UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment No. )
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| | | ☐ | | | | Preliminary Proxy Statement | | |
| | | ☐ | | | | CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2)) | | |
| | | ☑ | | | | Definitive Proxy Statement | | |
| | | ☐ | | | | Definitive Additional Materials | | |
| | | ☐ | | | | Soliciting Material under §.240.14a-12 | | |
Industrial Logistics Properties Trust
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notice of 20192024 Annual Meeting
of Shareholders and Proxy Statement
Monday, June 3, 2019
Thursday, May 30, 2024 at 9:1:30 a.m.p.m., Eastern timeTwo Newton Place, 255 Washington Street, Suite 100, Newton, Massachusetts 02458
Live Webcast Accessible at
https://www.virtualshareholdermeeting.com/ILPT2024
LETTER TO OUR SHAREHOLDERS
FROM OUR
YOUR BOARD OF TRUSTEES
Dear Fellow Shareholders:
Please join us for our
first annual meeting as a public company2024 Annual Meeting of Shareholders, which will be held virtually at 1:30 p.m. on
Monday, June 3, 2019.Thursday, May 30, 2024. The business to be conducted at the meeting is explained in the attached Notice of Meeting and Proxy Statement. We believe furnishing these materials over the internet expedites
shareholders'your receipt of these important materials while
loweringreducing the cost and
reducing the environmental impact of our annual meeting.
Although we are
ILPT ended 2023 with our portfolio of 411 warehouse and distribution properties in 39 states totaling approximately 60 million square feet, including 16.7 million square feet of industrial land and properties in Hawaii, 98.8% occupied. Our portfolio has a young company, please be assuredweighted average remaining lease term of 8.1 years and is anchored by tenants with strong business profiles and well recognized brands that continue to benefit from e-commerce. FedEx is our Board takes seriously our role in the oversightlargest tenant, representing 29.7% of our Company's long term business strategy, which isannualized revenues, followed by Amazon and Home Depot at 6.7% and 2.1% of our annualized revenues, respectively. Our top ten tenants account for nearly half of our total annualized revenues and 77% of our revenues come from investment grade tenants or their subsidiaries and from our secure Hawaii land leases.
During 2023, we entered into 56 new and renewal leases and four rent reset agreements for 5.4 million square feet. Same Property NOI and Same Property Cash Basis NOI increased 3.3% and 4.5%, respectively, compared to the best path to long term value creationprior year. Rents were 20.5% higher than prior rental rates for you, our shareholders. With this in mind, we have begun what we expect to be a multiyear process of examining our fundamental governance policies as we understand that good governance is critical to building and keeping shareholder confidence and to long term value creation. Shareholder engagement and feedback have been critical componentsthe same space. The impact of this examination. Our initial steps include engagingactivity is an executive search consulting firm to help us identify and vet qualified and diverse board candidates so that we can expand and, as appropriate, refresh our Board, adopting a proxy access bylaw and asking you to approve an amendment to our Declarationincrease of Trust so that$7.4 million in annualized rental revenues, more than 40% of which we will have a plurality vote standardbegin to benefit from in 2024.
Also during 2023, we sold three properties for contested elections.aggregate sale proceeds of $25.5 million, excluding closing costs. We discussused the sale proceeds to enhance our plans in more detail in the accompanying Proxy Statement.liquidity. As of year end, we had unrestricted cash of $112 million.
Looking ahead to 2024, we remain focused on leasing our properties with pending expirations and believe there is continued opportunity to generate organic cash flow growth and reduce leverage.
We thank you for your investment in Industrial Logistics Properties Trustour Company and for the confidencetrust you putplace in this Boardus to oversee your interests in our business.April 5, 2019
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| | Bruce M. Gans
Lisa Harris Jones
Joseph L. Morea
John G. Murray
Adam D. Portnoy
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Table of Contents
NOTICE OF 2019 ANNUAL MEETING OF SHAREHOLDERS
Monday, June 3, 2019
9:30 a.m., Eastern time
Two Newton Place, 255 Washington Street, Suite 100
Newton, Massachusetts 02458
ITEMS OF BUSINESS
1.Elect the Trustee nominees identified in the accompanying Proxy Statement to the Company's Board of Trustees;
2.Ratify the appointment of Ernst & Young LLP as independent auditors to serve for the 2019 fiscal year;
3.Approve an amendment to the Company's Declaration of Trust so that in a contested election our Trustees are elected by a plurality of the votes cast by our shareholders; and
4.Transact such other business as may properly come before the meeting and at any postponements or adjournments of the meeting.
RECORD DATE
You can vote if you were a shareholder of record as of the close of business on January 31, 2019.
PROXY VOTING
Shareholders as of the record date are invited to attend the 2019 Annual Meeting. If you cannot attend in person, please vote in advance of the 2019 Annual Meeting by using one of the methods described in the accompanying Proxy Statement.
April 5, 2019
Newton, Massachusetts
By Order of the Board of Trustees,
Jennifer B. Clark
Secretary
Please sign and return the proxy card or voting instruction form or use telephone or internet methods to authorize a proxy in advance of the 2019 Annual Meeting. See the "Proxy Materials and Voting Information" section on page 31 for information about how to authorize a proxy by telephone or internet or how to attend the 2019 Annual Meeting and vote your shares in person.
TABLE OF CONTENTS
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PLEASE VOTE
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PROXY STATEMENT
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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
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Review of Corporate Governance Policies and Shareholder Engagement
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Board Composition, Expansion and Refreshment
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Summary of Board Experience
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Key Responsibilities of the Board
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The Board's Role in Oversight of Risk Management
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Trustee Independence
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Executive Sessions of Independent Trustees
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Board Leadership Structure
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Code of Business Conduct and Ethics and Committee Governance
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Vote Standard for Election of Trustees
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Adoption of Proxy Access Bylaw
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Nominations for Trustees
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Communications with the Board
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Sustainability
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Shareholder Nominations and Other Proposals
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PROPOSAL 1: ELECTION OF TRUSTEES
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Trustee Nominees to be Elected at the 2019 Annual Meeting
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Continuing Trustees
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Executive Officers
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BOARD COMMITTEES
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The Audit Committee
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The Compensation Committee
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The Nominating and Governance Committee
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BOARD MEETINGS
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TRUSTEE COMPENSATION
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Compensation of Trustees
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Trustee Share Ownership Guidelines
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2018 Annual Trustee Compensation
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OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
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Trustees and Executive Officers
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Principal Shareholders
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Section 16(a) Beneficial Ownership Reporting Compliance
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
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EXECUTIVE COMPENSATION
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Summary Compensation Table
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2018 Outstanding Equity Awards at Fiscal Year End
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Potential Payments upon Termination or Change in Control
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PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS
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Audit Fees and All Other Fees
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Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
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Other Information
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REPORT OF THE AUDIT COMMITTEE
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PROPOSAL 3: APPROVAL OF AN AMENDMENT TO OUR DECLARATION OF TRUST SO THAT IN A CONTESTED ELECTION TRUSTEES ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY OUR SHAREHOLDERS
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FREQUENTLY ASKED QUESTIONS
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RELATED PERSON TRANSACTIONS
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OTHER INFORMATION
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Table of Contents
PLEASE VOTE
It is very important that you vote to play a part in the future of our Company. The Nasdaq Stock Market LLC (the "Nasdaq") rules do not allow a broker, bank or other nominee who holds shares on your behalf to vote on nondiscretionary matters without your instructions.
PROPOSALS THAT REQUIRE YOUR VOTE
| | | | | | | | |
PROPOSAL
| | MORE
INFORMATION
| | BOARD
RECOMMENDATION
| | VOTES REQUIRED
FOR APPROVAL
|
|---|
| | | | | Bruce M. Gans, M.D. | | | Kevin C. Phelan | |
| | | | | Lisa Harris Jones | | | Adam D. Portnoy | |
| | | | | Matthew P. Jordan | | | June S. Youngs | |
| | | | | Joseph L. Morea | | | | |
NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS OF INDUSTRIAL LOGISTICS PROPERTIES TRUST
| | Location: Live Webcast Accessible at
https:// www.virtualshareholder
meeting.com/ILPT2024 Date: Thursday, May 30, 2024 Time: 1:30 p.m., Eastern time | | |
1 | | Election of Trustees | | Page 12 | | FOR | | Plurality of all votes cast |
2 | | Ratification of independent auditors* | | Page 26 | | FOR | | Majority of all votes cast |
3 | | Approval of an amendmentAgenda: •
Elect the Trustee nominees identified in the accompanying Proxy Statement to our DeclarationBoard of Trust so that in a contested electionTrustees; •
Advisory vote to approve executive compensation; •
Ratify the appointment of Deloitte & Touche LLP as our Trustees are elected by a pluralityindependent auditors to serve for the 2024 fiscal year; and •
Transact such other business as may properly come before the meeting and at any postponements or adjournments of the votes cast by our shareholdersmeeting. | | Page 30 | | FOR | | Majority of all votes entitled to be cast |
| | | | | Record Date: You can vote if you were a shareholder of record as of the close of business on March 14, 2024 (the “Record Date”). | | | | | |
*Non-binding advisory vote.
You can vote in advance in one of three ways:
| | |
via | | | | Attending Our 2024 Annual Meeting: To provide all of our shareholders an opportunity to participate in our 2024 Annual Meeting, our 2024 Annual Meeting will be a completely virtual meeting of shareholders which will be conducted exclusively by webcast. Shareholders will be able to listen, vote and submit questions during our 2024 Annual Meeting. In order to attend and participate in our 2024 Annual Meeting, shareholders must register in advance at www.proxyvote.com by 11:59 p.m. Eastern time, on May 29, 2024. •
Record Owners: If you are a shareholder as of the internet
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Visitwww.proxyvote.comclose of business on the Record Date who holds shares directly, you may participate in our 2024 Annual Meeting by visiting https://www.virtualshareholdermeeting.com/ILPT2024 and enter yourentering the 16 digit control number provided inlocated on your Notice Regarding the Availability of Proxy Materials or proxy card or voting instruction form before 11:59 p.m., Eastern time, on June 2, 2019 to authorize a proxyVIA THE INTERNET. |
by phone
 |
|
Call 1-800-690-6903 ifcard. •
Beneficial Owners: If you are a shareholder as of recordthe close of business on the Record Date who holds shares indirectly through a brokerage firm, bank or other nominee, you may participate in our 2024 Annual Meeting by visiting https://www.virtualshareholdermeeting.com/ILPT2024 and 1-800-454-8683 if you are a beneficial owner before 11:59 p.m., Eastern time, on June 2, 2019 to authorize a proxyBY TELEPHONE. You will needentering the 16 digit control number providedlocated on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. Please follow the instructions from your bank, broker or nominee included with these proxy materials, or contact your bank, broker or nominee to request a control number if needed. | |
by mail
 |
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Sign, date and return your proxy card if you are a shareholder | | Please see the accompanying Proxy Statement for additional information. | |
| | | | | By Order of record or voting instruction form if you are a beneficial owner to authorize a proxyBY MAIL.our Board of Trustees, Signature Jennifer B. Clark
Secretary
March 20, 2024 | |
If the meeting is postponed or adjourned, these times will be extended to 11:59 p.m., Eastern time, on the day before the reconvened meeting.
PLEASE VISIT:www.proxyvote.com
•To review and download easy to read versions of our Proxy Statement and Annual Report.
•To sign up for future electronic delivery to reduce the impact on the environment.
2019 Proxy Statement 1
TABLE OF CONTENTS
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The Board of Trustees (the "Board"(“Board”) of Industrial Logistics Properties Trust, a Maryland real estate investment trust (the "Company," "we," "us"“Company,” “we,” “us” or "our"“our”) is furnishing this proxy statement and accompanying proxy card (or voting instruction form) to you in connection with the solicitation of proxies by theour Board for the 2019our 2024 annual meeting of shareholders. To provide all of our shareholders of the Company. Thean opportunity to participate in our annual meeting, our annual meeting will be held virtually via live webcast on Thursday, May 30, 2024, at Two Newton Place, 255 Washington Street, Suite 100, Newton, Massachusetts 02458 on Monday, June 3, 2019, at 9:1:30 a.m.p.m., Eastern time, andsubject to any postponements or adjournments or postponements thereof (the "2019“2024 Annual Meeting"Meeting”). We are first making these proxy materials available to shareholders on or about April 5, 2019.March 20, 2024.
Only owners of record of our common shares of beneficial interest of the Company ("(“Common Shares"Shares”) as of the close of business on January 31, 2019,March 14, 2024, the record dateRecord Date for the meeting,our 2024 Annual Meeting, are entitled to notice of, and to vote at, the meeting and at any postponements or adjournments of the meeting. Holders of Common Shares are entitled to one vote for each Common Share held as of the close of business on the record date. On January 31, 2019,Record Date. Our Common Shares are listed on The Nasdaq Stock Market LLC (“Nasdaq”). At the close of business on March 14, 2024, there were 65,074,791approximately 65,842,339 Common Shares issued and outstanding. The mailing address of the Company'sour principal executive officesoffice is Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE 2019 ANNUAL MEETING TO BE HELD ON MONDAY, JUNE 3, 2019.
The Notice of 2019
| | | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR OUR
2024 ANNUAL MEETING TO BE HELD ON THURSDAY, MAY 30, 2024. | | |
| | | The Notice of 2024 Annual Meeting, Proxy Statement and Annual Report to Shareholders for the fiscal year ended December 31, 2023 are available at www.proxyvote.com. | | |
PLEASE VOTE
Please vote to participate in our decision making. Nasdaq rules do not allow a broker, bank or other nominee who holds shares on your behalf to vote on nondiscretionary matters without your instructions.
PROPOSALS THAT REQUIRE YOUR VOTE
| PROPOSAL | | | MORE
INFORMATION | | | BOARD
RECOMMENDATION | | | VOTES REQUIRED
FOR APPROVAL | |
1
Election of Trustees | | | | | | ![[MISSING IMAGE: ic_tickmark-4c.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-036686/ic_tickmark-4c.gif) FOR | | | Plurality of all
votes cast | |
2
Advisory vote to approve executive compensation* | | | | | | FOR | | | Majority of all
votes cast | |
3
Ratification of independent auditors* | | | | | | FOR | | | Majority of all
votes cast | |
*
Non-binding advisory vote.
You can vote in advance in one of three ways:
| | via the internet | | | Visit www.proxyvote.com and enter your 16 digit control number provided in your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form before 11:59 p.m., Eastern time, on May 29, 2024 to authorize a proxy VIA THE INTERNET. | |
| | by phone | | | Call 1-800-690-6903 if you are a shareholder of record and 1-800-454-8683 if you are a beneficial owner before 11:59 p.m., Eastern time, on May 29, 2024 to authorize a proxy BY TELEPHONE. You will need the 16 digit control number provided on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. | |
| | by mail | | | Sign, date and return your proxy card if you are a shareholder of record or voting instruction form if you are a beneficial owner to authorize a proxy BY MAIL. | |
If the meeting is postponed or adjourned, these times will be extended to 11:59 p.m., Eastern time, on the day before the reconvened meeting.
PLEASE VISIT: www.proxyvote.com
•
To review and download easy to read versions of our Proxy Statement and Annual ReportReport.
•
To sign up for future electronic delivery to Shareholdersreduce the impact on the environment.
•
To register in advance to attend our 2024 Annual Meeting.
| | | | | 2024 Proxy Statement | | | 1 | |
PROXY SUMMARY
This proxy summary highlights information which may be provided 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. Page references are supplied to help you find further information in this Proxy Statement.
ELIGIBILITY TO VOTE
You can vote if you were a shareholder of record at the close of business on March 14, 2024, the Record Date for our 2024 Annual Meeting.
HOW TO CAST YOUR VOTE (Page 1) You can vote by any of the year ended December 31, 2018following methods:
•
By Telephone or Internet. All shareholders of record can authorize a proxy to vote their shares by touchtone telephone by calling 1-800-690-6903, or through the internet at www.proxyvote.com, using the procedures and instructions described in your Notice Regarding the Availability of Proxy Materials or proxy card.
•
By Written Proxy. All shareholders of record also can submit voting instructions by written proxy card. If you are availablea shareholder of record and receive a Notice Regarding the Availability of Proxy Materials, you may request a written proxy card by following the instructions included in the notice.
•
Electronically atwww.proxyvote.com our 2024 Annual Meeting. All shareholders of record may vote electronically at the meeting. Beneficial owners may vote electronically at our 2024 Annual Meeting if they have a legal proxy.
CORPORATE GOVERNANCE PRINCIPLES (Page 4) We endeavor to observe and implement best practices in our corporate governance.
We have a long-standing commitment to our shareholders and other stakeholders to conduct our business in an environmentally and socially responsible manner.
| PROPOSAL | | | BOARD
RECOMMENDATION | | | VOTES REQUIRED
FOR APPROVAL | | | | |
1
Election of Trustees | | | FOR | | | Plurality of all votes cast | | |
2
Advisory vote to approve executive compensation* | | | FOR | | | Majority of all votes cast | | |
3
Ratification of independent auditors* | | | FOR | | | Majority of all votes cast | | |
*
Non-binding advisory vote.
With respect to Proposal 1, you may vote “FOR” or “WITHHOLD” with respect to each nominee. You may vote “FOR,” “AGAINST” or “ABSTAIN” on Proposals 2 and 3.
| | 2 | | | | | | 2024 Proxy Statement | |
PROPOSAL 1:
ELECTION OF TRUSTEES (Page 21)
2 2019 Proxy Statement
Table
Upon the recommendation of Contentsour Nominating and Governance Committee, our Board has nominated Bruce M. Gans, M.D., Lisa Harris Jones, Joseph L. Morea, Kevin C. Phelan and June S. Youngs as Independent Trustees and Matthew P. Jordan and Adam D. Portnoy as Managing Trustees. Presented below is the expected composition of our Board immediately following our 2024 Annual Meeting, assuming the election of our Trustee nominees.
| NAME OF TRUSTEES | | | INDEPENDENT | | | COMMITTEE MEMBERSHIP | |
| Bruce M. Gans, M.D. | | | | | | Audit
Compensation | |
| Lisa Harris Jones | | | | | | Audit
Nominating and Governance (Chair) | |
| Matthew P. Jordan | | | | | | None | |
| Joseph L. Morea | | | | | | Audit (Chair) | |
| Kevin C. Phelan | | | | | | Compensation (Chair)
Nominating and Governance | |
| Adam D. Portnoy | | | | | | None | |
| June S. Youngs | | | | | | Audit
Compensation | |
PROPOSAL 2:
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION (Page 37)
COMPENSATION DISCUSSION AND ANALYSIS (Page 38) Our compensation structure is unique because of our relationship with our manager, The RMR Group LLC (“RMR”). Our business management agreement with RMR is designed to incentivize RMR to provide the highest quality services to us. Our Compensation Committee believes that our executive compensation program is appropriately designed to incentivize strong performance over the long term.
PROPOSAL 3:
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS (Page 51)
| | | | | 2024 Proxy Statement | | | 3 | |
CORPORATE GOVERNANCE PRINCIPLES AND
BOARD MATTERS
Review of Corporate Governance Policies and Shareholder Engagement
Review of Corporate Governance Policies and Shareholder Engagement
|
Our Board is committed to upholding the values of good corporate governance. In recognition of the relationship between corporate governance and long term performance, and as a result of our ongoing engagement with and feedback from our shareholders, theour Board has embarked on a review of the Company'scontinues to proactively evaluate our corporate governance principles. The Board expects that corporate governance reform will be a multi-year process and, as it weighs various alternatives, the Board is prioritizing its consideration based on a review of best practices and input from our shareholders. Based on these principles, theour Board has established the following priorities and taken the following steps: •had meaningful engagements with many
since 2020, added two new Independent Trustees to our Board as part of our Board refreshment plan and increased the size of our Board to seven members and the percentage of our Board comprised of independent Board members to 71%;
•
amended our Declaration of Trust to declassify our Board so that all of our Trustees stand for election annually, a measure which was supported by more than 85% of our shareholders;
•
conducted an annual shareholder outreach and engaged with shareholders who hold approximately 38% of our Common Shares;
•
adopted new Environmental, Social and Governance (“ESG”) policies in connection with our efforts to lead a sustainable business and continue to improve our internal culture and the communities in which we operate;
•
retained Korn Ferry, a leading executive search and consulting firm, to help identify and evaluatevet candidates to expand and as appropriate, refresh theour Board;
and
•adopted a proxy access bylaw (see page 9);
enhanced our compensation and
•asked shareholders sustainability disclosure and reporting in this Proxy Statementresponse to support an amendment to our Declaration of Trust so that in a contested election our Trustees are elected by a plurality of the votes cast by our shareholders (see page 30).The Board has also instituted a number of complementary mechanisms to allow shareholders to communicate their points of view, including:
•our commitment to thoughtfully consider shareholder proposals submitted to the Company;
•the ability to attend and voice opinions at the annual meeting of shareholders; and
•the ability to direct communications to individual Trustees or the entire Board (see page 10).
As the Board continues on the path to enhanced good governance, wefeedback.
We appreciate your support of the Board andon these initiatives.
Board Composition, Expansion and Refreshment
Board Composition, Expansion and Refreshment
|
We are currently governed by a five member Board of Trustees.
Ensuring theour Board is comprised of Trustees who bring diverse viewpoints and perspectives, exhibithave a variety of skills, professional experience and backgrounds and effectively represent the long-termlong term interests of our shareholders is a top priority of theour Board and theour Nominating and Governance Committee. TheOur Board is actively seeking to expandregularly evaluates its composition for several reasons, including to increasecomposition. Our Board’s expansion and refreshment activities have increased the ratio of Independent Trustees to Managing Trustees, createcreated more skill mix and diversity ensureand ensured a smooth transition ifas Trustees retire from our Board. We are currently governed by a seven member Board of Trustees, including five Independent Trustees and when a Trustee decides to retire or otherwise leaves thetwo Managing Trustees. Our Nominating and Governance Committee and our Board and ensure that the Board is comprised of individualshave an ongoing engagement with a diverse set of backgrounds, perspectives and skills. The Board believes that continuity is important to the effective conduct of our business and expects the expansion process will take place over several years. To facilitate these efforts, the Board has retained Korn Ferry, a leading executive search and consulting firm, to act as an advisor and to assist theour Nominating and Governance Committee in: •
identifying and evaluating potential trustee candidates;
•
creating an even playing field among candidates identified regardless of source;
•
using the criteria, evaluations and references to prioritize candidates for consideration regardless of source; and
•
assisting in attracting and vetting candidates.
| | 4 | |
•
exhibit high standards of integrity and ethics;
•
have business acumen, practical wisdom, ability to exercise sound judgment in a congenial manner and be able to make independent analytical inquiries;
•
have a strong record of achievements;
•
have knowledge of the commercial real estate ("CRE") industry and real estate investment trusts ("REITs");
| | •
be familiar with the industrial and logistics markets;
•
have diverse perspectives, backgrounds and experiences, including professional background, gender, ethnicity and skills; and
•
be committed to serving on the Board over a period of years in order to develop knowledge about the Company's operations and have sufficient time and availability to devote to Board and committee matters.
| | | 2024 Proxy Statement | |
In addition, the Board has determined that the Board, as a whole, should strive to have the right mix of characteristics and skills necessary to effectively perform its oversight responsibilities. The Board believes that Trustees with one or more of the following professional skills or experiences can assist in meeting this goal:
Process for Selecting Trustees
| | |
•
work experience with a proven record of success in his or her field;
•
risk oversight/management expertise;
•
accounting and finance, including a high level of financial literacy and understanding of the impact of financial market trends on the real estate industry;
•
operating business and/or transactional experience;
•
management/leadership experience;
•
knowledge of the Company's historical business activities;
| | •
familiarity with public capital markets;
•
experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing;
•
service on other public company boards and committees;
•
qualifying as a Managing Trustee in accordance with the requirements of our governing documents; and
•
qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the Securities and Exchange Commission ("SEC") and our governing documents.
|
The
Our Nominating and Governance Committee screens and the Board consider the qualifications, characteristics and skills of Trustees and Trusteerecommends candidates individually and in the broader context of the Board's overall composition when evaluating potential nominees for election as Trustee. Thenomination by our full Board. Our Nominating and Governance Committee and the Board also expect to askis assisted with its recruitment efforts by its ongoing engagement with Korn Ferry, to assist in consideringwhich recommends candidates that satisfy our Board’s criteria. They also provide research and pertinent information regarding candidates, as requested.
ISG Corporate Governance Framework
We follow the qualifications of, and evaluating, potential nominees.4 2019 Proxy Statement
Table of Contents
Investor Stewardship Group’s (“ISG”) Corporate Governance Framework for U.S. Listed Companies, as summarized below: | ISG Principle | | | Our Practice | |
Principle 1: Boards are accountable to shareholders. | | | •
All of our Trustees stand for annual election. •
We adopted a proxy access bylaw. | |
Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interest. | | | •
We do not have a dual class structure; each shareholder gets one vote per share. | |
Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives. | | | •
In 2023, we had a proactive shareholder outreach and had active engagements with shareholders owning approximately 38% of our Common Shares. •
Our engagement topics included business strategies, governance reform priorities, sustainability and social strategy, Board composition, leadership and refreshment, succession planning and executive compensation program disclosure. | |
Principle 4: Boards should have a strong, independent leadership structure. | | | •
We have a Lead Independent Trustee with clearly defined duties and robust responsibilities that are disclosed to shareholders. •
Our Board considers the appropriateness of its leadership structure at least annually. •
All of our committees are comprised solely of Independent Trustees. | |
Summary
| | | | 2024 Proxy Statement | | | 5 | |
| ISG Principle | | | Our Practice | |
Principle 5: Boards should adopt structures and practices that enhance their effectiveness. | | | •
71% of Board Experiencemembers are independent. •
Our Board includes members of underrepresented communities and is comprised of 29% women and 14% African American persons. •
We have an active Board refreshment plan, including an ongoing engagement with an executive search and consulting firm to identify and evaluate candidates to expand and refresh our Board; two new Independent Trustees have joined our Board since 2020. •
Our Trustees attended at least 75% of all Board and applicable committee meetings in 2023, and each of our Trustees attended the 2023 annual meeting of shareholders. | |
Principle 6: Boards should develop management incentive structures that are aligned with the long term strategy of the company. | | | •
Our Compensation Committee annually reviews and approves incentive compensation program design, goals and objectives for alignment with compensation and business strategies. •
Although we do not pay any cash compensation directly to our officers and have no employees, we have adopted our 2018 Equity Compensation Plan (the “Share Award Plan”) to reward our named executive officers and other employees of RMR who provide services to us and to align their interests with those of our shareholders. •
RMR’s compensation is tied to our performance. | |
Shareholder Engagement and Outreach
We conduct shareholder outreach throughout the year to engage with shareholders on issues important to them. Our Board receives reports on this engagement as well as any specific issues to be addressed.
Sustainability
Overview. Our business strategy incorporates a focus on sustainable approaches to operating our properties in a manner that benefits our shareholders, tenants and the communities in which we are located. Substantially all our properties are net leased to third party tenants that assume operating responsibilities for their properties and, as a result, we have limited opportunities to influence operational efficiencies at our properties. However, we encourage our tenants to operate our properties in ways that improve the economic performance of their operations, while simultaneously managing energy and water consumption, as well as greenhouse gas emissions.
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Our environmental, social and governance initiatives are primarily implemented by our manager, RMR, and focus on a complementary set of objectives, including the following:
•
Responsible Investment: We seek to invest capital in our properties that both improves environmental performance and enhances asset value. During the acquisition of properties, RMR assesses, among other things, environmental sustainability opportunities and physical and policy driven climate related risks as part of the due diligence process. In 2021, RMR, in coordination with a third-party consultant, began physical climate scenario analyses for substantially all our properties. These analyses include:
○
Evaluation of current physical climate risk exposure and assessments of future physical climate risk exposure models that consider a “business as usual” approach, a 2.0°C emissions mitigation approach in line with the Paris Climate Agreement and a “middle” approach, all based on the Intergovernmental Panel on Climate Change (“IPCC”) sixth assessment Representative Concentration Pathways (“RCP”) 8.5, 2.6, and 4.5, respectively. The outcome of these assessments will include qualitative exposures to long term acute and chronic climate risks for future climate. We anticipate this information will aid in ensuring investment strategies and operational protocols are effective in mitigating future physical climate risk.
