MPT

Medical Properties Trust
2016 2018 Proxy Statement
At the Very Heart of Healthcare

MPT
Letter from Our Chairman
April 29, 2016
Dear Fellow Shareholder:
I am honored to have you as one of our shareholders and thank you for the trust you have placed in us by purchasing shares in our company. We take your trust seriously.
We also value your thoughts and ideas. In addition to seeking your input via your vote, we regularly seek your views, either by contacting you directly or by making it easy for you to reach me or any of my fellow directors individually. These conversations contribute to the continuous improvement we describe in this Proxy Statement.
We are providing you this proxy and Proxy Statement to enable you to give us your input by voting. We hope that you will attend our 2016 annual shareholders meeting, to be held on May 19, 2016. Details of the business to be conducted at the meeting are set forth in the accompanying Proxy Statement. In the event that you are unable to attend, however, we urge you to vote by mail, phone, or Internet, as described in the following material.
I want to call your attention especially to the compensation provisions highlighted in our Compensation Discussion and Analysis: our plans both align pay with shareholder returns and include provisions that tie executives’ pay to numeric performance hurdles. We believe our plans have produced conservative results with excellent internal and external pay parity. I hope you agree.
As a company whose founders are still on the job, we rely on much more than compensation and solid governance to drive performance — our reputations drive us too.
We work hard to keep your trust. We thank you for your investment and we encourage your input.
Best Regards,
Edward K. Aldag, Jr.
Chairman, President and Chief Executive Officer

		April 30, 2018
		Dear Fellow Stockholder: 2017 was a monumental year for Medical Properties Trust. We exceeded our 2017 acquisitions guidance, including the largest single year total acquisitions in our history of approximately $2.3 billion. Our total portfolio includes more than 275 properties with total gross assets approaching $10 billion. We are also the second largest owner of hospital beds in the United States. We begin 2018 in a very strong financial position, poised for continued accretive growth and able to capitalize on new opportunities as they arise. We remain committed to hospitals that have a unique position in our healthcare system. As the healthcare landscape changes, our hospitals will adapt and change. Hospitals will remain at the very heart of healthcare, and we will be there to support them and the communities in which they operate. We are providing you this Proxy Statement to enable you to give us your input by voting. We hope that you will attend our 2018 annual meeting of stockholders, to be held on May 24, 2018. Details of the business to be conducted at the meeting are set forth in the accompanying Proxy Statement. In the event that you are unable to attend, however, we urge you to vote by mail, phone, or Internet, as described in the following material. On August 15, 2017, one of our initial board members, William G. McKenzie passed away suddenly. Gil provided many years of valued guidance to our company. He will be deeply missed by all. We continue to refresh our Board with highly respected individuals with significant healthcare and REIT expertise. This year we had the pleasure of adding Beth Pitman, a distinguished healthcare attorney to our Board. We also continue to grow our management team. In 2018, Rosa Hooper, the leader of our Asset Management and Underwriting Department, was promoted to Vice President and Charles Lambert, Managing Director of Capital Markets was promoted to Treasurer. As we mark our 15th year as a company, we celebrate our successes and look forward to the next 15 years. Thank you for your continued support of our company. Best Regards, Edward K. Aldag, Jr. Chairman, President and Chief Executive Officer

Proxy Statementand Notice of 20162018 Annual Meeting
i

Notice of 2016 Annual Meeting of Shareholders

April 29, 2016
Meeting Information
Date and Time:
May 19, 2016
10:30, a.m. Central Time
Location:
The Summit Club
1901 6th Avenue North
Birmingham, Alabama
Agenda
To elect the seven director nominees described in the enclosed Proxy Statement;
To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016;
To hold an advisory vote to approve executive officer compensation; and
To transact any other business that properly comes before the meeting.
2018

Attached you will find a notice of meeting and Proxy Statement that contain further information about these items and the meeting itself, including the different methods you can use to vote your proxy. Also enclosed are your proxy card, our 2015 2017Form 10-K, and our 20152017 Annual Report to Shareholders.stockholders. Only shareholdersstockholders of record at the close of business on March 21, 2016,20, 2018 are entitled to receive notice of, to attend, and to vote at the meeting and any adjournment thereof.

EVEN IF YOU PLAN TO ATTEND IN PERSON, YOU ARE REQUESTED TO SIGN, DATE, AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE, OR VOTE YOUR PROXY BY TELEPHONE OR INTERNET, AT YOUR EARLIEST CONVENIENCE. This will not prevent you from voting your shares in person if you choose to attend the Annual Meeting.

Any proxy may be revoked at any time prior to its exercise at the Annual Meeting.

If any of your shares of common stock are held by a broker, bank or other nominee, please follow the instructions you receive from your broker, bank or other nominee to have your shares of common stock voted.

A list of the shareholdersstockholders entitled to vote at the meeting will be open to examination by any shareholder,stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting at the principal executive offices of the Company in Birmingham, Alabama.

By Order of the Board of Directors,

Emmett E. McLean

Executive Vice President, Chief Operating Officer, Treasurer

and Secretary

ii        Medical PropertiesTrust

Meeting Information About the Meeting
What is the purpose of the meeting?
At the meeting, our shareholders will vote on the following proposals:
1.Agenda Date and Time: To elect the seven director nominees described in the enclosed Proxy Statement; May 24, 2018 10:30 a.m. Central Time To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending Location: December 31, 2018; City Club Birmingham 1901 6th Avenue North Birmingham, Alabama To hold an advisory vote to approve executive officer compensation; To transact any other business that properly comes before the meeting.

How to Vote

Your vote is important. You may vote your shares if you were a stockholder of record on March 20, 2018. If you are a registered owner you may vote using any of the following methods:

If you own your shares through a bank, broker or other nominee, you should follow the voting instructions provided by your bank, broker or other nominee.

2.Proxy Statementand Notice of 2018 Annual Meeting    iii

Meeting Information Agenda Date and Time: May 24, 2018 10:30 a.m. Central Time Location: City Club Birmingham 1901 6th Avenue North Birmingham, Alabama To elect the seven director nominees described in the enclosed Proxy Statement; To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016;
3. 2018;To hold an advisory vote to approve executive officer compensation; and
4. To transact any other business that properly comes before the meeting.
In addition, our management will report on our performance at the meeting and respond to appropriate questions from shareholders.
Who is entitled to vote?
The record date for the meeting is March 21, 2016. Only shareholders of record at the close of business on March 21, 2016, are entitled to receive notice of the meeting and to vote at the meeting the shares of our common stock that they held of record on that date. Each outstanding share of common stock entitles its holder to one vote on each matter voted on at the meeting. At the close of business on March 21, 2016, there were 237,714,694 shares of common stock outstanding and entitled to vote.
Am I entitled to vote if my shares are held in “street name”?
If you are the beneficial owner of shares held in “street name” by a brokerage firm, bank, or other nominee, your nominee is required to vote the shares in accordance with your instructions. If you do not give instructions to your nominee, your nominee will be entitled to vote your shares on routine items, but will not be permitted to do so on non-routine items. Your nominee will have discretion to vote on Proposal 2 (ratification of auditors) without any instructions from you, but your nominee will not have the ability to vote your uninstructed shares on Proposal 1 (election of directors), or Proposal 3 (advisory vote to approve executive officer compensation) on a discretionary basis. Accordingly, if you hold your shares in “street name” and you do not instruct your nominee how to vote on these proposals, your nominee cannot vote these shares and will report them as “broker non-votes,” and no votes will be cast on your behalf.
How many shares must be present to conduct business at the meeting?
A quorum must be present at the meeting in order for any business to be conducted. The presence at the meeting, in person or by proxy, of the holders of a majority of the shares of common stock outstanding on the record date, or 118,857,348 shares, will constitute a quorum. Abstentions and broker non-votes will be included in the number of shares considered present at the meeting for the purpose of determining whether there is a quorum.
Proxy Statement and Notice of 2016 Annual Meeting
iii

