UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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Universal Health Realty Income Trust

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

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Wednesday, June 8, 2022

☐10:00 a.m.

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Live Audio Webcast www.meetnow.global/MFCWV59

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Date Filed:April 11, 2022

Dear Shareholder:

You are cordially invited to attend the 2022 Annual Meeting of Shareholders (the “Annual Meeting”) of Universal Health Realty Income Trust (the “Trust”) which will be held on Wednesday, June 8, 2022, beginning at 10:00 a.m. In light of the continuing public health impact of the novel coronavirus (COVID-19) outbreak and to support the health and well-being of our communities, employees, shareholders and other stakeholders, this year’s Annual Meeting will be conducted completely virtually, via a live audio webcast; there will be no physical meeting location. You will be able to attend and participate in the Annual Meeting by visiting www.meetnow.global/MFCWV59, where you will be able to listen to the meeting live, submit questions, and vote. The annual meeting is being held for the following purposes:

Detailed information concerning these matters is set forth in the Important Notice Regarding the Availability of Proxy Materials (the “Notice”) you received in the mail and in the attached Notice of Annual Meeting of Shareholders and Proxy Statement. We have elected to provide access to our Proxy Materials over the internet under the Securities and Exchange Commission’s “notice and access” rules. If you want more information, please see the Questions and Answers section of this Proxy Statement.

Your vote is important. Whether or not you plan to attend the meeting online, please either vote by telephone or internet or, if you received printed Proxy Materials and wish to vote by mail, by promptly signing and returning your proxy card in the enclosed envelope. Please review the instructions on each of your voting options described in this Proxy Statement as well as in the Notice you received in the mail. If you then attend and wish to vote your shares in person,online, you still may do so. In addition to the matters noted above, we will discuss the business of the Trust and be available for your comments and discussionquestions relating to the Trust.

I look forward to seeing you at the meeting.Sincerely,

Alan B. Miller

Chairman of the Board,

Chief Executive Officer and President

April 26, 2022

UNIVERSAL CORPORATE CENTER

  |  367 SOUTH GULPH ROAD

  |  KING OF PRUSSIA, PENNSYLVANIA 19406

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Questions and Answers

Universal Corporate Center

367 South Gulph Road

King of Prussia, PA 19406

PROXY STATEMENT

QUESTIONS AND ANSWERSQuestions and Answers

3.      Q: Why did Shareholders receive a notice in the mail regarding the internet availability of Proxy Materials instead of a full set of Proxy Materials?

Questions and Answers

Questions and Answers

Questions and Answers

Questions and the advisory vote on our named executive officer compensation are deemed to be non-routine matters with respect to which brokers and nominees may not exercise their voting discretion without receiving instructions from the beneficial owner of the shares.Answers

Since the election of the Trustees and the advisory vote on named executive officer compensation are non-routine matters, a broker may not turn in a proxy card voting shares without receiving instructions from you.

Trustee Nominations for Inclusion in Next Year’s Proxy Statement (Proxy Access). Our bylaws permit a shareholder, or group of up to 20 shareholders, owning 3% or more of the Trust’s outstanding common stock continuously for at least three years to nominate and include in the Trust’s proxy materials trustees constituting up to 20% of the board, provided that such nominating shareholder(s) and nominee(s) satisfy the requirements specified therein for a nomination pursuant to the proxy access provisions, including timely submission of a notice of such a nomination to the Secretary of the Trust at its principal executive office (no earlier than 150 days and no later than 120 days before the anniversary of the date that the Trust mailed its proxy statement for the previous year’s annual meeting of shareholders) that contains certain information specified in our bylaws. Any shareholder who wishes to use these procedures to nominate a candidate for election to the Board of Trustees for inclusion in the Trust’s proxy materials relating to the 2020 annual meeting must satisfy the requirements specified in our bylaws and must provide written notice to the Secretary of the Trust at 367 South Gulph Road, King of Prussia, PA 19406, which must be received not earlier than December 2, 2019 and not later than January 1, 2020.  However, if our 2020 annual meeting of shareholders is held more than 30 days before or after June 12, 2020,