•
Environmental Stewardship: We seek to improve the environmental footprint of our properties, including by reducing energy consumption and water usage, especially when doing so may reduce operating costs and enhance the properties’ competitive position. Although our properties are net leased and our tenants oversee most of the property maintenance and improvements over the lease term, RMR’s Asset Services and Energy & Sustainability groups proactively leverage opportunities to make our properties more environmentally friendly and efficient. Specifically, RMR engages our tenants on the following topics:
○
Environmental Protection Agency’s (“EPA”) ENERGY STAR® energy, water and emissions benchmarking;
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Onsite renewable solar energy;
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Building honors and recognition through the EPA’s ENERGY STAR® and Building Owners and Manager’s Association (“BOMA”) 360 programs;
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Real-time energy and water monitoring;
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High-efficiency heating, ventilation and air conditioning (“HVAC”) and lighting technologies; and
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Electric vehicle charging stations.
As a result of these ongoing programs and efforts by our tenants, we have achieved the following:
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Certifying 283,817 square feet of our properties through EPA’s ENERGY STAR® program;
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Certifying more than 1.3 million square feet of our properties through the U.S. Green Building Council’s Leadership in Energy & Environmental Design (“LEED”) certification program, including 95,899 square feet achieving a Gold Certification; and
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Earning BOMA 360 recognition for more than 5.4 million square feet across 28 properties from the BOMA International 360 Performance Program.
•
Investments in Human Capital: We have no employees of our own. We rely on our manager, RMR, to hire, train, and develop a workforce that meets the needs of our business, contributes positively to our society and helps reduce our impact on the natural environment.
RMR employs approximately 1,100 real estate professionals across the United States. In 2023, RMR was recognized by The Boston Globe for the fourth consecutive year as one of “The Top Places to Work in Massachusetts” in the “Large Employers” category and by the EPA as an “ENERGY STAR Partner of the Year, Sustained Excellence.” In 2021, RMR received the Excellence Award from the Institute of Real Estate Management. In 2020, RMR was recognized by the Boston Business Journal as the “Fastest Growing Middle Market Company in Massachusetts,” and by Commercial Property Executive as 9th in its list of Top Commercial Property Management Companies.
| | | | | 2024 Proxy Statement | | | 7 | |
RMR’s recruiting programs, on-boarding, retention programs and its development and training programs currently include the following:
○
LiveWell Employee Wellness Program: RMR’s LiveWell program was launched in 2016 with the goal of providing resources and incentives to enhance employees’ physical, emotional and financial wellness. LiveWell includes a range of educational presentations, webinar series and wellness competitions.
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Managing with Impact: Since 2016, RMR hosted Managing with Impact workshops for managers throughout the company to expand their perspectives and increase their confidence as a new manager. Within their first year, managers complete the workshop and learn how to effectively delegate, solve problems and give meaningful performance feedback.
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Tuition Reimbursement Program: RMR offers tuition assistance up to $20,000 annually for work-related education from accredited colleges and universities in order to deepen employees’ skillsets and support personal enrichment.
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Accelerated Women in Leadership Program: RMR’s Accelerated Women in Leadership Program (“AWLP”) is a targeted learning experience that helps women strengthen and leverage their contribution and impact as professionals and leaders. Participants explore a variety of topics that help them manage biases that can be limiting, strengthen their executive presence, influence and negotiate more effectively, and integrate work and home life. Starting in 2020, a cohort of women professionals participate in AWLP each year.
○
Analyst Accelerator Internship Program: RMR’s Analyst Accelerator Internship Program is designed to attract early career talent to our industry from backgrounds underrepresented in real estate. The 10-week program is built upon the premise that hands on exposure as an analyst is an ideal way to provide rising college juniors or seniors with a solid first step toward a successful and lasting career in real estate. RMR actively recruits talent from college campuses and student communities interested in real estate who are traditionally underrepresented in the sector, including women and people of color. Relationships with programs like the University of Massachusetts Amherst Real Estate Program, involvement with Historically Black Colleges and Universities, and engagement with women’s career forums all amplify RMR’s outreach efforts to develop a robust and diverse talent pipeline.
○
Next Generation Executive Program: From 2021 through 2023, RMR sponsored eight rising leaders in The Partnership, Inc.’s Next Generation Executive Program (“NGE”). Admission to NGE is highly competitive and limited to a select group of America’s most promising multicultural leaders. The program prepares future leaders to meet the unique challenges facing today’s senior executive. Program areas include strategic innovation, organizational change, operating in a global market, team leadership and executive resiliency.
RMR also prioritizes on-going education and training for all employees across their organization as follows:
○
Engineering Apprenticeship Program: Given the increasing challenges within the real estate industry of attracting a qualified and diverse pool of engineers throughout the country, RMR made it a strategic focus to develop the next generation of qualified building engineers. RMR’s Engineering Apprenticeship Program standardizes the recruitment and development of engineering candidates to prepare them for open positions and to plan for future engineering needs. RMR recruits from various trade schools and job fairs to identify candidates for the two-year program with a curriculum that includes specific onboarding plans for training in electrical, HVAC, or plumbing trades and covers a range of essential engineering staff development topics.
○
Industry Associations & Credentials: In order to further their professional development, many of RMR’s employees seek out credentials and association memberships, with any membership costs reimbursed by RMR. Examples of credentials and association memberships include: BOMA Membership and Event Participation, Certified Property Manager, Certified Public Accountant, National Association of Industrial and Office Properties, LEED Accredited Professional, Certified Energy Manager and Fitwel Ambassador.
•
Corporate Citizenship: We seek to be a responsible corporate citizen and to strengthen the communities in which we own properties through our policies and charitable giving. RMR regularly
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encourages its employees to engage in a variety of charitable and community programs, including participation in a RMR company-wide service day and a charitable giving matching program.
•
Diversity & Inclusion: We value a diversity of backgrounds, experience and perspectives. Our Board is comprised of 29% women and 14% members of underrepresented communities. We have no employees of our own but our manager, RMR, is an equal opportunity employer with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status. RMR is committed to racial equality and fostering a culture of diversity and inclusion. As of December 31, 2023, 41% and 32% of RMR’s employees were female and non-white, respectively.
| | All RMR Employees(1) | | | RMR Managers and Above(1) | |
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(1)
RMR uses EEO Ethnicity and Race Categories to estimate the diversity of its workforce. EEO Ethnicity and Race Categories include Asian, Black or African American, Hispanic or Latino, American Indian or Alaskan Native, Native Hawaiian or other Pacific Islander, or multiracial background.
•
Culture and Employee Engagement: We believe an inclusive workplace positions RMR to achieve extraordinary results for our company. RMR strives to create a collaborative workplace that motivates talented people to contribute their best work and ideas. The root of RMR’s collaborative and innovative culture is a workplace that welcomes diverse perspectives and experiences. To ensure the strength of its workplace, RMR:
○
Conducts employee engagement surveys to ensure its people have the training, tools and resources they need to succeed.
○
Provides employees with ongoing coaching and feedback to support their growth and development.
RMR’s investment in people has resulted in its selection as a Boston Globe Top Place to Work four years in a row. When surveyed:
○
87% of RMR’s employees said RMR motivated them to give their best work.
○
85% feel their manager helps them learn and grow.
We have no employees of our own but RMR has made diversity and inclusion an important part of its hiring, retention and development programs. RMR has enhanced its hiring policies to support increasing diversity within its workforce. For every open position not filled by internal candidates, hiring managers are required to have at least one qualified woman or member of underrepresented community candidate in the final round interviews before an offer is extended to fill the position. A RMR manager who is a woman and/or member of an underrepresented community is required to be part of the final round interview team. In addition, RMR works with strategic industry partners like Commercial Real Estate Women (“CREW”) and The Partnership, Inc. for posting new positions and supporting multicultural professionals.
To learn more about RMR’s and our sustainability initiatives, visit www.rmrgroup.com/corporate-sustainability and www.ilptreit.com/about-us/sustainability.
Sustainability Accounting Metrics. The following disclosures are informed by the guidance of the Sustainability Accounting Standards Board (“SASB”) Industry Standard for Real Estate Version 2023-06. To the extent an accounting metric, as defined by the SASB Standard, is not applicable to our portfolio or data to report on the applicable accounting metric is not available to us, we have not made any disclosure.
| | | | | 2024 Proxy Statement | | | 9 | |
For the following disclosures, our properties are reported in one operating segment and is consistent with how these properties and our operating results are presented in our other Securities and Exchange Commission (“SEC”) filings. The information presented is as of December 31, 2023, unless otherwise noted. Additionally, for all sustainability accounting metrics, Same Property includes properties owned and operated continuously since January 1, 2022.
I.
Energy management integration discussion (SASB Accounting Metric Code: IF-RE-130a.5).
Our manager, RMR, engages with our tenants and encourages energy management best practices that improve the economic performance of their operations, which include:
○
ENERGY STAR® benchmarking (hotel properties);
○
Real-time energy monitoring (hotel properties);
○
Light Emitting Diodes (“LED”) lighting upgrades; and
○
Energy performance review for end-of-life HVAC equipment replacements.
These energy management efforts reduce energy usage helping to generate both economic and environmental benefits.
During the acquisition of properties, RMR assesses, among other things, energy management opportunities and physical and policy driven climate related risks as part of the due diligence process.
Some cities and states in which we own properties require annual whole-building energy and water use disclosure or achieving certain energy or emissions performance standards. In these jurisdictions, RMR engages with tenants to collect and report any direct tenant-paid energy and water consumption. RMR’s programs also aid in complying with building performance standards by actively seeking out cost effective ways to reduce energy and emissions across properties managed by them and where tenants directly manage energy.
Sections II, III, IV and V below provide SASB-aligned energy-related metrics.
II.
Energy consumption data coverage as a percentage of total floor area, by property subsector (SASB Accounting Metric Code: IF-RE-130a.1).
The following illustrates energy data available as compared to the total population of our properties.
The energy data for substantially all properties is managed directly by third party tenants. Data that is shared with us is reported in these SASB Accounting Metrics.
III.
Total energy consumed in gigajoules (“GJ”) by portfolio area with data coverage, percentage grid electricity and percentage renewable, by subsector (SASB Accounting Metric Codes: IF-RE-130a.2).
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None, or 0%, of the renewable energy consumed was directly purchased through power purchase agreements or by other explicit contractual means.
IV.
Same Property percentage change in energy consumption for the portfolio area with data coverage, by subsector (SASB Accounting Metric Code: IF-RE-130a.3).
Same property energy data coverage includes 100% of the total 2023 reported energy data.
V.
Percentage of eligible portfolio that (i) has obtained an energy rating and (ii) is certified to ENERGY STAR® (SASB Accounting Metric Code: IF-RE-130a.4).
59.3% of our properties are eligible to earn an ENERGY STAR® certification based on size, use profile and occupancy profile requirements established by the EPA. 27.1% of properties are rated and 0.8% are certified. Energy ratings and certifications are performed using the EPA’s Portfolio Manager online benchmarking tool.
| | | | | 2024 Proxy Statement | | | 11 | |
VI.
Water management integration discussion (SASB Accounting Metric Code: IF-RE-140a.4).
Property operations are managed by third party tenants that lease our properties. Our manager, RMR, engages with our tenants to collect water data for disclosure compliance and reporting and to share ways they can support tenants on water efficiency. During acquisition due diligence, property assessments are conducted that aim to capture information on building attributes that incorporate water efficiency into operations.
Sections VII, VIII and IX below provide SASB-aligned water-related metrics.
VII.
Water withdrawal data coverage as a percentage of total floor area and percentage in regions with High or Extremely High Baseline Water Stress (“BWS”) (SASB Accounting Metric Code: IF-RE-140a.1).
Baseline Water Stress measures total annual water withdrawals (municipal, industrial, and agricultural) expressed as a percent of the total annual available flow. Higher values indicate more users are competing for available resources. Baseline Water Stress is evaluated by property using the World Resources Institute Aqueduct tool.
VIII.
Total water withdrawn by portfolio area with data coverage and percentage in regions with High or Extremely High Baseline Water Stress, by subsector (SASB Accounting Metric Code: IF-RE-140a.2).
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IX.
Same Property percentage change in water withdrawn for portfolio area with data coverage, by subsector (SASB Accounting Metric Code: 140a.3).
X.
Percentage of new leases that contain a cost recovery clause for resource efficiency-related capital improvements and associated leased floor area (SASB Accounting Metric Code: IF RE-410a.1).
18.5%, or 62,156 square meters, of leases executed in 2023 included a cost recovery clause for resource efficiency-related capital improvements.
XI.
Discussion of approach to measuring, incentivizing, and improving sustainability impacts of tenants (SASB Accounting Metric Code: IF-RE-410a.3).
On our behalf, RMR collaborates with our net leased industrial tenants to capture environmental data for our properties. Engaging with our tenants that manage data directly, RMR has increased visibility into operational performance for our properties. This effort has provided insight for approximately 13.2 million square feet of industrial properties. RMR’s asset managers encourage our tenants to operate our properties in ways that improve the economic performance of their operations, while simultaneously managing energy and water consumption, as well as greenhouse gas emissions.
XII.
Area of properties located in FEMA Special Flood Hazard Areas or foreign equivalent, by property subsector (SASB Accounting Metric Code: IF-RE-450a.1).
130,227 square meters, or 2.3%, of properties are located in Special Flood Hazard Areas
XIII.
Description of climate change risk exposure analysis, degree of systematic portfolio exposure, and strategies for mitigating risks. (SASB Accounting Metric Code: IF-RE-450a.2).
We define climate change resilience as our ability to anticipate, prepare for and recover from adverse physical climate activity including increased severity of acute weather events and chronic changes to weather patterns as well as identify and plan for climate-related transitional activities such as changes in policy and market-driven expectations.
Properties susceptible to inundation from flood waters are evaluated routinely. The evaluation may include implementing tenant and local agency coordination protocols, property incident response plan reviews, insurance provider assessments and the implementation of physical protection elements, such as flood and wind protection barriers.
We routinely utilize technology to evaluate our properties for energy and water performance. Such activities support lower operating expenses, improve comfort for our occupants and reduce our exposure to impacts from policies targeting building energy performance and greenhouse gas emissions.
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Our portfolio strategy includes the development of hazard and vulnerability assessments of our existing properties and scenario planning and economic risk reviews of property development opportunities over long-term ownership periods. In 2021 RMR, in coordination with a third-party consultant, began physical climate scenario analyses for substantially all our properties. The climate scenario assessments under evaluation include current physical climate risk exposure and assessments of future physical climate risk exposure models that consider a “business as usual” approach, a 2.0°C emissions mitigation approach in line with the Paris Climate Agreement and a “middle” approach, all based on the IPCC sixth assessment RCP 8.5, 2.6, and 4.5, respectively. The following table summarizes physical and transitional climate change risks and opportunities identified for our portfolo.
| | | | | | | | | Risks | | | | | | | | | | | | | | | | |
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| | Bruce M.
Gans
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| | Lisa Harris
Jones
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Morea
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| | John G.
Murray
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| | Adam D.
Portnoy
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| | | | | | | | | | | | | | | | | | | | | | Opportunities | | |
| | High level of financial literacy and capital markets experience | | | | | | | | | | | | X | | | | X | | | | X | | |
| | | •
Over time, chronic or acute climate stressors such as extreme heat, increased precipitation, inland flooding or storm surges could lead to the need for capital investments to meet landlord commitments or improve asset resilience. These climate stressors may also impact public infrastructure such as roadways and bridges, limiting access to our properties. | •
Energy or emissions performance standards require capital investments to meet standards and offset regulatory fees. | •
Labor working conditions for warehouse and logistics facilities bay be impacted by extreme or chronic heat. | | | | | •
Energy-efficient, low-carbon footprint and climate change resilient properties may be in high demand, increasing revenue potential. | •
On-site solar power generation can drive down utility expenses and provide clean energy and covered parking for tenants. Battery energy storage may further reduce operating expenses and contribute to an increase of localized grid reliability. •
Innovative solutions such as smart buildings, healthy buildings and buildings with sought-after amenities such as alternative fuels and electric vehicle (EV) charging stations may attract high-quality, investment-grade tenants. | | |
XIV.
SASB Activity Metrics
| | | | | Code | | | | Activity Metric | | | Value | | |
| | Operating business experience | | | | X | | | | X | | | | | | | | X | | | | X | | |
| | | | | | | IF-RE-000.A | | | | | | | | | | Number of assets | | | | | | 411 | | |
| | Commercial real estate or REIT experience | | | | X | | | | | | | | X | | | | X | | | | X | | |
| | | | | | | IF-RE-000.B | | | | | | | | | | Leasable floor area (square meters) | | | | | | 5,569,611 | | |
| | Familiarity with the industrial and logistics markets | | | | | | | | | | | | X | | | | X | | | | X | | |
| | | | | | | IF-RE-000.C | | | | | | | | | | Percentage of indirectly managed assets | | | | | | 96.5% | | |
| | Management / Leadership experience | | | | X | | | | X | | | | X | | | | X | | | | X | | |
| | | | | | | IF-RE-000.D | | | | | | | | | | Average occupancy rate | | | | | | | | |
| | Knowledge of the Company's historical business activities | | | | X | | | | X | | | | X | | | | X | | | | X | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Familiarity with public capital markets | | | | | | | | | | | | X | | | | X | | | | X | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Risk oversight/management expertise | | | | X | | | | X | | | | X | | | | X | | | | X | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Service on other public company board and committees | | | | X | | | | X | | | | X | | | | X | | | | X | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Gender or ethnic diversity | | | | | | | | X | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Managing Trustee | | | | | | | | | | | | | | | | X | | | | X | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Independent Trustee | | | | X | | | | X | | | | X | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | 98.8% | | |
Key Responsibilities of the Board
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Key Responsibilities of Our Board
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| | Oversight of Strategy | | | | Oversight of Risk | | | | Succession Planning | | |
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| | ✓
TheOur Board oversees and monitors strategic planning. ✓
Business strategy is a key focus at theof our Board level and embedded in the work of Board committees. ✓
Company management is charged with executing our business strategy and provides regular performance updates to theour Board.
| | | | ✓
TheOur Board oversees risk management. ✓
Board committees, which meet regularly and report back to theour full Board, play significant roles in carrying out the risk oversight function. ✓
Company management is charged with managing risk, through robust internal processes and effective internal controls.
| | | | ✓
TheOur Board oversees succession planning and talent development for senior executive positions. ✓
The
Our Nominating and Governance Committee makes an annual report to theour Board on succession planning. ✓
In the event of a succession, theour entire Board may work with theour Nominating and Governance Committee, or the Independent Trustees, as applicable, to nominate and evaluate potential successors.
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2019 Proxy Statement 5
TableOur Board’s Role in Oversight of Contents
Risk Management The Board's Role in Oversight of Risk Management
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The
Our Board is elected by our shareholders to, among other things, oversee the Company'sour business and long term strategy. As part of fulfilling its responsibilities, theour Board oversees the safeguarding of the Company's assets, the maintenance of appropriate financial and other internal controls and the Company'sour compliance with applicable laws and regulations. Inherent in these responsibilities is the Board'sour Board’s understanding and oversight of the various risks the Company faces. Thewe face. Our Board considers that risks should not be viewed in isolation and should be considered in virtually every business decision and as part of the Company'sour business strategy.The
Our Board oversees risk as part of its general oversight of theour Company. Oversight of risk is addressed as part of various Board and Board committee activities and through regular and special Board and Board committee meetings. TheOur day to day business of the Company is conducted by our manager, The RMR, Group LLC ("RMR LLC"), and RMR LLC and the Company'sour officers and Director of Internal Audit are responsible for incorporating risk management in their activities. The Company's DirectorOur management and members of Internal Audit reports to theour internal audit group regularly meet with our Audit Committee and provides the Companyprovide us with advice and assistance with the Company'sour risk management function. In discharging their oversight responsibilities, theour Board and Board committees regularly review regularly a wide range of reports provided by RMR LLC and other service providers, provide, including: •
reports on market and industry conditions;
•
operating and regulatory compliance reports;
•
financial reports;
•
reports on risk management activities;
and our ESG activities and initiatives;
•
regulatory and legislative updates that may impact the Company;
us;
•
reports on the security of the Company'sour information technology processes and the Company'sour data; and
•
legal proceedingsproceeding updates and reports on other business related matters.The
Our Board and Board committees discuss these matters among themselves and with representatives of RMR, LLC,our officers, members of the Company, the Director of Internal Audit,our internal audit group, legal counsel, the Company'sour independent auditors and other professionals, as appropriate.The
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Our Audit Committee takes a leading role in helping theour Board fulfill its responsibilities for oversight of the Company'sour financial reporting, internal audit function, risk management, including cybersecurity, and the Company'sour compliance with legal and regulatory requirements. TheOur Board and Audit Committee review periodic reports annually from the Company'sour independent auditors regarding potential risks, including risks related to the Company'sour internal control over financial reporting. Thereporting, and at other times, as may be warranted. Our Audit Committee also annually reviews approves and oversees an internal audit plan developed by the Company's Directormembers of Internal Auditour internal audit group with the goal of helping the Companyus systematically evaluate the effectiveness of itsour risk management, control and governance processes on an annual basis. The Audit Committee considers risks relating to cybersecurity, receiving regular reports from management regarding cybersecurity risks and countermeasures being undertaken or considered by the Company, including updates on the internal and external cybersecurity landscape and relevant technical developments. TheOur Audit Committee meets at least quarterly and reports its findings and results of its monitoring activities and oversight on our financial reporting, internal audit function, risk management, including cybersecurity, and our compliance with legal and regulatory requirements, as applicable, to theour Board. TheOur Audit Committee also meets periodicallyquarterly with the Company's Directormembers of Internal Auditour internal audit group to review the results of the Company'sour internal audits and receive reports, and directs or recommends to theour Board actions or changes it determines appropriate to enhance or improve the effectiveness of our risk management, including cybersecurity, as it determines appropriate.
Our Audit Committee considers risks related to cybersecurity, and receives annual reports from our management regarding cybersecurity risks and countermeasures being undertaken or considered by us, including updates on the Company's risk management.Theinternal and external cybersecurity landscape and relevant technical developments and more frequent reports as it may direct or as warranted. RMR has conducted an external assessment of its cybersecurity controls using a qualified third party. In addition, RMR’s cybersecurity program is aligned to the National Institute of Standards and Technology Cybersecurity Framework. RMR conducts annual data security education and testing for its employees, including RMR employees who provide services to us, in addition to penetration testing and unannounced email phishing exercises.
Our Compensation Committee whose dutiesresponsibilities are detailed in its charter, among other duties,responsibilities, evaluates the performance of the Company's Director of Internal Audit and RMR LLC'sRMR’s performance under the Company'sour business and property management agreements, including any perceived risks created by compensation arrangements. Also, theour Compensation Committee and theour Board consider that the6 2019 Proxy Statement
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Company haswe have a share award program that requires share awards to executive officers to vest over a period of years. The Company believesWe believe that the use of share awards vesting over time rather than stock options mitigates the incentives for the Company'sour management to undertake undue risks and encourages management to make longerlong term and appropriately risk balanced decisions.
It is not possible to identify all of the risks that may affect the Companyus or to develop processes and controls to eliminate all risks and their possible effects, and processes and controls employed to address risks may be limited in their effectiveness. Moreover, it is necessary for the Companyus to bear certain risks to achieve itsour objectives. As a result of the foregoing and other factors, the Company'sour ability to manage risk is subject to substantial limitations. To learn more about the risks facing the Company,we face, you can review the matters discussed in Part I, "ItemItem 1A. Risk Factors"“Risk Factors” and "Warning“Warning Concerning Forward Looking Statements"Forward-Looking Statements” in our Annual Report to Shareholders for the fiscal year ended December 31, 2018 ("Annual Report"2023 (the “Annual Report”). The risks described in the Annual Report are not the only risks facing the Company.we face. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial also may materially adversely affect the Company'sour business, financial condition or results of operations in future periods.
Trustee Independence
Under the corporate governance listing standards of the Nasdaq theand our governing documents, our Board must consist of a majority of Independent Trustees. Our governing documents also require that a majority of the Board be Independent Trustees. Under our governing documents, Independent Trustees are Trustees who are not employees of RMR, LLC, are not involved in the Company'sour day to day activities and who meet the qualifications for independence under the applicable rules of the Nasdaq and the SEC.The
Our Board affirmatively determines whether Trustees have a direct or indirect material relationship with the Company,us, including the Company'sour subsidiaries, other than serving as the Company'sour Trustees or trustees or directors of the Company'sour subsidiaries. In making independence determinations, theour Board observes the Nasdaq and SEC criteria, as well as the criteria set forth in our governing documents. When assessing a Trustee'sTrustee’s relationship with the Company, theus, our Board considers all relevant facts and circumstances, not merely from the Trustee'sTrustee’s standpoint, but also from that of the persons or organizations with which the Trustee has an affiliation. Based on this review, theour Board has determined that Bruce M. Gans, M.D., Lisa Harris Jones, and Joseph L. Morea, Kevin C. Phelan and June S.
| | 16 | | | | | | 2024 Proxy Statement | |
Youngs currently qualify as independent trustees under applicable Nasdaq and SEC criteria and as Independent Trustees under our governing documents. In making these independence determinations, theour Board reviewed and discussed additional information provided by the Trusteesus and the CompanyTrustees with regard to each of the Trustees'Trustees’ relationships with the Company, us, RMR or The RMR Group Inc. (“RMR Inc. or”), the managing member of RMR, LLC and the other companies to which RMR LLC or its subsidiaries provideprovides management services. Theservices (the “RMR Clients”). Our Board has concluded that none of these threefive Trustees possessed or currently possesses any relationship that could impair his, her or hertheir judgment in connection with his, her or hertheir duties and responsibilities as a Trustee or that could otherwise be a direct or indirect material relationship under applicable Nasdaq and SEC standards.
Executive Sessions of Independent Trustees
Executive Sessions of Independent Trustees
|
Pursuant to the Company'sour Governance Guidelines, our Independent Trustees are expected to meet at least twice per year in regularly scheduled meetings at which only Independent Trustees are present. Our Independent Trustees also meet separately with the Company'sour officers, with the Company's Directorother representatives of Internal Auditour management, as appropriate, and with the Company'sour independent auditors. The presiding Trustee for purposes of leading Independent Trustee sessions will be the Chair of the Audit Committee,Lead Independent Trustee, unless the Independent Trustees determine otherwise. 2019 Proxy Statement 7
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Board Leadership Structure
Board Leadership Structure
|
In accordance with our governing documents, the Board is comprised of five Trustees, including three Independent Trustees and two Managing Trustees, and our Board is divided into three classes, with each Trustee of each class elected at an annual meeting of shareholders serving for a term that continues until the third annual meeting of shareholders following his or her election and until his or her successor is elected and qualifies.
All Trustees play an active role in overseeing the Company'sour business both at theour Board and committee levels. As set forth in the Company'sour Governance Guidelines, the core responsibility of our Trustees is to exercise sound, informed and independent business judgment in overseeing theour Company and itsour strategic direction. Our Trustees are skilled and experienced leaders and currently serve or have served as members of senior management in public and private for profit organizations and law firms, and have also served in academia. Our Trustees may be called upon to provide solutions to various complex issues and are expected to, and do, ask hard questions of the Company'sour officers and advisers. Theadvisors. Our Board is small, which facilitates informal discussions and communication from management to theour Board and among Trustees. We do not have a Chairman of the Board or a lead Independent Trustee.Our Chief Financial Officer and Treasurer and our Director of Internal Audit regularly attend Board and Board committee meetings. Special meetings of the Board may be called at any time by any Managing Trustee, the President or pursuant to the request of any two Trustees then in office. Our Managing Trustees, in consultation with the Company's management and the Director of Internal Audit, set the agenda for Board meetings. Other Trustees may suggest agenda items
Adam D. Portnoy serves as well. Discussions at Board meetings are led by the Managing Trustee or Independent Trustee who is most knowledgeable on a subject.ThreeChair of our Trustees, including oneBoard. Our Board believes that Mr. Portnoy’s leadership of RMR and extensive familiarity with our day to day business provide valuable insight for our Board.
