UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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| | | | | Preliminary Proxy Statement | | | |||||
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| | | | | Definitive Proxy Statement | | | |||||
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Notice of 20212022 Annual Meeting
of Shareholders and Proxy Statement
Thursday, June 17, 202116, 2022 at 9:30 a.m., Eastern time
Dear Fellow Shareholders:
In addition, we have a significant amount of available capital we can deploy strategically to address any challenges or opportunities presented by the COVID-19 pandemic. As of December 31, 2020, we had:
We continue to monitor changing events and circumstancessquare feet with an eyeaverage age of 26 years and a weighted average lease term of 1.2 years;
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Jennifer B. Clark | | Elena B. Poptodorova | | |||
| Donna D. Fraiche | | Adam D. Portnoy | | ||
| Barbara D. Gilmore | | Mark A. Talley | | ||
| John L. Harrington | | | Jeffrey P. Somers | | |
| William A. Lamkin | | |
NOTICE OF 20212022 ANNUAL MEETING OF SHAREHOLDERS OF OFFICE PROPERTIES INCOME TRUST
| Location: | ||||
Live Webcast Accessible at OfficePropertiesIncomeTrust/2022 16, 2022 | |
| Agenda: • Elect the Trustee nominees identified in the accompanying Proxy Statement to our Board of Trustees; • Advisory vote to approve executive compensation; • Ratify the appointment of Deloitte & Touche LLP as our independent auditors to serve for the • 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 March | ||||
Attending Our | |||||
• Record Owners:If you are a shareholder as of the close of business on the record date who holds shares directly, you may participate in our | |||||
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• Beneficial Owners:If you are a shareholder as of the record date who holds shares indirectly through a brokerage firm, bank or other nominee, you must register in advance to attend our | |||||
| Please see the accompanying Proxy Statement for additional information. By Order of our Board of Trustees,
Jennifer B. Clark Secretary April 12, 2022 | | |||
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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS | | | | | 4 | | | |
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12, 2022.
| | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR OUR 2022 ANNUAL MEETING TO BE HELD ON THURSDAY, JUNE 16, 2022. | | |
| | The Notice of 2022 Annual Meeting, Proxy Statement and Annual Report to Shareholders for the fiscal year ended December 31, 2021 are available at www.proxyvote.com. | | |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR OUR 2021 ANNUAL MEETING TO BE HELD ON THURSDAY, JUNE 17, 2021.
The Notice of 2021 Annual Meeting, Proxy Statement and Annual Report to Shareholders for the fiscal year ended December 31, 2020 are available at www.proxyvote.com.
PROPOSAL | |||||||||||||
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| | MORE INFORMATION | | | BOARD RECOMMENDATION | | | VOTES REQUIRED FOR APPROVAL | | ||||
1 | | | Election of Trustees | | | Page | | | | | Plurality of all votes cast* | | |
2 | | | Advisory vote to approve executive compensation** | | | Page | | | | | Majority of all votes cast | | |
3 | | | Ratification of independent auditors** | | | Page | | | | | Majority of all votes cast | ||
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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 June | | |
| 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 June | |
| 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. | |
2021 Proxy Statement 1
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PROPOSAL | ||||||||||
| | BOARD RECOMMENDATION | | | VOTES REQUIRED FOR APPROVAL | | ||||
1 | | | Election of Trustees | | | | | Plurality of all votes cast* | | |
2 | | | Advisory vote to approve executive compensation** | | | | | Majority of all votes cast | | |
3 | | | Ratification of independent auditors** | | | | | Majority of all votes cast | ||
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2 2021 Proxy Statement
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NAME OF TRUSTEES | | | INDEPENDENT | | | COMMITTEE MEMBERSHIP | | ||||
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Jennifer B. Clark | | | | | | ||||||
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Donna D. Fraiche | | ✔ | | | Compensation (Chair) Nominating and Governance | | |||||
Barbara D. Gilmore | | ✔ | | | Compensation Nominating and Governance | | |||||
John L. Harrington | | ✔ | | | Audit Nominating and Governance | | |||||
William A. Lamkin | | ✔ | | | Audit (Chair) Compensation | | |||||
Elena B. Poptodorova | | ✔ | | | Audit Nominating and Governance | | |||||
Adam D. Portnoy | | | | | | None | | ||||
Jeffrey P. Somers | | ✔ | | | Audit Compensation Nominating and Governance (Chair) | | |||||
| | ✔ | | | None | |
(Page 37)
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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 our shareholders, our Board continues to proactively evaluate our corporate governance principles. Based on these principles, last yearover the past two years our Board:
AsCommon Shares and actively engaged with shareholders who hold approximately 42% of our Board continues on the path to enhanced governance practices, weCommon Shares.
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We are currently governed by an eighta nine member Board of Trustees, including sixseven Independent Trustees and two Managing Trustees, and our Board is currently divided into three classes.Trustees. In 2020, with the support of more than 71% of our shareholders, our Boardwe amended our Declaration of Trust to declassify our Board. Beginning with our 2021 Annual Meeting, the Trustees whose terms expire at an annual meeting will stand for election at the meeting for one-year terms and all Trustees will stand for election at the 2023 annual meeting of shareholders and, thereafter, for one-year terms. Pursuant to his retirement agreement,On June 17, 2021, David M. Blackman will resignresigned as one of our Managing Trustees, followingand pursuant to a recommendation of our 2021 Annual Meeting or earlier if requestedNominating and Governance Committee, our Board elected Jennifer B. Clark as a Managing Trustee to fill the vacancy created by RMR LLC or our Board.
Mr. Blackman’s resignation.
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Our Nominating and Governance Committee screens and recommends candidates for nomination by our full Board. Our Bylaws provide thatOn April 12, 2022, our Board increased its size from eight members to nine members and, following the recommendation of our Nominating and Governance Committee, elected Mark A. Talley to fill the vacancy created by the increase in the size of our Board shall be eight members until increased or decreased by our Board. Our Nominating and Governance Committee is assisted with its recruitment efforts by its ongoing engagement with Korn Ferry, which recommends candidates that satisfy our Board'sBoard’s criteria. They also provide research and pertinent information regarding candidates, as requested.