Questions and Answers

Other Shareholder Business for Presentation at Next Year’s Annual Meeting For a shareholder proposal that is not intended to be included in the proxy materials for the 2020 Annual Meeting, or if you want to nominate a person for election as a trustee outside of the proxy access process described in the paragraph above, you must provide written notice to the Secretary of the Trust at 367 South Gulph Road, King of Prussia, PA 19406. The Secretary must receive this notice not earlier than February 13, 2020 and not later than March 14, 2020. However, if our 2020 annual meeting of shareholders is held more than 30 days before or more than 70 days after June 12, 2020, then the Secretary must receive this notice not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which we make a public announcement of the date of the meeting. The notice of a proposed item of business must provide information as required in our bylaws which, in general, require that the notice include for each matter a brief description of the matter to be brought before the meeting; the reasons for bringing the matter before the meeting; your name, address, and number of shares you own beneficially or of record of such shareholder; and any material interest you have in the proposal. The notice of a proposed trustee nomination must provide information and documentation as required in our bylaws which, in general, require that the notice of a trustee nomination include the information about the nominee that would be required to be disclosed in the solicitation of proxies for the election of a trustee under federal securities laws and the nominee’s written consent to be named in the proxy statement as a nominee and to serve as a trustee if elected. A copy of the bylaw requirements will be provided upon request to the Secretary at the address above.

PROPOSAL NO. 1

ELECTION OF TWO TRUSTEESElection of Two Trustees

We were organized under the laws of the State of Maryland as a real estate investment trust on August 6, 1986. Pursuant to our Declaration of Trust, the Trustees have been divided into three classes, with staggered terms. The terms of the Trustees in Class III expire at this meeting, the terms of the Trustees in Class I will expire at the 20202023 Annual Meeting and the terms of the Trustees in Class II will expire at the 20212024 Annual Meeting. At each Annual Meeting, Trustees are elected for a term of three years to succeed those in the class whose term is expiring at such Annual Meeting.

The persons listed below include our Board of Trustees and nominees. The terms of the current Class III Trustees, Messrs. Michael Allan Domb and James P. Morey, expire at the 20192022 Annual MeetingMeeting. The nominees for the Class III Trustees are Michael Allan Domb and James P. Morey. They have been nominated to be elected for a three-year term that expires at the 20222025 Annual Meeting. The Trustees have no reason to believe that the nominees will be unavailable for election; however, if a nominee becomes unavailable for any reason, the shares represented by the proxy will be voted for the person, if any, who is designated by the Board of Trustees to replace the nominee. The nominees have consented to be named and have indicated their intent to serve if elected.

Pursuant to our Declaration of Trust, a majority of our Trustees must be “Independent Trustees” with each class of Trustees containing at least one Independent Trustee. The Declaration of Trust defines an “Independent Trustee” as a Trustee who is not an affiliate of UHS, the parent company of our Advisor, and does not perform any services for us, except as Trustee. The vote of a majority of all the votes cast at a meeting at which a quorum is present is necessary for the election of the Class III Trustees. A majority of the votes cast means that the number of shares voted “for” a Trustee’s election exceeds the number of shares “withheld” from that Trustee. A nominee currently serving as a Trustee not receiving a majority of the votes cast will tender his or her resignation, promptly following certification of the shareholder vote, for consideration by the Nominating & Corporate Governance Committee.

The Board of Trustees believes that it is essential that its members represent diverse viewpoints, with a broad array of experiences, professions, skills, geographic representation and backgrounds, including diversity of gender and race that, when considered as a group, provide a sufficient mix of perspectives to allow the Board of Trustees to best fulfill its responsibilities to the long-term interests of our stockholders. The Board has one female member and has refreshed the Board by replacing 75% of the Independent Trustees of the Board (comprising 50% of the Board) within the last five years. The Board believes that it is important to further increase the diversity of the Board. In that regard the Board of Trustees has decided to pursue adding a member of an underrepresented minority group to the Board. The executive recruiter of our Advisor has recently commenced the candidate search.