Five of our nominees for election at the 2019 Annual Meeting,Trustees are independent under the applicable Nasdaq and SEC criteria and our governing documents. All of the members of theour Audit Committee, Nominating and Governance Committee and Compensation Committee are independent under the applicable listing requirements and rules of the Nasdaq and other applicable laws, rules and regulations, including those of the SEC. As set forth in our governing documents, two of our Trustees are Managing Trustees, persons who have been employees, officers or directors of RMR LLCor RMR Inc., or who have been involved in the Company'sour day to day activities for at least one year prior to his, her or hertheir election as Trustees.
Lead Independent Trustee
We have a Lead Independent Trustee who is selected annually by the vote of a majority of our Independent Trustees. Currently, Dr. Gans serves as our Lead Independent Trustee. Our Lead Independent Trustee has well-defined, robust responsibilities that include:
•
assisting the Board in evaluating its effectiveness;
•
presiding at all meetings of our Board at which the Chair or a Managing Trustee is not present;
•
presiding at all meetings and executive sessions of the Independent Trustees;
•
having the authority to call meetings of the Independent Trustees or executive sessions of the Independent Trustees;
•
serving as the principal liaison between the Independent Trustees and our senior management team;
•
assisting our Compensation Committee in its annual evaluation of the performance of our management and of our manager, RMR;
Code of Business Conduct and Ethics and Committee Governance
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The
•
considering suggestions for meeting agenda items from other Independent Trustees;
•
with our Nominating and Governance Committee and Chair of our Board, monitoring and coordinating with our management on corporate governance issues and developments;
•
authorizing the retention of advisors and consultants who report directly to the Independent Trustees when appropriate; and
•
if requested, and in coordination with the Chair of our Board and our management, being reasonably available for consultation and direct communication with shareholders.
Code of Business Conduct and Ethics and Committee Governance
Our Board is committed to corporate governance that promotes the long term interests of our shareholders. TheOur Board has established Governance Guidelines that provide a framework for effective governance. TheOur Board regularly reviews developments in corporate governance and updates our Governance Guidelines and other governance materials as it deems necessary and appropriate.The Company has
We have also adopted a Code of Business Conduct and Ethics (the "Code"“Code”) to, among other things, provide guidance to our Trustees andboard members, officers and RMR LLC, its officers and employees and its parent's and subsidiaries' directors, officers and employees to ensure compliance with applicable laws and regulations.The
Our Board has an Audit Committee, Compensation Committee and Nominating and Governance Committee. TheOur Audit Committee, Compensation Committee and Nominating and Governance Committee each have adopted a written charter, and each Board committee reviews its written charter on an annual basis to consider whether any changes are required. Our corporate governance materials are available for review in the governance section of our website, including our Governance Guidelines, the charter for each Board committee, the Code, and information about how to report concerns or complaints about accounting, internal accounting controls or auditing matters and any violations or possible violations of the Code, and how to communicate with our Trustees individually or as a group. To access these documents on the Company'sour website visit www.ilptreit.com.8 2019 Proxy Statement
Table
www.ilptreit.com.We intend to satisfy the requirements under Item 5.05 of Contents
Vote Standard for Election of Trustees
|
In uncontested elections our Trustees are elected by a pluralityForm 8-K regarding disclosure of amendments to, or waivers from, provisions of the votes castCode that apply to the principal executive officer, principal financial officer or controller, or persons performing similar functions, by posting such information on our shareholders. Ifwebsite.
Environmental, Social and Governance Policies
Our Board has adopted the amendmentfollowing policies in connection with our efforts to lead a sustainable business and to continue to improve our Declaration of Trust described in Proposal 3 is approved by our shareholders, our Trustee nominees will also be elected by a plurality ofinternal culture and the votes cast by our shareholders in contested elections (i.e., electionscommunities in which the numberwe operate: Employee Health and Wellness, Human Rights, Philanthropy and Business Partners’ Code of nominees standingConduct. These policies reflect our core culture of integrity and mutual respect as well as our commitment to caring for election as Trustees exceeds the number of Trustees to be elected at the meeting).
Adoption of Proxy Access Bylaw
|
In March 2019, after extensive analysis and shareholder engagement, the Nominating and Governance Committee recommended,our tenants and the Board adopted,individuals who provide services to us as well as for the communities in which we operate. Our Employee Health and Wellness policy is designed to protect the health and wellbeing of all individuals in our workplace; our Human Rights policy is designed to promote a proxy access bylaw pursuantculture of mutual respect for people, communities and our planet; our Philanthropy policy sets forth our and RMR’s commitment to whichinvesting in our communities through a shareholder, or a groupvariety of upphilanthropic engagements; and our Business Partners’ Code of Conduct sets forth our expectations for our and RMR’s business partners to 20 shareholders, owning at least three percent ofconduct business in an ethical manner that promotes the outstanding Common Shares continuously for at least three years, may nominate and include in the Company's proxy materials for an annual meeting Trustee nominees constituting up to the greater of two nominees or 20% of the number of Trustees on the Board that holdersaccomplishment of our Common Shares are entitled to elect, provided that for so long asgoals. For additional information regarding our ESG policies, see the Company has a classified Board of less than nine Trustees, such number of Trustee nominees will be reduced so that for any annual meeting it does not exceed one-half of the number of Trustees to be elected at the meeting as noticed by the Company rounded down to the nearest whole number (but not rounded down as a result“Sustainability” section beginning on page 6 of this proviso to less than one). Shareholders making such a nominationProxy Statement.
Prohibition on Hedging
Our Insider Trading Policies and their nominees must also satisfy the informational, documentation and other requirements specified by Section 2.17Procedures expressly prohibit members of our Bylaws.
Board and our officers from engaging in hedging transactions involving our securities. Recommendations for Trustees
The Nominating and Governance Committee is responsible for identifying and evaluating nominees for Trustee and for recommending to the Board nominees for election at each annual meeting of shareholders. The Nominating and Governance Committee may consider candidates suggested by the Company's Trustees, officers or shareholders or by others.
Shareholders who would like to recommend a Trustee nominee for the position of Trustee should submit their recommendations in writing by mail to the Chair of theour Nominating and Governance Committee, c/o Secretary, Industrial Logistics
| | 18 | | | | | | 2024 Proxy Statement | |
Properties Trust, Secretary, at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@ilptreit.com. Any such recommendation shallshould include a description of the candidate'scandidate’s qualifications for Board service, the candidate'scandidate’s written consent to be considered for nomination and to serve if nominated and elected, as well as the addresses and telephone numbers for contacting the shareholder and the candidate for more information. TheOur Nominating and Governance Committee may request additional information about the shareholder recommended nominee or about the shareholder recommending the nominee. Recommendations by shareholders will be considered by theour Nominating and Governance Committee in its discretion using the same criteria as other candidates it considers.As noted above, a shareholder, or a group of up to 20 shareholders, owning at least three percent of the outstanding Common Shares continuously for at least three years may utilize our proxy access bylaw to nominate and include in the Company's proxy materials Trustee candidate(s) for election at an annual meeting of shareholders provided that the shareholder(s) and the nominee(s) satisfy the informational, documentation and other requirements specified by Section 2.17 of our Bylaws.
Shareholders seeking to nominate one or more individuals as a Trustee candidate without relying on our proxy access bylaw shall comply
Communications with the advance notice requirements for shareholder nominations set forth in Section 2.13 of our Bylaws, which include, among other things, requirements as to the proposing shareholder's timely delivery of advance notice, continuous requisite ownership of Common Shares and submission of specified documentation and information. 2019 Proxy Statement 9
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Our Board Communications with the Board
|
The
Our Board has established a process to facilitate communication by shareholders and other interested parties with Trustees.our Trustees, individually or as a group. Communications should be addressed to our Trustees or the Trustee for whom the communication is intended, in care of the Secretary, Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@ilptreit.com.
Shareholder Nominations and Other Proposals
Our business strategy incorporates and values environmental sustainability principles. We seek to operate our properties in a manner that improves the environmental efficiency of their operations. We regularly consider ways to improve our internal culture and the communities in which we operate. Our environmental sustainability and community engagement strategies are primarily implemented by our manager, RMR LLC, and focus on a complementary set of objectives, including the following:
•Responsible Investment:During the acquisition of properties, RMR LLC assesses, among other things, environmental sustainability opportunities and climate related risks as part of the due diligence process. We regularly seek to invest in sustainability practices that improve environmental performance and enhance asset value.
•Environmental Stewardship:We seek to improve the environmental footprint of our properties, including by reducing energy consumption and water usage at our properties, especially when doing so may reduce operating costs and improve the properties' competitive positions.
•Corporate Citizenship:We seek to be a responsible corporate citizen and to strengthen the communities in which we own properties. We have no employees but our manager, RMR LLC, regularly encourages its employees to engage in a variety of charitable and community programs, including participation in a company-wide service day and a matching charitable giving program.
•Diversity:We value a diversity of backgrounds, experience and perspectives. Our Board is comprised of 20% women and minorities. RMR LLC is an equal opportunity employer.
To learn more about the Company's and RMR LLC's sustainability initiatives, visitwww.rmrgroup.com/corporate-sustainability.
Shareholder Nominations and Other Proposals
|
Deadline to Submit Proposals pursuantPursuant to Rule 14a-8 for the 20202025 Annual Meeting of Shareholders:Shareholders: Shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must be received at our principal executive officesoffice on or before December 7, 2019November 20, 2024 in order to be eligible to be included in the proxy statement for the 20202025 annual meeting of shareholders; provided, that, if the date of the 20202025 annual meeting of shareholders is more than 30 days before or after June 3, 2020,May 30, 2025, such a proposal must be submitted within a reasonable time before we begin to print itsour proxy materials. Under Rule 14a-8, the Company iswe are not required to include shareholder proposals in itsour proxy materials in certain circumstances or if conditions specified in the rule are not met.
Deadline to Submit Trustee Proxy Access Nominations for the 2025 Annual Meeting of Shareholders: Under our proxy access bylaw, a shareholder or a group of up to 20 shareholders owning at least three percent of our outstanding Common Shares continuously for at least three years may nominate and include in our proxy materials for the 2025 annual meeting of shareholders Trustee nominees constituting up to the greater of two nominees or 20% of the number of Trustees serving on our Board. In addition, the shareholder(s) and nominee(s) must satisfy the informational, documentation and other requirements specified by Section 2.17 of our Bylaws. Notice of a proxy access nomination for consideration at our 2025 annual meeting of shareholders must be delivered to or mailed and received at our principal executive office not later than November 20, 2024 and not earlier than October 21, 2024.
Deadline to Submit Other Nominations and Proposals for the 20202025 Annual Meeting of Shareholders under our Bylaws:Bylaws: To be timely, shareholder nominations and proposals intended to be made outside of Rule 14a-8 under the Exchange Act and outside of the proxy access bylaw at the 2025 annual meeting of shareholders must be received bydelivered to our Secretary at our principal executive offices,office, in accordance with the requirements of our Declaration of Trust and Bylaws, not later than 5:00 p.m., Eastern time, on December 7, 2019November 20, 2024 and not earlier than November 7, 2019;October 21, 2024; provided, that, if the date of the 20202025 annual meeting of shareholders is more than 30 days earlier or later than June 3, 2020,May 30, 2025, then a shareholder'sshareholder’s notice must be so delivered not later than 5:00 p.m., Eastern time, on the tenth day following the earlier of the day on which (i) notice of the date of the 20202025 annual meeting of shareholders is mailed or otherwise made available or (ii) public announcement of the date of the 20202025 annual meeting of shareholders is first made by the Company.us. Shareholders making such a nomination or proposal must comply with the advance notice and other requirements set forth in our Declaration of Trust and Bylaws, which include, among other things,10 2019 Proxy Statement
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requirements as to the shareholder'sshareholder’s timely delivery of advance notice, continuous requisite ownership of Common Shares and holding of a share certificate for such shares at the time of the advance notice, the record date for determining shareholders entitled to vote at the annual meeting and submissionat the time of specified information.
the annual meeting.
The foregoing description of the deadlines and other requirements for a shareholdershareholders to submit a nomination for election to theour Board or a proposal of other business for consideration at an annual meeting of shareholders is only a summary and is not a complete listing of all requirements. Copies of our Declaration of Trust and
| | | | | 2024 Proxy Statement | | | 19 | |
Bylaws, including the requirements for proxy access or other shareholder nominations and other shareholder proposals, may be obtained by writing to the Company'sour Secretary at Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, or from the SEC'sSEC’s website,www.sec.gov. Any shareholder considering making a nomination or other shareholder proposal should carefully review and comply with those provisions. 2019 Proxy Statement 11
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PROPOSAL 1: ELECTION OF TRUSTEES Upon the recommendation of theour Nominating and Governance Committee, theour Board has nominated Bruce M. Gans, M.D., Lisa Harris Jones, for electionJoseph L. Morea, Kevin C. Phelan and June S. Youngs as an Independent Trustees and Matthew P. Jordan and Adam D. Portnoy as Managing Trustees. Each Trustee in Class I and John G. Murray for election as a Managing Trustee in Class I. Ms. Harris Jones and Mr. Murraynominee currently serveserves on theour Board. If elected, Ms. Harris Jones and Mr. Murrayeach nominee would serve until the Company's 2022our 2025 annual meeting of shareholders and until his, her or hertheir successor is duly elected and qualifies, subject to the individual'sindividual’s earlier death, resignation, retirement, disqualification or removal. We expect that each Trustee nominee for election as Trustee will be able to serve if elected. However, if a Trustee nominee should become unable or unwilling to serve, proxies may be voted for the election of a substitute nominee designated by our Board.
Board of Trustees’ Qualifications and Experience
Our Trustees have a great diversity of experience and bring to our Board a wide variety of skills, qualifications, viewpoints and backgrounds that strengthen their ability to carry out their oversight role on behalf of our shareholders.
| | DIVERSITY OF SKILLS AND EXPERIENCES | |
| | Risk oversight/management expertise | | | Familiarity with the public capital markets | |
| | Accounting and finance experience, including a
high level of financial literacy and understanding of
the impact of financial market trends on the
real estate industry | | | Knowledge of the commercial real estate
(“CRE”) industry and real estate investment
trusts (“REITs”) | |
| | Operating business and/or transactional
experience | | | Familiarity with the industrial and logistics
markets | |
| | Management/leadership experience | | | Service on other public company boards and
committees | |
| | Knowledge of our historical business activities | | | Experience at a strategic or policymaking level in a
business, government, non-profit or academic
organization of high standing | |
| | CORE QUALIFICATIONS AND EXPERIENCES | |
| | High standards of integrity and ethics | | | Diverse perspectives, backgrounds and
experiences, including professional background,
gender, ethnicity and skills | |
| | Business acumen, practical wisdom, ability to
exercise sound judgment in a congenial manner
and ability to make independent analytical
inquiries | | | Commitment to serve on our Board over a
period of years in order to develop knowledge
about our operations and have sufficient time
and availability to devote to Board and
committee matters | |
| | Strong record of achievements, including work experience with a proven record of success | |
| | | | | 2024 Proxy Statement | | | 21 | |
Board Diversity Matrix
The Nominating and Governance Committee is committed to continuing to identify and recruit highly qualified trustee candidates with diverse experiences, perspectives, and backgrounds to join our Board. The table below provides certain information regarding the Board.Assumingcomposition of our Board as of March 20, 2024 and the immediately prior year. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f) and related instructions.
| | | Total Number of Trustees | | | | 7 | | |
| | | Part I: Gender Identity | | | | Female | | | | Male | | | | Non-Binary | | | | Did Not
Disclose
Gender | | |
| | | Trustees | | | | 2 | | | | 5 | | | | — | | | | — | | |
| | | Part II: Demographic Background | | | | | | | | | | | | | | | | | | |
| | | African American or Black | | | | 1 | | | | — | | | | — | | | | — | | |
| | | Alaskan Native or Native American | | | | — | | | | — | | | | — | | | | — | | |
| | | Asian | | | | — | | | | — | | | | — | | | | — | | |
| | | Hispanic or Latinx | | | | — | | | | — | | | | — | | | | — | | |
| | | Native Hawaiian or Pacific Islander | | | | — | | | | — | | | | — | | | | — | | |
| | | White | | | | 1 | | | | 5 | | | | — | | | | — | | |
| | | Two or More Races or Ethnicities | | | | — | | | | — | | | | — | | | | — | | |
| | | LGBTQ+ | | | | — | | |
| | | Did Not Disclose Demographic Background | | | | — | | |
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Snapshot of 2024 Board Nominees
Presented below is a quorum is present atsnapshot of the meeting, aexpected composition of our Board immediately following our 2024 Annual Meeting, assuming the election of our Trustee nominees. Our Board of Trustees believes that, collectively, our Trustees exhibit an effective mix of qualifications, experience and diversity.
A plurality of all the votes cast is required to elect a Trustee at the 2019our 2024 Annual Meeting. The names, principal occupations and certain other information andregarding the Trustee nominees for Trustees, as well as a summary of the key experiences, qualifications, attributes and skills that led theour Nominating and Governance Committee and theour Board to conclude that such persons are currently qualified to serve as Trustees are set forth on the following pages.The
Our Board of Trustees recommends a vote
"FOR"“FOR” the election of
botheach of our Trustee nominees.
12 2019 Proxy Statement
Table of Contents
Trustee Nominees to be Elected at the 2019 Annual Meeting
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| | | | | | | | |
| | Lisa Harris Jones
| | |
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Trustee Nominees to be Elected at Our 2024 Annual Meeting
| | Bruce M. Gans, M.D., 77, Independent Trustee | | | | | | | | |
| | | TRUSTEE SINCE 2018
LEAD INDEPENDENT TRUSTEE
SINCE 2019
BOARD COMMITTEES
Audit
Compensation | | | | | | |
| | 
| | | | Independent Trustee since 2018
Class/Term: Class I with a term expiringPROFESSIONAL EXPERIENCE: Executive vice president and chief medical officer at the 2019 Annual MeetingAge: 51
Kessler Institute for Rehabilitation, from 2001 to March 2021. National medical director for Rehabilitation Select Medical, the parent company of the Kessler Institute, from 2003 to March 2021. Professor of physical medicine and rehabilitation at Rutgers University—New Jersey Medical School. •
Chief policy officer for the American Medical Rehabilitation Providers Association. Senior health policy advisor at Powers Pyles Sutter & Verville, a Washington, DC-based law firm. •
Former president and chief executive officer of the Rehabilitation Institute of Michigan. Emeritus director and secretary for Global Partners Rehabilitation, a nonprofit organization dedicated to training and creating medical rehabilitation care givers in low- and middle-income countries. Board Committees: Audit; Compensation; Nominatingmember of the Foundation for Physical Medicine and Governance (Chair)Other Public Company Boards: TravelCentersRehabilitation and the American Psychiatric Education Council.
Former president of America LLC (since 2013); Senior Housing Propertiesthe American Academy of Physical Medicine and Rehabilitation, a medical society with more than 7,500 members. OTHER RMR PUBLIC CLIENT BOARDS(1): •
AlerisLife Inc. (from 2001 until it was acquired by ABP Trust (since 2015)in March 2023) OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
None
| | |
| | | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | Ms. Harris Jones is the founding member of Harris Jones & Malone, LLC, a law firm based in Maryland. Since founding Harris Jones & Malone, LLC in 2000, Ms. Harris Jones has represented a wide range of clients, focusing her practice in government relations and procurement at both the state and local levels. PriorQUALIFICATIONS Dr. Gans brings to founding Harris, Jones & Malone, LLC, Ms. Harris Jones was associated with other Maryland law firms from 1993 to 1999, and she has represented the City of Baltimore and many of its agencies and related quasi-public entities in various real estate development and financing transactions. In addition to her professional accomplishments, Ms. Harris Jones has heldour Board extensive leadership positionscapability, including through his service in many community servicehealthcare business, professional association, academic and civic organizations for which sheleadership positions. Dr. Gans’s business experience includes serving as the chief executive of a large medical organization as well as other executive positions with healthcare organizations. Dr. Gans has received recognitionsalso had a long academic career, including serving as a college professor of physical medicine and awards, including being the recipientrehabilitation and author of college text books. Dr. Gans has experience in, and knowledge of, the YWCA Greater Baltimore Special Leadership Award in 2012.Specific Qualifications, Attributes, SkillsCRE industry and Experience:
•
professional skills and experience in legal and business finance matters;
•
experience in public policy matters;
•
experience in real estate matters;
•
demonstrated leadership capability as an entrepreneur and founding member of a law firm;
•
workREITs. Dr. Gans has served on public company boards and board committees;
•
African American;
•
female;committees and
•
qualifying possesses institutional knowledge earned through prior service on our Board. Dr. Gans identifies as Caucasian and as male. Dr. Gans qualifies as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents.
| | |
| | Risk Oversight/Management | | | Financial Literacy | | | Public Company Board | | | Human Capital Management | |
| | REIT/Real Estate | | | ESG | | | Government/Public Policy | | | | |
(1)
In addition to us, RMR or its subsidiaries currently provide management services to four other public companies that do not have any employees of their own: Diversified Healthcare Trust (Nasdaq: DHC), Office Properties Income Trust (Nasdaq: OPI), Service Properties Trust (Nasdaq: SVC) and Seven Hills Realty Trust (Nasdaq: SEVN). For us and the companies with no employees, RMR or its subsidiaries provide all business operations and functions pursuant to the terms of the applicable management agreements with those companies.
| | 24 | | | |
| | | 2024 Proxy Statement | |
| | Lisa Harris Jones, 56, Independent Trustee | |
| | TRUSTEE SINCE 2018
BOARD COMMITTEES
Audit
Nominating and Governance (Chair) | | | | | | |
| | 
| | | | Managing Trustee since 2018
PresidentPROFESSIONAL EXPERIENCE: Founding and Chief Executive Officermanaging member of Harris Jones & Malone, LLC, a Maryland based law firm that focuses on state and local lobbying, government relations and procurement, since 2018Class/Term: Class I with 2000.
Practiced corporate securities, mergers and acquisitions, government relations, real estate financing and land use law at other Maryland law firms, prior to founding Harris Jones & Malone, LLC. Worked in a term expiring atpro bono capacity for dyslexia education, community development in Baltimore City’s most challenging areas, and the 2019 Annual MeetingAge: 58
Other Public Company Boards: Hospitality Propertiesadvancement of minority and women business enterprises.
Served in leadership positions on several non-profit boards including the Baltimore Museum of Art and Everyman Theatre. Recognized for both her professional and civic work by multiple entities including Savoy Magazine where she gained national recognition by being named one of the Most Influential Black Corporate Directors. OTHER RMR PUBLIC CLIENT BOARDS(1): •
Diversified Healthcare Trust (since 2018)
| 2015) | |
TravelCenters of America Inc. (from 2013 until it was acquired by BP Products North America Inc. in May 2023) | OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
None | | | | | | | |
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| | Mr. Murray has been the president of Hospitality Properties Trust since June 1996 and its chief executive officer since June 2018, and before then he was its chief operating officer from 1996 until June 2018, and its chief financial officer and treasurer from 1995QUALIFICATIONS Ms. Harris Jones brings to 1996. Mr. Murray has been an executive vice president of RMR LLC since 2001 and served in various other capacities with RMR LLC and its subsidiaries since 1993, including as a senior vice president of RMR LLC from 1993 to 2001. Mr. Murray has also served as a director of Sonesta International Hotels Corporation since 2019. From 2014 to 2017, Mr. Murray served as a member of the board of directors of the American Hotel & Lodging Association representing the owners' segment of the association. Prior to joining RMR LLC, Mr. Murray was employed at Fidelity Brokerage Services Inc. and at Ernst & Young LLP.Specific Qualifications, Attributes, Skills and Experience:
•
leadership position with the Company and RMR LLC and demonstrated management ability;
•
our Board extensive experience in, and knowledge of, the CRE industry and REITs; •
institutional knowledge earned through prior service as an officer of the Company and in leadership positions with RMR LLC;
•
professional skills and expertiseexperience in accountinglegal and business finance matters, public policy and real estate matters. Ms. Harris Jones has dedicated a great deal of her time and resources to matters of public interest. Ms. Harris Jones’s practice includes representation of small and large business enterprises, both publicly and privately held, municipalities and related quasi-public agencies, and nonprofit organizations. Ms. Harris Jones represents clients on a wide range of business interests’ concerns including, but not limited to, public and private real estate development, land use zoning and financing, construction, energy, retail sales, education, transportation, public safety, healthcare, gaming, telecommunications, intellectual technology, procurement, corporate, taxation, labor and experienceemployment, insurance, public interest, election, and environmental law. Ms. Harris Jones has demonstrated leadership capacity as an entrepreneur and founding member of a chief operating officer; and •
qualifying as a Managing Trustee in accordance with the requirements of our governing documents.
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2019 Proxy Statement 13
Table of Contents
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| | Bruce M. Gans, M.D.
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| | | | Independent Trustee since 2018
Class/Term: Class II with a term expiring at the 2020 annual meeting of shareholders
Age: 72
Board Committees: Audit; Compensation (Chair); Nominating and Governance
Other Public Company Boards: Five Star Senior Living Inc. (since 2001)
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| | Dr. Gans has been executive vice president and chief medical officer at the Kessler Institute for Rehabilitation since 2001 and national medical director for Rehabilitation Select Medical, the parent company of the Kessler Institute, since 2003. He is also a professor of physical medicine and rehabilitation at Rutgers University—New Jersey Medical School. Dr. Gans was an independent trustee of Hospitality Properties Trust from 2009 until 2015. Dr. Gans has also served as president and chief executive officer of the Rehabilitation Institute of Michigan. In Dr. Gans's extensive academic career, helaw firm. Ms. Harris Jones has served as professor of physical medicine and rehabilitation at a number of universities, in addition to his current position at Rutgers University—New Jersey Medical School. Dr. Gans is editor of a standard medical textbook on physical medicine and rehabilitation, which is now in its fifth edition, and he has written or coauthored more than forty articles in peer-reviewed publications and twenty-eight abstracts and has served on editorial boards for many medical journals, including serving as the associate editor of the American Journal of Physical Medicine and Rehabilitation. Dr. Gans has testified before the Senate Committee on Veterans' Affairs and has been called on to serve on technical expert panels and to advise the Medicare Payment Advisory Commission, the independent congressional agency established in 1997 to advise the U.S. Congress on issues affecting the Medicare program. Dr. Gans has also served as president of the American Academy of Physical Medicine and Rehabilitation, a medical society with more than 7,500 members, and as a leader in numerous other professional organizations.
Specific Qualifications, Attributes, Skills and Experience:
•
demonstrated leadership capability, including through his service in many healthcare management, professional, academic and civic leadership positions;
•
business experience as the chief executive of a large medical organization;
•
experience in, and knowledge of, the CRE industry and REITs;
•
work on public company boards and board committees;
•
many academiccommittees and professional achievements;
•
possesses institutional knowledge earned through prior service on the Board since shortly after the Company's formation;our Board. Ms. Harris Jones identifies as African American and •
qualifying as female. Ms. Harris Jones qualifies as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents.