Information About the Meeting
What happens if a quorum is not present at the meeting?
If a quorum is not present at the scheduled time of the meeting, the holders of a majority of the shares present in person or represented by proxy at the meeting may adjourn the meeting to another place, date, or time until a quorum is present. The place, date, and time of the adjourned meeting will be announced when the adjournment is taken, and no other notice will be given unless the adjournment is to a date more than 120 days after the original record date or if, after the adjournment, a new record date is fixed for the adjourned meeting.
How do I vote my shares?
Voting by telephone or Internet. If you are a beneficial owner of shares held in “street name,” meaning your shares are held in the name of a brokerage firm, bank, or other nominee, you may be eligible to provide voting instructions to your nominee by telephone or on the Internet. A large number of brokerage firms, banks, and other nominees participate in a program provided through Broadridge Financial Solutions that offers telephone and Internet voting options. If your shares are held in “street name” by a brokerage firm, bank, or other nominee that participates in the Broadridge program, you may provide voting instructions to your nominee by telephone or on the Internet by following the instructions set forth on the voting instruction form provided to you.
Voting by mail. If you are a registered shareholder, meaning you hold your shares in your own name, you may vote by properly completing, signing, dating, and returning the accompanying proxy card. The enclosed postage-paid envelope requires no additional postage if it is mailed in the United States or Canada. If you are a beneficial owner of shares held in “street name,” you may provide voting instructions to the brokerage firm, bank, or other nominee that holds your shares by properly completing, signing, dating, and returning the voting instruction form provided to you by your nominee.
Voting in person at the meeting. If you are a registered shareholder and attend the meeting, you may deliver your completed proxy card in person. In addition, we will make written ballots available to registered shareholders who wish to vote in person at the meeting. If you are a beneficial owner of shares held in “street name” and wish to vote at the meeting, you will need to obtain a proxy form from the brokerage firm, bank, or other nominee that holds your shares that authorizes you to vote those shares.
Can I change my vote after I submit my proxy?
Yes, you may revoke your proxy and change your vote at any time before the polls are closed at the meeting in any of the following ways: (1) by properly completing, signing, dating, and returning another proxy card with a later date; (2) if you are a registered shareholder, by voting in person at the meeting; (3) if you are a registered shareholder, by giving written notice of such revocation to our Secretary prior to or at the meeting; or (4) if you are a beneficial owner of shares held in “street name,” by following the instructions given by the brokerage firm, bank or other nominee that holds your shares. Your attendance at the meeting will not by itself revoke your proxy.
iv Medical Properties Trust

Information About the Meeting
What happens if I do not specify on my proxy how my shares are to be voted?
If you are a registered shareholder and submit a properly executed proxy but do not indicate any voting instructions, the proxy holders will vote as the Board of Directors recommends on each proposal.
Will any other business be conducted at the meeting?
As of the date hereof, the Board of Directors knows of no business that will be presented at the meeting other than the proposals described in this Proxy Statement. However, if any other proposal properly comes before the shareholders for a vote at the meeting, the proxy holders will vote the shares represented by your proxy in accordance with their best judgment.
How many votes are required for action to be taken on each proposal?
The seven director nominees will be elected to serve on the Board of Directors if they each receive a majority of the votes cast in person or represented by proxy at the meeting. This means that a director nominee will be elected only if the votes cast “for” his or her election exceed the votes cast “against” his or her election. The Board of Directors has adopted a director resignation policy whereby any director who fails to receive the required majority vote in an uncontested election is required to promptly tender his or her resignation to the Board for its consideration. The Ethics, Nominating and Corporate Governance Committee will then recommend to the full Board, and the Board will decide, whether to accept or reject the resignation offer or take other action. The Board of Directors will act on the recommendation of the Ethics, Nominating and Corporate Governance Committee within 90 days following certification of the election results. If you vote to “abstain” with respect to the election of one or more director nominees, your shares will not be voted with respect to the person or persons indicated, although they will be counted for the purpose of determining whether there is a quorum at the meeting.
The affirmative vote of the holders of a majority of the shares of common stock represented in person or by proxy at the annual meeting and entitled to vote on the proposal is required for approval of each of Proposals 2 and 3.
How will abstentions and broker non-votes be treated?
Abstentions and broker non-votes will not be counted as votes for or against any proposal, and will not be included in calculating the number of votes necessary for approval of the proposal. In all cases, abstentions and broker non-votes will be considered present for the purpose of determining the presence of a quorum.
Proxy Statement and Notice of 2016 Annual Meeting v

Information About the Meeting
How will proxies be solicited?
The costs of soliciting proxies from our shareholders will be borne by the Company. We will solicit proxies on behalf of the Board of Directors by mail, telephone, facsimile, or other electronic means or in person. Certain of our directors, officers and other employees, without additional compensation, may participate in the solicitation of proxies. We will supply copies of the proxy solicitation materials to brokerage firms, banks, and other nominees for the purpose of soliciting proxies from the beneficial owners of the shares of common stock held of record by such nominees. We will request that such brokerage firms, banks, and other nominees forward the proxy solicitation materials to the beneficial owners and reimburse them for their reasonable expenses. In addition, we anticipate using MacKenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016 as a solicitor at an initial anticipated cost of $7,500.
How can I obtain additional copies of the proxy materials?
If you wish to request extra copies of our Form 10-K, Annual Report or Proxy Statement free of charge, please send your request to Medical Properties Trust, Inc., 1000 Urban Center Drive, Suite 501, Birmingham, Alabama 35242, or visit our website at www.medicalpropertiestrust.com.
How does the Board of Directors recommend that I vote on the proposals?
FOR the election of the seven nominees to the Board of Directors;
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016;2018; and
FOR approval of the compensation of our named executive officers as disclosed in this Proxy Statement.

2017 Compensation Highlights

2017 Performance Highlights

Corporate Governance Highlights

Board Refreshment

Over the past four years we have had the opportunity to meaningfully refresh our Board replacing four directors. We have sought out a group of diverse leaders with varying skill sets that are critical to overseeing the management of our Company.

Average Board Tenure in Years

Average Age of Board Members

* as of the Annual Meeting

vi iv        Medical PropertiesTrust

TableCommittee Refreshment

The addition of Contents
01 Proposal 1: Electionthe new Board members has led to complete refreshment of Directorsour key committees.

02 Director Nominees
06Corporate Governance Information Regarding OurPractices

The following table summarizes certain highlights of our corporate governance policies and practices.

Proxy Statementand Notice of 20162018 Annual Meeting vii    v

Proposal 1: Election of Directorsvi        
Medical PropertiesTrust

Our Bylaws provide for the election of all directors at each annual meeting of shareholders.stockholders. The Board of Directors, at the recommendation of the Ethics, Nominating and Corporate Governance Committee, proposes that the seven nominees listed below, all of whom are currently serving on our Board, be elected to serve as directors until the 20172019 annual meeting of shareholdersstockholders or until his or her successor is duly elected and qualified. The Board of Directors does not know of any reason why any nominee would not be able to serve as a director. However, if any nominee were to become unable to serve as a director, the Board of Directors may designate a substitute nominee, in which case the persons named as proxies will vote for such substitute nominee. Alternatively, the Board of Directors may reduce the number of directors to be elected at the Annual Meeting.

Board of Directors’ Recommendation
The Board of Directors recommends that you vote
FOR eachthe ratification of the seven nominees listed below for director.
1 Medical Properties Trust

Proposal 1: Election Of Directors
Director Nominees
Edward K. Aldag, Jr.
Age 52
Mr. Aldag is our founder and has servedappointment of PricewaterhouseCoopers LLP as our Chief Executive Officer and President since August 2003 and as Chairman of our Board of Directors since March 2004.
The Board believes that Mr. Aldag’s position asindependent registered public accounting firm for the founder of our Company and his extensive experience in the healthcare and REIT industries make him highly qualified to serve as Chairman of our Board of Directors.
Mr. Aldag served as Vice Chairman of our Board of Directors from August 2003 until March 2004 and as our Secretary from August 2003 until March 2005. Prior to that, Mr. Aldag served as an executive officer and director with our predecessor from its inception in August 2002 until August 2003. From 1986 to 2001, Mr. Aldag managed two private real estate companies, Guilford Capital Corporation and Guilford Medical Properties, Inc. Mr. Aldag served as President and as member of the board of directors of Guilford Medical Properties, Inc. Mr. Aldag was the President of Guilford Capital Corporation from 1998 to 2001, served as Executive Vice President and Chief Operating Officer from 1990 to 1998, and was a member of the board of directors from 1990 to 2001. Mr. Aldag received his B.S. in Commerce & Business from the University of Alabama with a major in corporate finance.
G. Steven Dawson
Age 58
Mr. Dawson has served as a member of our Board of Directors and as Chairman of our Audit Committee since April 2004.
The Board believes that Mr. Dawson’s substantial experience as a board member and committee chairman at other public REITs, along with his strong skills in corporate finance, strategic planning, and public company oversight, make him a valued advisor and highly qualified to serve as a member of our Board of Directors and as Chairman of our Audit Committee.
Since 2003, Mr. Dawson has primarily been a private investor serving on the boards of numerous public and private REITs. Currently, he is a founding partner and management committee member for a private U.S./Canadian fund that owns and manages industrial distribution assets in the U.S. Previously, he served as President, Chief Executive Officer and Trustee of a privately held U.S./Canadian firm that owned and operated manufactured housing assets located in the U.S. From July 1990 to September 2003, he served as Chief Financial Officer and Senior Vice President-Finance of Camden Property Trust (and its predecessors) (NYSE:CPT), a REIT specializing in apartment communities based in Houston, Texas. Mr. Dawson serves on the board of directors and as the nominating and corporate governance committee chairman as well as a member of the audit and compensation committees for Institutional Financial Markets, Inc. (AMEX:IFMI), an investment firm specializing in credit-related fixed income investments. Mr. Dawson also serves on the board of directors and as audit committee chairman of American Campus Communities (NYSE:ACC), a developer, owner and manager of student housing communities. Mr. Dawson holds a degree in business from Texas A&M University and is a member of the Real Estate Roundtable at the Mays Graduate School of Business at Texas A&M University.
year ending December 31, 2018.

