Long-Term Compensation

6 Months Ended

Jun. 30, 2014

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Long-Term Compensation

9. Long-Term Compensation

At June 30, 2014, Prologis had stock options and full value awards (restricted stock, performance share awards and restricted stock units (“RSUs”)) under its incentive plans.

Summary of Activity

The activity for the six months ended June 30, 2014, with respect to our RSU and performance share awards, was as follows (number of shares in thousands):

	Number of Shares			Weighted Average Grant-Date Fair Value		Number of Shares Vested
Balance at December 31, 2013		2,266
Granted		1,273
Vested and distributed		(971	)
Forfeited		(29	)
Balance at June 30, 2014		2,539		$	39.19		106

All awards granted in the period were in the form of RSUs which generally vest over three years.

The activity for the six months ended June 30, 2014, with respect to our stock options, was as follows (number of options in thousands):

	Options Outstanding
	Number of Options			Weighted Average Exercise Price		Options Exercisable
Balance at December 31, 2013		6,253
Exercised		(357	)
Forfeited / Expired		(8	)
Balance at June 30, 2014		5,888		$	36.15		5,885

Outperformance Plan

We grant awards in the form of points under our Outperformance Plan (“OPP”) corresponding to three-year performance periods. As of June 30, 2014, all awards were equity classified. At the end of the applicable performance period, if the performance criteria are met, the participants’ points will be paid in the form of common stock of the REIT or units of the Operating Partnership. The fair value of the awards are measured as of the grant date and amortized over the performance period.

We granted points on February 13, 2014, with a fair value of $23.1 million as of the date of the grant using a Monte Carlo valuation model that assumed a risk free interest rate of 0.67% and an expected volatility of 46% for Prologis and 30% for the index of selected peer companies. Such points related to a three-year performance period that began on January 1, 2014, and will end on December 31, 2016. We also granted points in 2013 (three-year performance period will end on December 31, 2015) and 2012 (three-year performance period will end on December 31, 2014).

We recognized $6.9 million and $13.9 million of compensation expense related to our outstanding OPP awards during the three and six months ended June 30, 2014, respectively, and $5.2 million and $13.0 million during the three and six months ended June 30, 2013, respectively.