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| | Adam D. Portnoy
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| | Risk Oversight/Management | | | | Financial Literacy | | | Public Company Board | | | Investment Expertise | |
| | Legal/Regulatory | | | Human Capital Management | | | Government/Public Policy | | | REIT/Real Estate | |
| | ESG | | | | | | | | |
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| | | | | 2024 Proxy Statement | | | 25 | |
| | Matthew P. Jordan, 49, Managing Trustee | |
| | TRUSTEE SINCE 2022
BOARD COMMITTEES
None | | | | PROFESSIONAL EXPERIENCE: •
Executive Vice President of RMR Inc. since 2017. •
Chief Financial Officer and Treasurer of RMR Inc. since 2015. •
Executive Vice President of RMR since 2017. •
Chief Financial Officer and Treasurer of RMR since 2012. •
Former Chief Accounting officer for RMR. Director and the president and chief executive officer of Tremont Realty Capital LLC since January 2021. Executive vice president, chief financial officer and treasurer of Tremont Realty Capital LLC from October 2017 to December 2020. Executive vice president, chief financial officer and treasurer of RMR Advisors LLC from October 2017 to January 2021 when it merged with Tremont Realty Capital LLC. Employed at Stanley Black & Decker from 2011 to 2012 and before then at Ernst & Young LLP, prior to joining RMR. •
Certified public accountant. OTHER RMR PUBLIC CLIENT BOARDS(1): •
Seven Hills Realty Trust (since 2021) Tremont Mortgage Trust (from 2020 until it merged with Seven Hills Realty Trust in September 2021) OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
None | |
| | QUALIFICATIONS Mr. Jordan brings to our Board leadership experience in his positions with RMR and demonstrated management ability. Mr. Jordan has extensive experience in, and knowledge of, the CRE industry and REITs. Mr. Jordan possesses institutional knowledge earned through prior leadership positions with RMR. Mr. Jordan has professional skills and expertise in accounting and finance and experience as a chief executive officer, chief financial officer and chief accounting officer and is responsible for all accounting and finance matters affecting RMR and its managed REIT clients. Mr. Jordan identifies as Caucasian and as male. Mr. Jordan qualifies as a Managing Trustee in accordance with the requirements of our governing documents. | |
| | Risk Oversight/Management | | | Human Capital Management | | | Financial Literacy | | | Public Company Board | |
| | REIT/Real Estate | | | ESG | | | Investment Expertise | | | Public Company Executive | |
| | 26 | | | | | | 2024 Proxy Statement | |
| | Joseph L. Morea, 68, Independent Trustee | |
| | TRUSTEE SINCE 2018
BOARD COMMITTEES
Audit (Chair) | | | | PROFESSIONAL EXPERIENCE: Vice chairman and managing director, serving as head of U.S. Equity Capital Markets, at RBC Capital Markets, an international investment bank, from 2003 until 2012. •
Head of U.S. Investment Banking for RBC Capital Markets from 2008 to 2009. Prior work as an investment banker, including as a managing director and the co-head of U.S. Equity Capital Markets at UBS, Inc. Former chief operating officer of the Investment Banking Division and head of U.S. Equity Capital Markets at PaineWebber, Inc. •
Former managing director of Equity Capital Markets at Smith Barney, Inc. •
Work as a certified public accountant, prior to working as an investment banker. OTHER RMR PUBLIC CLIENT BOARDS(1): •
Seven Hills Realty Trust (since 2021) TravelCenters of America Inc. (from 2015 until it was acquired by BP Products North America Inc.in May 2023) Tremont Mortgage Trust (from 2017 until it merged with Seven Hills Realty Trust in September 2021) RMR Mortgage Trust (from 2016 to May 2020 (known previously as RMR Real Estate Income Fund)) OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
Portman Ridge Finance Corporation (since 2020) Garrison Capital Inc. (from 2015 until it was acquired by Portman Ridge Finance Corporation in 2020) •
First Eagle Senior Loan Fund (from 2013 to 2021) | |
| | QUALIFICATIONS Mr. Morea brings to our Board extensive experience in, and knowledge of, the investment banking industry and public capital markets. Mr. Morea has demonstrated leadership and management abilities as well as experience in capital raising, strategic business transactions and finance matters. Mr. Morea has experience serving on the boards of public companies as a trustee, director and committee member. Mr. Morea has institutional knowledge earned through prior service on our Board. Mr. Morea identifies as Caucasian and as male. Mr. Morea qualifies as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents. | |
| | Risk Oversight/Management | | | Human Capital Management | | | Financial Expertise | | | Investment Expertise | |
| | REIT/Real Estate | | | ESG | | | Public Company Board | | | | |
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| 2024 Proxy Statement | | 
| 27 | |
| | Kevin C. Phelan, 79, Independent Trustee | |
| | TRUSTEE SINCE 2020
BOARD COMMITTEES
Compensation (Chair)
Nominating and Governance | | | | Managing Trustee since 2017
Class/Term: Class II with a term expiring atPROFESSIONAL EXPERIENCE: Co-chair of the 2020 annual meetingBoston office of shareholdersAge: 48
Other Public Company Boards: Hospitality Properties Trust (since 2007); Senior Housing Properties Trust (since 2007); Office Properties Income TrustColliers International Group, Inc. (formerly known as Government Properties IncomeMeredith & Grew, or M&G), a full service commercial real estate firm, since 2010.
•
President of M&G from 2007 to 2010. Former executive vice president of the executive committee and director and partner of M&G. •
Established the finance and capital markets group of M&G after joining M&G in 1978. Former vice president at State Street Bank & Trust since 2009);Co., where he was responsible for commercial lending. Member of the board of directors of A.D. Makepeace Co., a privately owned cranberry grower and real estate development company. •
Member of several non-profit boards. OTHER RMR Real Estate Income Fund, including its predecessor funds (since 2009); The RMR Group Inc. (since 2015); Tremont MortgagePUBLIC CLIENT BOARDS(1): •
None OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
BNY Mellon Funds Trust (since 2017); Five Star Senior Living Inc. (since 2018); TravelCenters of America LLC (since 2018)2000)
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| | QUALIFICATIONS Mr. Phelan brings to our Board extensive experience in, and knowledge of, the CRE and investment banking industries and the public capital markets. Mr. Phelan has demonstrated leadership and management abilities and experience in capital raising and strategic business transactions. Mr. Phelan has professional training, skills and expertise in, among other things, real estate finance matters and transactions. Mr. Phelan identifies as Caucasian and as male. Mr. Phelan qualifies as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents. | |
| | Risk Oversight/Management | | | Human Capital Management | | | Financial Literacy | | | Public Company Board | |
| | REIT/Real Estate | | | Investment Expertise | | | ESG | | | | |
| | 28 | | | | | | 2024 Proxy Statement | |
| | Adam D. Portnoy, 53, Managing Trustee | | | | | | | | |
| | | TRUSTEE SINCE 2017
CHAIR OF OUR BOARD SINCE 2019
BOARD COMMITTEES
None | | | | | | |
| | Mr. Portnoy has been presidentPROFESSIONAL EXPERIENCE: •
President and chief executive officerChief Executive Officer of The RMR Group Inc. ("RMR Inc."), since shortly after its formation in 2015. Mr. Portnoy has been president President and chief executive officerChief Executive Officer of RMR LLC since 2005, and was a director of RMR LLCDirector from 2006 untilto June 5, 2015 when RMR LLC became a majority owned subsidiary of RMR Inc. and RMR Inc. became RMR LLC'sRMR’s managing member. Mr. Portnoy has been a director of RMR Advisors LLC since 2007 and served as its president from 2007 to September 2017 and its chief executive officer from 2015 to September 2017. Mr. Portnoy has been a director •
Director of Tremont Realty AdvisorsCapital LLC since March 2016 and served as its president and chief executive officer from March 2016 through December 2017. Mr. Portnoy is an owner, the sole2016. •
Sole trustee, controlling shareholder and an officer of ABP Trust. Mr. Portnoy is the majority owner Director and has been a directorcontrolling shareholder of Sonesta International Hotels Corporation and its parent. •
Sole director of AlerisLife, Inc. since 2012. Mr. Portnoy served as president and chief executive officerits acquisition by ABP Trust in March 2023. Director of RMR Real Estate Income FundAdvisors LLC from 2007 to 2015 and as president of Office Properties Income Trust from 2009 to 2011. Mr. Portnoy was a managing trustee of Select Income REIT from 2011 until2021 when it merged with a wholly owned subsidiary of Office Properties Income TrustTremont Realty Capital LLC. Served in December 2018. Mr. Portnoy was a managing trustee of Equity Commonwealth from 2006 until 2014 and served as its president from 2011 to 2014. Prior to joining RMR LLC in 2003, Mr. Portnoy held various positions in the finance industry and public sector, including working as an investment banker at Donaldson, Lufkin & Jenrette and working in private equity at DLJ Merchant Banking Partners and at the International Finance Corporation (a member of The World Bank Group). In addition, Mr. Portnoy previously founded Founded and served as chief executive officer of a privately financed telecommunications company. Mr. Portnoy currently serves as the •
Honorary Consul General of the Republic of Bulgaria to Massachusetts. •
Member of Massachusetts and onOpportunity Alliance, Inc. Board. •
Member of Massachusetts High Technology Council, Inc. Board. •
Chair of the Boardboard of Directorsdirectors of the Pioneer Institute, and previouslyInstitute. Executive committee member of the board of directors of the Greater Boston Chamber of Commerce. •
Member of AJC New England’s Leadership Board. Previously served on the board of governors for the National Association of Real Estate Investment Trusts and the board of trustees of Occidental College.Specific Qualifications, Attributes, Skills
OTHER RMR PUBLIC CLIENT BOARDS(1): •
Service Properties Trust (since 2007) •
Diversified Healthcare Trust (since 2007) •
Office Properties Income Trust (since 2009) •
Seven Hills Realty Trust, including its predecessor companies (since 2009) •
The RMR Group Inc. (since 2015) TravelCenters of America Inc. (from 2018 until it was acquired by BP Products North America Inc. in May 2023) and Experience:chair of its board (from 2019 to May 2023) AlerisLife Inc. (from 2018 until it was acquired by ABP Trust in March 2023) and chair of its board (from 2019 to March 2023) Tremont Mortgage Trust (from 2017 until it merged with Seven Hills Realty Trust in September 2021) OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
None
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| | QUALIFICATIONS Mr. Portnoy brings to our Board extensive experience in, and knowledge of, the asset management and CRE industryindustries and REITs;•
REITs, gained in part through his key leadership position with RMR LLC and its subsidiaries, his public company board service, and his demonstrated management ability; •
public company trustee and director service;
•
ability. Mr. Portnoy also possesses experience in investment banking and private equity; •
experience in starting a telecommunications company and servingequity, as its senior executive;
•
well as institutional knowledge earned through prior service on theour Board since the Company's formation and in leadership positions with RMR LLC;deep knowledge of our business. Mr. Portnoy identifies as Caucasian and •
qualifying as male. Mr. Portnoy qualifies as a Managing Trustee in accordance with the requirements of our governing documents.
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TheOur Nominating and Governance Committee and theour Board believe that, because Mr. Portnoy is the president and chief executive officer of RMR LLC, his day to day work requires his extensive attention toand the business of all the companies (including our Company) for which he serves as a managing trustee or managing director including the Company, and therefore,is integral to his day to day work, service on these additional boards does not impair the amount of attention or time that Mr. Portnoy spends on service on our Board. TheOur Board believes that Mr. Portnoy'sPortnoy’s extensive familiarity with theour day to day business of the Company provides valuable insight for theour Board. |
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14 2019 Proxy Statement
Table of Contents
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| | Risk Oversight/Management | | | | Human Capital Management | | | Financial Literacy | | | Public Company Board | |
| | REIT/Real Estate | | | Investment Expertise | | | ESG | | | Public Company Executive | |
| | Government/Public Policy | | | | | | | | |
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| | | | | 2024 Proxy Statement | | | 29 | |
| | June S. Youngs, 66, Independent Trustee | | | | | | |
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| | | | Independent Trustee since 2018
Class/Term: Class III with a term expiring at the 2021 annual meeting of shareholders
Age: 64
Board Committees: Audit (Chair); Compensation; Nominating and Governance
Other Public Company Boards: THL Credit Senior Loan Fund (since 2013); Eagle Growth & Income Opportunities Fund (since 2015); Garrison Capital Inc. (since 2015); TravelCenters of America LLC (since 2015); RMR Real Estate Income Fund (since 2016); Tremont Mortgage Trust (since 2017)
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| | TRUSTEE SINCE 2022
BOARD COMMITTEES
Audit
Compensation | | | | PROFESSIONAL EXPERIENCE: Executive in residence in management for the Global Supply Chain Management program for Bryant University. Former vice president of Corporate Logistics for CVS Health, responsible for all aspects of corporate logistics, including planning, budgeting and analysis, distribution services, logistics quality and compliance oversight, industrial engineering, continuous improvement and supply chain transformation until April 2019. Director of North American Supply Chain for Ocean Spray Cranberries Inc. prior to joining CVS in 2014. •
Senior vice president, global supply chain and logistics for Hasbro, Inc. from 1997 to 2005. •
Director of distribution and transportation for Nabisco, Inc. from 1984 to 1997. Member of the board of visitors of Northeastern University’s D’Amore-McKim School of Business. •
Member of the Supply Chain Advisory Board for Northeastern University. •
Member of the Supply Chain Advisory Board for the University of Rhode Island. Past chair and member of the board of the New England Chapter of the National Industrial Transportation League and the Council of Supply Chain Management Professionals. OTHER RMR PUBLIC CLIENT BOARDS(1): •
None OTHER NON-RMR MANAGED PUBLIC COMPANY BOARDS: •
None | |
| | QUALIFICATIONS Ms. Youngs brings to our Board demonstrated leadership capability through her service in many logistics management, professional, academic and civic leadership positions. Ms. Youngs has business experience as a vice president of a large retail corporation and significant experience in supply chain logistics. Ms. Youngs identifies as Caucasian and as female. Ms. Youngs qualifies as an Independent Trustee in accordance with the requirements of Nasdaq, the SEC and our governing documents. | |
| | Risk Oversight/Management | | | Human Capital Management | | | Financial Literacy | | | ESG | |
| | 30 | | | | | | 2024 Proxy Statement | |
Executive Officers
Our executive officers serve at the discretion of our Board. There are no family relationships among any of our Trustees or executive officers.
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| | Mr. Morea was a vice chairman and managing director, serving as head of U.S. Equity Capital Markets, at RBC Capital Markets, an international investment bank, from 2003 until 2012. From 2008 to 2009, Mr. Morea also served as the head of U.S. Investment Banking for RBC Capital Markets. Previously, Mr. Morea was employed as an investment banker, including as a managing director and the co-head of U.S. Equity Capital Markets at UBS, Inc., the chief operating officer of the Investment Banking Division and head of U.S. Equity Capital Markets at PaineWebber, Inc. and a managing director of Equity Capital Markets at Smith Barney, Inc. Prior to working as an investment banker, Mr. Morea was employed as a certified public accountant. Mr. Morea served as a trustee of Equity Commonwealth from 2012 until 2014.
Specific Qualifications, Attributes, Skills and Experience:
•
experience in and knowledge of the investment banking industry and public capital markets;
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demonstrated leadership and management abilities;
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experience in capital raising and strategic business transactions;
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experience as a public company trustee and director and board committee member;
•
professional training, skills and expertise in, among other things, finance matters;
•
institutional knowledge earned through prior service on the Board since shortly after the Company's formation; and
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qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents.
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2019 Proxy Statement 15
Table of Contents
The Company's executive officers serve at the discretion of the Board. There are no family relationships among any of the Company's Trustees or executive officers.
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| | John G. Murray
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| | | | President and Chief Executive Officer since 2018
Age: 58
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| | Mr. Murray's background and qualifications are described above.
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| | Richard W. Siedel, Jr.
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| | | | | | | | | | | | | | | | | Yael Duffy Age: 44 | | | | | | | | President since 2022 Chief Operating Officer since 2020 | | | | | | |
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| | | | Chief Financial Officer and Treasurer since 2018
Age: 39
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| | Mr. Siedel has been
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| | | | | | | Ms. Duffy serves as a senior vice presidentSenior Vice President of RMR, LLCresponsible for overseeing asset management, leasing and property management functions of a portfolio of office, industrial and retail properties managed by RMR. Ms. Duffy joined RMR in 2006 and has served in various capacities with RMR since 2016that time. Ms. Duffy has served as president and waschief operating officer of Office Properties Income Trust since January 2024. Ms. Duffy identifies as Caucasian and as female. | | | | | | |
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| | | | | | | | | | | | | | | Tiffany Sy Age: 44 | | | | | | | | Chief Financial Officer and Treasurer since 2023 | | | | | | |
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| | | | | | | Ms. Sy has served as a vice presidentVice President of RMR LLC from 2015 to 2016. He has beensince October 2022 and vice president, chief financial officer and treasurer of Senior Housing PropertiesTremont Realty Capital LLC from October 2022 to September 2023. Tremont Realty Capital LLC is a wholly owned SEC registered investment adviser subsidiary of RMR. Ms. Sy served as chief financial officer and treasurer of Seven Hills Realty Trust since 2016 and was chieffrom October 2022 until September 2023. Prior to joining RMR, Ms. Sy held various accounting officer ofleadership positions at AlerisLife Inc. (then known as Five Star Senior Living Inc. from 2014 through 2015,) and he previously served as controllerBank Rhode Island. Ms. Sy also practiced public accounting for 15 years, including in the audit practice of RMR LLC from 2013 to 2014. Mr. Siedel's former experience also includes various accounting leadership positions, including corporate controller at Sensata Technologies (NYSE: ST) from 2010 to 2013 and an auditor at Ernst & Young LLP from 2001 to 2010.for more than 10 years. Ms. Sy is a certified public accountant. Ms. Sy identifies as Caucasian and female. | | | | | | |
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16 2019 Proxy Statement
Table of Contents
BOARD COMMITTEES
The Audit Committee
| | | | 2024 Proxy Statement | | | 31 | |
BOARD COMMITTEES
Audit Committee
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Joseph L. Morea (Chair)
Bruce M. Gans,
M.D.
Lisa Harris Jones 7
June S. Youngs
8 meetings during 20182023
| | The
| Our Audit Committee is comprised solely of Independent Trustees. Its primary role is to help theour Board fulfill its oversight responsibilities related to the integrity of our financial statements and financial reporting process, the qualifications, independence and performance of our independent registered public accounting firm, the performance of our internal audit function, risk management and our compliance with legal and regulatory requirements. TheOur Audit Committee is responsible for the appointment, compensation, retention and oversight, and the evaluation of the qualifications, performance and independence, of the Company'sour independent auditor and the resolution of disagreements between management and theour independent auditor. TheOur independent auditor reports directly to theour Audit Committee. The Audit Committee also has final authority and responsibility for the appointment and assignment of duties to the Director of Internal Audit. TheOur Audit Committee reviews the overall audit scope and plans of the audit with theour independent auditor. TheOur Audit Committee also reviews with management and theour independent auditors the Company'sour quarterly reports on Form 10-Q, annual reports on Form 10-K and earnings releases.The
Our Board has determined that each member of theour Audit Committee is financially literate and that Mr. Morea is theour Audit Committee's "financialCommittee’s “financial expert."” | |
Compensation Committee
The Compensation Committee
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Members | | | Members
Kevin C. Phelan (Chair)
Bruce M. Gans, (Chair) Lisa Harris Jones
Joseph L. Morea
5M.D.
June S. Youngs4 meetings during 20182023
| | The
| Our Compensation Committee is comprised solely of Independent Trustees. Its primary responsibilities pertain to evaluating the performance and compensation of RMR LLC, ofand our executive officers, and our Director of Internal Audit, evaluating and approving any changes in our agreements with RMR LLC and approving equity compensation awards. TheOur Compensation Committee recommends to theour Board the cash compensation payable to our Trustees for Board and committee service. Our Compensation Committee determines and approves the equity based compensation payable to our Trustees for Board and committee service, and any compensation payable to the Lead Independent Trustee in his, her or their capacity as such. Our Compensation Committee administers our Share Award Plan and determines all awards granted pursuant to the Share Award Plan. It also reviews amounts payable by us to RMR LLC under our business and property management agreements and approves any proposed amendments to or termination of those agreements. | |
Nominating and Governance Committee
The Nominating and Governance Committee
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Members | | | Members
Lisa Harris Jones (Chair) Bruce M. Gans
Joseph L. Morea
3
Kevin C. Phelan2 meetings during 20182023
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| Our Nominating and Governance Committee is comprised solely of Independent Trustees. Its primary role is to identify individuals qualified to become Board members, consistent with criteria approved by theour Board, and to recommend candidates to theour entire Board for nomination or selection as Board members for each annual meeting of shareholders or when vacancies occur, to perform certain assessments of theour Board and Board committees, including to assess the independence of Trustees and Trustee nominees, and to develop and recommend to theour Board governance principles for theour Company. Under its charter, theour Nominating and Governance Committee is also responsible for considering and reporting on the Company'sour succession planning to theour Board. | |
2019 Proxy Statement 17
| | 32 | | | | | | 2024 Proxy Statement | |
In 2018, the2023, our Board held 7five meetings. In 2018,2023, each then Trustee attended 75% or more of the aggregate of all meetings of theour Board and the committees on which he, she or shethey served or that were held during the period in which the Trustee served as a Trustee or committee member. The Company'sAll of the Trustees attended last year’s annual meeting of shareholders. Our policy with respect to Board members'members’ attendance at meetings of theour Board and annual meetings of shareholders can be found in the Company'sour Governance Guidelines, the full text of which appears at the Company'sour website,www.ilptreit.com.
Compensation of Trustees The
Our Board of Trustees believes that competitive compensation arrangements are necessary to attract and retain qualified Independent Trustees. On May 23, 2018, after conducting a market review with respect to leading companies of similar size to Under the Company as well as an industry peer group and other companies managed by RMR LLC or its subsidiaries, upon the recommendation of the Compensation Committee, the Board approved the Company'scurrently effective Trustee compensation arrangements, for Independent Trustees of the Company.The Company will continue to compensate its Independent Trustees through the use of annual retainers plus fees for meetings attended. Effective May 23, 2018, each Independent Trustee receives an annual fee of $50,000$85,000 for services as a Trustee, plus a fee of $1,250 for each Board or Board committee meeting attended. Trustees also received a proratedTrustee. The annual fee for 2018 of $13,333. Up to two $1,250 fees are paid if a Board meeting and one or more Board committee meetings, or two or more Board committee meetings, are held onany new Independent Trustee is prorated for the same date.initial year. Each Independent Trustee who serves as a committee chair of the Board'sour Audit Committee, Compensation Committee or Nominating and Governance CommitteesCommittee also receives an additional annual fee of $20,000, $15,000 $10,000 and $10,000, respectively. The committee chairs of the Board's Audit, Compensation or Nominating$15,000, respectively, and Governance Committeesour Lead Independent Trustee also received a proratedreceives an additional annual fee of $17,500 for 2018serving in this role. Trustees who serve as the chair of $5,000, $3,333 and $3,333, respectively.a special committee receive an additional fee. Trustees are reimbursed for travel expenses they incur in connection with their duties as Trustees and for out of pocket costs they incur in connection with their attending certain continuing education programs.
In 2018, each
Each Independent Trustee and Managing Trustee also receivedreceives an award of 1,000Common Shares annually, which was 20,000 Common Shares in connection with the Company's initial public offering ("IPO") and an annual award of 3,000 Common Shares.2023. Managing Trustees do not receive cash compensation for their services as Trustees.
Trustee Share Ownership Guidelines Trustee Share Ownership Guidelines
|
The
Our Board believes it is important to align the interests of our Trustees with those of our shareholders, and for our Trustees to hold equity ownership positions in theour Company. Accordingly, each Trustee is expected to holdretain at least 20,000 Common Shares by: (a)(which number shall automatically adjust in the caserespect of Trustees elected onstock splits or before March 27, 2018, the date of the 2023 annual meeting of shareholders of the Company and (b) in the case of Trustees elected after March 27, 2018,similar events) within five years fromfollowing: (i) if elected by shareholders, the annual meeting of shareholders of theour Company at which thesuch Trustee was initially elected, or (ii) if earlier,elected by our Board, the first annual meeting of shareholders of theour Company following the initial appointmentelection of thesuch Trustee to theour Board. Compliance with these ownership guidelines is measured as of the end of each fiscal year.annually. Any Trustee who is prohibited by law or by applicable regulation of his, her or hertheir employer from owning equity in theour Company is exempt from this requirement. TheOur Nominating and Governance Committee may consider whether exceptions should be made for any Trustee on whom this requirement could impose a financial hardship. As of January 31, 2019,March 14, 2024, all Trustees have met or, within the applicable period, are expected to meet, these share ownership guidelines. 18 2019 Proxy Statement
Table of Contents
2018 Annual Trustee Compensation
| | | | 2024 Proxy Statement | | | 33 | |
Fiscal Year 2023 Trustee Compensation The following table details the total compensation of the Trustees for the fiscal year ended December 31, 20182023 for services as a Trustee. | Name | | | Fees Earned or Paid
in Cash ($)(1) | | | Stock Awards ($)(2) | | | All Other
Compensation ($) | | | Total ($) | | | Bruce M. Gans, M.D. | | | | | 102,500 | | | | | | 35,600 | | | | | | — | | | | | | 138,100 | | | | Lisa Harris Jones | | | | | 100,000 | | | | | | 35,600 | | | | | | — | | | | | | 135,600 | | | | Matthew P. Jordan(3) | | | | | — | | | | | | 35,600 | | | | | | — | | | | | | 35,600 | | | | Joseph L. Morea | | | | | 105,000 | | | | | | 35,600 | | | | | | — | | | | | | 140,600 | | | | Adam D. Portnoy(3) | | | | | — | | | | | | 35,600 | | | | | | — | | | | | | 35,600 | | | | Kevin C. Phelan | | | | | 100,000 | | | | | | 35,600 | | | | | | — | | | | | | 135,600 | | | | June S. Youngs | | | | | 85,000 | | | | | | 35,600 | | | | | | — | | | | | | 120,600 | | |
| | | | | | | | | Name | | Fees Earned or Paid
in Cash ($)(1) | | Stock Awards ($)(2) | | All Other
Compensation ($) | | Total ($)
| | | | | | | | | | | Bruce M. Gans | | 96,666 | | 83,660 | | — | | 180,326 | Lisa Harris Jones | | 95,416 | | 83,660 | | — | | 179,076 | Joseph L. Morea | | 103,333 | | 83,660 | | — | | 186,993 | John G. Murray(3)(4) | | — | | 60,900 | | — | | 60,900 | Adam D. Portnoy(3) | | — | | 83,660 | | — | | 83,660 | John C. Popeo(3)(4)(5) | | — | | 83,660 | | — | | 83,660 | Barry M. Portnoy(3)(5) | | — | | — | | — | | — | | | | | | | | | | |
(1)- The amounts reported in the Fees Earned or Paid in Cash column reflect the cash fees earned by each Independent Trustee in
2018,2023, consisting of a $63,333$85,000 annual cash fee, and for each of Mr. Morea, Ms. Harris Jones and Messrs. Gans and Morea earnedMr. Phelan, an additional annual cash fee of $13,333, $13,333$20,000, $15,000 and $20,000,$15,000, respectively, for service as a committee chair in 2018. Ms. Harris Jones2023. Dr. Gans earned an additional $18,750 and Messrs. Gans and Morea each earned an additional $20,000 in fees$17,500 for meetings attended in 2018.
(2)For all Trustees other than John G. Murray, equalsservice as the sum of 1,000Lead Independent Trustee.
(2)
Equals 20,000 Common Shares multiplied by the closing price of such shares on March 27, 2018,June 1, 2023, the award date for Common Shares awarded in connection with their initial election as Trustees, and 3,000 Common Shares multiplied by the closing price of such shares on May 23, 2018, the award date. For Mr. Murray, equals 3,000 Common Shares multiplied by the closing price of such shares on December 12, 2018, the award date for Common Shares awarded in connection with his initial election as a Managing Trustee. Amounts shown are also the compensation cost for the award recognized by the Companyus for financial reporting purposes pursuant to Financial Accounting Standards Board Accounting Standards CodificationTM Topic 718, "Compensation—“Compensation—Stock Compensation" ("Compensation” (“ASC 718"718”) (which equals the closing price of the shares on the award date, multiplied by the number of shares subject to the grant)award). No assumptions were used in this calculation. All Common Share awards fully vested on the award date.