Proxy Statementand Notice of 20162018 Annual Meeting 2    1

Proposal 1: Election Of Directors
R. Steven Hamner
Age 59
Mr. Hamner is one of our founders and has served as our Executive Vice President and Chief Financial Officer since September 2003 and as a member of our Board of Directors since February 2005.
The Board believes that Mr. Hamner’s position as a co-founder of our Company and his extensive experience in the real estate and healthcare industries and in the corporate finance sector make him highly qualified to serve as a member of our Board of Directors.
In August and September 2003, Mr. Hamner served as our Executive Vice President and Chief Accounting Officer. From October 2001 through March 2004, he was the Managing Director of Transaction Analysis LLC, a company that provided interim and project-oriented accounting and consulting services to commercial real estate owners and their advisors. From June 1998 to September 2001, he was Vice President and Chief Financial Officer of United Investors Realty Trust, a publicly traded REIT. For the ten years prior to becoming an officer of United Investors Realty Trust, he was employed by the accounting and consulting firm Ernst & Young LLP and its predecessors. Mr. Hamner received a B.S. in Accounting from Louisiana State University.Nominees

Robert E. Holmes, Ph.D.2        
Age 74
Dr. Holmes has served as a member of our Board of Directors since April 2004.
The Board believes that Dr. Holmes’ position as a well-respected leader in the business community and his deep understanding of the corporate and economic challenges faced by public companies today make him a valued advisor and highly qualified to serve as a member of our Board of Directors and as Chairman of our Ethics, Nominating and Corporate Governance Committee.
Dr. Holmes, our Lead Independent Director, retired in 2009 as Professor of Management, Dean, and Wachovia Chair of Business Administration at the University of Alabama at Birmingham School of Business, positions he held since 1999. From 1995 to 1999, he was Dean of the Olin Graduate School of Business at Babson College in Wellesley, Massachusetts. Prior to that, he was Dean of the James Madison University College of Business in Harrisonburg, Virginia, for 12 years. He is the co-author of four management textbooks, numerous articles, papers, and cases, and has served as a board member or consultant to a variety of business firms and non-profit organizations. He is past president of the Southern Business Administration Association, is actively engaged in AACSB International — the Association to Advance Collegiate Schools of Business, and served on the boards of the Entrepreneurial Center, Tech Birmingham, the Alabama Council on Economic Education, and other organizations. Dr. Holmes received a bachelor’s degree from the University of Texas at Austin, an MBA from University of North Texas, and a Ph.D. with an emphasis on management strategy from the University of Arkansas.
3 Medical PropertiesTrust

Proposal 1: Election Of Directors
MPT
Sherry A. Kellett
Age 71
Ms. Kellett has served as a member of our Board of Directors since February 2007.
The Board believes that Ms. Kellett’s experience as a board member and audit committee member at other public companies, along with her extensive experience in corporate finance and the financial sector generally, make her a valued advisor and highly qualified to serve as a member of our Board of Directors.
Ms. Kellett is a certified public accountant and served as Senior Executive Vice President and Corporate Controller of BB&T Corporation (NYSE:BBT), a financial holding company, from 1995 until her retirement in August 2003. Ms. Kellett served as Corporate Controller of Southern National Corporation, a bank holding company, from 1991 until 1995, when it merged with BB&T Corporation. Ms. Kellett previously held several positions at Arthur Andersen & Co. She is currently a member of the board of directors and chair of the audit committee of Highwoods Properties, Inc., a self-administered REIT based in Raleigh, North Carolina (NYSE:HIW). Ms. Kellett also serves on the board of directors, as chair of the audit committee and on the compensation committee and the compliance committee of MidCountry Financial Corp., a privately held financial institution based in Macon, Georgia. Ms. Kellett has also served on the boards of the North Carolina School of the Arts Foundation, Piedmont Kiwanis Club, Senior Services, Inc., The Winston-Salem Foundation, the Piedmont Club, and the North Carolina Center for Character Education, and she is a member of the North Carolina Zoological Park Council, a gubernatorial appointment.
William G. McKenzie (Gil)
Age 57
Mr. McKenzie is one of our founders and has served as a director since our formation.
The Board believes that Mr. McKenzie’s position as a co-founder of our Company and his extensive experience in the healthcare industry make him a valued advisor and highly qualified to serve as a member of our Board of Directors.
From September 2003 to January 2012, Mr. McKenzie served as the Vice Chairman of our Board of Directors, and he served as the Executive Chairman of our Board of Directors in August and September 2003. From May 2003 to August 2003, he was an executive officer and director of our predecessor. From 1998 to the present, Mr. McKenzie has served as President, Chief Executive Officer, and Chairman of the Board of Gilliard Health Services, Inc., a privately held owner and operator of acute care hospitals that Mr. McKenzie currently owns and co-founded in 1981. From 1996 to 1998, he was Executive Vice President and Chief Operating Officer of the Mississippi Hospital Association’s for-profit subsidiary, Diversified Services, Inc. (DSI). During his brief tenure at DSI, Mr. McKenzie founded and managed The Health Insurance Exchange, a mutual company, health insurance company and HMO. From 1994 to 1996, Mr. McKenzie was Senior Vice President of Managed Care and Executive Vice President of Physician Solutions, Inc., a physician practice management subsidiary he founded for Vaughan HealthCare, a 501(c)(3) healthcare company in Alabama. From 1981 to 1994, Mr. McKenzie was Hospital Administrator and Chief Financial Officer and held other management positions with Gilliard Health Services, Inc. Mr. McKenzie received a Master of Science in Health Administration from the University of Colorado and a B.S. in Business Administration from Troy University. He has served in numerous leadership capacities with the Alabama Hospital Association and local civic organizations, including eight years of service on the Board of Directors for the Montgomery Academy.

Proxy Statementand Notice of 20162018 Annual Meeting 4    3

D. Paul Sparks, Jr.4        
Age 53Medical PropertiesTrust
Mr. Sparks has served

Proxy Statementand Notice of our Board of Directors since September 2014.2018 Annual Meeting
The Board believes that Mr. Sparks’ substantial experience in executive positions and his ability to guide companies through periods of growth and development make him a valued advisor and qualified to serve as Chairman of the Compensation Committee and as a member of our Board of Directors.
Mr. Sparks retired in January 2016 after a 32-year career in the energy industry. He was Senior Vice President Resource Development for Energen Resources Corporation (NYSE: EGN) and served in various capacities with Energen since 1989, including Senior Vice President of Operations from 2006 until 2012. Mr. Sparks worked with Amoco Corporation, a global chemical and oil company, in Texas and Louisiana prior to joining Energen. During the last 27 years, Mr. Sparks helped Energen grow from a small regulated utility to a top 20 U.S. independent oil and gas exploration and production company. His personnel responsibilities grew during the same period from managing 40 to over 350 people while Senior Vice President of Operations. In his pre-retirement role, he was responsible for the forward-looking strategy and implementation of valuing and developing the assets of Energen Resources Corporation. Mr. Sparks is active in a number of organizations: he is the current chairman of the New Mexico Oil and Gas Association, past advisor to the Gas Research Institute, a board member of the Independent Petroleum Association of America and past officer of the Society of Petroleum Engineers. He has authored a number of peer-reviewed publications and holds a patent in oil and gas technology. Mr. Sparks is a member of the Sunrise Rotary and the Downtown Exchange Club and past chairman of Mountain Brook Athletics. He is a 1984 graduate of Mississippi State University with a degree in Petroleum Engineering. He is also a Bagley College of Engineering Distinguished Fellow.
5 Medical Properties Trust

Proposal 1: Election of Directors
Governance Information Regarding Our Board of Directors

Annual Election of Directors

Our Board members stand for election each year. They serve until the next annual meeting or until their respective successors are elected and qualified, subject to their prior, death, resignation, retirement, death, disqualification, or removal from office. We do not have a classified board and our charter bars us, absent the approval of our shareholders,stockholders, from adopting the Maryland Unsolicited Takeover Act, which, among other things, permits the board of directors of a Maryland corporation to classify itself without a shareholderstockholder vote.
We maintain a majority vote standard and director resignation policy for uncontested director elections.