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We follow the Investor Stewardship Group's ("ISG"Group’s (“ISG”) Corporate Governance Framework for U.S. Listed Companies, as summarized below:
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ISG Principle | | | Our Practice | |
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Principle 1: Boards are accountable to shareholders. | | | • We amended our Declaration of Trust to declassify our Board. Beginning in 2023, all of our Trustees will stand for election annually. • We adopted a proxy access bylaw. • We have a resignation policy pursuant to which an incumbent Trustee who fails to receive a majority of votes cast in an uncontested election will submit an offer to resign from our Board and, in such circumstance, our Board will decide whether to accept or reject the resignation offer. | |
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| | | • We do not have a dual class structure; each shareholder gets one vote per share. | |
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| Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives. | | | • In Common Shares. We had active engagements with shareholders owning approximately 42% of our Common Shares. • Our engagement topics included the impact of the COVID-19 pandemic on our business, governance reform priorities, sustainability and social strategy, Board composition, leadership and refreshment, succession planning and executive compensation program disclosure. | |
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| | | • 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. • We have strong Independent Committee Chairs. | | |
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77.8% of Board members are independent. • Our Board is comprised of 44.4% women and 11.1% African American. • 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; • Our Trustees then in office attended at least 75% of all Board and applicable committee meetings in | | |
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| | | • 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 the Office Properties Income Trust Amended and Restated 2009 Incentive Share Award Plan (the • RMR’s compensation is tied to our performance. | |
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6 2021 Proxy Statement
Our environmental, social and governance initiatives are primarily implemented by our manager, RMR, LLC, and focus on a complementary set of objectives, including the following:
| | | | | 2022 Proxy Statement | | | 7 | |
RMR LLC'sManagement and was ranked 75th on Fortune Magazine’s list of 100 fastest growing companies.
2021 Proxy Statement 7
the next generation of qualified building engineers. Over the last year, it launched a program to standardizeRMR’s Engineering Development Program standardizes the recruitment and development of engineering candidates to prepare them for open positions and to plan for future engineering needs. RMR LLC recruitedrecruits from various trade schools and job fairs to identify candidates for the two-year program. Theprogram 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.
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2020 and excludes properties classified as held for sale and properties undergoing significant redevelopment, if any, and three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests.
8 or 2021 Proxy Statementlevels.
For all sustainability accounting metrics, Same Property includes three properties with a total of 444,066 square feet owned by two joint ventures in which we own equity interests and which we report on an unconsolidated basis.
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2021 Proxy Statement 9
78.4%
RMR LLC supports on
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10 2021 Proxy Statement
Some cities and states in which we own properties require annual whole-building energy and water use disclosure. In these jurisdictions, RMR LLC engages with tenants to collect and report any direct tenant-paid energy and water consumption.
2021 Proxy Statement 11
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12 2021 Proxy Statement
In advance of a natural hazard event, resources are directed to properties identified as potentially impacted through these mapping tools. The resources made available include access to senior management and mobilization of equipment and personnel. Rapid response personnel may also be directed to properties after a weather event has occurred.
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| Oversight of Strategy | | | Oversight of Risk | | | Succession Planning | |
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Our Board oversees and monitors strategic planning. Business strategy is a key focus of our Board and embedded in the work of Board committees. Company management is charged with executing business strategy and provides regular performance updates to our Board. | | | | Our Board oversees risk management. Board committees, which meet regularly and report back to our 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. | | | | Our Board oversees succession planning and talent development for senior executive positions. Our Nominating and Governance Committee makes an annual report to our Board on succession planning. In the event of a succession, our entire Board may work with our Nominating and Governance Committee, or the Independent Trustees, as applicable, to nominate and evaluate potential successors. | ||||
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Our Board is elected by our shareholders to, among other things, oversee our business and long term strategy. As part of fulfilling its responsibilities, our Board oversees the safeguarding of our assets, the maintenance of appropriate financial and other internal controls and our compliance with applicable laws and regulations. Inherent in these responsibilities is our Board'sBoard’s understanding and oversight of the various risks we 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 our business strategy.
2021 Proxy Statement 13
activities. Our Director of Internal Audit reports to our Audit Committee and provides us with advice and assistance with our risk management function.
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management, including cybersecurity, as it determines appropriate.
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 unannounced email penetration testing and phishing exercises.
14 2021 Proxy Statement
To learn more about the risks we face, you can review the matters discussed in Part I, "Item“Item 1A. Risk Factors"Factors” and "Warning“Warning Concerning Forward-Looking Statements"Statements” in our Annual Report to Shareholders for the fiscal year ended December 31, 20202021 (the "Annual Report"“Annual Report”). The risks described in the Annual Report are not the only risks we face. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods.
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Under the corporate governance listing standards of the Nasdaq and our governing documents, our Board must consist of a majority of Independent Trustees. Under our governing documents, Independent Trustees are Trustees who are not employees of RMR, LLC, are not involved in our day to day activities and who meet the qualifications for independence under the applicable rules of the Nasdaq and the SEC.
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Pursuant to our 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 our officers, with our Director of Internal Audit and with our independent auditors. The presiding Trustee for purposes of leading Independent Trustee sessions will be the Lead Independent Trustee, unless the Independent Trustees determine otherwise.
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All Trustees play an active role in overseeing our business both at our Board and committee levels. As set forth in our Governance Guidelines, the core responsibility of our Trustees is to exercise sound, informed and independent business judgment in overseeing our Company and our 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 and nonprofit organizations and law firms, and have also served as government officials and 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 our officers and advisers. Our Board is small, which facilitates informal discussions and communication from management to our Board and among Trustees.
2021 Proxy Statement 15
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We have a Lead Independent Trustee who is selected annually by the vote of a majority of our Independent Trustees. Currently, Ms. Poptodorova serves as our Lead Independent Trustee. Our Lead Independent Trustee has well-defined, substantiverobust responsibilities that include:
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Our Board is committed to corporate governance that promotes the long term interests of our shareholders. Our Board has established Governance Guidelines that provide a framework for effective governance. Our Board regularly reviews developments in corporate governance and updates our Governance Guidelines and other governance materials as it deems necessary and appropriate.
16 2021 Proxy Statement
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Our Governance Guidelines provide that if an incumbent Trustee does not receive a majority of the votes cast in an uncontested election, the Trustee will submit an offer to resign from our Board. In such circumstance, our Nominating and Governance Committee will make a recommendation to our Board on whether to accept or reject the resignation offer, or whether other action should be taken. Our Board will act on the resignation offer taking into account the recommendation of our Nominating and Governance Committee and make its decision within 90 days following the certification of the election results.
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Our Insider Trading Policies and Procedures expressly prohibit members of our Board and our officers from engaging in hedging transactions involving our securities and those of RMR Inc. or any other public company to which RMR LLC or its affiliates provide management services.
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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 our 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 2.18 of our Bylaws.
Shareholders seeking to nominate one or more individuals as a Trustee candidate without relying on our proxy access bylaw must comply
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Our Board has established a process to facilitate communication by shareholders and other stakeholders with our Trustees. Communications should be addressed to our Trustees in care of our Secretary, Office Properties Income Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@opireit.com.