(3)
Managing Trustees do not receive cash compensation for their services as Trustees. The compensation of Mr. Murray for his service as an executive officer of the Company is not included here and is described below under "Executive Compensation."
(4)On November 30, 2018, John C. Popeo resigned from his positions as a Managing Trustee and President and Chief Executive Officer of the Company in connection with his retirement. The Board elected Mr. Murray to serve as a Managing Trustee and President and Chief Executive Officer, effective December 1, 2018.
(5)Barry M. Portnoy served as a Managing Trustee of the Company until his death on February 25, 2018. The Board elected Mr. Popeo as a Managing Trustee, effective March 27, 2018, and he served on the Board until his retirement on November 30, 2018. 2019 Proxy Statement 19
Table of Contents
OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY
Trustees and Executive Officers
| 34 | | | | | | 2024 Proxy Statement | |
OWNERSHIP OF OUR EQUITY SECURITIES Trustees and Executive Officers The following table sets forth information regarding the beneficial ownership of the outstanding Common Shares by each Trustee nominee, each Trustee, each of our named executive officers and our Trustees, Trustee nominees named executive officers and other executive officers as a group, all as of January 31, 2019.March 14, 2024. Unless otherwise noted, to the Company'sour knowledge, voting power and investment power in the Common Shares are exercisable solely by the named person and the principal business address of the named person is c/o Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458. | Name and Address | | | Aggregate
Number of
Shares
Beneficially
Owned* | | | Percent of
Outstanding
Shares** | | | Additional Information | | | Adam D. Portnoy | | | | | 837,208 | | | | 1.3% | | | Includes 745,672 Common Shares owned
by ABP Trust. Voting and investment
power with respect to Common Shares
owned by ABP Trust may be deemed to
be shared by Adam D. Portnoy as ABP
Trust’s sole trustee. | | | Matthew P. Jordan | | | | | 81,712 | | | | Less than 1% | | | | | | Lisa Harris Jones | | | | | 70,383 | | | | Less than 1% | | | | | | Joseph L. Morea | | | | | 40,000 | | | | Less than 1% | | | | | | Bruce M. Gans, M.D. | | | | | 37,500 | | | | Less than 1% | | | | | | Kevin C. Phelan | | | | | 43,205 | | | | Less than 1% | | | Includes 8,500 Common Shares owned by
the Anne D. Phelan Trust, of which
Mr. Phelan and his spouse are co-trustees
and beneficiaries. | | | Yael Duffy | | | | | 29,264 | | | | Less than 1% | | | | | | June S. Youngs | | | | | 23,500 | | | | Less than 1% | | | | | | Brian E. Donley(1) | | | | | 16,012 | | | | Less than 1% | | | | | | Tiffany R. Sy | | | | | 2,750 | | | | Less than 1% | | | | | | All Trustees, the Trustee nominees and executive officers as a group (nine persons) | | | | | 1,165,522 | | | | 1.8% | | | | |
| | | | | | | | | | | Name and Address
| | Aggregate
Number of
Shares
Beneficially
Owned*
| | Percent of
Outstanding
Shares**
| | Additional Information
|
|---|
| | | | | | | | | Adam D. Portnoy | | | 758,465 | | | 1.17% | | Includes 745,672 Common Shares owned by ABP Trust. Voting and investment power with respect to Common Shares owned by ABP Trust may be deemed to be shared by Adam D. Portnoy as ABP Trust's sole trustee. | | John C. Popeo | | | 28,122 | | | Less than 1% | | | | John G. Murray | | | 7,791 | | | Less than 1% | | | | Richard W. Siedel, Jr. | | | 6,130 | | | Less than 1% | | | | Lisa Harris Jones | | | 4,057 | | | Less than 1% | | | | Bruce M. Gans | | | 4,000 | | | Less than 1% | | | | Joseph L. Morea | | | 4,000 | | | Less than 1% | | | | | | | | | | | | All Trustees, named executive officers and other executive officers as a group (seven persons) | | | 812,565 | | | 1.25% | | | | | | | | | | |
*- Amounts exclude fractional shares.
**
The percentages indicated are based on 65,074,791approximately 65,842,339 Common Shares outstanding as of January 31, 2019.March 14, 2024. (1)
Mr. Donley resigned as our Chief Financial Officer and Treasurer, effective September 30, 2023. Principal Shareholders
| | | | 2024 Proxy Statement | | | 35 | |
Principal Shareholders Set forth in the table below is information about the number of Common Shares held by persons the Company knowsknown to be the beneficial owners of more than 5.0% of the outstanding Common Shares.Shares based on filings with the SEC pursuant to Section 13(d) and Section 13(g) of the Exchange Act. | Name and Address | | | Aggregate
Number of
Shares
Beneficially
Owned | | | Percent of
Outstanding
Shares* | | | Additional Information | | MCB LP Acquisitions LLC (“MCB”)
2002 Clipper Park Road, Suite 105, Baltimore, Maryland 21211 | | | | | 6,400,000 | | | | | | 9.7% | | | | Based on a Schedule 13G filed with the SEC on
June 29, 2023 by MCB reporting that, at
June 22, 2023, MCB beneficially owned and
had shared voting power over 6,400,000
Common Shares. | | The Vanguard Group, Inc. (“Vanguard”)
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 | | | | | 5,865,958 | | | | | | 8.9% | | | | Based on a Schedule 13G/A filed with the SEC
on February 13, 2024 by Vanguard reporting
that, at December 29, 2023, Vanguard
beneficially owned 5,865,958 Common Shares
and had sole dispositive power over 5,841,805
Common Shares and shared dispositive power
over 24,153 Common Shares. | |
| | | | | | | | | | | Name and Address
| | Aggregate
Number of
Shares
Beneficially
Owned*
| | Percent of
Outstanding
Shares**
| | Additional Information
|
|---|
| | | | | | | | The Vanguard Group, Inc.
("Vanguard")
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 |
| | 9,345,354 | | | 14.4% | | Based on a Schedule 13G filed with the SEC on January 10, 2019 by Vanguard reporting that, at December 31, 2018, Vanguard beneficially owned 9,345,354 Common Shares and had sole voting power over 105,696 Common Shares, shared voting power over 60,689 Common Shares, sole dispositive power over 9,228,091 Common Shares and shared dispositive power over 117,263 Common Shares. | BlackRock, Inc. ("BlackRock")
55 East 52nd Street
New York, New York 10055 | | | 5,787,354 | | | 8.9% | | Based on a Schedule 13G filed with the SEC on February 8, 2019 by BlackRock reporting that, at December 31, 2018, BlackRock beneficially owned and had sole dispositive power over 5,787,354 Common Shares and sole voting power over 5,550,639 Common Shares. | Massachusetts Financial
Services Company ("MFS")
111 Huntington Avenue,
Boston MA 02199 |
| | 3,475,394 | | | 5.3% | | Based on a Schedule 13G filed with the SEC on February 13, 2019 by MFS reporting that, at December 31, 2018, MFS beneficially owned and had sole dispositive power over 3,475,394 Common Shares and sole voting power over 3,394,510 Common Shares. | Cohen & Steers, Inc. ("Cohen")
280 Park Avenue, 10th Floor
New York, NY 10017 | | | 5,473,649 | | | 8.4% | | Based on a Schedule 13G filed with the SEC on February 14, 2019 by Cohen reporting that, at December 31, 2018, Cohen beneficially owned and had sole dispositive power over 5,473,649 Common Shares and sole voting power over 4,809,302 Common Shares. | | | | | | | | |
*Beneficial ownership is shown as of December 31, 2018.
**- Our Declaration of Trust places restrictions on the ability of any person or group to acquire beneficial ownership of more than 9.8% of any class of
the Company's shares.our Common Shares. Vanguard, however, is an Excepted Holder, as defined in our Declaration of Trust, and therefore is not subject to this ownership limit, subject to certain limitations.
- The percentages indicated are based on
65,074,791approximately 65,842,339 Common Shares outstanding as of January 31, 2019.
March 14, 2024.
Section 16(a) Beneficial Ownership Reporting Compliance
| 36 | | | | | | 2024 Proxy Statement | |
| | PROPOSAL 2: | | | ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION | |
As required by Section 16(a)14A of the Securities Exchange Act, we are seeking a non-binding advisory vote from our shareholders to approve the compensation of 1934, as amended (the "Exchange Act"), requires our Trustees,named executive officers as described in the “Compensation Discussion and beneficial owners of more than 10% of our Common Shares to file reports of ownership and changes of ownership with the SECAnalysis” section beginning on page 38 and the Nasdaq. Based“Executive Compensation” section beginning on our records and other information, we believepage 45. Our Board recommends that duringshareholders vote “FOR” the year ended December 31, 2018 all applicable Section 16(a) filing requirements were met. 2019 Proxy Statement 21
Table of Contents
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is comprised entirely offollowing resolution:
RESOLVED: That the three Independent Trustees listed above. No member of the Compensation Committee is a current, or during 2018 was a former, officer or employee of the Company. In 2018, none of the Company's executive officers served (i) on the compensation committee of any entity that had one or more of its executive officers serving on the Board or the Compensation Committeeshareholders of the Company or (ii)approve, on the board of directors or board of trustees of any entity that had one or more of its executive officers serving on the Compensation Committee of the Company. Members of the Compensation Committee serve as independent trustees or independent directors and compensation committee members of other public companies to which RMR LLC or its subsidiaries provide management services. Mr. Gans serves as an independent director of Five Star Senior Living Inc. ("FVE"). Ms. Harris Jones serves as an independent trustee of Senior Housing Properties Trust ("SNH") and an independent director of TravelCenters of America LLC ("TA"). Mr. Morea serves as an independent trustee of Tremont Mortgage Trust ("TRMT") and RMR Real Estate Income Fund ("RIF") and an independent director of TA. In addition, each of our Independent Trustees serves as a director of Affiliates Insurance Company ("AIC"). The disclosures regarding our relationships with these foregoing entities and certain transactions with or involving them under the section entitled "Certain Related Person Transactions" are incorporated by reference herein.22 2019 Proxy Statement
Table of Contents
EXECUTIVE COMPENSATION
The following tables and footnotes summarize the total compensation of the Company's President and Chief Executive Officer and Chief Financial Officer and Treasurer, who were serving as such officers as of December 31, 2018, and the Company's former President and Chief Executive Officer who served during the fiscal year ended December 31, 2018, or the Company's "named executive officers." None of the Company's named executive officers are employed by the Company. The Company's manager, RMR LLC, provides services that otherwise would be provided by employees, and employs and compensates the Company's named executive officers directly and in RMR LLC's sole discretion in connection with their services rendered to the Company and to RMR LLC and the other companies managed by RMR LLC or its subsidiaries. For information regardingnon-binding, advisory basis, the compensation paid by the Company to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis” in this Proxy Statement.
Because your vote is advisory, it will not be binding upon our Board or Compensation Committee. However, our Board values shareholders’ opinions and our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions. Approval of the advisory vote to approve executive compensation requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at our 2024 Annual Meeting. Our Board of Trustees recommends a vote “FOR” the advisory vote to approve executive compensation. | | | | | 2024 Proxy Statement | | | 37 | |
COMPENSATION DISCUSSION AND ANALYSIS Compensation Overview Our compensation structure is unique because of our relationship with our manager, RMR. Our business management agreement with RMR LLC, please seeis designed to incentivize RMR to provide the highest quality services to us. RMR’s base business management fee is paid based on the lower of the historical cost of our properties and our market capitalization. RMR also may earn an incentive management fee based on the three year total return of our Common Shares relative to an index of our peers. Because our named executive officers are employees of RMR and not our Company, RMR, and not our Company, determines the cash compensation payable to our named executive officers. We do not reimburse RMR for compensation RMR paid or pays to our executive officers and our management agreements with RMR do not require RMR to allocate or pay a specific amount or percentage of RMR’s management fees to our named executive officers or require those officers to dedicate a specified amount of their time to our business. RMR Compensation Practices. In order to enable our shareholders to make an informed decision on the non-binding advisory vote to approve the compensation of our named executive officers (“Say on Pay”), RMR has provided us with the following information about the compensation it paid in 2023 to our named executive officers for services provided by those officers to RMR, our Company and other RMR Clients: •
The portion of the management fee that is allocated to named executive officer compensation paid by RMR. •
Of this named executive officer compensation, the breakdown of base salary vs. cash bonus. •
The metrics RMR uses to evaluate performance to determine the named executive officers’ cash bonuses. Our named executive officers are officers and employees of RMR and, as officers and employees of RMR, also provide services to RMR and other RMR Clients. RMR has informed us that the cash compensation paid by RMR to our named executive officers is for services provided by the officers to RMR, our Company and other RMR Clients. RMR has also informed us that it is not able to allocate with reasonable certainty or provide a reasonable estimate of the compensation paid by RMR to our named executive officers for their services to us for a number of reasons, including that: •
Our management agreements with RMR do not require individual executive officers to dedicate a specific amount of time to providing services to us under those agreements. RMR’s officers and employees provide services on an as needed basis across RMR, our Company and all other RMR Clients. •
Our management agreements with RMR do not require that a specified amount or percentage of the management fees we pay to RMR be allocated to our executive officers. •
RMR does not designate a specific amount of time that our named executive officers must spend providing services to us or record the amount of time that our named executive officers (or any other employee of RMR) spend providing services to us or other entities. Summary of 2023 Named Executive Officer Compensation. •
RMR has advised us that in 2023, RMR paid each of our named executive officers cash compensation for services provided by the officers to RMR, our Company and other RMR Clients, which cash compensation was comprised of a base salary and a discretionary cash bonus. With respect to 2023, our named executive officers collectively received aggregate base salary payments of $942,827 and aggregate discretionary cash bonuses of $1,125,000 from RMR.2 These amounts collectively represent 4.6% of the aggregate management fees and reimbursements we paid to RMR for 2023. 2
Our named executive officers were our only executive officers during 2023. Mr. Donley resigned as our Chief Financial Officer, effective September 30, 2023, and Ms. Sy was elected as our Chief Financial Officer and Treasurer, effective October 1, 2023. Although some of our named executive officers served as our executive officers for only a part of 2023, they were employed by RMR for the full year and the cash compensation information described in this Proxy Statement includes the cash compensation RMR paid to each of them for the full year. | | 38 | | | | | | 2024 Proxy Statement | |
On an aggregated basis, the named executive officers received 46% of their total cash compensation in the form of base salary payments and the remaining 54% in the form of discretionary cash bonuses. •
RMR did not provide guaranteed cash bonuses to our named executive officers during 2023 and did not set specific performance targets on which bonuses would be payable to them. Instead, the annual cash bonuses paid by RMR to our named executive officers in 2023 were discretionary in amount and were based on a performance evaluation conducted by certain members of RMR’s Executive Operating Committee. •
RMR Inc. awarded 2,400 shares of Class A common stock of RMR Inc., with a grant date fair value of $59,496, to each of Ms. Duffy and Mr. Donley; and 1,200 shares of Class A common stock of RMR Inc., with a grant date fair value of $29,748, to Ms. Sy (subject to certain vesting requirements described below). The award to Ms. Sy was made in her capacity as an officer of RMR, prior to her becoming our Chief Financial Officer and Treasurer, effective October 1, 2023. •
A list of specified peer companies was considered by RMR to develop appropriate compensation packages for the named executive officers. Named Executive Officer Compensation Philosophy and Process. | | The key principle of RMR’s compensation philosophy for all employees, including our named executive officers, is to pay for performance. RMR maintains a rigorous and thorough talent and compensation review process to ensure that its employees are in appropriate roles that maximize their full potential. This process also ensures that there is strong leadership guiding employees and that there is a succession and development plan for each role. RMR’s goal is to make employee and leadership development an integral part of its culture, supporting each employee and the continued success of RMR, our Company and other RMR Clients. | | | | |
RMR’s named executive officer compensation planning process incorporates key areas of evaluation, including: •
external market data; •
internal benchmarking; and •
quantitative and qualitative assessments of Company, group and individual performance. Named Executive Officer Compensation Practices. RMR’s pay for performance compensation philosophy is reflected in its compensation practices, including: •
no guaranteed salary increases or guaranteed cash bonuses; •
no specific performance targets on which bonuses would be paid; •
no specific incentive or additional performance awards for growing assets under management or for exceeding return benchmarks; •
no excessive perquisites; •
no tax gross-ups; •
annual assessment of named executive officer compensation against peer companies and best practices; •
holistic performance evaluations; and •
annual salary cap. Components of the Named Executive Officers’ Compensation. RMR’s compensation program includes both a base salary and a cash bonus. The cash bonuses RMR pays to our named executive officers are discretionary in amount and are based on a performance evaluation. The evaluation involves an analysis of both (i) the overall performance of RMR, our Company and other RMR Clients, and (ii) the performance of the individual officer and his, her or their contributions, and services provided, to RMR, our Company and other RMR Clients. RMR believes this evaluation process allows RMR to link pay with performance in the | | | | | 2024 Proxy Statement | | | 39 | |
closest way possible and provide RMR with the flexibility necessary to take all relevant factors into account in determining the bonus amounts, including the named executive officer’s ability to react to changing circumstances that impact the businesses of RMR, our Company and other RMR Clients. RMR Inc. also awards shares of Class A common stock of RMR Inc. to our named executive officers. One fifth of the shares awarded vested on the award date and an additional one fifth are scheduled to vest on each of the next four anniversaries of the award date, subject to the applicable named executive officer continuing to render significant services to RMR or one of the RMR Clients or their respective affiliates and to accelerated vesting under certain circumstances. The table below "Related Person Transactions" section. describes the objectives supported by each of RMR’s and RMR Inc.’s primary compensation elements, along with an overview of the key design features of each element. | Compensation Element | | | What It Does | | | Key Measures | | | Base Salary | | | •
Provides a level of fixed pay appropriate to an executive’s role and responsibilities •
Evaluated on an annual basis | | | •
Experience, duties and scope of responsibility •
Internal and external market factors | | | Discretionary Cash Bonus | | | •
Provides a competitive annual cash incentive opportunity •
Links executives’ interests with shareholders’ interests •
Incentivizes and rewards superior group, individual and Company performance | | | •
Based on holistic performance evaluation | | | Equity Compensation | | | •
Links executives’ interests with long-term interests of shareholders •
Incentivizes and rewards superior group, individual and Company performance | | | •
Based on holistic performance evaluation | |
Named Executive Officer Pay Mix. As discussed above, RMR’s compensation program is designed so that the majority of compensation is performance based to promote alignment of our named executive officers’ interests with those of shareholders. During 2023, Mses. Duffy and Sy and Mr. Donley received aggregate performance based discretionary cash bonuses of $1,125,000 from RMR. The base salary payments for our named executive officers (which represent the fixed portion of their compensation packages) are reviewed annually and may be adjusted as RMR deems appropriate. RMR historically adjusts salary payments on October 1, the first day of its fiscal year. During 2023, Mses. Duffy and Sy and Mr. Donley received aggregate base salary payments of $942,827 from RMR. On an aggregated basis, in 2023, Mses. Duffy and Sy and Mr. Donley received 46% of their total cash compensation in the form of base salary payments and the remaining 54% in the form of performance based discretionary bonuses. For information regarding the compensation paid by RMR LLC and RMR Inc. to the named executive officers of RMR Inc., please see the documents filed by RMR Inc. with the SEC, including its Annual Report on Form 10-K for the fiscal year ended September 30, 20182023 and its Proxy Statement on Schedule 14A for its 20192024 Annual Meeting of Shareholders. RMR Inc.'s’s filings with the SEC are not incorporated by reference into this Proxy Statement. | | 40 | | | | | | 2024 Proxy Statement | |
Compensation Philosophy Our compensation program for our executive officers consists of Common Share awards under the Share Award Plan. Our Compensation Committee believes that these share awards recognize our executive officers’ scope of responsibilities, reward demonstrated performance and leadership, motivate future performance and further align the interests of the executive officers with those of our shareholders. Overview of 2023 Compensation Actions In September 2023, our Compensation Committee Chair met with one of our Managing Trustees, Adam D. Portnoy, and the compensation committee chairs of RMR Inc. and other RMR Clients, which included: Diversified Healthcare Trust; Office Properties Income Trust; Service Properties Trust; and Seven Hills Realty Trust (collectively, the “Other RMR Managed REITs”). The purposes of this meeting were, among other things, to discuss compensation philosophy and factors that may affect compensation decisions, to consider the allocation of internal audit and related services costs among RMR Inc., our Company does not payand other RMR Clients, to provide a comparative understanding of potential share awards by us and the Company'sOther RMR Managed REITs and to hear and consider recommendations from RMR concerning potential share awards and the vesting of those shares, which were in part based on the results of RMR’s review of current market practices with respect to executive compensation, and specifically of the companies’ peer groups, and shareholder feedback received during shareholder outreach with respect to the percentage of executive officer compensation received in share awards. The share awards made by the Other RMR Managed REITs are considered to be appropriate comparisons because of the similarities between certain services we require from our share awardees and the services provided by awardees providing similar services to these other companies. Subsequent to this meeting, the members of our Compensation Committee held a meeting at which our Compensation Committee Chair provided a report of the information discussed with Mr. Portnoy and others, and made recommendations for share awards to our named executive officers. Our Compensation Committee then discussed these recommendations and other factors, including the following factors for the 2023 share awards: (i) the value of the proposed share awards; (ii) the historical awards previously awarded to these named executive officers salariesand the corresponding values at the time of the awards; (iii) the recommendations of RMR as presented by Mr. Portnoy, president and chief executive officer of RMR; (iv) the value of share awards to executive officers providing comparable services at the applicable Other RMR Managed REITs and other RMR Clients; (v) the scope of, and any changes to, the responsibilities assigned to, or bonusesassumed by, these named executive officers during the past year and on a going forward basis; (vi) the length of historical services by these named executive officers; (vii) our Compensation Committee’s perception regarding the quality of the services provided by these named executive officers in carrying out those responsibilities; and (viii) our financial and operating performance in the past year and our perceived future prospects. Our Compensation Committee considered these multiple factors in determining whether to increase or decrease the amounts of the prior year’s awards. There was no formulaic approach in the use of these various factors in determining the number of shares to award to each named executive officer. The share amounts we awarded were determined by our Compensation Committee on a discretionary basis using various factors. The named executive officers did not participate in these meetings and were not involved in determining or recommending the amount or form of named executive officer compensation they received from us. Analysis of 2023 Awards under the Share Award Plan Although we do not pay any cash compensation directly to our officers and have no employees, we adopted the Share Award Plan to reward our named executive officers and other RMR employees who provide services to us and to align their interests with those of our shareholders. We award shares under the Share Award Plan to recognize our named executive officers’ scope of responsibilities, reward demonstrated performance and leadership, motivate future performance, align the interests of our executives with those of our other shareholders and motivate the executives to remain employees of RMR and to continue to provide services to us through the term of the awards. | | | | | 2024 Proxy Statement | | | 41 | |
Under its charter, our Compensation Committee evaluates, approves and administers our equity compensation or employee benefits except forplans, which currently consist solely of the Share Award Plan. Our Compensation Committee has historically determined to use awards of Common Shares under the 2018 EquityShare Award Plan rather than seek to issue stock options as equity compensation. Because the value of the Common Shares may be determined in part by reference to its dividend yield relative to market interest rates rather than by its potential for capital appreciation, we believe a conventional stock option plan might not provide appropriate incentives for management for a business like ours, but a share award plan may create a better identity of interests between management and other shareholders. Also, because we believe a stock option plan could have the potential to encourage excessive short term risk taking, we have historically granted share awards rather than issue stock options. Our Compensation Committee uses comparative information about the applicable Other RMR Managed REITs as additional data to help it determine whether it is awarding share amounts that are reasonable based on the characteristics of those REITs and their respective officers. Our Compensation Committee also considers the size and structure of the applicable Other RMR Managed REITs and other RMR Clients, and the experience, length of service and scope of duties and responsibilities of the officers at these other companies to assess the appropriateness of the value of the share awards proposed for our officers in light of the proposed awards for officers with comparable roles at the other companies. Our Compensation Committee reviewed the compensation data regarding the applicable Other RMR Managed REITs and their officers, together with the other factors discussed above in “Overview of 2023 Compensation Actions,” but our Compensation Committee did not undertake a detailed comparison of the named executive officers across the applicable Other RMR Managed REITs or other RMR Clients or assign weight to any particular characteristic of these other companies or their officers because our Compensation Committee determines the share amounts in its sole discretion on a non-formulaic basis. In 2023, our Compensation Committee considered the foregoing factors and the factors set forth above in “Overview of Fiscal 2023 Compensation Actions” and decided to increase the number of Common Shares awarded to each of Mses. Duffy and Sy and Mr. Donley, that were awarded in 2022 in accordance with the recommendation of RMR and the Chair of our Compensation Committee. Ms. Sy’s award of Common Shares in 2023 was in her capacity as an officer of RMR prior to her becoming our executive officer. Our Compensation Committee also determined that it would be appropriate to provide that such share awards would vest upon the occurrence of certain corporate “change in control” or termination events. We determine the fair market value of the shares awarded based on the closing price of the Common Shares on the date of the award. Our Compensation Committee has imposed, and may impose, vesting and other conditions on the awarded Common Shares because it believes that time based vesting encourages the recipients of the share awards to remain employed by RMR and to continue to provide services to us. Our Compensation Committee currently uses a vesting schedule under which one fifth of the shares vest immediately and the remaining shares vest in four equal, consecutive annual installments commencing on the first anniversary of the date of the award. Our Compensation Committee utilizes a four year time based vesting schedule to provide an incentive to provide services for a long term and in consideration of the tax treatment of the share awards to us and to the recipients. In the event a recipient who received a share award ceases to render significant services, whether as an employee or otherwise to us, RMR or any RMR Client during the vesting period, we may cause the forfeiture of the Common Shares that have not yet vested. As with other issued Common Shares, vested and unvested shares awarded under the Share Award Plan (the "Share Award Plan").
are entitled to receive distributions that we make, if any, on the Common Shares. Because the consideration of share awards by our Compensation Committee and our Board is determined on a regular schedule (i.e., in September for our officers and employees of RMR and at the first meeting of our Board after the annual meeting of shareholders for the Trustees), any proximity of any awards to earnings announcements or other market events is coincidental. Our Compensation Committee believes that its compensation philosophy and programs are designed to foster a business culture that aligns the interests of its named executive officers with those of its shareholders. Our Compensation Committee believes that the equity compensation of its named executive officers is appropriate to the goal of providing shareholders dependable, long term returns. Summary Compensation Table
| 42 | | | | | | 2024 Proxy Statement | |
Frequency of Say on Pay | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Stock Awards ($)(1) | | All Other Compensation ($)(2) | | Total ($) |
|---|
John G. Murray(3)
President and Chief Executive Officer |
| 2018 | | | 60,900 | | | — | | | 60,900 | | | | | | | | | | | Richard W. Siedel, Jr.
Chief Financial Officer and Treasurer | | 2018 | | | 116,650 | | | 1,320 | | | 117,970 | | | 2017 | | | — | | | — | | | — | | | | | | | | | | | John C. Popeo(3)
Former President and Chief Executive Officer |
| 2018 | | | 200,310 | | | 1,320 | | | 201,630 | | | 2017 | | | — | | | — | | | — | | | | | | | | | | |
- Our current policy, consistent with the prior vote of our shareholders, is to provide shareholders with an opportunity to approve, on an advisory basis, our compensation of our named executive officers each year at the annual meeting of shareholders. Accordingly, we are providing shareholders with an opportunity to approve this compensation on a non-binding, advisory basis. As noted above, our only compensation paid by us to our named executive officers is Common Share awards. None of our named executive officers are employed by us. Our manager, RMR, provides services that otherwise would be provided by employees and employs and compensates our named executive officers directly and in RMR’s sole discretion in connection with their services rendered to us and to RMR and other RMR Clients as discussed above.