Independent Directors
The New York Stock Exchange (the “NYSE”) listing standards require that a

A majority of our Board and each of our audit, compensation and nominating committees is comprised of directors who qualify as independent as defined by the NYSE. The NYSE listing standards also require thatNew York Stock Exchange (the “NYSE”). Each year we affirmatively determine that each director deemed independent by the NYSE’s definition has no material relationship with us (either directly or as a partner, shareholderstockholder or officer of an organization that has a relationship with us). The Board of Directors has determined that five directors — of the director nominees—G. Steven Dawson, Robert E. Holmes, Ph.D., Sherry A. Kellett, William G. McKenzie, andElizabeth N. Pitman, D. Paul Sparks, Jr. — , Michael G. Stewart and C. Reynolds Thompson, III—have no relationship with us that would interfere with such person’s ability to exercise independent judgment as a member of our Board, and that they otherwise qualify as “independent” under the NYSE’s listing standards.

Independent Board Leadership
Three

Two of Medical Properties Trust’s four founders still serve as members of the Board of Directors. Studies regularly show thatfounder-led companies outperform their peers.peers^[i]. We are therefore fortunate not to have to rely exclusively on governance mechanisms to ensure that our Board exercises robust, effective, and independent leadership.

We preserve the benefits thatfounder-led companies enjoy by maintaining our founder, Mr. Aldag, as Chairman and Chief Executive officer.Officer. That dynamic is of particular importance in afounder-led company like ours, though we regularly review this structure and its alternatives.

We supplement our Board’s independence with a Lead Independent Director, currently Mr. Stewart, to whom the Board has given substantial powers and authorities. Our Lead Independent Director presides at all meetings of the Board at which the Chairman is not present and at all executive sessions of the independent directors. He serves as principal liaison between the Chairman and the independent directors, advising the Chairman on the quality, quantity and timeliness of the information presented to the Board. He advises the Chairman on the agendas for Board meetings and calls meetings of the independent directors if deemed necessary or appropriate. The Lead Independent Director also oversees the annual self-evaluation of the Board. The Board can also, at its discretion, add to the Lead Independent Director’s responsibilities.

We believe there are risks in relying exclusively on independent board chairs or lead independent directors for board independence. We therefore value — value—and have — have—strong independent committee chairs on our Board. We also believe that ourfounder-led culture enables robust and honest interactions from all of our Board members, each of whom brings important and diverse skill sets to their jobs. Finally, the Board completes an annual board evaluationself-evaluation process that is discussedinstituted by the Ethics, Nominating and Corporate Governance Committeeour Lead Independent Director and presented to the full Board.

^[i]See, Chris Zook, “Founder-Led“Founder-Led Companies Outperform the Rest—Here’s Why” inHarvard Business Review, March 24, 2016.

6        
Proxy Statement and Notice of 2016 Annual Meeting 6Medical PropertiesTrust

Proposal 1: Election of Directors

Risk Oversight

Our Board of Directors plays a central role in overseeing and evaluating risk. While it is management’s responsibility to identify and manage our exposure to risk on aday-to-day basis, the Board routinely discusses these risks with management and actively oversees our risk-management procedures and protocols. The Board regularly receives reports from senior management on areas of material risk to the Company, including operational, financial, legal, regulatory and strategic risks. In addition, each of the Audit Committee, the Compensation Committee and the Ethics, Nominating and Corporate Governance Committee each exercisesexercise oversight and provides guidance relating to the particular risks within the purview of each committee, as well as making periodic reports to the full Board. Our Board of Directors also oversees risk by means of the required approval by our Board of significant transactions and other decisions, including material acquisitions or dispositions of property, material capital markets transactions, significant capital expendituresimprovement projects and important employment-related decisions.

Board Committees and Meetings

Our Board of Directors and our Board’s four standing committees hold regular meetings. In 2015,2017, the Board of Directors met five times; the Audit Committee met fourfive times; the Ethics, Nominating and Corporate Governance Committee met two times;one time; the Compensation Committee met fivefour times; and the Investment Committee met at each ofdid not meet as all acquisitions were approved by the Board of Directors.full Board. In 2015,2017, all directors attended at least 75% of the total number of meetings of the Board and the committees on which he or she served.

The Board of Directors regularly meets in executive session without anynon-independent directors present. Dr. HolmesMr. Stewart has been designated as the Lead Independent Director and in that capacity presides at these executive sessions. Dr. HolmesMr. Stewart may be contacted directly by shareholdersstockholders at rholmes@medicalpropertiestrust.com.mstewart@mpt.net. The directors of the Company are encouraged to attend our annual meeting of shareholdersstockholders absent cause. All directors of the Company holding their position at the time of the meeting attended our 20152017 annual meeting of shareholders.
stockholders.

Committees of the Board of Directors

The Board of Directors delegates certain of its functions to its standing committees.
The

Audit Committee
G. Steven Dawson Chairman
Sherry A. Kellett
D. Paul Sparks, Jr.
The Board of Directors has determined that each member of the Audit Committee is financially literate and satisfies the additional NYSE independence requirements for audit committee members, and that each member of the Audit Committee qualifies as an “audit committee financial expert” under current Securities and Exchange Commission (“SEC”) regulations. The Board of Directors has also determined that service by Ms. Kellett and Mr. Dawson on other public companies’ audit committees has not impaired their abilities to effectively serve on our Audit Committee.
The Audit Committee oversees (i) our accounting and financial reporting processes, (ii) the integrity and audits of our financial statements, (iii) our compliance with legal and regulatory requirements, (iv) the qualifications and independence of our independent auditors, and (v) the performance of our internal and independent auditors. The specific functions and responsibilities of the Audit Committee are set forth in the Audit Committee Charter, a copy of which is posted on our website at www.medicalpropertiestrust.com. The information on our website is not part of this Proxy Statement. The report of the Audit Committee appears on page 13 of this Proxy Statement.
7 Medical Properties Trust

Proposal 1: Election of Directors
The Compensation Committee
D. Paul Sparks, Jr. Chairman
In 2015, L. Glenn Orr, Jr. served as Chairman of the Compensation Committee. Mr. Orr retired on April 3, 2016, and was replaced by Mr. Sparks. Pursuant to the NYSE listing standards, in determining the independence of the directors serving on the Compensation Committee, our Board of Directors considered all factors specifically relevant to determining whether a director has a relationship to us which is material to that director’s ability to be independent from our management in connection with the duties of a Compensation Committee member, including, but not limited to, such director’s source of compensation and whether such director is affiliated with us, one of our subsidiaries, or an affiliate of one of our subsidiaries.
Dr. Robert E. Holmes Sherry A. Kellett
The principal functions of the Compensation Committee are to evaluate the performance of our executive officers, review and approve the compensation for our executive officers, and review, administer and make recommendations to the full Board of Directors regarding our incentive compensation plans and equity-based plans. The Compensation Committee also reviews and approves corporate goals and objectives relevant to the Chief Executive Officer’s compensation, evaluates the Chief Executive Officer’s performance in light of those goals and objectives, and establishes the Chief Executive Officer’s compensation levels. The Compensation Committee makes all compensation decisions with respect to the Chief Executive Officer and all other executive officers. The Chief Executive Officer is frequently asked to provide the Compensation Committee with the information it needs to perform these functions as well as to provide input and insights regarding each executive officer’s performance. The specific functions and responsibilities of the Compensation Committee are set forth in more detail in the Compensation Committee’s Charter, a copy of which is posted on our website at www.medicalpropertiestrust.com. The report of the Compensation Committee appears on page 30 of this Proxy Statement.
In 2015, the Compensation Committee continued its engagement of FTI Consulting, Inc., or FTI Consulting, a nationally recognized compensation consultant specializing in the real estate industry. FTI Consulting assisted the Compensation Committee in determining the amount and form of executive compensation. The Compensation Committee also considered information presented by FTI Consulting when reviewing the appropriate types and levels for the Company’s non-employee director compensation program. Information concerning the nature and scope of FTI Consulting’s assignments and related disclosure is included in “Compensation Discussion and Analysis” beginning on page 15 of this Proxy Statement. The Compensation Committee has assessed the independence of FTI Consulting, as required under the NYSE listing rules. The Compensation Committee has also considered and assessed all relevant factors, including, but not limited to, those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that could give rise to a potential conflict of interest. Based on this review, we are not aware of any conflict of interest that has been raised by the work performed by FTI Consulting. To bring additional perspective to our continually evolving and improving compensation plans, in 2016 the Compensation Committee retained Semler Brossy Consulting Group LLC (“Semler Brossy”), a nationally known compensation consulting firm as its new independent advisor.