Proposal No. 1: Election of Two Trustees

Trustees Whose Terms Expire In 2023

Alan B. Miller

Robert F. McCadden*

Proposal No. 1: Election of Two Trustees

Trustees Whose Terms Expire In 2024

Marc D. Miller

Gayle L. Capozzalo*

PROPOSAL NO. 2

ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATIONAdvisory Vote on Named Executive Officer Compensation

Pursuant to rules of the Securities and Exchange Commission, we are asking you to approve, on an advisory (non-binding) basis, the compensation paid to our named executive officers as disclosed in the Compensation Discussion and Analysis below, the compensation tables below, and any related narrative discussion contained in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives shareholders the opportunity to express their views on the compensation paid to our named executive officers.

UHSAs a result of Delaware, Inc. (the “Advisor”), a wholly-owned subsidiary of UHS, serves as Advisor to us under an advisory agreement dated December 24, 1986, and as amended and restated as of January 1, 2019 (the “Advisory Agreement”). Pursuant to the Advisory Agreement, the Advisor is obligated to present an investment program to us, to use its best efforts to obtain investments suitable for such program (although it is not obligated to present any particular investment opportunity to us), to provide administrative services to us and to conduct our day-to-day affairs. Our officers are all employees of the Advisor and although as of December 31, 2018shareholder feedback received in recent years, we had no salaried employees, our officers do typically receive annual stock-based compensation awards in the form of restricted stock. During 2018, we granted shares of restricted stock to each of our named executive officers which had an aggregate grant date value of $481,189 for the entire group. For a description of the long-term incentive awards grantedmade several significant changes to our named executive officers during 2018, you should read the Summary Compensation Table and the Grants of Plan-Based Awards Table includeddisclosures, as provided in this Proxy Statement. In special circumstances, if warrantedStatement, in Executive Compensation Discussion and deemed appropriate byAnalysis under the Compensation Committeecaption Disclosures Regarding Advisory Fee, Elements of the Board of Trustees, our officers may also receive special compensation awards in the form of restricted stock and/or cash bonuses.  There were no special compensation awards made in 2018, 2017 or 2016.

The advisory fee, which was computed at 0.70% of our average invested real estate assets as derivedCompensation from our consolidated balance sheet (“Advisory Fee”), was $3.8 million during 2018 as computed on average invested real estate assetsAdvisor (UHS subsidiary) to our NEOs, Stock-based Compensation from UHT to our NEOs and Comparison of $544 million. As part of the annual review process, our Independent Trustees review data prepared by us which calculates the percentages of our aggregateOur Advisory Fee and other generalOther General and administrative expenses (we have no salaries, wages and benefits expense),Administrative Expenses to Selected Healthcare REIT Peer Group.

These enhanced disclosures were designed to:

These enhanced disclosures increased our revenues, net assets and gross assets. Those percentages, calculated utilizingshareholders’ support for our financial data, are then comparedSay on Pay vote to the percentages92% during each of the general2020 and administrative expenses, including salaries, wages2019 fiscal years (as tabulated at the June, 2021 and benefits expense, of a selected peer group of other healthcare REITs, to their respective revenues, net assets and gross assets.  

During the period analyzedJune, 2020 annual meetings, respectively), from 65% support from our shareholders for the 2018 review, our aggregate of Advisory Fee and other general and administrative expenses amounted to 6.8% of our revenues, 1.1% of our net assets and 0.9% of our gross assets. The average offiscal year (as tabulated at the healthcare REITs in the selected peer group had aggregate general and administrative expenses of 7.4% of revenues, 1.0% of net assets and 0.9% of gross assets. As a result, our Independent Trustees believe that the aggregate of our Advisory Fee and other general and administrative expenses are reasonable in comparison to the average general and administrative cost structures of the selected healthcare REIT peer group.