In evaluating our compensation process for 2023, our Compensation Committee generally considered the results of the most recent advisory vote of our shareholders on the compensation of the executive officers named in the proxy statement for our 2023 annual meeting of shareholders. As noted above, Section 14A of the Exchange Act requires that we provide an opportunity for our shareholders to indicate how frequently we should hold the non-binding advisory vote on the compensation paid to our named executive officers. This “frequency” vote is required to be held at least once every six years. We last held a “frequency” vote at our 2020 annual meeting of shareholders. At that meeting, our shareholders voted in favor of holding annual advisory votes on the compensation of our named executive officers. Our next “frequency” vote is expected to be held at the 2026 annual meeting of shareholders. | | | | | 2024 Proxy Statement | | | 43 | |
REPORT OF OUR COMPENSATION COMMITTEE The Compensation Committee (our “Compensation Committee”) of the Board of Trustees (our “Board of Trustees”) of Industrial Logistics Properties Trust has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, our Compensation Committee recommended to our Board of Trustees that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Kevin C. Phelan, Chair
Bruce M. Gans, M.D.
June S. Youngs COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Our Compensation Committee is comprised entirely of the three Independent Trustees listed above. No member of our Compensation Committee is a current, or during 2023 was a former, officer or employee of ours. In 2023, none of our executive officers served (i) on the compensation committee of any entity that had one or more of its executive officers serving on our Board or our Compensation Committee or (ii) on the board of directors or board of trustees of any entity that had one or more of its executive officers serving on our Compensation Committee. | | 44 | | | | | | 2024 Proxy Statement | |
EXECUTIVE COMPENSATION The following tables and footnotes summarize the total compensation we paid to our President and Chief Operating Officer, our Chief Financial Officer and Treasurer and our former Chief Financial Officer and Treasurer, or our “named executive officers.” Brian Donley resigned as our Chief Financial Officer and Treasurer, effective September 30, 2023. Our named executive officers were our only executive officers during 2023. Please see “Compensation Discussion and Analysis—Compensation Overview” above for an explanation of why we pay our named executive officers no cash compensation. For information regarding the compensation paid by RMR and RMR Inc. to our named executive officers, please see the above “RMR Compensation Practices” section. For information regarding the compensation paid by RMR and RMR Inc. to the named executive officers of RMR Inc., please see the documents filed by RMR Inc. with the SEC, including its Annual Report on Form 10-K for the fiscal year ended September 30, 2023 and its Proxy Statement on Schedule 14A for its 2024 Annual Meeting of Shareholders. RMR Inc.’s filings with the SEC are not incorporated by reference into this Proxy Statement. Summary Compensation Table | Name and Principal Position | | | Year | | | Salary(1) | | | Bonus(1) | | | Stock Awards ($)(2) | | | All Other
Compensation
($)(3) | | | Total ($) | | Yael Duffy
President and Chief Operating Officer | | | | | 2023 | | | | — | | | — | | | | | 54,450 | | | | | | 534 | | | | | | 54,984 | | | | | | | 2022 | | | | — | | | — | | | | | 51,225 | | | | | | 5,245 | | | | | | 56,470 | | | | | | | 2021 | | | | — | | | — | | | | | 129,900 | | | | | | 7,498 | | | | | | 137,398 | | | Tiffany R. Sy(4)
Chief Financial Officer and Treasurer | | | | | 2023 | | | | — | | | — | | | | | 5,445 | | | | | | 46 | | | | | | 5,491 | | | | | | | 2022 | | | | — | | | — | | | | | — | | | | | | — | | | | | | — | | | | | | | 2021 | | | | — | | | — | | | | | — | | | | | | — | | | | | | — | | | Brian E. Donley(5)
Former Chief Financial Officer and Treasurer | | | | | 2023 | | | | — | | | — | | | | | 27,225 | | | | | | 145 | | | | | | 27,370 | | | | | | | 2022 | | | | — | | | — | | | | | 10,245 | | | | | | 1,189 | | | | | | 11,434 | | | | | | | 2021 | | | | — | | | — | | | | | — | | | | | | — | | | | | | — | | |
(1)
Our named executive officers are officers and employees of RMR, and as officers and employees of RMR, also provide services to RMR and RMR Clients. In 2023, our named executive officers received aggregate base salary payments of $942,827 and aggregate cash bonuses of $1,125,000 from RMR for services those officers provided to RMR, our Company and other RMR Clients. Although some of our named executive officers served as our executive officers for only a part of 2023, the cash compensation information described in the preceding sentence includes the cash compensation RMR paid to each named executive officer for the full year. (2)
Represents the grant date fair value of Common Share awards in 20182023, 2022 and 2021, as applicable, calculated in accordance with ASC 718 (which equals the closing price of the shares on the award date, multiplied by the number of shares subject to the grant)award). No assumptions were used in this calculation. No Common Shares were awarded in 2017. The values listed in this column include the value of the 5,000 Common Shares the Companywe awarded (i) to Ms. Sy in her capacity as an officer of RMR prior to her becoming our Chief Financial Officer and Treasurer, effective October 1, 2023 and (ii) to Mr. Popeo in his capacity as President and Chief Executive Officer and the 4,000 Common Shares the Company awarded to Mr. Popeo in his capacity as a Managing Trustee. The values listed in this column also include the value of the 3,000 Common Shares the Company award to Mr. Murray in his capacity as a Managing Trustee. The values listed in this column do not include the value of the 2,500 Common Shares the Company awarded to Mr. MurrayDonley in his capacity as an officer and employee of RMR LLC (priorprior to this appointment as Presidenthis becoming our Chief Financial Officer and Chief Executive Officer of the CompanyTreasurer, effective DecemberOctober 1, 2018).
(2)2022. (3)
Consists of cash distributions in the applicable year on unvested Common Shares received in connection with cash distributions the Companywe paid to all of the Company'sour shareholders. The Company paysWe pay no cash compensation to itsour executive officers. As noted above, theyour named executive officers are employees of, and are paid by, RMR LLC.
(3)Mr. Popeo resignedfor their service as our executive officers (other than the Company's President and Chief Executive Officer effective November 30, 2018. The Board appointed John G. Murrayawards of Common Shares described in this Proxy Statement for their service as a Managing Trustee and the Company's President and Chief Executive Officer effective December 1, 2018. In connection with his retirement, RMR LLC entered into a retirement agreement with Mr. Popeo on October 24, 2018. For additional informationour executive officers or, with respect to this agreement and/or(i) Ms. Sy in 2023, for her service as an officer of RMR and (ii) Mr. Popeo's retirement, please see the section entitled "Related Person Transactions"Donley in 2022, for his service as an officer of RMR). (4)
Only one year of information has been provided for Ms. Sy because she was not a named executive officer prior to 2023. (5)
Mr. Donley resigned as Chief Financial Officer and the section entitled "Potential Payments upon Termination or Change in Control" in this Proxy Statement. 2019 Proxy Statement 23
TableTreasurer, effective September 30, 2023. Only two years of Contents
information has been provided for Mr. Donley because he was not a named executive officer prior to 2022. 2018 Outstanding Equity Awards at Fiscal Year End
| | | | 2024 Proxy Statement | | | 45 | |
Share awards granted
2023 Grants of Plan Based Awards The following table shows the total Common Shares awarded by the Companyus to theour named executive officers in 20182023 in their capacity as our officers, other than for Ms. Sy who was awarded these Common Shares in her capacity as an officer of RMR prior to her becoming our Chief Financial Officer and Treasurer, effective October 1, 2023. | Name | | | Grant Date | | | All Other Stock Awards:
Number of Shares of
Stock or Units (#) | | | Grant Date Fair Value of
Stock and Option
Awards ($)(1) | | | Yael Duffy | | | | | 9/13/2023 | | | | | | 15,000 | | | | | | 54,450 | | | | Tiffany R. Sy | | | | | 9/13/2023 | | | | | | 1,500 | | | | | | 5,445 | | | | Brian E. Donley | | | | | 9/13/2023 | | | | | | 7,500 | | | | | | 27,225 | | |
(1)
Equals the number of Common Shares awarded multiplied by the closing price on the date of the Companyaward, which is also the grant date fair value under ASC 718. No assumptions were used in this calculation 2023 Outstanding Equity Awards at Fiscal Year End The agreements governing the Common Shares we awarded to our named executive officers in 2023 (and prior years) provide that one fifth of each award vested on the date of the award grant and an additional one fifth vests on each of the next four anniversaries of the award date, subject to the applicable named executive officer continuing to render significant services, whether as an employee or otherwise, to the Company,us, RMR LLC or any company to which RMR LLC provides management servicesClient or their respective affiliates and to accelerated vesting under certain circumstances. Holders of vested and unvested Common Shares awarded under the Share Award Plan receive distributions that the Company makes,we make, if any, on itsour shares on the same terms as other holders of the Common Shares. The following table shows the total Common Shares awarded by the Companyus in 20182023 and prior years to the Company'sour named executive officers that were unvested as of December 31, 2018.2023. | | | | | | | Stock Awards | | | Name | | | Year
Granted | | | Number of Shares or Units of Stock
That Have Not Vested (#)(1) | | | Market Value of Shares or Units of
Stock That Have Not Vested ($)(2) | | | Yael Duffy | | | 2023 | | | | | 12,000 | | | | | | 56,400 | | | | | 2022 | | | | | 4,500 | | | | | | 21,150 | | | | | 2021 | | | | | 2,000 | | | | | | 9,400 | | | | | 2020 | | | | | 1,000 | | | | | | 4,700 | | | Tiffany R. Sy(3) | | | 2023 | | | | | 1,200 | | | | | | 5,640 | | | | | 2022 | | | | | 450 | | | | | | 2,115 | | | | | 2021 | | | | | 200 | | | | | | 940 | | | | | 2020 | | | | | — | | | | | | — | | | Brian E. Donley(4) | | | 2023 | | | | | 6,000 | | | | | | 28,200 | | | | | 2022 | | | | | 900 | | | | | | 4,230 | | | | | 2021 | | | | | 400 | | | | | | 1,880 | | | | | 2020 | | | | | 200 | | | | | | 940 | | |
| | | | | | | | | | | | | | |
| |
| | Stock Awards |
|---|
| Name | | Year Granted | |
Number of Shares or Units of Stock
That Have Not Vested (#)(1)
| |
Market Value of Shares or Units of
Stock That Have Not Vested ($)(2)
|
|---|
John G. Murray(3) | |
2018 |
|
2,000 |
|
39,340 | Richard W. Siedel, Jr. | |
2018 | |
4,000 | |
78,680 | John C. Popeo(4) | |
2018 |
|
4,000 |
|
78,680 | | | | | | | | |
(1)- The Common Shares awarded in
20182023, 2022, 2021 and 2020 were awarded on September 13, 2018.
- 2023, September 14, 2022, September 15, 2021 and September 17, 2020, respectively.
(2)
Equals the number of Common Shares not vested multiplied by the closing price of the Common Shares on December 31, 2018.
29, 2023. (3)
Ms. Sy was appointed as Chief Financial Officer and Treasurer on October 1, 2023. The Common Shares awarded to Ms. Sy were awarded to her in her capacity as an officer of RMR before becoming an executive officer of our Company. (4)
Mr. Donley was appointed as Chief Financial Officer and Treasurer on October 1, 2022 and resigned effective September 30, 2023. The Common Shares awarded to Mr. Murray in 2018Donley prior to 2023 were awarded to him in his capacity as an officer and employee of RMR LLC before he becamebecoming an executive officer of theour Company.
(4)Under Although Mr. Popeo's retirement agreement,Donley resigned as our executive officer, effective September 30, 2023, pursuant to the Common Shares set forth in the table will continue to vest in accordance with the existing terms of Mr. Popeo's awards through March 31, 2019 and, in connection with his retirement, the Compensation Committee approved the accelerated vesting of allaward agreements, his unvested Common Shares effective as of March 31, 2019.remained outstanding because he continued to render significant services to RMR or other RMR Clients.Potential Payments upon Termination or Change in Control
| 46 | | | | | | 2024 Proxy Statement | |
2023 Stock Vested The following table shows Common Share awards made in 2023 and prior years to our named executive officers that vested in 2023. | | | | Stock Awards | | | Name | | | Number of Shares Acquired
on Vesting (#) | | | Value Realized on
Vesting ($)(1) | | | Yael Duffy | | | | | 6,800 | | | | | | 24,977 | | | | Tiffany R. Sy(2) | | | | | 550 | | | | | | 2,022 | | | | Brian E. Donley(3) | | | | | 2,340 | | | | | | 8,546 | | |
(1)
Equals the number of vesting Common Shares multiplied by the closing price on the dates that such Common Shares vested in 2023. (2)
The Common Shares awarded to Ms. Sy were awarded to her in her capacity as an officer of RMR before becoming an executive officer of our Company. (3)
This amount includes an aggregate of 840 Common Shares awarded to Mr. Donley in his capacity as an officer and employee of RMR. Potential Payments upon Termination or Change in Control The form of share award agreement for awards made to our named executive officers provides for acceleration of vesting of all share awards upon the occurrence of certain change in control or termination events (each, a "Termination Event"“Termination Event”).The following table describes the potential payments to our named executive officers upon a Termination Event, if such event had occurred, as of December 31, 2018. 2023. | Name | | | Number of Shares Vested Upon
Termination Event (#) | | | Value Realized on Termination Event
as of December 31, 2023 ($)(1) | | | Yael Duffy | | | | | 19,500 | | | | | | 91,650 | | | | Tiffany R. Sy(2) | | | | | 1,850 | | | | | | 8,695 | | | | Brian E. Donley(3) | | | | | 7,500 | | | | | | 35,250 | | |
| | | | | | | | | | | | Name | | Number of Shares Vested Upon
Termination Event (#)
| | Value Realized on Termination Event as
of December 31, 2018 ($)(1)
|
|---|
John G. Murray(2) | |
2,000 |
|
39,340 | Richard W. Siedel, Jr. | |
4,000 | |
78,680 | John C. Popeo(3) | |
4,000 |
|
78,680 | | | | | | |
(1)- Equals the number of unvested Common Shares multiplied by the closing price of the Common Shares on December
31, 2018.
- 29, 2023.
(2)
The Common Shares awarded to Mr. Murray in 2018Ms. Sy were awarded to himher in her capacity as an officer of RMR before becoming an executive officer of our Company. (3)
This amount includes an aggregate of 1,500 Common Shares awarded to Mr. Donley in his capacity as an officer and employee of RMR LLC before he becameprior to becoming an executive officer of theour Company.
(3)Under Mr. Popeo's retirement agreement, the Common Shares set forth in the table will continue to vest in accordance with the existing terms of Mr. Popeo's awards through March 31, 2019 and, in connection with his retirement, the Compensation Committee approved the accelerated vesting of all his unvested Common Shares effective as of March 31, 2019. From time to time we have approved, and may in the future approve, the acceleration of vesting of Common Shares previously awarded under the Share Award Plan to former employees of RMR, LLC, which may include individuals who are our executive officers, when their employment with RMR LLC is terminated. For a discussion of the consequences of a Termination Event under the Company'sour business and property management agreements with RMR, LLC, see the below "Related“Related Person Transactions"Transactions” section. Pay Ratio 2019 Proxy Statement 25
Pay ratio disclosure under Item 402(u) has not been provided because we do not have any employees. Pay Versus Performance The following table and footnotes summarize the total compensation we paid to our Named Executive Officers (our “NEOs”), compensation “actually paid” to our NEOs (calculated in accordance with SEC rules), the cumulative total shareholder return of Contentsthe Company, the peer group total shareholder return and our net income for the past four fiscal years. We do not use any financial performance measures to link | | | | | 2024 Proxy Statement | | | 47 | |
compensation actually paid to our NEOs by us to the Company’s performance. Accordingly, pursuant to the SEC rules, we have not included a “company selected measure” or the tabular list of performance measures. Please see “Compensation Discussion and Analysis—Compensation Overview” above for an explanation of why we pay our NEOs no cash compensation. For information regarding the compensation paid by RMR and RMR Inc. to our NEOs, please see the above “RMR and RMR Inc. Compensation Practices” section. Pay Versus Performance | Year | | | Summary
Compensation
Table Total for
Principal
Executive
Officer
(“PEO”) | | | Compensation
Actually Paid
to PEO(1) | | | Summary
Compensation
Table Total for
PEO | | | Compensation
Actually Paid
to PEO(1) | | | Average
Summary
Compensation
Table Total for
Non-PEO NEOs | | | Average
Compensation
Actually Paid
to Non-PEOs
NEOs(2)(3) | | | Value of initial fixed $100
investment based on: | | | Net
Income
(Loss)
$(000s) | | | | | Total
Shareholder
Return | | | Peer Group
Total
Shareholder
Return** | | | | | | | Yael Duffy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 | | | | $ | 54,984 | | | | $80,210 | | | | | — | | | | | | — | | | | $16,430 | | | $22,054 | | | $24.73 | | | | $ | 155.46 | | | | | $ | (107,989) | | | | | | | | Yael Duffy | | | John Murray | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2022 | | | | | 56,470 | | | | | | (124,685)* | | | | | | 121,175 | | | | | | (490,790)* | | | | | | 21,064 | | | | | | (106,492)* | | | | | | 16.96 | | | | | | 130.45 | | | | | | (226,723) | | | | | 2021 | | | | | — | | | | | | — | | | | | | 510,225 | | | | | | 542,690 | | | | | | 139,754 | | | | | | 147,803 | | | | | | 125.58 | | | | | | 185.66 | | | | | | 119,682 | | | | | 2020 | | | | | — | | | | | | — | | | | | | 426,070 | | | | | | 442,115 | | | | | | 119,712 | | | | | | 124,535 | | | | | | 110.84 | | | | | | 114.64 | | | | | | 82,071 | | | |
*
Because the Company does not pay cash compensation to its NEOs, the total compensation from the summary compensation table does not include cash compensation received by our NEOs. The negative values for Compensation Actually Paid in 2022 reflect the decline in value of the share awards granted by us to our NEOs. **
Peer group total shareholder return is based on the MSCI U.S. REIT/Industrial REIT Index. (1)
The following table summarizes the applicable deductions and additions for the PEO in the calculation of Compensation Actually Paid to the PEO. PEO Compensation Actually Paid | | Year | | | PEO Name | | | Total
Compensation
Per Summary
Compensation
Table Less
Stock Grant
Amount | | | Year End
Fair Value
of Equity
Awards
Granted
and
Unvested
During
Applicable
Year | | | Change in
Fair Value
as of Year
End of Any
Prior Year
Awards that
Remain
Unvested as
of Year End | | | Awards
Granted and
Vested in
the Same
Year, at Fair
Value as of
the Vesting
Date | | | Change in
Fair Value
as of Year
End of Any
Prior Year
Awards that
Vested
During
Applicable
Year | | | Total Equity
Value
Reflected in
Compensation
Actually Paid | | | Compensation
Actually
Paid to
PEO | | | | 2023 | | | Yael Duffy | | | | $ | 534 | | | | | $ | 56,400 | | | | | $ | 10,725 | | | | | $ | 10,890 | | | | | $ | 1,661 | | | | | $ | 79,676 | | | | | $ | 80,210 | | |
(2)
The only non-PEO NEOs for 2023 are Tiffany R. Sy and Brian E. Donley. (3)
The following table summarizes the applicable deductions and additions for each of the Non-PEO NEOs in the calculation of Compensation Actually Paid to each Non-PEO NEO. Average Non-PEO NEOs—Compensation Actually Paid | | Year | | | Total
Compensation
Per Summary
Compensation
Table Less
Stock Grant
Amount | | | Year End
Fair Value
of Equity
Awards
Granted
and
Unvested
During
Applicable
Year | | | Change in
Fair Value
as of Year
End of Any
Prior Year
Awards that
Remain
Unvested as
of Year End | | | Awards
Granted and
Vested in
the Same
Year, at Fair
Value as of
the Vesting
Date | | | Change in
Fair Value
as of Year
End of Any
Prior Year
Awards that
Vested
During
Applicable
Year | | | Total Equity
Value
Reflected in
Compensation
Actually Paid | | | Compensation
Actually
Paid to
Non-PEO NEOs | | | | 2023 | | | | $ | 95 | | | | | $ | 16,920 | | | | | $ | 1,537 | | | | $3,267 | | | | $ | 234 | | | | $21,959 | | | $22,054 | |
| | 48 | | | | | | 2024 Proxy Statement | |
Relationship Description *
Because the Company does not pay cash compensation to its NEOs, the total compensation from the summary compensation table does not include cash compensation received by our NEOs. The negative values for Compensation Actually Paid in 2022 reflect the decline in value of the share awards granted by us to our NEOs. | | | | | 2024 Proxy Statement | | | 49 | |
| | 50 | | | | | | 2024 Proxy Statement | |
TABLE OF CONTENTSPROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORSThe
| | PROPOSAL 3: | | | RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS | |
Our Audit Committee has the sole authority and responsibility to hire, evaluate and, when appropriate, replace our independent auditors and is directly responsible for the appointment, compensation and general oversight of the work of theour independent auditors. TheOur Audit Committee is responsible for approving the audit and permissible non-audit services provided by theour independent auditors and the associated fees.The
Our Audit Committee evaluates the performance of our independent auditors annually and determines whether to re-engage the current independent auditors or consider other audit firms. In doing so, theour Audit Committee considers the quality and efficiency of the services provided by the auditors, the auditors'auditors’ technical expertise and knowledge of our operations and industry, the auditors'auditors’ independence, legal proceedings involving the auditors, the results of inspections by the Public Company Accounting Oversight Board ("PCAOB"(“PCAOB”) and peer quality reviews of the auditors and the auditors'auditors’ reputation in the marketplace. In connection with the mandated rotation of theour independent auditors'auditors’ lead engagement partner, theour Audit Committee and its chairChair consider the selection of the new lead engagement partner identified by theour independent auditors. Based on this evaluation, theour Audit Committee has appointed ErnstDeloitte & YoungTouche LLP (“Deloitte”) to serve as the Company'sour independent auditors for the fiscal year ending December 31, 2019. Ernst & Young LLP2024. Deloitte has served as the Company'sour independent auditors since our formation in 2017June 2020 and is considered by management and theour Audit Committee to be well qualified. Further, the Audit Committee and the Board believe that the continued retention of Ernst & Young LLP to serve as the independent registered public accounting firm is in the best interests of the Company and its shareholders.Thewell-qualified.
Our Audit Committee has determined to submit its selection of theour independent auditors to our shareholders for ratification. This vote will ratify prior action by theour Audit Committee and will not be binding upon theour Audit Committee. However, theour Audit Committee may reconsider its prior appointment of theour independent auditors or consider the results of this vote when it determines who to appoint as our independent auditors in the future.
Audit Fees and All Other Fees Audit Fees and All Other Fees
|
The following table shows the fees for audit and other services provided to the Companyus by Ernst & Young LLPDeloitte for the fiscal years ended December 31, 20182023 and 2017.2022. | | | | 2023 Fees(1) | | | 2022 Fees | | | Audit Fees | | | | $ | 1,155,625 | | | | | $ | 1,277,227 | | | | Audit Related Fees | | | | | 31,200 | | | | | | — | | | | Tax Fees | | | | | 31,500 | | | | | | 7,350 | | | | All Other Fees | | | | | 948 | | | | | | 948 | | |
| | | | | | | | | | |
| | 2018 Fees ($)
| | 2017 Fees ($)
|
|---|
Audit Fees(1) | |
824,462 |
|
2,265,913 | Audit Related Fees | |
— | |
— | Tax Fees | |
— |
|
— | All Other Fees | |
720 | |
— | | | | | | |
(1)- The amount of audit fees for
20182023 is based on the fees billed and paid to date and on the estimate for remaining fees provided by Ernst & Young LLPDeloitte to and approved by our or Select Income REIT's ("SIR") Audit Committee for the services provided by Ernst & Young LLP, including in connection with the audit of the Company's 2018 financial statements, prior to that date.Deloitte. The final amount of the fees for those services may vary from the estimate provided. The amount of audit fees for 2017 includes $1,900,0002022 include charges of fees associated with$275,000, $165,000 and $158,000, respectively, related to (i) increased audit requirements pursuant to the IPO which were incurred by SIRCompany’s debt and for which we reimbursed SIR.
26 2019 Proxy Statement
Tablejoint venture agreements entered into during 2022, (ii) the Company’s acquisition of Contents
Monmouth Real Estate Corporation in 2022 and (iii) growth of the Company during 2022. Audit Fees.Fees. This category includes fees associated with the annual financial statements audit and related audit procedures, the audit of internal control over financial reporting, work performed in connection with any registration statements and any applicable Current Reports on Form 8-K and the review of any of the Company'sour Quarterly Reports on Form 10-Q. Audit Related Fees.Fees. This category consists of services that are reasonably related to the performance of the audit or review of financial statements and are not included in "Audit“Audit Fees."” These services principally include due diligence in connection with acquisitions, consultation on accounting and internal control matters, audits in connection with proposed or consummated acquisitions, information systems audits and other attest services. | | | | | 2024 Proxy Statement | | | 51 | |
Tax Fees.Fees. This category consists of fees for tax services, including tax compliance, tax advice and tax planning. All Other Fees.Fees. This category consists of services that are not included in the above categories. The amountamounts for 2018 reflects2023 and 2022 reflect annual subscription fees for Ernst & Young LLP'sDeloitte’s online accounting research application.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
|
The
Our Audit Committee has established policies and procedures that are intended to control the services provided by our independent auditors and to monitor their continuing independence. Under these policies, our independent auditors may not undertake any services unless the engagement is specifically approved by theour Audit Committee or the services are included within a category that has been approved by theour Audit Committee. The maximum charge for services is established by theour Audit Committee when the specific engagement or the category of services is approved. In certain circumstances, our management is required to notify theour Audit Committee when approved services are undertaken and theour Audit Committee or its Chair may approve amendments or modifications to the engagement or the maximum fees. Our Director of Internal AuditRMR’s internal audit group is responsible for reporting to theour Audit Committee regarding compliance with these policies and procedures.The
Our Audit Committee will not approve engagements of theour independent auditors to perform non-audit services for the Companyus if doing so will cause theour independent auditors to cease to be independent within the meaning of applicable SEC or Nasdaq rules. In other circumstances, theour Audit Committee considers, among other things, whether our independent auditors are able to provide the required services in a more or less effective and efficient manner than other available service providers and whether the services are consistent with the PCAOB'sPCAOB’s rules. All services for which the Companywe engaged its independent auditorsDeloitte in fiscal 20182023 and 20172022 were approved by theour Audit Committee. The total fees for audit and non-audit services provided by Ernst & Young LLPDeloitte in fiscal 20182023 and fiscal 20172022 are set forth above. Our or SIR's Audit Committee approved the engagement of Ernst & Young LLPDeloitte in fiscal 2023 and 2022 to provide the non-audit services described above because it determined that Ernst & Young LLPDeloitte providing these services would not compromise Ernst & Young LLP'sits independence and that the firm'sDeloitte’s familiarity with our record keeping and accounting systems would permit the firm to provide these services with equal or higher quality, more efficientlyquickly and at a lower cost than the Companywe could obtain thesecomparable quality services from other providers. 2019 Proxy Statement 27
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Other Information The Company has
We have been advised by Ernst & Young LLPDeloitte that neither the firm, nor any member of the firm, has any material interest, direct or indirect, in any capacity in the Companyus or itsour subsidiaries. One or more representatives of Ernst & Young LLPDeloitte will be present at the 2019our 2024 Annual Meeting. The representatives will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.Assuming a quorum is present at the meeting, ratification
Ratification of the appointment of theour independent auditors requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at the 2019our 2024 Annual Meeting.The
Our Board of Trustees recommends a vote "FOR"“FOR” the ratification of the appointment of ErnstDeloitte & YoungTouche LLP as independent auditors. 28 2019 Proxy Statement
| | 52 | | | | | | 2024 Proxy Statement | |
REPORT OF THEOUR AUDIT COMMITTEE In the course of the Audit Committee'sCommittee (our “Audit Committee”) of the Board of Trustees (our “Board of Trustees”) of Industrial Logistics Properties Trust’s oversight of the Company'sour financial reporting process, theour Audit Committee has: (i) reviewed and discussed with management the audited financial statements for the fiscal year ended December 31, 2018;2023; (ii) discussed with ErnstDeloitte & YoungTouche LLP, the Company'sour independent auditors, the matters required to be discussed under PCAOBPublic Company Accounting Oversight Board (the “PCAOB”) Auditing Standard No. 1301; (iii) received the written disclosures and the letter from theour auditors required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding theour independent auditors'auditors’ communications with theour Audit Committee concerning independence; (iv) discussed with theour independent auditors their independence; and (v) considered whether the provision of non-audit services by theour independent auditors is compatible with maintaining their independence and concluded that it is compatible at this time. Based on the foregoing review and discussions, theour Audit Committee recommended to theour Board of Trustees that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2018,2023, for filing with the SEC.Securities and Exchange Commission. Joseph L. Morea, Chair
Bruce M. Gans, M.D.