Proxy Statementand Notice of 20162018 Annual Meeting 8    7

Compensation Committee

Proposal 1: Election of Directors8        
The Medical PropertiesTrust

Ethics, Nominating and Corporate Governance Committee
Dr. Robert E. Holmes
Chairman

Proxy Statementand Corporate Governance Committee is responsible for, among other things, recommending the nominationNotice of qualified individuals to become directors to the full Board of Directors; recommending the composition of the Board’s committees to the full Board of Directors; periodically reviewing the performance and effectiveness of the Board of Directors as a body; and periodically reviewing our corporate governance guidelines and policies. In 2015, Ms. Kellett served as a member of this committee. The specific functions and duties of the Committee are set forth in its charter, a copy of which is posted on our website at www.medicalpropertiestrust.com.2018 Annual Meeting
William G. McKenzie
D. Paul Sparks, Jr.
The Ethics, Nominating and Corporate Governance Committee will consider all potential candidates for nomination for election as directors who are recommended by the Company’s shareholders, directors, officers, or employees. All director recommendations must be made during the time periods provided and must provide the information required by Article II, Section 2.03 of the Company’s Second Amended and Restated Bylaws. All director recommendations should be sent to the Ethics, Nominating and Corporate Governance Committee, c/o Secretary, Medical Properties Trust, Inc., 1000 Urban Center Drive, Suite 501, Birmingham, Alabama 35242. The Committee will screen all potential director candidates in the same manner, regardless of the source of their recommendation. The Committee’s review will typically be based on the written materials provided with respect to a potential director candidate. The Committee will evaluate and determine whether a potential candidate meets the Company’s minimum qualifications and requirements, whether the candidate has the specific qualities and skills for directors, and whether requesting additional information or an interview is appropriate. While the Committee considers different perspectives and skill sets when evaluating potential director candidates, the Committee has not established a formal policy regarding diversity in identifying candidates. The Committee nevertheless regularly reviews the composition of the Board as part of the annual self-evaluation process and seeks nominees who, taken as a whole, possess the experience and skills necessary for the effective functioning of the Board.
The Board of Directors has adopted the following minimum qualifications and specific qualities and skills for the Company’s directors, which will serve as the basis upon which potential director candidates are evaluated by the Ethics, Nominating and Corporate Governance Committee: (i) directors should possess the highest personal and professional ethics, integrity, and values; (ii) directors should have, or demonstrate an ability and willingness to acquire in short order, a clear understanding of the fundamental aspects of the Company’s business; (iii) directors should be committed to representing the long-term interests of our shareholders; (iv) directors should be willing to devote sufficient time to carry out their duties and responsibilities effectively and should be committed to serving on the Board of Directors for an extended period of time; and (v) directors should not serve on more than three boards of public companies in addition to our Board of Directors. The Ethics, Nominating and Corporate Governance Committee also takes into consideration the diversity of its Board, including breadth of experience and the ability to bring new and different perspectives to the Board.
The Ethics, Nominating and Corporate Governance Committee recommended the nomination of all seven of the incumbent directors for re-election to the Board of Directors. The entire Board of Directors approved such recommendation.
9
Medical Properties Trust

Proposal 1: Election of Directors
MPT
The

Investment Committee
Prior to 2016, the Investment Committee was comprised of all of our current directors.
Edward K. Aldag, Jr.
Chairman
The Investment Committee has the authority to, among other things, consider and take action with respect to all acquisitions, dispositions, developments, and leasing of healthcare facilities in which our aggregate investment will fall between $10 million and $50 million.
G. Steven Dawson
R. Steven Hamner
William G. McKenzie

Governance, Ethics, and Stockholder Communications

Corporate Governance Guidelines.Guidelines. In furtherance of its goal of providing effective governance of the Company’s business and affairs for the long-term benefit of its shareholders,stockholders, the Board of Directors has adopted Corporate Governance Guidelines. The Corporate Governance Guidelines are posted on our website at www.medicalpropertiestrust.com.
www.medicalpropertiestrust.com.

Code of Ethics and Business Conduct.The Company has adopted a Code of Ethics and Business Conduct, as approved by the Board of Directors, which applies to all directors, officers, employees, and agents of the Company and its subsidiaries. The Code of Ethics and Business Conduct is posted on our website at www.medicalpropertiestrust.com.www.medicalpropertiestrust.com. We audit compliance with our Code of Ethics and Business Conduct Policy with each officer, director, and employee with a questionnaire that is required to be completed annually.

Proxy Access Bylaw Provisions.In 2017, we amended ourby-laws
to provide for “proxy access” for our stockholders. The proxy access provision permits a stockholder (or a group of up to 20 stockholders) that has owned at least 3% of our outstanding common stock for at least three years to nominate, and include in our proxy materials, up to the greater of two directors or 20% of the directors then in office; provided that the stockholders and the nominees satisfy the requirements specified in ourby-laws.

Stockholder and Interested Party Communications with the Board.Stockholders and all interested parties may communicate with the Board of Directors or any individual director regarding any matter that is within the responsibilities of the Board of Directors. Stockholders and interested parties should send their communications to the Board of Directors, or an individual director, c/o Secretary, Medical Properties Trust, Inc., 1000 Urban Center Drive, Suite 501, Birmingham, Alabama 35242. The Secretary will review the correspondence and forward any communication to the Board of Directors, or the individual director, if the Secretary determines that the communication deals with the functions of the Board of Directors or requires the attention of the Board of Directors or the individual director. The Secretary will maintain a log of all communications received from shareholders.
stockholders.

We will provide, free of charge, hard copies of our Annual Report to Stockholders, ourForm 10-K, our quarterly reports onForm 10-Q, current reports onForm 8-K, and all amendments to these reports as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Also available, free of charge, are hard copies of our Corporate Governance Guidelines, the charters of our Ethics, Nominating and Corporate Governance Committee, our Audit Committee, and our Compensation Committee, and our Code of Ethics and Business Conduct. All of these documents are also available on our website at www.medicalpropertiestrust.com.www.medicalpropertiestrust.com.

10        
Proxy Statement and Notice of 2016 Annual Meeting 10Medical PropertiesTrust

Proposal 2:
Ratification of Independent Registered Public Accounting Firm

The Audit Committee of our Board of Directors has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm to audit our financial statements for the year ending December 31, 2016.2018. PricewaterhouseCoopers LLP served as our independent registered public accounting firm during the year that ended December 31, 2015.2017.

Proxy Statement
and Notice of 2018 Annual Meeting    11

Board of Directors’ Recommendation
The Board of Directors recommends that you vote FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016.
11
Medical Properties Trust2018.

Proposal 2: Ratification of Independent Registered Public Accounting Firm
Independent Auditor

The Audit Committee of the Board of Directors has selected PricewaterhouseCoopers LLP (“PwC”) as the independent auditor to perform the audit of our consolidated financial statements for the year ending December 31, 2016.2018. PwC, an independent registered public accounting firm, also performed the audit of our consolidated financial statements for 20152017 and 2014.2016. The Board of Directors has approved the appointment of PwC as the Company’s independent registered public accounting firm for 20162018 based on the recommendation of the Audit Committee.

Representatives of PwC are expected to be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions from our shareholders.
stockholders.

The Audit Committee is directly responsible for the appointment, compensation, and oversight of our independent auditor. In addition to retaining the independent auditor to audit our consolidated financial statements, the Audit Committee may retain the independent auditor to provide other auditing services. The Audit Committee understands the need for our independent auditor to maintain objectivity and independence in its audits of our financial statements.

To help ensure the independence of the independent auditor, the Audit Committee has adopted a policy for the pre-approval ofthat all audit andnon-audit services to be performed by its independent auditor. Pursuant to this policy, all audit and non-audit services to be performed by the independent auditor must be approved in advance by the Audit Committee. The Audit Committee approved all audit and audit-related services provided to us by PwC during the 20152017 and 20142016 calendar years.

The table below sets forth the aggregate fees billed by PwC for audit andnon-audit services:
Fees
2015
2014
Audit Fees
$965,827
$770,000
Audit-Related Fees
—
—
Tax Fees
386,774
325,402
All Other Fees
—
—
Total
$1,352,601
$1,095,402

Proposal 2: Ratification of Independent Registered Public Accounting Firm
Audit Committee Report

The Audit Committee is composed of three independent directors and operates under a written charter adopted by the Board of Directors, a copy of which is available on our website. The Board of Directors has determined that each committee member is independent within the meaning of the NYSE listing standards.

Management is responsible for the Company’s accounting and financial reporting processes, including its internal control over financial reporting, and for preparing the Company’s consolidated financial statements. PwC, the Company’s independent auditor, is responsible for performing an audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and for expressing an opinion as to whether the Company’s consolidated financial statements are fairly presented in all material respects in conformity with generally accepted accounting principles in the United States of America (“GAAP”). In this context, the responsibility of the Audit Committee is to oversee the Company’s accounting and financial reporting processes and the audits of the Company’s consolidated financial statements.