Since, pursuant to the terms of the Advisory Agreement, the Advisory Fee is derived from our consolidated balance sheet, the nature of amount of the various underlying operating expenses incurred by the Advisor, including compensation paid to our named executive officers, is not determinable and not related to the amount of the Advisory Fee. However, for approximation purposes only, based upon a calculation that includes certain assumptions and estimates related to the portion of time spent by each of our four named executive officers while directly providing services on our behalf, we estimate that approximately $800,000 of our Advisory Fee for 2018 could be allocated to salaries expense incurred by the Advisor in connection with those individuals. This estimate can vary substantially from year-to-year based upon the relative level of our acquisitions, divestitures and other business activities. The estimate is based upon a portion of the fixed salaries paid by the Advisor to of our named

executive officers for services provided on our behalf. The estimate does not include any portion of variable/incentive compensation awarded by the Advisor to these individuals in the form of cash bonus and/or stock-based incentive compensation since those awards made by the Advisor to each individual are entirely measured and based upon performance metrics related only to UHS. Therefore, no portion of the variable/incentive compensation awarded by the Advisor to our named executive officers is attributable to services provided by those individuals on our behalf. 

The remainder of the Advisory Fee could be allocated to various other operating expenses incurred by the Advisor on our behalf including, but not limited to, salaries of other employees of the Advisor that routinely provide services on our behalf (approximately 20 individuals), benefits expense, lease and rental expense, salaries expense for additional employees of the Advisor that, from time-to-time, and as warranted, provide services on our behalf and all other general and administrative expenses.  June, 2019 annual meeting).

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we are asking the shareholders to vote “FOR” the following resolution at the Annual Meeting:

“RESOLVED, that the Trust’s shareholders approve, on an advisory basis, the compensation paid to the Trust’s named executive officers, as disclosed in the Trust’s proxy statement for the 20192022 Annual Meeting of Shareholders, pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this Proxy Statement.”

Vote Required

The affirmative vote of a majority of all of the votes cast at a meeting at which a quorum is present is required for approval of the advisory vote on named executive officer compensation. For purposes of the vote on Proposal No. 2, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.

The “say-on-pay” vote is advisory and will not be binding upon the Trust, the Board of Trustees or the Compensation Committee. However, the Compensation Committee will take into account the outcome of the vote when considering future named executive officer compensation arrangements.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE COMPENSATION PAID TO THE TRUST’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED PURSUANT TO ITEM 402 OF REGULATION S-K, INCLUDING THE COMPENSATION DISCUSSION AND ANALYSIS, COMPENSATION TABLES AND NARRATIVE DISCUSSION CONTAINED IN THIS PROXY STATEMENT.

PROPOSAL NO. 3

RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSRatification of the Selection of Independent Registered Public Accountants

The Audit Committee of the Board has selected, and as a matter of good corporate governance, is requesting the ratification by the shareholders of the selection of KPMG LLP to serve as our independent registered public accountants for the year ending December 31, 2019.2022. KPMG LLP has served as our independent registered public accountants since 2002. If a favorable vote is not obtained, the Audit Committee may reconsider the selection of KPMG LLP. Even if the selection is ratified, the Audit Committee, in its discretion, may select different independent auditors if it subsequently determines that such a change would be in the best interest of the Trust and its shareholders.

KPMG LLP representatives will attend the Annual Meeting and respond to questions where appropriate. Such representatives may make a statement at the Annual Meeting should they so desire.

Shareholder Approval

We are submitting the selection of the independent registered public accountants for shareholder ratification as a matter of good corporate governance. Ratification of the selection of the independent registered public accountants by the shareholders requires that the votes cast in favor of ratification exceed the votes cast opposing ratification. If a favorable vote is not obtained, the Audit Committee may reconsider the selection of KPMG LLP. Even if the selection is ratified, the Audit Committee, in its discretion, may select different independent auditors if it subsequently determines that such a change would be in the best interest of the Trust and its shareholders. Unless marked to the contrary, proxies will be voted FOR the ratification of the selection of KPMG LLP as our independent registered public accountants.

THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE SELECTION OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2019.

Executive Compensation

These enhanced disclosures increased our shareholders’ support for our Say on Pay vote to 92% during each of the 2020 and 2019 fiscal years (as tabulated at the June, 2021 and June, 2020 annual meetings, respectively), from 65% support from our shareholders for the 2018 fiscal year (as tabulated at the Trustees, executive officers and holders of more than 10% of our shares of beneficial interest complied with all Section 16(a) filing requirements.June, 2019 annual meeting).