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Deadline to Submit Proposals pursuant to Rule 14a-8 for the 20222023 Annual Meeting of Shareholders:Shareholders: Shareholder proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”) must be received at our principal executive office on or before December 14, 202113, 2022 in order to be eligible to be included in the proxy statement for the 20222023 annual meeting of shareholders; provided, that, if the date of the 20222023 annual meeting of shareholders is more than 30 days before or after June 17, 2022,16, 2023, such a proposal must be submitted within a reasonable time before we begin to print our proxy materials. Under Rule 14a-8, we are not required to include shareholder proposals in our proxy materials in certain circumstances or if conditions specified in the rule are not met.
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| | Total Number of Trustees | | | | 9 | | | ||||||||||||
| | Part I: Gender Identity | | | | Female | | | | Male | | | | Non- Binary | | | | Did Not Disclose Gender | | |
| | Trustees | | | | 4 | | | | 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 | | | | 4 | | | | 4 | | | | — | | | | — | | |
| | Two or More Races or Ethnicities | | | | — | | | | — | | | | — | | | | — | | |
| | LGBTQ+ | | | | — | | | ||||||||||||
| | Did Not Disclose Demographic Background | | | | — | | |
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A plurality of all the votes cast is required to elect a Trustee at our 20212022 Annual Meeting.
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| | | | | | | Barbara D. Gilmore Age: 71 Independent Trustee since 2009 Term: Term expiring at our 2022 Annual Meeting | | | | | | | | Board Committees: • Compensation • Nominating and Governance | | | | | | | | Other RMR Managed Public Company Boards(1): • AlerisLife Inc. (since 2004) • TravelCenters of America Inc. (since 2007) • Seven Hills Realty Trust (formerly known as RMR Mortgage Trust, since 2020) Other Non-RMR Managed Public Company Boards: None | | | | | | | |||||||
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Ms. Gilmore served as a professional law clerk at the United States Bankruptcy Court, Eastern Division of the District of Massachusetts, from 2015 until her retirement in 2018, and prior to that, at the United States Bankruptcy Court, Central Division of the District of Massachusetts, from 2001 to 2015. Ms. Gilmore was a partner of the law firm of Sullivan & Worcester LLP from 1993 to 2000, during which time she was appointed and served as trustee or examiner in various cases involving business finance matters. | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Professional skills and experience in legal and business finance matters • Experience in public policy matters • Experience as a lawyer, bankruptcy court clerk, bankruptcy trustee and bankruptcy examiner • Insights gained and understanding of government practices through government service • Work on public company boards and board committees • Institutional knowledge earned through prior service on our Board since shortly after • Identifies as Caucasian and as female • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents |
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| | | | | | | | | | | | | John L. Harrington Age: 85 Independent Trustee since 2009 Term: Term expiring at our 2022 Annual Meeting | | | | | |||||||||||||||||||
| | | Board Committees: • Audit • Nominating and Governance | | | | | | | | Other RMR Managed Public Company Boards(1): • Service Properties Trust (since 1995) • Diversified Healthcare Trust (since 1999) Other Non-RMR Managed Public Company Boards: None | | | | | | | |||||||||||||||||||
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| | | | | | Mr. Harrington has been | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Demonstrated leadership capability • Work on public company boards and board committees and in key management roles in various enterprises • Service on the boards of several private and charitable organizations • Professional skills and expertise in accounting, finance and risk management and experience as a chief executive officer and chief financial officer • Expertise in compensation and benefits matters • Institutional knowledge earned through prior service on our Board • Identifies as Caucasian and as male • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents | | | | | | | ||||||||||||||||
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| | | | | | | | | | | | | William A. Lamkin Age: 62 Independent Trustee since 2019 Term: Term expiring at our 2022 Annual Meeting | | | | | | | | Board Committees: • Audit (Chair) • Compensation | | | | | | | | Other RMR Managed Public Company Boards(1): • Service Properties Trust (since 2007) • Seven Hills Realty Trust (since 2021) Other Non-RMR Managed Public Company Boards: • Ackrell SPAC Partners I Co. (since 2020) | | | | | | | |
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| | | | | | Mr. Lamkin was a partner in Ackrell Capital LLC, a San Francisco based investment bank, from 2003 to 2019. Mr. Lamkin was an independent trustee of Tremont Mortgage Trust from 2020 until it merged with Seven Hills Realty Trust in September 2021. Mr. Lamkin was an independent trustee of Select Income REIT from 2012 until it merged with a wholly owned subsidiary of the Company in December 2018. Prior to being a partner in Ackrell Capital LLC, he was employed as a financial consultant and as an investment banker, including as a senior vice president in the investment banking division of ABN AMRO. Prior to working as a financial consultant and as an investment banker, Mr. Lamkin was a practicing attorney. | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Experience in, and knowledge of, the commercial real estate and investment banking industries • Demonstrated management ability • Experience in capital raising and strategic business transactions • Professional training, skills and expertise in, among other things, legal and finance matters • Work on public company boards and board committees • Institutional knowledge earned through prior service on our Board • Identifies as Caucasian and as male • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents |
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| | | | | | | | | | | | | Elena B. Poptodorova Age: 70 Independent Trustee since 2017 Lead Independent Trustee since 2019 Term: Term expiring at our 2022 Annual Meeting | | | | | | | | Board Committees: • Audit • Nominating and Governance | | | | | | | | Other RMR Managed Public Company Boards(1): • TravelCenters of America Inc. (since 2020) Other Non-RMR Managed Public Company Boards: None | | | | | | | |||