In the performance of its oversight function, the Audit Committee reviewed and discussed with management and PwC the Company’s audited consolidated financial statements as of and for the year ended December 31, 2015.2017. Management and PwC represented to the Audit Committee that the Company’s audited consolidated financial statements as of and for the year ended December 31, 2015,2017, were prepared in accordance with GAAP. The Audit Committee also discussed with PwC the matters required to be discussed by the Statement of Auditing Standards No. 16,1301, as amended (“AS No. 16”1301”), as adopted by the PCAOB. AS No. 161301 sets forth requirements pertaining to the independent auditor’s communications with the Audit Committee regarding the conduct of the audit.

The Audit Committee received the written disclosures and the letter from PwC required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence (“Rule 3526”). Rule 3526 requires the independent auditor to provide written and oral communications prior to accepting an initial engagement conducted pursuant to the standards of the PCAOB and at least annually thereafter regarding all relationships between the auditor and the Company that, in the auditor’s professional judgment, may reasonably be thought to bear on independence, and to confirm that they are independent of the Company within the meaning of the securities acts administered by the SEC. The Audit Committee discussed with PwC any relationships that may impact their objectivity and independence and satisfied itself as to the firm’s independence.

The members of the Audit Committee are not professionally engaged in the practice of accounting or auditing and, as such, rely without independent verification on the information provided to them and on the representations made by management and PwC. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting processes or appropriate internal controls and procedures designed to assure compliance with the accounting standards and applicable laws and regulations. Furthermore, the reviews and discussions of the Audit Committee referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, that the Company’s audited consolidated financial statements are presented in accordance with GAAP, or that PwC is, in fact, independent.

Based on the Audit Committee’s review and the discussions described above, and subject to the limitations on its role and responsibilities described above and in the Audit Committee Charter, the Audit Committee recommended to the Board of Directors that the audited financial statements as of and for the year ended December 31, 2015,2017, be included in the Company’s 20152017 Annual Report onForm 10-K for filing with the SEC.

The foregoing report is provided by the undersigned members of the Audit Committee of the Board of Directors.

Proxy Statement
G. Steven Dawson (Chairman) Sherry A. Kellett D. Paul Sparks, Jr.and Notice of 2018 Annual Meeting
13
Medical Properties Trust

Proposal 3:
Advisory Vote to Approve Executive Compensation

The Company asks that you indicate your support for our named executive officer compensation policies and practices as described in the “CompensationCompensation Discussion and Analysis” or (“CD&A,&A”) and the accompanying tables and related disclosures beginning on the next page of this Proxy Statement. This proposal, commonly known as a “say-on-pay”“say-on-pay” proposal, is required pursuant to Section 14A of the Exchange Act. While thesay-on-pay vote is advisory and thereforenon-binding on the Company, the Board of Directors or the Compensation Committee, it gives our shareholdersstockholders the opportunity to express their views on our named executive officers’ compensation. Our Board of Directors and Compensation Committee members take seriously and act upon these views; please see the summary of these actions beginning on page 15.views. This vote is not intended to address any specific item of compensation but rather the overall compensation of our executive officers and the policies and practices described in this Proxy Statement. We conduct an annual,non-bindingsay-on-pay vote consistent with the recommendation of a majority of our shareholdersstockholders expressed by vote at our 20112017 Annual Meeting.
Meeting of Stockholders.

The Board of Directors and the Compensation Committee will review the voting results of this advisorysay-on-pay vote and take them into consideration when structuring future executive compensation arrangements. The affirmative vote of the holders of a majority of the shares of common stock represented in person or by proxy at the 2018 Annual Meeting of Stockholders and entitled to vote on the proposal will be required for approval.

As we describe in further detail in the CD&A, we believe that the experience, abilities and commitment of our executive officers are unique in the business of investing in hospital real estate, and are therefore critical to the long-term achievement of our investment goals. Accordingly, the primary objectives of our executive compensation program are to retain our key leaders, attract future leaders and align our executives’ long-term interest with the interests of our shareholders.stockholders. The Board of Directors encourages you to carefully review the information regarding our executive compensation program contained in this Proxy Statement.

14        
Medical PropertiesTrust

Board of Directors’ Recommendation
The Board of Directors recommends that you vote FOR the following resolution:
“Resolved, “Resolved, that the shareholdersstockholders advise that they APPROVE the compensation of the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, which disclosure includes the Compensation Discussion and Analysis, the compensation tables, and any related material.”

Executive Summary

Highlights/Key Takeaways

Our Compensation Policies Follow Stockholder Guidance

Strong approval of our recentsay-on-pay
Proxy Statement votes.Approximately 94% of the of shares present and Noticeentitled to vote at our 2017 annual meeting were cast in favor of 2016 Annual Meeting 14the 2017say-on-pay

Compensation Discussion proposal, and Analysis
Executive Summary
We Are Listening
For96% voted in favor of the past three yearsproposal in 2016. In 2018, we have made continuous improvementsmet with stockholders in person or by telephone representing approximately 43% of our outstanding common stock to our executive compensation plans and other important governance practices. Manyreceive their feedback. All of these have been direct resultsmeetings included the Chair of the Compensation Committee, and our CEO was not in attendance. Additionally, our officers met in person with more than 330 investors at 19 conferences and road shows since the beginning of 2017. We continue to proactively monitor and review our compensation program in an effort to ensure that it reflects best practices, takes into account the views of our meetingsstockholders and other conversations with our shareholders — inties the two years since our 2014 annual shareholder meeting, we contacted shareholders holding 67% and 50%majority of our shares and met with 44% and 42%, respectively of those shareholders. Many of our meetings in 2015 and 2016 included all three of our Compensation Committee members and none of our executive officers. We have also made additional improvements in reactionpay to evolving norms and best practices in compensation and governance.
This CD&A describes how our compensation plan design resulted in significantly reduced compensation for our Named Executive Officers (NEOs) in 2015, a year in which our shareholders suffered negative total shareholder return; it describes the many changes we have made to our compensation and governance plans in recent years; and very importantly, reviews the many components of success that we have achieved to position your company for continued outperformance.
In 2015, our executive compensation rewards proved to be directly and substantially linked with our shareholders’ financial experience, with significantly reduced compensation matching our shareholder returns. We believe that when our shareholders consider this linkage, along with the continued other improvements in our compensation plan and the outstanding financial and operational successes we continue to create, they will vote FOR the advisory proposal regarding our executive compensation.
performance.

Our Pay for Performance Plan is WorkingContinues to Evolve

We believe that our current executive compensation program represents a balanced, strategically-aligned structure, appropriately focused onpay-for-performance
CEO Highlights as demonstrated by the following:

Proxy Statementand Notice of 2018 Annual Meeting    15

2017 Financial and operational performance during 2015.
15 Medical Properties Trust

Compensation Discussion and Analysis
2015 Financial and Operational Successes:
While 2015 was disappointing when measured solely by temporary market conditions impacting our (and almost all other REITs’) stock prices — and our executive officers suffered for that along with our shareholders, our executives continued to execute the long-term strategic initiatives that have been long established. We believe 2015 total shareholder return results were a timing difference and we fully expect that our shareholders will benefit from the resulting successes over the foreseeable future; some of these successes in 2015 include:
Record profits, cash flows and normalized funds from operations (FFO) in 2015.
18.9% year-over-year increase in normalized FFO per share.
51% growth in normalized FFO.
41% growth in revenue in 2015, from $313 million to $442 million.
5% increase in our annual cash dividend, now $0.88 a share.
Maintaining an investment grade debt rating from Standard & Poors.
Continued highly and immediately accretive asset growth of 51%, including completion of the highly attractive and accretive 32 hospitals, €700 million Median portfolio in Germany and the intensely competitive 7 hospital, $900 million Capella transaction among others.
Since year-end 2015 reduced revolver balances by approximately $500 million and executed further deleveraging transactions that are expected to further reduce total debt by approximately $600 million when closed during the second quarter of 2016.
Continued to improve tenant concentration metrics to the lowest in company history with no single facility representing more than 2% of total assets.
Improved the dividend payout ratio to the lowest in company history and among the best in the healthcare REIT sector at below 70%.
17 Medical Properties Trust

Compensation Discussion and Analysis MPT
20152017 Chief Executive Officer Pay Mix — Mix—Total Direct Compensation

Pay mix is based on total direct compensation, which includes base salary, annual cash incentive approved value of annual restricted stock awards (granted(paid in 2016 based on 2015 performances which equaled $0) and the2018 for 2017 performance), grant date fair value of the long-term restricted stockone-year operational metric (G&A as a percentage of revenue and ROE) awards,one-year relative TSR awards and five-year absolute TSR awards, all granted in 2017 for 2017, based upon the probable outcome of the performance-based vesting conditionsvalue as calculated by an independent appraiser.
LTIPappraiser (as disclosed in the Grant of Plan (34%)
Base Salary (23%)
Performance-Based Compensation (77%)
Annual Cash Incentive (43%)
Based Awards Table).