Advisory Fee Calculation

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Advisory Agreement/Fee and Estimated Portion of Advisory Fee Attributable to Compensation Paid by Our Advisor to Our Named Executive Officers:

UHS of Delaware, Inc. (the “Advisor”), a wholly-owned subsidiary of UHS, serves as Advisor to us under an advisory agreement dated December 24, 1986, and as amended and restated as of January 1, 2019 (the “Advisory Agreement”). Pursuant to the Advisory Agreement, the Advisor is obligated to present an investment program to us, to use its best efforts to obtain investments suitable for such program (although it is not obligated to present any particular investment opportunity to us), to provide administrative services to us and to conduct our day-to-day affairs. Our officers are all employees of the Advisor and although as of December 31, 2018 we had no salaried employees, our officers do typically receive annual stock-based compensation awards in the form of restricted stock. In special circumstances, if warranted and deemed appropriate by the Compensation Committee of the Board of Trustees, our officers may also receive special compensation awards in the form of restricted stock and/or cash bonuses.  There were no special compensation awards made in 2018, 2017 or 2016.

All transactions between us and UHS must be approved by the Trustees who are unaffiliated with UHS (the “Independent Trustees”). In performing its services under the Advisory Agreement, the Advisor may utilize independent professional services, including accounting, legal, tax and other services, for which the Advisor is reimbursed directly by us. The Advisory Agreement may be terminated for any reason upon sixty days written notice by us or the Advisor. The Advisory Agreement expires on December 31 of each year; however, it is renewable by us, subject to a determination by the Independent Trustees, that the Advisor’s performance has been satisfactory. In December of 2018, based upon a review of our Advisory Fee and other general and administrative expenses as compared to an industry peer group, the Advisory Agreement was renewed for 2019. With the exception of the elimination of the of the annual incentive fee formula, as discussed below, the 2019 Advisory Agreement was renewed pursuant to the same terms as the Advisory Agreement in place since 2013.  

Pursuant to the terms of the original advisory agreement, which was in effect from inception through December 31, 2018, in addition to the Advisory Fee as discussed below, the Advisor was entitled to an annual incentive fee equal to 20% of the amount by which cash available for distribution to shareholders for each year, as defined in the agreement, exceeded 15% of our equity as shown on our consolidated balance sheet, determined in accordance with generally accepted accounting principles without reduction for return of capital dividends. Cash available for distribution to shareholders was defined as net cash flow from operations less deductions for, among other things, amounts required to discharge our debt and liabilities and reserves for replacement and capital improvements to our properties and investments. Since the incentive fee requirements were not achieved at any time from our inception through December 31, 2018, no incentive fees were paid during that time. Given that the incentive fee requirements have never been achieved, and were deemed unlikely to be achieved in the future, the amended and restated Advisory Agreement that became effective on January 1, 2019, among other things, eliminated the incentive fee provision.  

The advisory fee, which was computed at 0.70% of our average invested real estate assets as derived from our consolidated balance sheet (“Advisory Fee”), was $3.8 million during 2018 as computed on average invested real estate assets of $544 million. The average real estate assets“Average Invested Real Estate Assets” for Advisory Fee calculation purposes exclude certain items from our consolidated balance sheet such as, among other things, accumulated depreciation, cash and cash equivalents, base and bonus rent receivables, deferred charges, and other assets.

Allocation of Advisory Fee + UHT Stock-Based Compensation Expense

Since, pursuant to the termsExecutive Compensation

As described more fully below, for estimation and analyses purposes, a portion of the Advisory Agreement,Fee could be attributed to NEO compensation. We do not pay salary or other cash compensation to our NEOs. For illustrative purposes only, we estimated that $1,152,000 of the Advisory Fee is derived from our consolidated balance sheet, the nature of amount of the various underlying operating expenses incurred by the Advisor, including compensation paid to our named executive officers, is not determinable and not related to the amount of the Advisory Fee. However, for approximation purposes only, based upon a calculation that includes certain assumptions and estimates related to the portion of time spent by each of our four named executive officers while directly providing services on our behalf, we estimate that approximately $800,000 of our Advisory Fee for 20182021 could be allocatedattributed to salaries ($757,000) and cash incentive bonus ($395,000) expense incurred by the Advisor in connection with those individuals. This estimate can vary substantially from year-to-year based upon the relative levelNEOs.