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| | | | | | Ms. Poptodorova has served as vice president and director for Euro-Atlantic affairs of the Atlantic Club of Bulgaria since April 2017, as vice president of the Atlantic Treaty Association since December 2017 and as a board member of the U.S.–Bulgarian Chamber in America since February 2020. Ms. Poptodorova served as director of the Shapiro-Silverberg AJC Central Europe Office from October 2016 until February 2017. Ms. Poptodorova was the ambassador extraordinary and plenipotentiary of the Republic of Bulgaria to the United States from 2010 to 2016 and from 2002 to 2008. During this time, she facilitated foreign investments in Bulgaria’s information technology sector and assisted the development of transatlantic business association to support investment ventures. From 2009 to 2010, Ms. Poptodorova was the director of the Security Policy Directorate at the Ministry of Foreign Affairs and from 2008 to 2009 she served as the ambassador-at-large for the Black Sea Region. From 2001 to 2002, Ms. Poptodorova served as a spokesperson of the Ministry of Foreign Affairs and director of the Human Rights and International Humanitarian Organizations Directorate. Ms. Poptodorova was a member of the Bulgarian Parliament from 1990-2001, where she served on a variety of committees, including the national security, human rights, media and agriculture committees. During her service as a member of the Bulgarian Parliament, Ms. Poptodorova worked extensively on communal property and industrial property matters with the local government of her electoral district. In addition to her extensive government service, Ms. Poptodorova is a current member of the board of directors of the American Foundation for Bulgaria and the Institute for Cultural Diplomacy in Germany, and she was previously a member of the board of directors of the European Institute, the Executive Council on Diplomacy, the Women’s Foreign Policy Group and American University in Bulgaria. | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Executive experience and demonstrated leadership ability as a former diplomat • Insights gained and understanding of government practices through government service • Experience in communal property and industrial property matters • Experience in public policy matters • Service on the boards of several private and charitable organizations • Identifies as Caucasian and as female • Bulgarian national • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents | | | | | | | ||||||||||||||||||
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| | | | | 2022 Proxy Statement | | | 27 | |
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| | | | | | | | | | | | | Adam D. Portnoy Age: 51 Managing Trustee since 2009 Chair of our Board since 2019 Term: Term expiring at our 2022 Annual Meeting | | | | | | | | Board Committees: None | | | | | | | | Other RMR Managed Public Company Boards(1): • Service Properties Trust (since 2007) • Diversified Healthcare Trust (since 2007) • Seven Hills Realty Trust (including its predecessor companies, since 2009) • The RMR Group Inc. (since 2015) • Industrial Logistics Properties Trust (since 2017) • AlerisLife Inc. (since 2018); • TravelCenters of America Inc. (since 2018) Other Non-RMR Managed Public Company Boards: None | | | | | | | |
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| | | | | | Mr. Portnoy has been president and chief executive officer of RMR Inc. since shortly after its formation in 2015. Mr. Portnoy has been president and chief executive officer of RMR | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Extensive experience in, and knowledge of, the CRE and office building leasing industries and REITs • Leadership position with RMR • Public company trustee and director service • Experience in investment banking and private equity • Experience in starting a telecommunications company and serving as its senior executive • Government organization service • Institutional knowledge earned through prior service on our Board since our formation and in leadership positions with RMR • Identifies as Caucasian and as male • Qualifying as a Managing Trustee in accordance with the requirements of our governing documents Our Nominating and Governance Committee and our Board believe that, because Mr. Portnoy is the president and chief executive officer of RMR |
26 2021 Proxy Statement
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| | | | | | | | | | | | | Jennifer B. Clark Age: 60 Managing Trustee since 2021 Term: Term expiring at the 2023 annual meeting of shareholders | | | | | | | | Board Committees: None | | | | | | | | Other RMR Managed Public Company Boards:(1) • The RMR Group Inc. (since 2018) • AlerisLife Inc. (since 2020) Other Non-RMR Managed Public Company Boards: None | | | | | | | |||
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| | | | | | Ms. Clark has been executive vice president, general counsel and secretary of RMR Inc. since shortly after its formation in 2015. Ms. Clark joined RMR in 1999 as a vice president; she became a senior vice president in 2006, an executive vice president and general counsel in 2008 and secretary in 2015. Ms. Clark also serves as an officer of ABP Trust, a director and secretary of Sonesta International Hotels Corporation and its parent, and a director, executive vice president, general counsel and secretary of Tremont Realty Capital LLC (formerly known as Tremont Realty Advisors LLC). Ms. Clark serves as the secretary of each of the companies to which RMR or its subsidiaries provide management services, including our Company. Ms. Clark served as a trustee of Diversified Healthcare Trust from 2018 to 2021. Ms. Clark also served as a trustee of RMR Mortgage Trust from 2019 to January 2021 and chief legal officer of RMR Mortgage Trust from 2002 to January 2021. Until Tremont Mortgage Trust’s merger with and into RMR Mortgage Trust, Ms. Clark served as secretary of Tremont Mortgage Trust. Ms. Clark also served as a director of RMR Advisors LLC from 2016 to 2021 when it merged with Tremont Realty Capital LLC, as its president and chief executive officer from 2019 to 2021, and prior to that as its executive vice president and general counsel from October 2017 through December 2018 and as its secretary from 2004 to 2021, and as vice president and chief legal officer from 2007 through September 2017. Prior to joining RMR, Ms. Clark was a partner at the law firm of Sullivan & Worcester LLP. | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Professional skills and experience in legal, corporate governance and real estate matters • Leadership position with RMR and demonstrated management ability • Extensive experience in, and knowledge of, the CRE industry and REITs • Identifies as Caucasian and as female • Qualifying as a Managing Trustee in accordance with the requirements of our Bylaws | | | | | | | ||||||||||||||||||
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| | | | | | | | | | | | | Donna D. Fraiche Age: 70 Independent Trustee since 2019 Term: Term expiring at the 2023 annual meeting of shareholders | | | | | | | | Board Committees: • Compensation (Chair) • Nominating and Governance | | | | | | | | Other RMR Managed Public Company Boards(1): • AlerisLife Inc. (since 2010) • Service Properties Trust (since 2015) Other Non-RMR Managed Public Company Boards: None | | | | | | | |
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| | | | | | Ms. Fraiche is a member and the founder of Fraiche Strategies, LLC since 2020. Ms. Fraiche was senior counsel at the law firm of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC and practiced law at that firm from 2004 to February 2020. Previously, Ms. Fraiche practiced law with the firm now known as Locke Lord LLP in New Orleans. Ms. Fraiche served as an independent trustee of Select Income REIT from 2012 until it merged with a wholly owned subsidiary of the Company in December 2018. Ms. Fraiche is past president of the Louisiana Chapter of the International Women’s Forum and is the president of The Supreme Court of Louisiana Historical Society. She served on the American Hospital Association Leadership Development Committee and the Committee on Governance and is a past president and a fellow of the American Health Lawyer’s Association. She is a former chair of the Louisiana Health Care Commission. She is a past chair of the board of trustees of Loyola University. She serves on the investments committee of the Baton Rouge Area Foundation and on the board and the finance and compensation committees of Women’s Hospital as a past chair of the board. Ms. Fraiche also serves as Treasurer of the Louisiana Consular Corps and Honorary Consul for Japan in New Orleans. | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Professional and consulting legal skills • Many leadership roles and experiences, including her service in numerous public policy and civic leadership roles • Work on public company boards and board committees • Institutional knowledge earned through prior service on our Board • Identifies as Caucasian and as female • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents | | | | | | | ||||||||||||||||