Proxy Statementand Notice of 20162018 Annual Meeting 18    17

Compensation Discussion and Analysis
Pay for Performance Alignment
Summary Compensation Table amounts reflect the accounting value of compensation, but we believe that more important than accounting is the actual value earned in a given year for each executive.
We have demonstrated a strong correlation between shareholder returns and executive compensation. Our executive’s compensation is highly variable and dependent on both relative and absolute TSR.
In 2015, our CEO was eligible to earn up to $4.73 million in performance-based equity, all of which was unearned based on the Company’s 1-year and 3-year TSR performance.
We believe this strong correlation between earned compensation and shareholder value is essential in promoting long-term growth while having shoulder-to-shoulder alignment with shareholders’ interest.
$10
80%
$9.35M
$8.38M
70.8% 3YR TSR (2011-2014)
$8
60%
$6
39.8% 3YR TSR (2010-2013)
40%
$4
$2.76M
20%
$2
16.8% 3YR TSR (2012-2015)
$-
0%
2013
2014
2015
Base Salary
Annual Cash Incentive
Annual Time-Based Stock Award
Annual Performance-Based Restricted Stock Award
LTIP Plan
Total Compensation ($ Millions)
Three-Year Total Shareholder Return
Name and Position
Edward K. Aldag, Jr.
Chairman, Chief Executive Officer and President
Steven Hamner
Executive Vice President and Chief Financial Officer
Emmett E. McLean
Executive Vice President,
Chief Operating Officer,
Treasurer and Secretary
Year
2015
2014
2013
2015
2014
2013
2015
2014
2013
Salary
($)
950,000
600,000
600,000
575,000
400,000
400,000
525,000
395,000
395,000
Annual Cash Incentive
($)
1,805,000
1,857,000
1,817,250
805,000
878,500
860,250
735,000
867,519
849,497
Annual Time-Based Restricted Stock Award
($)
-
1,375,000
1,475,000
-
625,000
675,000
-
440,000
475,000
Annual Performance-Based Restricted Stock Award
($)
-
1,670,122
1,425,732
-
768,497
669,383
-
532,804
446,250
LTIP Plan
($)
-
3,850,000
3,057,456
-
2,100,000
1,651,024
-
1,750,000
1,406,433
Total Earned Compensation
($)
2,755,000
9,352,122
8,375,438
1,380,000
4,771,997
4,255,657
1,260,000
3,985,323
3,572,180
Salary represents amounts earned and paid in the year; while annual cash incentive represents amounts earned for that year although paid in the following year.
Annual Time-Based Restricted Stock: Reflects the value approved by the Compensation Committee after reviewing the respective years performance and is granted in following fiscal year. For example, the 2014 Time-Based Restricted Stock value reflects the value the Compensation Committee approved in December 2014 after reviewing annual performance and granted in January 2015.
Annual Performance-Based Restricted Stock: Reflects the value of the stock earned for the Company’s 1-year TSR performance at the stock price on the date it was earned. 2015 value reflects $0 as no performance stock was earned.
3-Year Long-Term Incentive Performance Plan: Reflects the value earned based on the 3-year TSR performance period ended at the end of the fiscal year. For example, 2014 amount includes the actual value earned under the 2012 LTIP Plan at the stock price on the date it was earned. 2015 value excludes all stock under the 2013 LTIP Plan as all stock was forfeited based on performance over the three-year performance period.
19 Medical Properties Trust

Compensation Discussion and Analysis MPT
Compensation Philosophy, Design and Process

Virtually every company says it uses pay to drive and reward performance. We do as well. But doing this for a public company in a broad, ever-changing sector whose shares are held by individuals and institutions with diverse time horizons and risk tolerances, requires us to balance many considerations.

18        
We implement this philosophy and these considerations with pay objectives that:Medical PropertiesTrust
Combine a mixture of short, medium, and long-term plans; some market-focused, some individually focused; some cash-based, some equity-based; to capture all the variables described above.
Put 77% of NEOs’ total annual compensation in 2015 at-risk via stock price, corporate, or individual performance measurements.
Use performance metrics to determine 90% of annual cash incentive awards. In 2015, the Compensation Committee awarded only one-half of the remaining 10%.
Encourage our executives and directors to acquire and maintain significant equity ownership in our Company.
Our CEO must acquire and hold Company equity valued at six-times base salary or more, our other NEOs (our CFO and COO) must hold four or more times base salary, and our non-employee directors must hold at least three-times their annual retainer. Our NEOs greatly exceed these requirements.
Prohibit actions that would de-link compensation from our philosophy and goals:
Our claw back policy avoids rewarding bad conduct.
We do not issue or reprice options.
We do not provide perquisites except for standard car, financial planning and insurance benefits.
We have robust anti-hedging and pledging policies.
We use rigorous, relevant, disclosed measurement goals that incentivize above-median performance without creating unacceptable risk.
Rely on the expertise of independent outside compensation consultants.
Task and empower our Compensation Committee to:
Review and approve corporate goals and objectives relative to the compensation of the executive officers, evaluate the performance of the executive officers, and determine and approve appropriate compensation levels based on these objectives;
Review and approve, on an annual basis, the corporate incentive goals and metrics relevant to the cash bonus pay and performance-based equity awards;
Evaluate the competitiveness of each executive’s compensation package in relation to other possible compensation offers the executive may receive;
Approve changes to executives’ total compensation package including base salary, cash bonus payout amounts and long-term equity incentive awards.
Proxy Statement and Notice of 2016 Annual Meeting 20

Compensation Discussion and Analysis

Elements of Pay

Base Pay

Historically, the Compensation Committee reviews base salaries annually but approves increases only triennially. Consistent with this, we increased NEO base salaries in 2012 and then not again until 2015. Base salaries were increased in 2015 to be more in line with our peer group.group, and at the same time we reduced the maximum cash bonus multiple for our CEO. None of our NEOs have received a base salary increase in 2016.since 2015. Base salary on average does not accountaccounts for more than 20%approximately 13% of NEO total target compensation.

Our approach to base pay is to provide a fixed amount to promote recruitment and retention, and reflect individual experience, performance, internal pay equity and peer-group comparisons.
The following chart sets forth 2017 base salaries for our NEOs.

Annual Cash Bonus Plan

In 2015,2017, all executive officers were eligible for an annual cash incentive cash bonus subject to achievingthe achievement of specifiedpre-determined performance goals.
We used the annual cash bonus plan to incentivize achievement of our annual strategic financial goals. Ninety percent of these goals’ performance criteria are linked to objective performance hurdles. The remaining 10% is linked to NEO’s individual performance.
In 2015, we reduced the number of payout levels of the annual cash bonus from four to three, and from six in 2013: each annual cash bonus is now based on

Each NEO has a set Threshold, Target and Maximum percentagesannual cash incentive bonus, each expressed as a percentage of base salary. In addition, in 2015, we adjusted the base salaries and maximum bonus NEOs may receive under this plan to be more in line with our peer group which resulted in a reduction in ourThe CEO’s maximum bonus percentage tois 200% from 350%.
21 Medical Properties Trust

Compensation Discussionof base salary and Analysis MPT
We spend considerable time designing the NEOs’maximum annual cash bonusesincentive bonus for each of our other NEOs is 150% of base salary.

The Compensation Committee develops targets for the Annual Cash Bonus Plan to align payment with theincentivize management to execute near-term transactions and strategies that are expected to result in long-term achievement of key Company strategic financial goals importantprofitable growth and balance sheet strength. The Compensation Committee uses stringent measures to sustainable shareholder returns:
Performance Metric Weighting Threshold Target Maximum 2015 Results
Normalized FFO Per Share Growth
Encourages focus on profitability as measured byset each target, generally based upon our publicly disclosed guidance. For example, to simply reach the most frequently used assessed REIT earnings measure;target level of bonus in 2017, our NEOs were required to mitigate against the risk of non-profitable or other low quality growth. 36% 8% 10% 15% 18.9% Beat maximum target by 90%
We increased our assets by $800 million, or 28% in 2014, an extraordinary achievement that we thought unlikely again in 2015. Accordingly, when establishing a Target for 2015 normalizedgrow Normalized FFO per share by 4.7% and increase investments in hospital real estate by 12% over the level of investment in 2016. In fact, however, we believed 10% would be an aggressive targetincreased our hospital real estate investments by approximately 35% driving extraordinary results for our stockholders and would require, all other things equal, a difficult goalmaximum achievement of approximately $600 millioneach of average acquisitions - in other words,our pre-determined components.