Lisa Harris Jones
June S. Youngs | | | | | | | Joseph L. Morea, Chair
Bruce M. Gans
Lisa Harris Jones2024 Proxy Statement | | | 53 | |
2019 Proxy Statement 29
Table of ContentsPROPOSAL 3: APPROVALTABLE OF AN AMENDMENT TO OUR DECLARATION OF TRUST SO THAT IN A CONTESTED ELECTION OUR TRUSTEES ARE ELECTED BY A PLURALITY OF THE VOTES CAST BY OUR SHAREHOLDERS
The Board has approved, and we are seeking shareholder approval for, an amendment to our Declaration of Trust so that in contested elections our Trustees are elected by a plurality of the votes cast by our shareholders. A plurality voting standard in contested elections of our Trustees will ensure that if the number of Trustee nominees proposed by the Board and our shareholders exceeds the total number of Trustees to be elected at a meeting, those Trustee nominees who receive the largest number of votes are elected to the Board. Plurality voting in contested elections of Trustees would align the Company's voting practices for contested elections with the guidelines of many institutional shareholders and proxy advisory firms and is consistent with best practices.
If the amendment proposed by the Board is not approved, in a contested election (which is an election in which the total number of nominees for election to the Board at a meeting of shareholders exceeds the total number of Trustees to be elected at such meeting), nominees must receive a majority of all votes entitled to be cast in order to be elected by shareholders. As a result, it is possible that in a contested election, due to abstentions and against votes, no Trustee would be elected by shareholders or less than the number of Trustees up for election would be elected, in which event the incumbent Trustee(s) would holdover or, if the incumbent Trustee(s) resign(s), the vacancies on the Board would be filled by the remaining Trustees rather than our shareholders. If the amendment proposed by the Board is approved by our shareholders, in a contested election, the Trustee nominees gaining the largest number of votes would be elected by our shareholders, more accurately reflecting the desires of shareholders.
Set forth immediately below is the text of the amendment proposed by the Board to the first sentence of Section 5.3(e) of our Declaration of Trust, marked to show the changes proposed. Words that are crossed out are proposed to be deleted.
Except as may be mandated by any applicable law or the listing requirements of the principal securities exchange on which the Shares are listed, and subject to the provisions of any class or series of Shares hereafter authorized and then outstanding,(1) the affirmative vote ofa plurality of all of the votes cast for the election of a Trustee at a meeting of shareholders of the Trust duly called and at which a quorum is present is required to elect a Trustee in an uncontested election of Trustees, and (2) the affirmative vote of a majority of all the votes entitled to be cast for the election of Trustees at a meeting of shareholders of the Trust duly called and at which a quorum is present is required to elect a Trustee in a contested election (which is an election at which the number of nominees exceeds the number of Trustees to be elected at such meeting).
Proposal 3 asks shareholders to approve the above described amendment to the first sentence of Section 5.3(e) of our Declaration of Trust so that in a contested election Trustees are elected by plurality voting. As indicated above, our Declaration of Trust currently provides a plurality vote standard for uncontested Trustee elections. As required under our Declaration of Trust, assuming a quorum is present at the meeting, the proposed amendment to our Declaration of Trust requires the approval of holders of shares representing a majority of the total number of votes authorized to be cast in respect of shares then outstanding and entitled to vote thereon.
The Board of Trustees recommends a vote "FOR" the approval of the amendment to our Declaration of Trust so that in a contested election our Trustees are elected by a plurality of the votes cast by our shareholders.
30 2019 Proxy Statement
Table of Contents
CONTENTS FREQUENTLY ASKED QUESTIONS
Proxy Materials and Voting Information
1.
What is included in the proxy materials? What is a proxy statement and what is a proxy?
The proxy materials for the 2019our 2024 Annual Meeting include the Notice Regarding the Availability of Proxy Materials, Notice of 20192024 Annual Meeting, this Proxy Statement and theour Annual Report for the fiscal year ended December 31, 2023 (collectively, the "proxy materials"“proxy materials”). If you request a paper copy of these materials, the proxy materials will also include a proxy card or voting instruction form. A proxy statement is a document that the SEC regulations require the Companyus to give you when it askswe ask you to return a proxy designating individuals to vote on your behalf. A proxy is your legal designation of another person to vote the shares you own. That other person is called your proxy. We are asking you to designate the following three persons as your proxies for the 2019 Annual Meeting: Jennifer B. Clark, Secretary; John G. Murray, Managing Trustee, President and Chief Executive Officer; and Adam D. Portnoy, Managing Trustee. 2.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
If your shares are registered directly in your name with the Company'sour registrar and transfer agent, Equiniti Shareowner Services, you are considered a shareholder of record of those shares. If you are a shareholder of record, you should receive only one notice or proxy card for all the Common Shares you hold, whether in certificate form and inor book entry form. If your shares are held in an account you own at a bank or brokerage firm or you hold shares through another nominee, you are considered the "beneficial owner"“beneficial owner” of those shares. If you are a beneficial owner, you will receive voting instruction information from the bank, broker or other nominee through which you own your Common Shares. If you hold some shares of record and some shares beneficially, you should receive a notice or proxy card for all the Common Shares you hold of record and a separate voting instruction form for the shares from the bank, broker or other nominee through which you own Common Shares. 3.
What different methods can I use to vote?
By Written Proxy.Telephone or Internet. All shareholders of record as of the close of business on March 14, 2024, the Record Date, can authorize a proxy to vote their shares by touchtone telephone by calling 1-800-690-6903, or through the internet at www.proxyvote.com, using the procedures and instructions described in your Notice Regarding the Availability of Proxy Materials or proxy card. Beneficial owners may authorize a proxy by telephone or internet if their bank, broker or other nominee makes those methods available, in which case the bank, broker or nominee will include the instructions with the proxy voting materials. To authorize a proxy by telephone or internet, you will need the 16 digit control number provided on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. The telephone and internet proxy authorization procedures are designed to authenticate shareholder identities, to allow shareholders to authorize a proxy to vote their shares and to confirm that their instructions have been recorded properly. Proxies submitted by telephone or through the internet must be received by 11:59 p.m., Eastern time, on May 29, 2024 or, if the meeting is postponed or adjourned to a later date, by 11:59 p.m., Eastern time, on the day immediately preceding the date of the reconvened meeting. By Written Proxy. All shareholders of record as of the close of business on the Record Date also can submit voting instructions by written proxy card. If you are a shareholder of record and receive a Notice Regarding the Availability of Proxy Materials, you may request a written proxy card by following the instructions included in the notice. If you are a beneficial owner, you may request a written proxy card or a voting instruction form from your bank, broker or other nominee. Proxies submitted by mail must be received by 11:59 p.m., Eastern time, on June 2, 2019May 29, 2024 or, if the meeting is postponed or adjourned to a later date, by 11:59 p.m., Eastern time, on the day immediately preceding the date of the reconvened meeting.By Telephone or Internet.
| | 54 | | | | | | 2024 Proxy Statement | |
Electronically at our 2024 Annual Meeting. •
All shareholders of record also can authorize a proxy to vote their shares by touchtone telephone by calling 1-800-690-6903, or throughas of the internet atwww.proxyvote.com, using the procedures and instructions described in your Notice Regarding the Availabilityclose of Proxy Materials or proxy card. Beneficial owners may authorize a proxy by telephone or internet if their bank, broker or other 2019 Proxy Statement 31
Table of Contents
nominee makes those methods available, in which case the bank, broker or nominee will include the instructions with the proxy voting materials. To authorize a proxy by telephone or internet, you will need the 16 digit control number provided on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. The telephone and internet proxy authorization procedures are designed to authenticate shareholder identities, to allow shareholders to vote their shares and to confirm that their instructions have been recorded properly. Proxies submitted by telephone or through the internet must be received by 11:59 p.m., Eastern time, on June 2, 2019 or, if the meeting is postponed or adjourned to a later date, by 11:59 p.m., Eastern time,business on the day immediately preceding the date of the reconvened meeting.
In Person. All shareholders of recordRecord Date may vote in personelectronically at the meeting. Beneficial owners may vote in person at the meeting, if they have a legal proxy, as described in the response to
question 11. Even if you plan to attend our 2024 Annual Meeting, we recommend that you follow the voting directions described above, so that your vote will be counted if you later decide not to attend our 2024 Annual Meeting. •
Beneficial owners as of the close of business on the Record Date may vote electronically at our 2024 Annual Meeting if they have a 16 digit control number, as described in the response to questions 11 and 12. A shareholder may revoke a proxy at any time before it is exercised at our 2024 Annual Meeting, subject to the proxy voting deadlines described above, by authorizing a proxy again on a later date by internet or by telephone, by signing and returning a later dated proxy card, by attending the meeting and voting electronically or by sending an original written statement revoking the prior proxy to our Secretary at our principal executive office (or by hand delivery to the Secretary before the taking of the vote at our 2024 Annual Meeting). Attendance at our 2024 Annual Meeting will not, by itself, revoke a duly executed proxy. Beneficial owners who wish to change their votes should contact the organization that holds their shares. Shareholders must register in advance to attend our 2024 Annual Meeting by visiting www.proxyvote.com. If you have any questions or need assistance in voting your shares or authorizing your proxy, please call the firm assisting the Companyus in the solicitation of proxies:Morrow Sodali LLC
470 West Avenue
Stamford, Connecticut 06902
Shareholders Call Toll Free:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, NY 10005
Shareholders: (800) 662-5200
Banks and Brokers Call Collect: (203) 658-9400431-9629
Brokers: (212) 269-5550 4.
Who may vote at the 2019our 2024 Annual Meeting?
Holders of record of Common Shares as of the close of business on January 31, 2019, the record date,Record Date, or their duly authorized proxies may vote at the meeting. Holders of Common Shares are entitled to one vote for each Common Share held on the record date.Record Date. 5.
What if I authorize a proxy and do not specify how my shares are to be voted?
If you submit a signed proxy card or authorize a proxy by internet or telephone, but do not indicate how your Common Shares should be voted on one or more proposals, then the proxies will vote your shares as theour Board of Trustees recommends on those proposals. Other than the proposals listed on pages 12, 2621, 37 and 30,51, we do not know of any other matters to be presented at the meeting. If any other matters are properly presented at the meeting, the proxies may vote your shares in accordance with their best judgment.discretion. 6.
What is a quorum? How are abstentions, withheld votes and broker non-votes counted?
A quorum of shareholders is required for shareholders to take action at the 2019our 2024 Annual Meeting. The presence, in person or by proxy, of shareholders entitled to cast a majority of all the votes entitled to be cast at the 2019our 2024 Annual Meeting constitutes a quorum. Abstentions and broker non-votes (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owner or the persons entitled to vote and (ii) the broker does not have discretionary voting power on a particular matter), if any, are included in determining whether a quorum is present. Abstentions are not votes cast and, therefore, will not be included in vote totals and will have no effect on the outcome of any Proposal to be acted upon at the 2024 Annual Meeting. A proxy marked “WITHHOLD” | | | | | 2024 Proxy Statement | | | 55 | |
with respect to Proposal 1 or Proposal 2. Brokerwill have the same effect as an abstention.Broker non-votes are not votes cast and, therefore, will not be included in vote totals and will have no effect on the outcome of Proposal 1.1 or 2. There can be no broker non-votes on Proposal 23 as it is a matter on which, if you hold your shares in street name and do not provide voting instructions to the broker, bank or other nominee that holds your shares, the nominee has discretionary32 2019 Proxy Statement
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authority to vote on your behalf. Abstentions and broker non-votes will have the same effect as votes against Proposal 3. 7. What if I change my mind after I authorize a proxy to vote my shares?
Shareholders have the right to revoke a proxy at any time before it is voted at the 2019 Annual Meeting, subject to the proxy voting deadlines described above. Shareholders may revoke a proxy by authorizing a proxy again on a later date by internet or by telephone (only the last internet or telephone proxy submitted prior to the meeting will be counted) or by signing and returning a later dated proxy card or by attending the meeting and voting in person. If you are a beneficial owner, see the response toquestion 12.
A shareholder's attendance at the 2019 Annual Meeting will not revoke that shareholder's proxy unless that shareholder votes again at the meeting or sends an original written statement to the Secretary of the Company revoking the prior proxy. An original written notice of revocation or subsequent proxy should be delivered to Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, Attention: Secretary, or hand delivered to the Secretary before the taking of the vote at the 2019 Annual Meeting.
Beneficial owners who wish to change their votes should contact the organization that holds their shares.
8.
Can I access the proxy materials on the internet? How can I sign up for the electronic proxy delivery service?
The Notice of 20192024 Annual Meeting, this Proxy Statement and the Annual Report are available atwww.proxyvote.com. You may access these proxy materials on the internet through the conclusion of the 2019our 2024 Annual Meeting. Instead of receiving future copies of the Company'sour proxy materials by mail, shareholders of record, as of the close of business on the Record Date, and most beneficial owners may elect to receive these materials electronically. Opting to receive your future proxy materials electronically will reduce the environmental impact of our annual meeting, save us the cost of printing and mailing documents, and also will give you an electronic link to our proxy voting site. Your Notice Regarding the Availability of Proxy Materials instructs you as to how you may request electronic delivery of future proxy materials.9.
8.
How are proxies solicited and what is the cost?
The Company bears
We bear all expenses incurred in connection with the solicitation of proxies. The Company hasproxies on behalf of the Company. We have engaged Morrow Sodali LLC ("Morrow Sodali"D.F. King & Co., Inc. (“D.F. King”) to assist with the solicitation of proxies for an estimated fee of $15,000$12,500 plus reimbursement of expenses. The Company hasWe have agreed to indemnify Morrow SodaliD.F. King against certain liabilities arising out of the Company'sour agreement with Morrow Sodali.D.F. King. We will request banks, brokers and other nominees to forward proxy materials to the beneficial owners of Common Shares and to obtain their voting instructions. We will reimburse those firms for their expenses of forwarding proxy materials. Proxies may also be solicited, without additional compensation, by the Company'sour Trustees and officers, and by RMR, LLC, its officers and employees and its parent'sparent’s and subsidiaries'subsidiaries’ directors, trustees, officers and employees, by mail, telephone or other electronic means or in person. 2019 Proxy Statement 33
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10.
9.
As permitted by the Exchange Act and our Bylaws, we may deliver to shareholders only one copy of the Notice Regarding the Availability of Proxy Materials, Notice of 20192024 Annual Meeting, this Proxy Statement and the Annual Report to shareholdersShareholders residing at the same address, unless the shareholders havea shareholder at such address has notified us of theirsuch shareholder’s desire to receive multipleseparate copies of those documents. This practice is known as "householding."“householding.” We will deliver a separate copy of any of those documents to you if you write to the Companyus at Investor Relations, Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458, or call the Companyus at (617) 219-1489. If you want to receive separate copies of our notices regarding the availability of proxy materials, notices of annual meetings, proxy statements and annual reports in the future, or if you are receiving multiple copies and would like to receive only one copy per household, you should contact your bank, broker or other nominee, or you may contact us at the above address or telephone number. | | 56 | | | | | | 2024 Proxy Statement | |
2024 Annual Meeting Information 10.
Why is our 2024 Annual Meeting being held virtually? To provide all of our shareholders an opportunity to participate in our 2024 Annual Meeting, our 2024 Annual Meeting will be a completely virtual meeting of shareholders. Shareholders attending our 2024 Annual Meeting virtually will be afforded the same rights and opportunities to participate as they would have had at an in-person meeting. 11.
How do I attend the 2019our virtual 2024 Annual Meeting? In order to attend and participate in our 2024 Annual Meeting, shareholders must register in person?
advance at www.proxyvote.com by 11:59 p.m. Eastern time, on May 29, 2024. Attendance at the meeting is limited to the Company'sour Trustees and officers, shareholders as of the record date (January 31, 2019)close of business on the Record Date or their duly authorized representatives or proxies, and other persons permitted by the Chairmanchair of the meeting. All attendees need photo identification for admission.
•
Record owners: If you are a shareholder as of the record dateclose of business on the Record Date who holds shares directly, you need not present any documentation to attend the 2019may participate in our 2024 Annual Meeting other than photo identification.
by visiting https://www.virtualshareholdermeeting.com/ILPT2024 and entering the 16 digit control number located on your Notice Regarding the Availability of Proxy Materials or proxy card. •
Beneficial owners: If you are a shareholder as of the record dateclose of business on the Record Date who holds shares indirectly through a brokerage firm, bank or other nominee, you must present evidencemay participate in our 2024 Annual Meeting by visiting https://www.virtualshareholdermeeting.com/ILPT2024 and entering the 16 digit control number located on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. Please follow the instructions from your beneficial ownership of shares. For this purpose,bank, broker or nominee included with these proxy materials, or contact your bank, broker or nominee to request a copy of a letter or account statement from the applicable brokerage firm, bank or other nominee confirming such ownership will be acceptable and such copy may be retained by the Company. Please note that you will not be able to vote your shares at the meeting without a legal proxy, as described in the response toquestion 12.control number if needed. If you have questions regarding thesepreregistration procedures or admission procedures, please call Investor Relations at (617) 219-1489. 12.
How can I vote in personelectronically at the meetingour 2024 Annual Meeting if I am a beneficial owner?
If you are a beneficial owner and want to vote your shares at the 2019our 2024 Annual Meeting, you need to have a legal proxy16 digit control number from your bank, broker or other nominee. You also need toPlease follow the procedures described in the response toquestionquestions 3 and 11 and to bring the legal proxy with you to the meeting and hand it in with a signed ballot that will be provided to you at the meeting. . You will not be able to vote your shares at the meeting without a legal proxy. If you do not have a legal proxy, you can still attend the meeting by following the procedures described in the response toquestion 11. However, you will not be able to vote your shares at the meeting without a legal proxy. The Company encourages16 digit control number. We encourage you to vote your shares in advance, even if you intend to attend the meeting. 13.
How can I ask questions at our 2024 Annual Meeting? 34 2019 Proxy Statement
Shareholders as of Contentsthe close of business on the Record Date who attend and participate in our 2024 Annual Meeting at https://www.virtualshareholdermeeting.com/ILPT2024 will have an opportunity to submit questions live via the internet during a designated portion of the program. Shareholders must have available their control number provided on their proxy card or voting instruction form. If you experience any technical difficulties accessing our 2024 Annual Meeting or during the meeting, please call the toll-free number that will be available on our virtual shareholder login site for assistance. We will have technicians ready to assist you with any technical difficulties you may have beginning 15 minutes prior to the start of our 2024 Annual Meeting. | | | | | 2024 Proxy Statement | | | 57 | |
Company Documents, Communications and Shareholder Proposals13.
14.
How can I view or request copies of the Company'sour SEC filings and other documents?
You can visit our website to view our Governance Guidelines, Board committee charters and the Code. To view these documents, go towww.ilptreit.com, click on "Investors"“Investors” and then click on "Governance."“Governance.” To view the Company'sour SEC filings and Forms 3, 4 and 5 filed by the Company'sour Trustees and executive officers, go towww.ilptreit.com, click on "Investors,"“Investors,” click on “Financial Information” and then click on "Financial Information" and then click on "SEC“SEC Filings."” We will deliver free of charge, upon request, a copy of the Company'sour Governance Guidelines, Board committee charters, Code or Annual Report to any shareholder requesting a copy. Requests should be directed to Investor Relations at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.14.
15.
How can I communicate with the Company'sour Trustees?
Any shareholder or other interested person who wants to communicate with the Company'sour Trustees individually or as a group, should write to the party for whom the communication is intended,such Trustee(s), c/o Secretary, Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or email secretary@ilptreit.com. The communication will then be delivered to the appropriate party or parties.15.Trustee(s).
16.
How do I submit a nomination or other proposal for action at the 20202025 annual meeting of shareholders?
A nomination or other proposal for action to be presented by any shareholder at the Company's 2020our 2025 annual meeting of shareholders must be submitted as follows:
•
For a proposal to be eligible to be included in the proxy statement pursuant to Rule 14a-8 under the Exchange Act, the proposal must be received at the Company'sour principal executive officesoffice by December 7, 2019.
November 20, 2024. •
If the shareholder nomination is to be included in the proxy statement pursuant to our proxy access bylaw, the nomination must be made in accordance with the procedures and requirements set forth in our Bylaws and must be delivered to or mailed and received by us not later than November 20, 2024 and not earlier than October 21, 2024. •
If the shareholder nomination or proposal is not to be included in the proxy statement pursuant to our proxy access bylaw or Rule 14a-8, the nomination or proposal must be made in accordance with the procedures and requirements set forth in our Bylaws and must be received by the Companydelivered to us not later than 5:00 p.m., Eastern time, on December 7, 2019November 20, 2024 and not earlier than November 7, 2019.October 21, 2024. Proposals should be sent to the Company'sour Secretary at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458. For additional information regarding how to submit a shareholder proposal, see page 1019 of this Proxy Statement. 2019 Proxy Statement 35
| | 58 | | | | | | 2024 Proxy Statement | |
RELATED PERSON TRANSACTIONS The descriptions of agreements in this "Related“Related Person Transactions"Transactions” section do not purport to be complete and are subject to, and qualified in their entirety by, reference to the actual agreements, copies of certain of which are filed as exhibits to the Annual Report. A "related“related person transaction"transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which (i) the Company was, iswe were, are or will be a participant, (ii) the amount involved exceeds $120,000 and (iii) any related person had, has or will have a direct or indirect material interest. A "related person"“related person” means any person who is, or at any time since January 1, 20182023 was: •
a Trustee, a nominee for Trustee or an executive officer of the Company;
ours; •
known to the Companyus to be the beneficial owner of more than 5.0% of the outstanding Common Shares when a transaction in which such person had a direct or indirect material interest occurred or existed;
•
an immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of any of the persons referenced in the preceding two bullets, and any person (other than a tenant or employee) sharing the household of any of the persons referenced in the preceding two bullets; or
•
a firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10.0% or greater beneficial ownership interest.The Company has
We have adopted written Governance Guidelines that describe the consideration and approval of related person transactions. Under these Governance Guidelines, the Companywe may not enter into a transaction in which any Trustee or executive officer, any member of the immediate family of any Trustee or executive officer or other related person, has or will have a direct or indirect material interest unless that transaction has been disclosed or made known to theour Board and theour Board reviews and approves or ratifies the transaction by the affirmative vote of a majority of the disinterested Trustees, even if the disinterested Trustees constitute less than a quorum. If there are no disinterested Trustees, the transaction must be reviewed, authorized and approved or ratified by both (i) the affirmative vote of a majority of theour Board and (ii) the affirmative vote of a majority of the Independent Trustees. In determining whether to approve or ratify a transaction, theour Board, or disinterested Trustees or Independent Trustees, as the case may be, also act in accordance with any applicable provisions of the Company'sour Declaration of Trust and Bylaws, and consider all of the relevant facts and circumstances and approve only those transactions that they determine are fair and reasonable to the Company.us. All related person transactions described belowin Annex A to this Proxy Statement were reviewed and approved or ratified by a majority of the disinterested Trustees or otherwise in accordance with the Company'sour policies, Declaration of Trust and Bylaws, each as described above.above, and Maryland law. In the case of any transactions with the Companyus by employees of RMR Inc. and its subsidiaries who are subject to the Code but who are not our Trustees or executive officers, of the Company, the employee must seek approval from an executive officer who has no interest in the matter for which approval is being requested. Copies of the Company'sour Governance Guidelines and the Code are available on our website, www.ilptreit.com. Certain related person transactions are set forth in Annex A to this Proxy Statement. | | | | | 2024 Proxy Statement | | | 59 | |
OTHER INFORMATION At this time, we know of no other matters that will be brought before the Company's website,www.ilptreit.com.Certain Related Person Transactions
meeting. If, however, other matters properly come before the meeting or any postponement or adjournment, the persons named in the accompanying proxy card intend to vote the shares for which they have been appointed or authorized as proxy in accordance with their discretion on such matters to the maximum extent that they are permitted to do so by applicable law. Jennifer B. Clark
Secretary Newton, Massachusetts
March 20, 2024 | | 60 | | | | | | 2024 Proxy Statement | |
ANNEX A—CERTAIN RELATED PERSON TRANSACTIONS Relationships with RMR LLC and Others Related to It. The Company has We have relationships and historical and continuing transactions with RMR, LLC, RMR Inc., and others related to them. Onethem, including other RMR Clients, some of the Company'swhich have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The chair of our Board and one of our Managing Trustees, Adam D. Portnoy, asis the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., isthe chair of the board of directors, a managing director, and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. Barry M. Portnoy, Adam Portnoy's father, was the Company'sRMR. Matthew Jordan, our other Managing Trustee, is executive vice president, chief financial officer and a managing director and an officertreasurer of RMR Inc. and, an officer and employee of RMR LLC until his death on February 25, 2018. John G. Murray, who succeeded John C. Popeo as the36 2019 Proxy Statement
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Company's other Managing Trustee and President and Chief Executive Officer effective December 1, 2018, and eachABP Trust. Each of the Company's otherour current officers is also an officer and employee of RMR LLC and, until November 30, 2018, John Popeo was an officerRMR. Some of RMR LLC and will be an employee of RMR LLC until March 31, 2019. The Company'sour Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services.Clients. Adam Portnoy serves as the chair of the boards and until his death, Barry Portnoy served, as a managing director or managing trustee of each of these companies and otherpublic companies. Other officers of RMR, LLCincluding Mr. Jordan and certain of our other officers, serve as managing trustees or managing directorsofficers of certain of these companies. In addition, officers of RMR LLC and RMR Inc. serve as the Company's officers and officers of other companies to which RMR LLC or its subsidiaries provide management services.
RMR LLC or its subsidiaries provide management services to four other Nasdaq listed REITs: Hospitality Properties Trust, which owns hotels and travel centers; Office Properties Income Trust (formerly known as Government Properties Income Trust, "OPI"), which owns buildings primarily leased to single tenants and those with high credit quality characteristics, such as government tenants; SNH, which primarily owns healthcare, senior living and medical office buildings; and TRMT, which primarily originates and invests in first mortgage loans secured by middle market and transitional commercial real estate. RMR LLC also provides services to other publicly and privately owned companies, including: FVE, which is listed on the Nasdaq and operates senior living communities; TA, which is listed on the Nasdaq and operates and franchises travel centers and restaurants; and Sonesta International Hotels Corporation ("Sonesta"), which operates, manages and franchises hotels, resorts and cruise ships. A subsidiary of RMR LLC is an investment adviser to RIF, a closed end investment company listed on the NYSE American, which invests in securities of real estate companies that are not managed by RMR LLC.
The Company has
We have no employees. The personnel and various services the Company requireswe require to operate the Company'sour business are provided to the Companyus by RMR LLC. Upon completion of the IPO on January 17, 2018, the Company enteredRMR. We have two agreements with RMR LLC to provide management services to the Company:us: (i) a business management agreement, which relates to the Company'sour business generally, and (ii) a property management agreement, which relates to the Company'sour property level operations. Both of these management agreements are described below, see "—“—Management Agreements with RMR LLC."