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| | | | | 2022 Proxy Statement | | | 29 | |
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| | | | | | | | | | | | | Jeffrey P. Somers Age: 79 Independent Trustee since 2009 Term: Term expiring at the 2023 annual meeting of shareholders | | | | | | | | Board Committees: • Audit • Compensation • Nominating and Governance (Chair) | | | | | | | | Other RMR Managed Public Company Boards(1): • Diversified Healthcare Trust (since 2009) • Seven Hills Realty Trust (including its predecessor companies, since 2009) Other Non-RMR Managed Public Company Boards: None | | | | | | | |
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| | | | | | Mr. Somers has been, since 2010, of counsel to, and from 1995 to 2009, was a member, and for six of those years the managing member, of the law firm of Morse, Barnes-Brown & Pendleton, PC. Prior to that time, he was a partner for more than 20 years at the law firm of Gadsby Hannah LLP (now McCarter & English, LLP) and for eight of those years was managing partner of the firm. Mr. Somers served as an independent trustee of Tremont Mortgage Trust from 2017 to 2020 and of Select Income REIT from 2012 until it merged with a wholly owned subsidiary of | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Expertise in legal, corporate governance and regulatory matters • Leadership role as a law firm managing member • Service as a trustee of public REITs and investment companies • Service with government and extensive experience in public policy matters and complex business transactions • Sophisticated understanding of finance and accounting matters • Work on public company boards and board committees • Institutional knowledge earned through prior service on our Board since shortly after • Identifies as Caucasian and as male • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents | | | | | | | ||||||||||||||||
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| | | | | | | | | | | | | Mark A. Talley Age: 57 Independent Trustee since 2022 Term: Term expiring at the 2023 annual meeting of shareholders | | | | | | | | Board Committees: None | | | | | | | | Other RMR Managed Public Company Boards(1): None Other Non-RMR Managed Public Company Boards: None | | | | | | | |
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| | | | | | Mr. Talley is a principal and one of the founding partners of Greenwood Commercial Real Estate where he primarily provides acquisition, disposition and leasing services for clients regarding office real estate. Prior to starting Greenwood in May 2021, Mr. Talley worked for more than 25 years in various roles in the commercial real estate industry in the metropolitan Detroit, Michigan market, including working at Griswold Realty Advisors between 2012 and 2021, working as Vice President at Grubb & Ellis between 2007 and 2012 as well as working as a Client Relationship Manager at Jones Lang LaSalle (including its predecessor LaSalle Partners) between 1995 and 2007. Mr. Talley is also currently involved in various non-profit and civic leadership roles in the Detroit, Michigan area. | | | | | | | | Specific Qualifications, Attributes, Skills and Experience: • Professional skills and extensive experience in and knowledge of the CRE industry • Demonstrated leadership capability as an entrepreneur and founding member of an African American led CRE firm • Identifies as African American and as male • Qualifying as an Independent Trustee in accordance with the requirements of the Nasdaq, the SEC and our governing documents | | | | | | | ||||||||||||||||
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| | | Christopher J. Bilotto Age: 44 | | | | | | | | President since 2021 Chief Operating Officer since 2020 | | | | | | | |||||||||||
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| | | | | | Mr. Bilotto previously served as the Company’s Vice President from May 2019 to December 2020. Mr. Bilotto has been a senior vice president of RMR since October 2020 and a vice president of RMR from 2016 to September 2020 and has served in various finance leadership roles with RMR and its subsidiaries since 2011, including currently being responsible for asset management oversight for all office, industrial and retail properties managed by RMR and for design, construction, development and redevelopment across the United States. Mr. Bilotto identifies as Caucasian and as male. | | | | | | | ||||||||||||||||
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| | | | | | | | | | | | | Matthew C. Brown Age: 40 | | | | | | | | Chief Financial Officer and Treasurer since 2019 | | | | | | | |
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| | | | | 2022 Proxy Statement | | | 31 | |
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William A. Lamkin (Chair)
| | | Our Audit Committee is comprised solely of Independent Trustees. Its primary role is to help our 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. Our Audit Committee is responsible for the appointment, compensation, retention and oversight, and the evaluation of the qualifications, performance and independence, of our independent Our Board has determined that each member of our Audit Committee is financially literate and that Mr. Harrington is our Audit | |
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Donna D. Fraiche (Chair)
| | | Our Compensation Committee is comprised solely of Independent Trustees. Its primary responsibilities pertain to evaluating the performance and compensation of RMR, | |
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Jeffrey P. Somers (Chair)
| | | 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 our Board, and to recommend candidates to our entire Board for nomination or selection as Board members for each annual meeting of shareholders or when vacancies | |
| 32 | | | | | 2022 Proxy Statement | |
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Our Board believes that competitive compensation arrangements are necessary to attract and retain qualified Independent Trustees.
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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 our Company. Accordingly, each Trustee is expected to retain at least 20,000 Common Shares (which number shall automatically adjust in respect of stock splits or similar events) within five years following: (i) if elected by shareholders, the annual meeting of shareholders of our Company at which such Trustee was initially elected, or (ii) if appointedelected by our Board, the first annual meeting of shareholders of our Company following the initial appointmentelection of such Trustee to our Board. Compliance with these ownership guidelines is measured annually. Solely for purposes of determining compliance with these ownership guidelines, Common Shares of our Company owned as of immediately prior to our one-for-four reverse share split effected on December 31, 2018, by Trustees who were serving as our Trustees or trustees of Select Income REIT ("SIR"(“SIR”) as of immediately prior to SIR'sSIR’s merger with and into a subsidiary of our Company on December 31, 2018, and which shares are owned continuously thereafter through the end of the applicable compliance measurement period, will not be adjusted to give effect to that reverse share split. Any Trustee who is prohibited by law or by applicable regulation of his, her or their employer from owning equity in our Company is exempt from this requirement. Our Nominating and Governance Committee may consider whether exceptions should be made for any Trustee on whom this requirement could impose a financial hardship.