Proxy Statementand Notice of 2018 Annual Meeting    19

The following table sets forth the $600 million would result in about a 10% normalized FFO per share increase only if such acquisitions were made very early in 2015. Primarily because we successfully competedcomponents for the $900 million Capella transaction that closed in late August, we exceededAnnual Cash Bonus Plan for 2017, the Targetweighting of each such component, and achieved Maximum. It should be noted that the Capella opportunity was not even in our pipeline (we were not aware of it) until after our cash bonus metrics were established.2017 results.

Ensures focus on reducing the risk that long- and short-term results are overly dependent on any single tenant; also incentivizes management to continue to develop the hospital sale/leaseback market and identify additional acquisition opportunities. 18% 25% 24% 23% 17.6% Beat maximum target by 27%Cash Compensation Comparison
Based on our assets at year-end 2014 and signed but not closed acquisitions, our expected Exposure to One Tenant metric was 27%. In addition, we expected to add additional investments to this tenant relationship in 2015 (and we did). Accordingly, we established a high Target level of 24%, which required us to add at least $400 million of acquisitions not related to our largest tenant. Because we successfully identified Capella as a potential completely new relationship and we won a very competitive competition for Capella’s acquisition, we were able to reduce our Exposure to One Tenant to only 17.6%. To achieve this level of success, we would have had to establish a goal of adding nearly $2.0 billion of accretive assets in 2015.
Additional Acquisitions
Motivates management to execute on our long-term strategic growth plan; for management to be rewarded for this target, the acquisitions must be profitable and accretive on a per share basis in order to also meet the FFO Growth and AFFO Payout Targets 36% $400 Million $600 Million $800 Million $1.6B Beat maximum target by 100%
In 2014 we had grown our assets by 28%, and extremely challenging process that we believed was highly unlikely to repeat. Based on our pipeline of known opportunities in early 2015, and the difficulty we knew existed in achieving any level of double digit asset growth, we established a growth Target of 16%, equivalent to about $600 million in new assets in 2015. Once again, the unexpected and unknowable (in early 2015) Capella opportunity, which we successfully closed

As reflected in the face of intense competition from other investors, drove our asset acquisitions to $1.6 billion, increasing our assets by a phenomenal 43%, even aftertable, the prior year’s growth of 28%.
Qualitative Performance Review
Represents indicatorstotal cash compensation of the executive’s success in fulfilling his or her responsibilities to the Company and in executing its strategic business plan. 10% N/A N/A N/A N/A
Even though our executives led our company to outstanding levels of outperformance of financial and operational goals, the Committee members recommended, and our executives agreed, to reduce the Discretionary component to zeroNEOs did not increase over 2016, even in light of our shareholders’ negative total return.
2014 Bonus 2015 Bonus % Change
Edward K. Aldag, Jr. $1,857,000 $1,805,000 -3%
R. Steven Hamner $878,500 $805,000 -8%
Emmett E. McLean $867,519 $735,000 -15%
Proxy Statement and Notice of 2016 Annual Meeting 22

Compensation Discussion and Analysis
Results of Our 2015 Annual Cash-Bonus Plan
In 2015, our growth in revenue (79th percentile), normalized FFO/share (92nd percentile) and annual dividends declared (67th percentile) havethe successful performance with respect to all been well above median on both an annual and cumulative basis as compared to the constituentscomponents of the SNL US REIT Healthcare Index.[1]
In addition, our management achieved another important goal: a reduction in our exposure to our largest tenant, from 19% in 2014 to 17.6% in 2015, which, on a 3-year basis adds up to a 22% decrease in exposure to a single tenant. Moreover, we achieved this important goal even though two of our tenants merged in 2015, temporarily driving our exposure to almost 27% before we reduced it to 17.6%.
These achievements, and the others noted on the summary page of this CD&A warranted our paying out slightly less than the maximum award: approximately 95% of maximum.
Growth in Revenue
79th Percentile
Growth in Normalized FFO/share
92nd Percentile
bonus plan.

The following chart outlines the performance hurdles set by the Compensation Committee for each award.
of these performance-based awards.

Compensation Discussion and Analysis

Compensation Review Process

Role of the Compensation Committee

Pursuant to its charter, the Compensation Committee is responsible for designing our executive compensation plans, establishing compensation levels, and measuring the performance of our NEOs. The Compensation Committee, which consists of three independent directors, is responsible for the review and approval of all aspects of our executive compensation program. Among other duties, the Compensation Committee is responsible for the following:
•

In order to assist the Compensation Committee to design, establish and monitor our executive compensation plans, the Compensation Committee has engaged an independent executive compensation consultant, as described below.

Role of the Compensation Consultant

In 2015,2017, the Compensation Committee retained FTI Consulting, Inc.,Gressle & McGinley, LLC, a nationally recognized compensation consulting firm specializing in the real estate industry (the “Compensation Consultant” or “FTI Consulting”“Gressle & McGinley”). The Compensation Consultant was engaged by and reports directly to the Compensation Committee. Upon the request of the Compensation Committee, a representative of FTI Consulting attendsGressle & McGinley attended meetings of the Compensation Committee and communicatescommunicated with the Chairman of the Compensation Committee between meetings; however, the Compensation Committee makes all decisions regarding the compensation of our executive officers.

The Compensation Consultant provides various executive compensation services to the Compensation Committee pursuant to a written consulting agreement between the Compensation Committee and the Compensation Consultant. Generally, these services include, among others, (i) advising the Compensation Committee on the principal aspects of our executive compensation program and director compensation program and evolving industry practices; (ii) presenting information to assist the Compensation Committee in determining the appropriate peer group to be used to evaluate the competitiveness of our compensation program; (iii) providing market information and analysis regarding the competitiveness of our program design and our award values in relationship to our performance; and (iv) preparing recommendations based on the Company’s performance, current market trends and corporate governance matters. The Compensation Committee recognizes that it is essential to receive objective advice from its outside compensation consultant. The Compensation Committee has determined based on a review of relevant factors that FTI Consulting adviceGressle & McGinley is objectiveindependent and free from the influencethat their work has not raised any conflict of management.interests. The Compensation Committee also closely examines the safeguards and steps that FTI ConsultingGressle & McGinley takes to ensure that its executive compensation consulting services are objective. The Compensation Committee takes the following factors into consideration:
•

Compensation Discussion and Analysis
• FTI Consulting

Proxy Statement
During 2015, we paid FTI Consulting $215,562 in consulting fees directly related toand Notice of 2018 Annual Meeting    23

Role of the Chief Executive Officer

Although all executive Board and other compensation-related services performed for the Compensation Committee.
To bring additional perspective to our continually evolving and improving compensation plans, in 2016determinations are made by the Compensation Committee, retained Semler Brossy as its new independent advisor.
the CEO is frequently asked to provide the Compensation Committee information to assist it in evaluating and determining executive compensation and to provide input and insights regarding each executive officer’s performance, other than his own.

Say-On-Pay Results

At our 20152017 annual meeting, 52.6%approximately 94% of shares cast were voted in favor of ourSay-on-Pay vote. While this vote an increase fromis advisory and not binding on our 2014 annual meeting when only 50.6% of shares cast were voted in favor of our Say-on-Pay vote. In the two years since our 2014 annual shareholder meeting, we have contacted shareholders holding 67% and 50% of our shares and met with 44% and 42%, respectively of those shareholders. The great majority of our meetings in 2015 and 2016 included all three ofCompany, our Compensation Committee members and noneBoard value the opinions of our stockholders and consider the voting results when making executive officers. Ascompensation decisions. Over the past few years, we have met with a directlarge number of our stockholders to solicit input on our executive compensation program and, as a result of ourthose meetings, and conversations with our shareholders we have we have made improvements to our executive compensation plans and other important governance practices.
Proxy Statement and Notice of 2016 Annual Meeting 26

The 20152017 peer group is composed of the same companies that were in our 20142016 peer group, with the exception of the removal in 2015additions of Chamber Street1) Gaming and Leisure Properties, due to its pending merger withInc. (a specialty REIT of appropriate size that uses triple net leases); 2) Gramercy Property Trust (an appropriately sized REIT that has international properties and BioMed Realty Trustuses triple net leases); 3) HCP, Inc. (a health care REIT of appropriate size that has international properties and uses triple net leases); and 4) Sabra Health Care REIT, Inc. (a health care REIT of appropriate size that has international properties and triple net leases). We removed three companies from the 2016 peer group, as they no longer exist due to its recent acquisition by Blackstone Mortgage.mergers. The following table provides key information about theour 2017 peer group market as of December 31, 2015.2017.