The chief element of our acquisitions, divestitures and other business activities. The estimatecompensation program is based upon a portionthe annual granting of long-term incentive awards, as discussed in greater detail below. On June 2, 2021, we granted shares of restricted stock to each of our NEOs which had an aggregate grant date value of $558,464. These shares vest on the second anniversary of the fixed salaries paid by date of grant. As discussed below in Long-Term Incentives, the Advisor to of our named executive officers for services provided on our behalf. The estimate does not include any portion of variable/incentive compensationrestricted share grants awarded by the Advisor to these individuals in the form of cash bonus and/or stock-based incentive compensation since those awards made by the Advisor to each individual are entirely measured andJune, 2021 were determined based upon performance metrics related onlywhich compared UHT’s 3-year average total shareholder return for 2018 through 2020 to UHS. Therefore, no portion of the variable/incentive compensation awarded by3-year average total shareholder return for our peer group and the Advisor to our named executive officers is attributable to services provided by those individuals on our behalf. average for the NAREIT Index.

The remainder of the Advisory Fee could be allocatedattributed to various other operating expenses incurred by the Advisor on our behalf including, but not limited to, salaries of other employees of the Advisor that routinely provide services on our behalf (approximately 20 individuals), benefits expense, lease and rental expense, salaries expense for additional employees of the Advisor that, from time-to-time, and as warranted, provide services on our behalf and all other general and administrative expenses.

Although this management structureElements of Compensation from our Advisor (UHS subsidiary) to our NEOs

UHS of Delaware, Inc. (the “Advisor”), a wholly-owned subsidiary of UHS, serves as Advisor to us under an advisory agreement dated December 24, 1986, and as amended and restated as of January 1, 2019 (the “Advisory Agreement”). Pursuant to the Advisory Agreement, arrangement may create the potential for conflictsAdvisor, among other things, provides administrative services to us and to conduct our day-to-day affairs. Our officers are all employees of interest, including with respect to advisingthe Advisor and although as of December 31, 2021 we had no salaried employees, our officers do typically receive annual stock-based compensation awards directly from UHT (as discussed below) in the form of performance based restricted stock. In special circumstances, if warranted and deemed appropriate by the Compensation Committee regarding compensation of our Board of Trustees, our officers may also receive special compensation awards in the form of restricted stock and/or cash bonuses. There were no special compensation awards made in 2021, 2020 or 2019.

In return for the above-mentioned services, we pay an Advisory Fee to the Advisor. While each of our NEOs dedicates a significant portion of their time and effort to rendering services on our behalf, the Advisory Fee ($4.4 million for 2021) represents an extremely small portion of UHS’s pre-tax income (approximately 0.3% for 2021). The aggregate compensation our NEOs earned from UHS during 2021 exceeded our Advisory Fee. As a result, our Advisor (UHS) does not directly attribute any portion of the compensation expense it incurs for our NEOs, to services provided by those individuals on our behalf.

Estimated salary and cash incentive bonus allocation assumptions:

Since, pursuant to the terms of the Advisory Agreement, the Advisory Fee is derived from our consolidated balance sheet, the nature of amount of the various underlying operating expenses incurred by the Advisor, including compensation paid to our named executive officers, we believe thatis not determinable and not related to the quality and depthamount of the managementAdvisory Fee. However, for illustrative purposes only, based upon a calculation that includes certain assumptions and advisoryestimates related to the portion of time spent by each of our four named executive officers while directly providing services on our behalf, as well as certain other estimation assumptions, we estimate that an aggregate of $1,152,000 of our Advisory Fee for 2021 could be allocated to salaries and cash incentive bonus expense incurred by the Advisor in connection with those individuals as follows:

Variable/incentive stock-based compensation assumptions:

The estimates above do not include any portion of variable/incentive stock-based compensation awarded by the Advisor to these individuals since, as discussed below, those awards made by the Advisor to each individual are entirely measured and based upon stock performance metrics related only to UHS. Therefore, no portion of the variable/incentive stock-based

Executive Compensation

compensation awarded by the Advisor to our named executive officers is attributable to services provided by those individuals on our behalf. Rather, the stock-based incentive compensation awarded to these individuals for their services rendered on behalf of UHT occurs in the form of performance based restricted stock grants awarded directly from UHT, as mentioned above, which had a grant date value of $558,464 for 2021.