30 2021 Proxy Statement
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Name | | | Fees Earned or Paid in Cash ($)(2) | | | Stock Awards ($)(3) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||
David M. Blackman(4)(5) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Jennifer B. Clark(5) | | | | | — | | | | | | 104,580 | | | | | | — | | | | | | 104,580 | | |
Donna D. Fraiche | | | | | 87,500 | | | | | | 104,580 | | | | | | — | | | | | | 192,080 | | |
Barbara D. Gilmore | | | | | 80,000 | | | | | | 104,580 | | | | | | — | | | | | | 184,580 | | |
John L. Harrington | | | | | 75,000 | | | | | | 104,580 | | | | | | — | | | | | | 179,580 | | |
William A. Lamkin | | | | | 92,500 | | | | | | 104,580 | | | | | | — | | | | | | 197,080 | | |
Elena B. Poptodorova | | | | | 90,000 | | | | | | 104,580 | | | | | | — | | | | | | 194,580 | | |
Adam D. Portnoy(5) | | | | | — | | | | | | 104,580 | | | | | | — | | | | | | 104,580 | | |
Jeffrey P. Somers | | | | | 87,500 | | | | | | 104,580 | | | | | | — | | | | | | 192,080 | | |
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | |||||||||
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David M. Blackman(3) | | — | | 93,135 | | — | | 93,135 | |||||
Donna D. Fraiche | 87,500 | 93,135 | — | 180,635 | |||||||||
Barbara D. Gilmore | | 75,000 | | 93,135 | | — | | 168,135 | |||||
John L. Harrington | 75,000 | 93,135 | — | 168,135 | |||||||||
William A. Lamkin | | 92,500 | | 93,135 | | — | | 185,635 | |||||
Elena B. Poptodorova | 90,000 | 93,135 | — | 183,135 | |||||||||
Adam D. Portnoy(3) | | — | | 93,135 | | — | | 93,135 | |||||
Jeffrey P. Somers | 87,500 | 93,135 | — | 180,635 | |||||||||
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2021 Proxy Statement 31
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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 March 24, 2021.22, 2022. Unless otherwise noted, to our 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 Office Properties Income 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 | | | 718,708 | | | 1.48% | | | Includes 576,258 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. | |
Jennifer B. Clark | | | 47,202 | | | Less than 1% | | | | |
Jeffrey P. Somers | | | 20,112 | | | Less than 1% | | | | |
Donna D. Fraiche | | | 17,550 | | | Less than 1% | | | | |
William A. Lamkin | | | 17,550 | | | Less than 1% | | | Includes 17,550 Common Shares owned by Janet W. Lamkin and William A. Lamkin as trustees of a trust, Trustees U/T/D 9-28-18. Mr. Lamkin may be deemed to hold voting and investment power as a trustee and beneficiary of the trust. | |
Barbara D. Gilmore | | | 16,312 | | | Less than 1% | | | Includes 750 Common Shares owned jointly with Ms. Gilmore’s husband. | |
John L. Harrington | | | 15,562 | | | Less than 1% | | | Includes 15,562 Common Shares owned by the John L. Harrington Revocable Trust. Mr. Harrington may be deemed to hold voting and investment power as a trustee and beneficiary of the John L. Harrington Revocable Trust. | |
Christopher J. Bilotto | | | 11,908 | | | Less than 1% | | | | |
Matthew C. Brown | | | 11,654 | | | Less than 1% | | | | |
Elena B. Poptodorova | | | 9,775 | | | Less than 1% | | | | |
Mark A. Talley | | | — | | | Less than 1% | | | | |
All Trustees, the Trustee nominees, named executive officers and other executive officers as a group (eleven persons) | | | 886,333 | | | 1.83% | | | | |
Name and Address | | Aggregate Number of Shares Beneficially Owned* | | Percent of Outstanding Shares** | | Additional Information | ||||
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Adam D. Portnoy | | | 715,208 | | | 1.48% | | Includes 576,258 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. | ||
David M. Blackman | | | 58,327 | | | Less than 1% | | |||
Jeffrey P. Somers | | | 16,612 | | | Less than 1% | | | ||
Donna D. Fraiche | | | 14,050 | | | Less than 1% | | |||
William A. Lamkin | | | 14,050 | | | Less than 1% | | Includes 14,050 Common Shares owned by Janet W. Lamkin and William A. Lamkin as trustees of a trust, Trustees U/T/D 9-28-18. Mr. Lamkin may be deemed to hold voting and investment power as a trustee and beneficiary of the trust. | ||
Barbara D. Gilmore | | | 12,812 | | | Less than 1% | | Includes 750 Common Shares owned jointly with Ms. Gilmore's husband. | ||
John L. Harrington | | | 12,062 | | | Less than 1% | | Includes 12,062 Common Shares owned by the John L. Harrington Revocable Trust. Mr. Harrington may be deemed to hold voting and investment power as a trustee and beneficiary of the John L. Harrington Revocable Trust. | ||
Elena B. Poptodorova | | | 6,800 | | | Less than 1% | | |||
Matthew C. Brown | | | 7,856 | | | Less than 1% | | | ||
Christopher J. Bilotto | | | 7,711 | | | Less than 1% | | |||
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All Trustees, the Trustee nominees, named executive officers and other executive officers as a group (ten persons) | | | 865,488 | | | 1.79% | | | ||
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Name and Address | | | Aggregate Number of Shares Beneficially Owned* | | | Percent of Outstanding Shares** | | | Additional Information | |
BlackRock, Inc. (“BlackRock”) 55 East 52nd Street New York, New York 10055 | | | 9,098,619 | | | 18.79% | | | BlackRock filed a Schedule 13G/A with the SEC on January 27, 2022, reporting that, at December 31, 2021, BlackRock beneficially owned and had sole dispositive power over 9,098,619 Common Shares and sole voting power over 8,775,504 Common Shares. | |
The Vanguard Group, Inc. (“Vanguard”) 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | | | 7,959,952 | | | 16.44% | | | Vanguard filed a Schedule 13G/A with the SEC on February 10, 2022, reporting that, at December 31, 2021, Vanguard beneficially owned 7,959,952 Common Shares and had shared voting power over 85,626 Common Shares, sole dispositive power over 7,831,069 Common Shares and shared dispositive power over 128,883 Common Shares. | |
State Street Corporation (“State Street”) 1 Lincoln Street Boston, Massachusetts 02111 | | | 2,854,579 | | | 5.89% | | | State Street filed a Schedule 13G/A with the SEC on February 11, 2022, reporting that, at December 31, 2021, State Street beneficially owned and had shared dispositive power over 2,854,579 Common Shares and shared voting power over 2,429,840 Common Shares. | |
Name and Address | | Aggregate Number of Shares Beneficially Owned* | | Percent of Outstanding Shares** | | Additional Information | ||||
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BlackRock, Inc. ("BlackRock") 55 East 52nd Street New York, New York 10055 | | | 8,779,768 | | | 18.17% | | BlackRock filed a Schedule 13G with the SEC on January 25, 2021, reporting that, at December 31, 2020, BlackRock beneficially owned and had sole dispositive power over 8,779,768 Common Shares and sole voting power over 8,670,202 Common Shares. | ||
The Vanguard Group, Inc. ("Vanguard") 100 Vanguard Boulevard Malvern, Pennsylvania 19355 | | | 7,519,276 | | | 15.56% | | Vanguard filed a Schedule 13G/A with the SEC on February 10, 2021, reporting that, at December 31, 2020, Vanguard beneficially owned 7,519,276 Common Shares and had shared voting power over 150,761 Common Shares, sole dispositive power over 7,331,190 Common Shares and shared dispositive power over 188,086 Common Shares. | ||
State Street Corporation ("State Street") One Lincoln Street Boston, Massachusetts 02111 | | | 2,463,010 | | | 5.10% | | State Street filed a Schedule 13G with the SEC on February 9, 2021, reporting that, at December 31, 2020, State Street beneficially owned and had shared dispositive power over 2,463,010 Common Shares and shared voting power over 2,166,570 Common Shares. | ||
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Our compensation structure is unique because of our relationship with our manager, RMR LLC.RMR. Our business management agreement with RMR LLC is designed to incentivize RMR LLC to provide the highest quality services to us. RMR LLC'sRMR’s base business management fee is paid based on the lower of the historical cost of our properties and our market capitalization. RMR LLC 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 they are employees of RMR LLC and not our Company, RMR, LLC, and not our Company, determines the cash compensation payable to our named executive officers. We do not reimburse RMR LLC for compensation RMR LLC paid or pays to our executive officers and our management agreements with RMR LLC do not require RMR LLC to allocate or pay a specific amount or percentage of RMR LLC'sRMR’s management fees to the named executive officers or require those officers to dedicate a specified amount of their time to our business. Last year, in response to feedback in connection with our shareholder engagement program, we endeavored to better explain to our shareholders our arrangements with RMR LLC and how cash compensation to our named executive officers relates to the aggregate fees paid to RMR LLC. Based on our shareholder engagement and the fact that more than 93% of the votes cast approved our 2020 Say on Pay proposal, our Compensation Committee believes these disclosure changes addressed past concerns regarding shareholder approval of Say on Pay.
