is not positive, then the awards will be earned but not paid unless and until absolute TSR becomes positive. The earned award will expire seven years after the end of the performance period, if absolute TSR does not become positive within that period.

The POP compensation pool is capped at the maximum of the greater of $75 million and 0.5% of our equity market capitalization at the start of a performance period.

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