Enhanced Disclosure on Elements of Compensation from our Advisor to our NEOs

As a result of suggestions received from our shareholders, we are providing the information below as an additional means for our shareholders to fully evaluate the Advisor’s executive compensation program for the purpose of making an informed decision related to the Say on Pay vote.

The Advisor has provided the information below in connection with the compensation expense it incurred for our NEOs for 2021. During the year, each of our four NEOs received, from our Advisor, a base salary, cash incentive bonus, incentive stock-based compensation awards, pension benefits and other compensation (if applicable).

Executive Compensation

The aggregate compensation earned by our NEOs from the Advisor during 2021, as disclosed above, is for informational purposes only and not be replicatedat all reflective of, or based upon, amounts due from us to the Advisor.

Our aggregate 2021 Advisory Fee paid to UHS was approximately $4.4 million. Pursuant to the terms of the Advisory Agreement, we are not liable for any additional amounts due to the Advisor for 2021, regardless of the compensation paid to our NEOs by contracting with unrelated third parties orthe Advisor. Since the Advisory Fee is derived from our consolidated balance sheet, the nature of amount of the various underlying operating expenses incurred by being self-advised without considerable cost increases. We also believe that becausethe Advisor, including compensation paid to our NEOs, does not impact the amount of the Advisory Fee.

Elements of Compensation Committeefrom UHT to our NEOs

Since we do not pay cash compensation in the form of annual base salaries to our NEOs, and typically do not pay cash bonuses, the chief element of our compensation program is comprised solelythe annual granting of Independent Trustees, any potentiallong-term incentive awards.

On June 2, 2021, we granted shares of performance based restricted stock to each of our named executive officers which had an aggregate grant date value of $558,464 for conflict is mitigated. Please see “Certain Relationshipsthe entire group. Threshold and Related Transactions”target ranges of awards were developed for more information.each NEO based on UHT’s relative performance to peers. The June, 2021 awards were made at target level for each NEO based upon UHT’s above average performance, as measured by UHT’s three- year average total shareholder return (“TSR”) for 2018 through 2020, as compared to the average TSR for the peer group and the average TSR for the NAREIT index. UHT’s TSR for the three-year period was 13.7% which outperformed the peer group average of 8.3% and the NAREIT index average of 6.3%.

Comparison of Our Advisory Fee and Other General and Administrative Expenses to Selected Healthcare REIT Peer Group:

The Advisory Agreement with UHS is scheduled to expire on December 31^st of each year. However, it is renewable by us on an annual basis, subject to a determination by the independent members of our Board of Trustees that the Advisor’s performance has been satisfactory. As part of the annual review process, our Independent Trustees review datathe performance of our Advisor, as well as the performance of our NEOs. The annual review process also includes a review and benchmarking of our operating cost structure to that of a selected peer group of other healthcare REITs.

Data prepared by us whichon an annual basis calculates the percentages of our aggregate operating cost structure (“Operating Expenses”) consisting of our Advisory Fee and other general and administrative expenses (we have no salaries, wages and benefits expense), to our revenues, net assets and gross assets. Those percentages, calculated utilizing our financial data, are then compared to the percentages of the Operating Expenses of a selected peer group of other healthcare REITs consisting of their general and administrative expenses, including salaries, wages and benefits expense, of a selected peer group of other healthcare REITs, to their respective revenues, net assets and gross assets.

During

Executive Compensation

Below is a table which reflects, for each period utilized in the period analyzedanalyses for 2021, 2020 and 2019, the 2018 review, our aggregate of Advisory Fee and other general and administrative expenses amounted to 6.8%our Operating Expenses as percentages of our revenues, 1.1% of our net assets and 0.9% of our gross assets. The average ofassets, as compared to comparable aggregate data for the selected healthcare REITs peer group.