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Compensation Element | |||||||
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| | | | Key Measures | | ||
Base Salary | | | • Provides a level of fixed pay appropriate to an • Evaluated on an annual | | | • Experience, duties and scope of responsibility • Internal and external market factors | |
Discretionary Cash Bonus | | | • Provides a competitive annual cash incentive opportunity • Links • Incentivizes and rewards superior group, individual and Company performance | | | • Based on holistic performance evaluation
| |
Equity Compensation | | | • Links • Incentivizes and rewards superior group, individual and Company performance | | | • Based on holistic performance evaluation by the compensation committee of RMR Inc. | |
2021 Proxy Statement 37
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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'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.
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In September 2020,2021, the Chair of our Compensation Committee met with one of our Managing Trustees, Adam D. Portnoy, and the chairs (and expected, and later future, chair in the case of Seven Hills Realty Trust,
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38 2021 Proxy Statement
awards previously awarded to these named executive officers and the corresponding values at the time of the awards; (iii) the recommendations of RMR LLC as presented by Mr. Portnoy, president and chief executive officer of RMR LLC;RMR; (iv) the value of share awards to executive officers providing comparable services at the applicable Other RMR Managed REITs and companies to whichother RMR LLC or its subsidiaries provide management services;Clients; (v) the scope of, and any changes to, the responsibilities assigned to, or assumed 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'sCommittee’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'syear’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 subjectivediscretionary basis using the various factors in our Compensation Committee's sole discretion. Thesefactors. 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.
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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 LLC 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'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 LLC and to continue to provide services to us through the term of the awards.
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2021 Proxy Statement 39
Committee also determined that it would be appropriate to provide that such share awards would vest upon the occurrence of certain corporate "change“change in control"control” or termination events.
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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.compensation on a non-binding, advisory basis. As noted above, our only compensation to our named executive officers is Common Share awards. None of our named executive officers are employed by us. Our manager, RMR, LLC, provides services that otherwise would be provided by employees and employs and compensates our named executive officers directly and in RMR LLC'sRMR’s sole discretion in connection with their services rendered to us and to RMR LLC and the other companies managed by RMR LLC or its subsidiariesClients as discussed above.
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Our
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Summary Compensation Table |
Name and Principal Position | | | Year | | | Salary | | | Bonus | | | Stock Awards ($)(1) | | | All Other Compensation ($)(2) | | | Total ($) | | ||||||||||||||||||
Christopher J. Bilotto(3) President and Chief Operating Officer | | | | | 2021 | | | | | | — | | | | | | — | | | | | | 127,100 | | | | | | 13,151 | | | | | | 140,251 | | |
| | | 2020 | | | | | | — | | | | | | — | | | | | | 115,200 | | | | | | 6,056 | | | | | | 121,256 | | | ||
| | | 2019 | | | | | | — | | | | | | — | | | | | | 59,740 | | | | | | 1,777 | | | | | | 61,517 | | | ||
Matthew C. Brown(3) Chief Financial Officer and Treasurer | | | | | 2021 | | | | | | — | | | | | | — | | | | | | 127,100 | | | | | | 14,251 | | | | | | 141,351 | | |
| | | 2020 | | | | | | — | | | | | | — | | | | | | 115,200 | | | | | | 7,508 | | | | | | 122,708 | | | ||
| | | 2019 | | | | | | — | | | | | | — | | | | | | 89,610 | | | | | | 1,926 | | | | | | 91,536 | | |
| | | | | | | | | | | | | | ||||||||||
Name and Principal Position | | Year | | Salary | | Bonus | | Stock Awards ($)(1) | | All Other Compensation ($)(2) | | Total ($) | | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Christopher J. Bilotto(3)(4)(5) | | 2020 | | | — | | | | — | | | 115,200 | | 6,056 | | 121,256 | | ||||||
| | 2019 | | | — | | | | — | | | 59,740 | | 1,777 | | 61,517 | | ||||||
| | | | | | | | | | | | | | ||||||||||
Matthew C. Brown(5) | | 2020 | | | — | | | | — | | | 115,200 | | 7,508 | | 122,708 | | ||||||
| 2019 | | | — | | | | — | | | 89,610 | | 1,926 | | 91,536 | | |||||||
| | | | | | | | | | | | | | ||||||||||
David M. Blackman(4)(5) | | 2020 | | | — | | | | — | | | 438,735 | | 39,597 | | 478,332 | | ||||||
| | 2019 | | | — | | | | — | | | 609,810 | | 20,737 | | 630,547 | | ||||||
| | 2018 | | | — | | | | — | | | 118,650 | | 24,080 | | 142,730 | | ||||||
| | | | | | | | | | | | | |
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Name | | | Grant Date | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | | Grant Date Fair Value of Stock and Option Awards ($)(1) | | ||||||
Christopher J. Bilotto | | | 9/15/2021 | | | | | 5,000 | | | | | | 127,100 | | |
Matthew C. Brown | | | 9/15/2021 | | | | | 5,000 | | | | | | 127,100 | | |
| | | | | | | ||||||
Name | | Grant Date | | All Other Stock Awards: Number of Shares of Stock or Units (#) | | Grant Date Fair Value of Stock and Option Awards ($)(1) | ||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Christopher J. Bilotto | | | 9/17/2020 | | | 5,000 | | | 115,200 | |||
Matthew C. Brown | | | 9/17/2020 | | | 5,000 | | | 115,200 | |||
David M. Blackman | | | 9/17/2020 | | | 15,000 | | | 345,600 | |||
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The agreements governing the Common Shares we awarded to our named executive officers in 20202021 in their capacity as our officers provided that one fifth of each award vested on the date of the award 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 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 we make, if any, on our shares on the same terms as other holders of the Common Shares.
