How do I equip my mercenary?

You cannot give regular equipment to a mercenary. They have their own weapons and armor will will upgrade automatically as the same level of their owner. Their spells and abilities will likewise improve. Higher tier mercenaries have better equipment and abilities than lower tier ones.

The Call of the Forsaken expansion added the ability to equip mercenaries. This is special equipment that must be purchased from the Mercenary Merchant in Ethernere Tainted West Karana using Marks of Valor you obtain from doing Heroic Adventures. There will be a new tab on your inventory window labeled "Merc" with slots to equip this special gear. Some of the gear is designed to be upgraded to various levels to correspond to your level (it will have an Upgrade button when you inspect it). If you accidentally upgrade it too far just keep upgrading until it comes around again to where you want it.