.” Management Agreements with RMR LLC. The Company'sRMR. Our management agreements with RMR LLC provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms: •
Base Management Fee.Fee. The annual base management fee payable to RMR LLC by the Companyus for each applicable period is equal to the lesser of:
o
○
the sum of (a) 0.5% of the average aggregate historical cost of the real estate assets acquired from a REIT to which RMR LLC provided business management or property management services (the "Transferred Assets"), which include the 266 properties SIR contributed to the Company in connection with its formation and IPO (the "Initial Properties"“Transferred Assets”), plus (b) 0.7% of the average aggregate historical cost of the Company'sour real estate investments excluding the Transferred Assets up to $250.0 million, plus (c) 0.5% of the average aggregate historical cost of the Company'sour real estate investments excluding the Transferred Assets exceeding $250.0 million; and
o ○
the sum of (a) 0.7% of the average closing price per Common Share on the stock exchange on which such Common Shares are principally traded during such period, multiplied by the average number of Common Shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of the Company'sour preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of the Company'sour consolidated indebtedness during such period (together, the "Company's“Company’s Average Market Capitalization"Capitalization”) up to $250.0 million, plus (b) 0.5% of the Company'sour Company’s Average Market Capitalization exceeding $250.0 million. The average aggregate historical cost of the Company'sour real estate investments includes the Company'sour consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves.
•
Incentive Management Fee.Fee. The incentive management fee which may be earned by RMR LLC for an annual period is calculated as follows:
o
○
An amount, subject to a cap, based on the value of the outstanding Common Shares, equal to 12.0% of the product of:
§if the relevant measurement period ends on or before December 31, 2020, $1.56 billion (the Company's unadjusted equity market capitalization as calculated at the IPO) or, if the relevant measurement period ends thereafter, the Company's
▪
our equity market capitalization on the last trading day of the calendar year immediately prior to the relevant measurement period, and
§ ▪
the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of the holders of Common | | | | | 2024 Proxy Statement | | | A-1 | |
Shares (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable market index, or the benchmark return per share, for the relevant measurement period. Effective as of January 1, 2019, the Company amended the Company's business management agreement with RMR LLC so that the SNLThe MSCI U.S. REIT/Industrial REIT Index will be used asis the applicable marketbenchmark index for periods beginning on and after JanuaryAugust 1, 2019, with2021, and the SNL U.S.U. S. REIT EquityIndustrial Index usedis the benchmark index for periods ending on or prior to December 31, 2018. For purposes of the total return per share of the holders of Common Shares, share price appreciation for a measurement period is determined by subtracting (1) if the measurement period ends on or before December 31, 2020, $24.00 per Common Share (the Company's unadjusted initial share price, as defined under the business management agreement, based on the Company's IPO price of the Common Shares), if the measurement period ends after December 31, 2020, the closing price of the Common Shares on the Nasdaq on the last trading day of the year immediately before the first year of the applicable measurement period from (2) the average closing price of the Common Shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period.o
○
The calculation of the incentive management fee (including the determinations of the Company'sour equity market capitalization, initial share price and the total return per share of holders of Common Shares) is subject to adjustments if additionalwe issue or repurchase our Common Shares, or our Common Shares are issuedforfeited, during the measurement period.
o ○
No incentive management fee is payable by the Companyus unless theour total return per share during the measurement period is positive.
o ○
The measurement periods are generally three year periods ending with the year for which the incentive management fee is being calculated, with shorter periods applicable in the case of the calculation of the incentive fee for 2020 (the period beginning on January 12, 2018, the first day the Common Shares began trading, and ending on December 31, 2020), 2019 (the period beginning on January 12, 2018 and ending on December 31, 2019) and 2018 (the period beginning on January 12, 2018 and ending on December 31, 2018).
ocalculated. ○
If the Company'sour total return per share exceeds 12.0% per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable market index for such measurement period and 12.0% per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if the Company'sour total return per38 2019 Proxy Statement
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share is between 200 basis points and 500 basis points below the applicable market index in any year, by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, the Company'sour total return per share is more than 500 basis points below the applicable market index.
o- index in any year, determined on a cumulative basis (i.e., between 200 basis points and 500 basis points per year multiplied by the number of years in the measurement period and below the applicable market index).
○
The incentive management fee is subject to a cap. The cap is equal to the value of the number of Common Shares which would, after issuance, represent 1.5% of the number of Common Shares then outstanding multiplied by the average closing price of Common Shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period.
o ○
Incentive management fees the Companywe paid to RMR LLC for any period may be subject to "clawback"“clawback” if the Company'sour financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC and the amount of the incentive management fee the Companywe paid was greater than the amount the Companywe would have paid based on the restated financial statements. Pursuant to the Company'sour business management agreement with RMR, LLC, the Companywe recognized net business management fees of approximately $7.3$23.2 million for the period from January 17, 2018 throughyear ended December 31, 2018. The Company2023. We did not incur an incentive management fee pursuant to the Company'sour business management agreement for the year ended December 31, 2023. In calculating the incentive management fee payable by us, our total shareholder return per share3 and benchmark return per share were adjusted in accordance with our business management agreement to reflect aggregate net increases in the number of Common Shares outstanding as a result of certain share issuances, repurchases and forfeitures by us during the three year measurement period ended December 31, 2018.- 2023.
3
“Total shareholder return” for purposes of the incentive management fee calculation differs from “total shareholder return” presented in the performance graph in the Annual Report because “total shareholder return” for purposes of the incentive management fee calculation has been determined in accordance with the terms of the business management agreement and includes adjustments for Common Shares issued, repurchased and forfeited during the period and other items whereas “total shareholder return” presented in the performance graph is determined in the same or similar manner as each index reflected in the performance graph and does not include such adjustments and other items. | | A-2 | | | | | | 2024 Proxy Statement | |
•
Property Management and Construction Supervision Fees. The property management fees payable to RMR LLC by the Companyus for each applicable period are equal to 3.0% of gross collected rents and the construction supervision fees payable to RMR LLC by the Companyus for each applicable period are equal to 5.0% of construction costs. Pursuant to the Company'sour property management agreement with RMR, LLC, the Companywe recognized aggregate property management and construction supervision fees of approximately $4.7$13.4 million for the period from January 17, 2018 throughyear ended December 31, 2018.- 2023.
•
Expense Reimbursement. The Company is We are generally responsible for all of the Company'sour operating expenses, including certain expenses incurred or arranged by RMR LLC on the Company'sour behalf. The Company isWe are generally not responsible for payment of RMR LLC'sRMR’s employment, office or administrative expenses incurred to provide management services to the Company,us, except for the employment and related expenses of RMR LLC'sRMR’s employees assigned to work exclusively or partly at the Company'sour properties, the Company'sour share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, the Company'sour share of RMR LLC'sRMR’s costs for providing the Company'sour internal audit function and as otherwise agreed. The Company'sOur property level operating expenses are generally incorporated into rents charged to the Company'sour tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR LLC. The amount the Company recognized as expense for payroll and related costs the Company reimbursed to RMR LLC was approximately $2.7$8.4 million for the period from January 17, 2018 through December 31, 2018. The Audit Committee appoints the Company's Director of Internal Auditthese expenses and the Compensation Committee approves the costs of the Company's internal audit function. The amount recognized as expense for internal audit costs was approximately $0.2 million for the year ended December 31, 2018.
2023. •
Term. The Company's Our management agreements with RMR LLC have terms that end on December 31, 2038,2043, and automatically extend on December 31st of each year for an additional year, so that the terms of the Company'sour management agreements thereafter end on the 20th anniversary of the date of the extension.
•
Termination Rights. The Company has We have the right to terminate one or both of the Company'sour management agreements with RMR LLC:RMR: (i) at any time on 60 days'days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as 2019 Proxy Statement 39
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defined therein, and (iv) by written notice during the 12 months following a change of control of RMR, LLC, as defined therein. RMR LLC has the right to terminate the management agreements for good reason, as defined therein.
•
Termination Fee. If the Companywe terminate one or both of our management agreements with RMR for convenience, or if RMR terminates one or both of the Company's management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of the Company'sour management agreements for good reason, the Company haswe have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years. If the Company terminateswe terminate one or both of the Company'sour management agreements with RMR LLC for a performance reason, the Company haswe have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination. The Company isWe are not required to pay any termination fee if the Company terminates the Company'swe terminate our management agreements with RMR LLC for cause or as a result of a change of control of RMR LLC.
RMR. •
Transition Services. RMR LLC has agreed to provide certain transition services to the Companyus for 120 days following an applicable termination by the Companyus or notice of termination by RMR, LLC, including cooperating with the Companyus and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under the Company'sour business management agreement and to facilitate the orderly transfer of the management of the managed properties under the Company'sour property management agreement, as applicable.
•
Vendors. Pursuant to the Company'sour management agreements with RMR, LLC, RMR LLC may from time to time negotiate on the Company'sour behalf with certain third party vendors and suppliers for the procurement of goods and services to the Company.us. As part of this arrangement, the Companywe may enter agreements with RMR LLC and other companies to which RMR LLC or its subsidiaries provide management servicesClients for the purpose of obtaining more favorable terms from such vendors and suppliers.
•
Investment Opportunities.Opportunities. Under the Company'sour business management agreement with RMR, LLC, the Company acknowledgeswe acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to the Company'sours and the Company iswe are not entitled to preferential treatment in receiving information, recommendations and other services from RMR. | | | | | 2024 Proxy Statement | | | A-3 | |
Our Joint Ventures. We have two separate joint venture arrangements, one with two third party institutional investors for 18 properties in which we own a 22% equity interest (the “Industrial Fund Joint Venture”), and another with one third party institutional investor for 94 properties in which we own a 61% equity interest (the “Mountain Joint Venture”). RMR LLC.Financing. Pursuantprovides management services to both of these joint ventures. The Industrial Fund Joint Venture is not our consolidated subsidiary and, as a side letter the Company enteredresult, we are not obligated to pay management fees to RMR under our management agreements with RMR LLC on January 29, 2019,for the Companyservices it provides regarding the Industrial Fund Joint Venture. The Mountain Joint Venture is our consolidated subsidiary and, as such, we are obligated to pay management fees to RMR LLC each acknowledged that RMR LLC and one or more of the Company's subsidiaries may enter into property specificunder our management agreements with RMR for the services it provides regarding the Mountain Joint Venture; however, the Mountain Joint Venture pays management fees directly to accommodate secured financingsRMR, and thatany such fees paid by the terms and conditions ofMountain Joint Venture are credited against the property management agreement will control the rights and obligations of the Company and RMR LLC.
fees payable by us to RMR. Share Awards to RMR LLC Employees. The Company awards We award Common Shares to the Company'sour officers and other employees of RMR LLC annually. Generally, one fifth of these awards vests on the date of the awards and one fifth vests on each of the next four anniversaries of the dates of the awards. During 2018, the Company2023, we awarded to the Company'sour officers and other employees of RMR LLC annual awards of 54,400188,350 Common Shares, valued at approximately $1.3$0.7 million, in aggregate, based upon the closing price of the Common Shares on the Nasdaq on the date the awards were made under the Company'sour equity compensation plan. These share awards to RMR LLC employees are in addition to the share awards made to the Company's current and formerour Managing Trustees, as Trustee compensation, and the fees the Companywe paid to RMR LLC.RMR. During 2018, the Company2023, we purchased 2,36949,158 Common Shares, at the applicable closing price of the Common Shares on the Nasdaq on the datedates of purchase, from certain of the Company'sour Managing Trustees, officers and other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of Common Shares.40 2019 Proxy Statement
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On occasion, the Company haswe have entered into arrangements with former employees of RMR LLC in connection with the termination of their employment with RMR, LLC, providing for the acceleration of vesting of Common Share awards previously awarded to them under the Company'sour equity compensation plans. The Company did not accelerateaggregate value of the vesting of any Common Share awards we so accelerated, measured as of the effective dates of acceleration, was approximately $0.1 million, in 2018.aggregate, for the year ended December 31, 2023. Additionally, each of the Company'sour executive officers during 20182023 received share awards of RMR Inc. and other companies to which RMR LLC or its subsidiaries provide management servicesClients in their capacities as officers or employees of RMR LLC.Other. The Company has in the past held,RMR.
Directors’ and likely will in the future hold, business meetings at hotels operated by Sonesta, which is majority owned by one of the Company's Managing Trustees, Adam Portnoy, and the remainder was owned by Barry Portnoy until his death, and the Company's Trustees and officers have in the past stayed, and are likely in the future to stay, overnight at hotels operated by Sonesta when traveling for Company business. The Company pays Sonesta for the use of meeting space and related services and pays Sonesta or reimburses the Company's Trustees and officers for the costs of these hotel stays.Relationship with SIR. Until January 17, 2018, when the Company completed the IPO, the Company was a wholly owned subsidiary of SIR. SIR was the Company's largest shareholder until December 27, 2018, when SIR distributed to its shareholders of record as of the close of business on December 20, 2018, all 45,000,000 Common Shares that SIR then owned. Effective December 31, 2018, SIR merged with and into a wholly owned subsidiary of OPI. Adam Portnoy, one of the Company's Managing Trustees, was also a managing trustee of SIR prior to its merger into OPI's subsidiary. John Popeo, before he resigned on November 30, 2018, was the Company's other Managing Trustee and the Company's President and Chief Executive Officer, and he also served as the chief financial officer and treasurer of SIR. RMR LLC provided management services to SIR until its merger into OPI's subsidiary, and continues to provide management services to OPI and it provides management services to the Company. As a result of the merger, OPI succeeded to all of SIR's rights and obligations, including with respect to SIR's agreements with the Company.
Pre-IPO RMR LLC Management Fees. For periods prior to the completion of the IPO on January 17, 2018, base management fees payable by SIR under SIR's business management agreement with RMR LLC were calculated based on the historical costs of the Initial Properties and incentive management fees payable by SIR and allocated to the Company were based on the percentage of the base management fees allocated to the Company compared to the total base management fees paid by SIR. Base management fees paid by SIR and allocated to the Company by SIR for the period from January 1, 2018 to January 16, 2018 were approximately $0.3 million. The incentive management fee allocated to the Company by SIR for the year ended December 31, 2017 and paid by SIR to RMR LLC in January 2018 was approximately $7.7 million. General and administrative expenses incurred by SIR, which include costs of the internal audit function provided by RMR LLC to the companies it or its subsidiaries manage, were allocated to the Company by SIR for periods prior to the IPO based on the percentage of the base management fees allocated to the Company compared to the total base management fees paid by SIR. The amounts allocated to the Company by SIR for internal audit costs for the period from January 1 to January 16, 2018 was approximately $4,000.
RMR LLC was paid by SIR property management fees equal to 3.0% of gross collected rents and construction supervision fees equal to 5.0% of construction costs. The aggregate property management and construction supervision fees allocated to the Company by SIR for the period from January 1 to January 16, 2018 was approximately $0.2 million. This amount was calculated based upon gross collected rents and construction supervision services provided at or for the Initial Properties.
Under SIR's management agreements with RMR LLC, SIR was generally responsible for all of the Company's operating expenses, including certain expenses incurred by RMR LLC on the Company's behalf. The Company's property level operating costs are generally incorporated into rents charged to the Company's tenants, including certain payroll and related costs incurred by RMR LLC. The total of these property management related reimbursements paid by SIR to RMR LLC for costs incurred by RMR LLC related to the Initial Properties for the period from January 1 to January 16, 2018 was approximately $0.1 million. The Company also paid or reimbursed SIR for the Company's allocated portion of certain
2019 Proxy Statement 41
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insurance policies. The total of these insurance related reimbursements paid to SIR for costs for the period from January 1 to January 16, 2018 was approximately $4,000.
IPO Related Agreements with SIR. In connection with the Company's IPO on January 17, 2018, the Company and SIR entered a transaction agreement (the "Transaction Agreement") to govern the Company's relationship with SIR. OPI is the successor to SIR under the Transaction Agreement. Pursuant to the Transaction Agreement:
•the Company's current assets and current liabilities were settled between SIR (for the periods ending on and before the closing of the IPO) and the Company (for periods ending after the closing of the IPO);
•SIR agreed to indemnify the Company with respect to any of its liabilities, and the Company agreed to indemnify SIR with respect to any of the Company's liabilities, after giving effect to the settlement between the Company and SIR of the Company's current assets and current liabilities; and
•the Company and SIR agreed to cooperate to enforce the ownership limitations in the Company's and SIR's respective declaration of trust as may be appropriate to qualify for and maintain qualification for taxation as a REIT under the United States Internal Revenue Code of 1986, as amended, and otherwise to ensure each receives the economics of its assets and liabilities and to file future tax returns, including appropriate allocations of taxable income, expenses and other tax attributes.
On January 17, 2018, the Company and SIR also entered a registration rights agreement, which granted SIR registration rights with respect to the Common Shares it owned, subject to certain limitations, with respect to the Common Shares then owned by SIR. This registration rights agreement expired on December 27, 2018 due to SIR no longer beneficially owning any of Common Shares following SIR's pro rata distribution of the Common Shares that it then held to its shareholders on such date.
The Company also reimbursed SIR for approximately $7.3 million of costs that SIR incurred in connection with the Company's formation and preparation for the IPO.
Relationship with AIC. On December 28, 2018, the Company and SIR entered a stock purchase agreement (the "AIC Stock Purchase Agreement") pursuant to which the Company purchased all of SIR's shares of common stock of AIC, effective December 31, 2018 for a purchase price of $8.6 million. As a result of this purchase, the Company, ABP Trust and five other companies to which RMR LLC provides management services currently own AIC, an Indiana insurance company, in equal amounts and are parties to a shareholders agreement regarding AIC. All the Company's Trustees (other than John Murray) and all the independent trustees and independent directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR LLC provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. Pursuant to this agreement, AIC pays RMR LLC a service fee equal to 3.0% of the total annual net earned premiums payable under then active policies issued or underwritten by AIC or by a vendor or an agent of AIC on its behalf or in furtherance of AIC's business.
The Company and the other AIC shareholders participate in a combined property insurance program arranged and insured or reinsured in part by AIC. Historically, the Company participated in this program through SIR, as SIR's subsidiary, and SIR allocated to the Company the portion of the premiums for this insurance program, including taxes and fees, covering the Initial Properties, which allocation was approximately $0.3 million for the policy year ending June 30, 2019, which amount may be adjusted from time to time as the Company acquires or disposes of properties included in this insurance program. The Company paid or reimbursed SIR approximately $0.3 million in respect of this insurance program for the policy year ending June 30, 2019.
Directors' and Officers'Officers’ Liability Insurance. The Company,Insurance
. We, RMR Inc. and certain other companies to which RMR LLC or its subsidiaries provide management servicesClients, participate in a combined directors'directors’ and officers'officers’ liability insurance policy. The current combined policy expires in September 2020. Prior to SIR's42 2019 Proxy Statement
TableWe paid a premium of Contents
distribution of the Common Shares it owned to its shareholders, as a majority owned subsidiary of SIR, the Company was provided coverage under this policy and SIR allocated a portion of its cost of the policy to the Company. The cost of this insurance SIR allocated to, and which was paid by, the Company was approximately $0.1 million for this coverage for the year ended December 31, 2018.
policy years ending September 30, 2023, 2024 and 2025. The foregoing descriptions of the Company'sour agreements with RMR LLC, SIR/OPI, AIC and other related persons are summaries and are qualified in their entirety by the terms of the agreements. A further description of the terms of certain of those agreements is included in the Annual Report. In addition, copies of certain of the agreements evidencing these relationships are filed with the SEC and may be obtained from the SEC'sSEC’s website, www.sec.gov. The Company www.sec.gov. We may engage in additional transactions with related persons, including businesses to whichof RMR LLC or its subsidiaries provide management services. 2019 Proxy Statement 43
Clients.| | A-4 | | | | | | 2024 Proxy Statement | |
TABLE OF CONTENTSTable of Contents
OTHER INFORMATION
At this time, the Company knows of no other matters that will be brought before the meeting. If, however, other matters properly come before the meeting or any postponement or adjournment thereof, the persons named in the accompanying proxy card intend to vote the shares for which they have been appointed or authorized as proxy in accordance with their discretion on such matters to the maximum extent that they are permitted to do so by applicable law.
Jennifer B. Clark
Secretary
Newton, Massachusetts
April 5, 2019
44 2019 Proxy Statement
Thank you for being a shareholder of Industrial Logistics Properties Trust.
AUTHORIZE![[MISSING IMAGE: px_24industriallogistpg01-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-036686/px_24industriallogistpg01-bw.jpg) INVESTOR RELATIONSINDUSTRIAL LOGISTICS PROPERTIES TRUST255 WASHINGTON STREET, SUITE 300NEWTON, MASSACHUSETTS 02458AUTHORIZE YOUR PROXY BY INTERNETINTERNETBefore the meeting - Go to www.proxyvote.com Useor scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of information up until 11:until11:59 p.m., Eastern time,Time, on June 2, 2019.May 29, 2024. Have your proxy card in hand when you access the website and followandfollow the instructions to obtain your records and to submit your voting instructions. AUTHORIZEinstructions.AUTHORIZE YOUR PROXY BY TELEPHONE - 1-800-690-6903 Use1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m., Eastern time, on June 2, 2019.Time, onMay 29, 2024. Have your proxy card in hand when you call and then follow the instructions. Ifinstructions.If the meeting is postponed or adjourned, the above times will be extended to 11:59 p.m., Eastern time, on theTime, onthe day before the reconvened meeting. AUTHORIZEmeeting.AUTHORIZE YOUR PROXY BY MAIL Mark,MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to IndustrialtoIndustrial Logistics Properties Trust, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC11717.VOTE BY VIRTUALLY ATTENDING THE MEETINGYou must register in advance to attend the meeting by visiting the "Attend a Meeting" link at www.proxyvote.com.During the meeting - Go to https://www.virtualshareholdermeeting.com/ILPT2024You may attend the meeting via the Internet and vote during the meeting. Have your proxy card in hand whenyou access the website and follow the instructions provided on the website.ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS IfCOMMUNICATIONSIf you would like to reduce the costs incurred by Industrial Logistics Properties Trust in mailing proxy materials, you canyoucan consent to receiving all future proxy statements, proxy cards and annual reports electronically by email or over the Internet.theInternet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted,whenprompted, indicate that you agree to receive or access shareholder communications electronically in future years. INDUSTRIAL LOGISTICS PROPERTIES TRUST C/O BROADRIDGE FINANCIAL SOLUTIONS, INC. P.O. BOX 1342 BRENTWOOD, NY 11717 TOyears.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E70798-Z74330 KEEPV35639-P09451KEEP THIS PORTION FOR YOUR RECORDS DETACHRECORDSDETACH AND RETURN THIS PORTION ONLY THISONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. INDUSTRIALDATED.INDUSTRIAL LOGISTICS PROPERTIES TRUST 1.TRUSTThe Board of Trustees Recommends a Vote FOR all the Nomineesfor Trustee in Proposal 1 and FOR Proposals 2 and 3.For Withhold1. Election of Trustees. NomineeTrustees.Nominees (for Independent Trustee in Class I)Trustee): Lisa Harris Jones NomineeBruce M. GansNominees (for Managing Trustee in Class I)Trustee): John G. Murray For Withhold ! ! ! ! ForMatthew P. JordanAdam D. PortnoyLisa Harris JonesJoseph L. MoreaKevin C. PhelanJune S. YoungsFor Against Abstain ! ! ! ! ! ! 2.Abstain2. Advisory vote to approve executive compensation.3. Ratification of the appointment of ErnstDeloitte & Young LLP asTouche LLPas independent auditors to serve for the 20192024 fiscal year. 3. Approval of an amendment to the Company's Declaration of Trust so that in a contested election the Company's Trustees are elected by a plurality of the votes cast by the Company's shareholders. THISyear.THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR BOTH NOMINEES FORALL THE NOMINEESFOR TRUSTEE IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. TO3.TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PROXIES, IN THEIR DISCRETION, ARE AUTHORIZED TO VOTE AND OTHERWISE REPRESENTOTHERWISEREPRESENT THE UNDERSIGNED ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR AT ANY POSTPONEMENT OR ADJOURNMENTORADJOURNMENT THEREOF. ! For address changes, please check this box and write them on the back where indicated. (NOTE:(NOTE: Please sign exactly as your name(s) appear(s) hereon. All holders must sign. When signing as attorney, executor, administrator or other fiduciary, please givepleasegive full title as such. Joint owners should each sign personally. If a corporation, please sign in full corporate name, by authorized officer, indicating title. If a partnership,apartnership, please sign in partnership name by authorized person indicating title.)Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date The Board of Trustees Recommends a Vote FOR both Nominees for Trustee in Proposal 1 and FOR Proposals 2 and 3.
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INDUSTRIAL LOGISTICS PROPERTIES TRUST ANNUALTRUSTANNUAL MEETING OF SHAREHOLDERS June 3, 2019, 9:SHAREHOLDERSMay 30, a.m.2024, 1:30 p.m., Eastern time IndustrialTimeIndustrial Logistics Properties Trust Two Newton Place, 255 Washington Street, Suite 100 Newton, Massachusetts 02458 Upon arrival, please present photo identification atTrustVirtually via the registration desk. PleaseInternet athttps://www.virtualshareholdermeeting.com/ILPT2024Please see the Proxy Statement for additional attendance instructions. The 2019instructions.The 2024 Annual Meeting of Shareholders of Industrial Logistics Properties Trust will address the following items of business:1. Election of the Trustees named in the Proxy Statement to the Company's Board of Trustees;2. Advisory vote to approve executive compensation;3. Ratification of the appointment of ErnstDeloitte & YoungTouche LLP as independent auditors to serve for the 20192024 fiscal year; Approval of an amendment to the Company's Declaration of Trust so that in a contested election the Company's Trustees are elected by a plurality of the votes cast by the Company's shareholders; andand4. Transaction of such other business as may properly come before the meeting and at any postponements or adjournments of the meeting. 2. 3. 4. THEmeeting.THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR BOTHALL THE NOMINEES FOR TRUSTEE IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. E70799-Z74330 INDUSTRIAL3.V35640-P09451INDUSTRIAL LOGISTICS PROPERTIES TRUST Two Newton Place, 255 Washington Street, Suite 300 Newton, MA 02458 Proxy ImportantTRUSTANNUAL MEETING OF SHAREHOLDERSMay 30, 2024, 1:30 p.m., Eastern TimeProxyImportant Notice Regarding Internet Availability of Proxy Materials: The proxy materials for the 20192024 Annual Meeting of Shareholders of Industrial Logistics Properties Trust (the "Company"), including the Company’s annual reportAnnual Report and proxy statement,Proxy Statement, are available on the Internet. To view the proxy materials or vote onlineauthorize your proxy by Internet, by telephone or by telephone,mail, please follow the instructions on the reverse side hereof. This proxy is solicited on behalf of the Board of Trustees of Industrial Logistics Properties Trust. TheTrust.The undersigned shareholder of the Company hereby appoints Jennifer B. Clark John G. Murray and Adam D. Portnoy, or anyeither of them, as proxies for the undersigned, with full power of substitution in each of them, to attend the 20192024 Annual Meeting of Shareholders of the Company to be held virtually via the Internet at Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 100, Newton, Massachusetts 02458,https://www.virtualshareholdermeeting.com/ILPT2024, on June 3, 2019,May 30, 2024, at 9:1:30 a.m.p.m., Eastern time,Time, and any postponement or adjournment thereof, to cast on behalf of the undersigned all the votes that the undersigned is entitled to cast at the meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of the annual reportAnnual Report and the proxy statement,Proxy Statement, which includes the Notice of 2019of2024 Annual Meeting of Shareholders, each of which is incorporated herein by reference, and revokes any proxy heretofore given with respect to the meeting. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS INSTRUCTED ON THE REVERSE SIDE HEREOF. IF THIS PROXY IS EXECUTED, BUT NO INSTRUCTION IS GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST FOR BOTHALL THE NOMINEES FOR TRUSTEE IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. ADDITIONALLY, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST BY THE PROXIES, IN THEIR DISCRETION, ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. SeeTHEREOF.See reverse for instructions on how to authorize a proxy. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Address Changes/Comments:
0001717307 ilpt:EquityAwardsAdjustmentsMember ecd:NonPeoNeoMember 2023-01-01 2023-12-31 | |
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