2021 Proxy Statement 43
The following table shows the total Common Shares awarded by us in 20202021 and prior years to our named executive officers that were unvested as of December 31, 2020.
| | | | | | | | | Stock Awards(1) | | |||||||||
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 ($)(2) | | |||||||||
Christopher J. Bilotto(3) | | | | | 2021 | | | | | | 4,000 | | | | | | 99,360 | | |
| | | 2020 | | | | | | 3,000 | | | | | | 74,520 | | | ||
| | | 2019 | | | | | | 800 | | | | | | 19,872 | | | ||
| | | 2018 | | | | | | 51 | | | | | | 1,267 | | | ||
Matthew C. Brown(4) | | | | | 2021 | | | | | | 4,000 | | | | | | 99,360 | | |
| | | 2020 | | | | | | 3,000 | | | | | | 74,520 | | | ||
| | | 2019 | | | | | | 1,200 | | | | | | 29,808 | | | ||
| | | 2018 | | | | | | 31 | | | | | | 770 | | |
| | | | | | | |||||
| | | | Stock Awards(1) | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name | | Year Granted | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | |||||
Christopher J. Bilotto(3) | | | 2020 | | | 4,000 | | 90,880 | |||
| | | 2019 | | | 1,200 | | 27,264 | |||
| | | 2018 | | | 102 | | 2,317 | |||
| | | 2017 | | | 51 | | 1,159 | |||
| | | | | | | |||||
Matthew C. Brown(4) | | | 2020 | | | 4,000 | | 90,880 | |||
| | 2019 | | | 1,800 | | 40,896 | ||||
| | 2018 | | | 62 | | 1,409 | ||||
| | 2017 | | | 31 | | 704 | ||||
| | | | | | | |||||
David M. Blackman(5) | | | 2020 | | | 12,000 | | 272,640 | |||
| | | 2019 | | | 9,000 | | 204,480 | |||
| | | 2018 | | | 1,428 | | 32,444 | |||
| | | 2017 | | | 714 | | 16,222 | |||
| | | | | | |
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| | | Stock Awards | | |||||||||
Name | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($)(1) | | ||||||
Christopher J. Bilotto(2) | | | | | 2,502 | | | | | | 63,456 | | |
Matthew C. Brown(3) | | | | | 2,662 | | | | | | 67,482 | | |
| | | | | ||
| | Stock Awards | ||||
---|---|---|---|---|---|---|
Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(1) | ||
Christopher J. Bilotto(2) | | 1,533 | | 35,133 | ||
Matthew C. Brown(3) | | 1,693 | | 38,755 | ||
David M. Blackman(4) | | 8,142 | | 186,022 | ||
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44 2021 Proxy Statement
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The Share Award Plan and the form of share award agreement for awards made to our named executive officers provide 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, 2020.
Name | | | Number of Shares Vested Upon Termination Event (#) | | | Value Realized on Termination Event as of December 31, 2021 ($)(1) | | ||||||
Christopher J. Bilotto(2) | | | | | 7,851 | | | | | | 195,019 | | |
Matthew C. Brown(3) | | | | | 8,231 | | | | | | 204,458 | | |
| | | | | ||
Name | | Number of Shares Vested Upon Termination Event (#) | | Value Realized on Termination Event as of December 31, 2020 ($)(1) | ||
---|---|---|---|---|---|---|
Christopher J. Bilotto(2) | | 5,353 | | 121,620 | ||
Matthew C. Brown(3) | | 5,893 | | 133,889 | ||
David M. Blackman(4) | | 23,142 | | 525,786 | ||
| | | | |
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Pay ratio disclosure under Item 402(u) has not been provided because we do not have any employees.
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46 2021 Proxy Statement
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| | | 2021 Fees ($)(1) | | | 2020 Fees ($) | | ||||||
Audit Fees | | | | | 869,688 | | | | | | 724,552 | | |
Audit Related Fees | | | | | — | | | | | | — | | |
Tax Fees | | | | | 7,350 | | | | | | — | | |
All Other Fees | | | | | 812 | | | | | | 948 | | |
The amount of audit fees for 2021 is based on the fees billed and paid to date and an estimate for remaining fees for services provided by Deloitte. The final amount of fees may vary from the estimate provided. | ||||
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The following table shows the fees for audit and other services provided to us by Ernst & Young LLP for the period it served as our independent auditor for the fiscal yearsyear ended December 31, 2020, and 2019, in each case, at such times they served as our independent auditors.
| | | 2020 Fees ($) | | |||
Audit Fees | | | | | 140,500 | | |
Audit Related Fees | | | | | — | | |
Tax Fees | | | | | 7,000 | | |
All Other Fees | | | | | 992 | | |
| | | | | | ||
| 2020 Fees ($) | | 2019 Fees ($) | | |||
| | | | | | ||
Audit Fees | | 140,500 | | 984,573 | | ||
Audit Related Fees | | — | | — | | ||
Tax Fees | | 7,000 | | 58,600 | | ||
All Other Fees | | 992 | | 787 | | ||
| | | | | |
Audit 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 our Quarterly Reports on Form 10-Q.
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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
2021 Proxy Statement 47
by our Audit Committee or the services are included within a category that has been approved by our Audit Committee. The maximum charge for services is established by our Audit Committee when the specific engagement or the category of services is approved. In certain circumstances, our management is required to notify our Audit Committee when approved services are undertaken and our Audit Committee or its Chair may approve amendments or modifications to the engagement or the maximum fees. Our Director of Internal Audit is responsible for reporting to our Audit Committee regarding compliance with these policies and procedures.
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We have been advised by Deloitte that neither the firm, nor any member of the firm, has any material interest, direct or indirect, in any capacity in us or our subsidiaries.
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| | ||
| | William A. Lamkin, Chair John L. Harrington Elena B. Poptodorova Jeffrey P. Somers | |
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50 2021 Proxy Statement
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Attendance at our 2022 Annual Meeting will not, by itself, revoke a duly executed proxy.
Alliance Advisors
Stamford, Connecticut 06902
Stockholders Call Toll Free: (800) 662-5200
Banks and Brokers Call Collect: (203) 658-9400
2021 Proxy Statement 51
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52 2021 Proxy Statement
“householding.”
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Because
2021 Proxy Statement 53
owners should complete the registration process noted above at least three days in advance of our 20212022 Annual Meeting to ensure that all documentation and verifications are in order.
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54 2021 Proxy Statement
13, 2022.
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Newton, Massachusetts
April 13, 2021
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2021 Proxy Statement A-1
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.
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A-2 2021 Proxy Statement
of the bad faith, fraud, willful
| A-2 | | | | | 2022 Proxy Statement | |
| | | | | 2022 Proxy Statement | | | A-3 | |
2021.
RMR.
A-4 2021 Proxy Statement
| A-4 | | | | | 2022 Proxy Statement | |