Companies included in the selected healthcare REIT peer group had aggregate generalwere Healthpeak Properties, Inc., Healthcare Realty Trust Incorporated, Healthcare Trust of America, Inc., LTC Properties, Inc., Medical Properties Trust, Inc., National Health Investors Inc., Omega Healthcare Investors, Inc., Diversified Healthcare Trust, Ventas, Inc. and administrative expenses of 7.4% of revenues, 1.0% of net assets and 0.9% of gross assets. As a result,Welltower, Inc.

Executive Compensation

whether and the extent to which the performance goals have been attained and the amount of compensation, if any, that is payable as a result. The Compensation Committee must certify in writing prior to payment of the compensation that the performance goals and any other material terms of the award were in fact satisfied.

20182021 Compensation:

Since we do not pay cash compensation in the form of annual base salaries to our named executive officers, and typically do not pay cash bonuses, the chief element of our compensation program is the periodic granting of long-term incentive awards.

Long-Term Incentives

On June 13, 2018,2, 2021, we granted shares of performance based restricted stock to each of our named executive officers which had an aggregate grant date value of $481,189$558,464 for the entire group. For a descriptionThreshold and target ranges of the long-term incentive awards granted to ourwere developed for each named executive officers duringofficer based on UHT’s relative performance to peers. The June, 2021 awards were made at target level for each name executive officer based upon UHT’s above average performance, as measured by UHT’s three-year average total shareholder return (“TSR”) for 2018 you should readthrough 2020, as compared to the Summary Compensation Tableaverage TSR for the peer group and the Grantsaverage TSR for the NAREIT index. UHT’s TSR for the three-year period was 13.7% which outperformed the peer group average of Plan-Based Awards Table included in this Proxy Statement. 8.3% and the NAREIT index average of 6.3%.

As discussed herein, the Compensation Committee believes that in the general absence of cash compensation, it is important to provide our named executive officers, including the Chief Executive Officer, an incentive to increase shareholder value by awarding equity basedequity-based compensation. For a description of the long-term incentive awards granted to our named executive officers during 2021, you should read the Summary Compensation Table and the Grants of Plan-Based Awards Table included in this Proxy Statement.

In determining the number of shares of restricted stock granted to our named executive officers during 2018,2021, our Compensation Committee reviewed competitive incentive pay and TSR data of a selected peer group. This peer group was updated based on analysis and feedback from our outside consultant, and one peer company (Stratus Properties) was added to our peer group. DataIncentive pay data was prepared by the human resource personnel of our Advisor.Advisor and reviewed for accuracy by our outside consultant. The data compared the compensation levels of our named executive officers against those of comparable positions in a selected peer group consisting of other comparable advisor managed healthcare real estate investment trusts (“REITs”) in addition to peer companies of self-managed REITs with similar asset size and comparable dividend yield. TSR was reviewed for peer companies of similar REITs in addition to the average TSR for the National Association of Real Estate Investment Trusts (NAREIT Index).

The companies in the advisor peer group, which had no salaried employees since they are managed pursuant to advisory or management agreements, consisted of Service Properties Trust (formerly Hospitality Properties Trust) and Diversified Properties Trust and(formerly Senior Housing Properties Trust.Trust). Companies included in the self-managed and comparable asset and dividend yield peer group were Agree Realty Corp., BRT Apartments (formerly BRT Realty Trust),Corp, Care Trust REIT, Condor (formerly Supertel Hospitality), First Real Estate InvestmentCommunity Healthcare Trust, of NJ, Four Corners Properties Trust, Getty Realty Corp., Gladstone Commercial Corp., LTC Properties, Inc.,

Monmouth Real Estate Investment Corp., One Liberty Properties, Inc., Sotherly (formerly MHI Hospitality), Stratus Properties, UMH Properties, Inc., and Wheeler REIT.

Executive Compensation

The Compensation Committee also considered Mr. Alan Miller’s recommendations and took into account each named executive officer’s position, responsibilities and contribution to our financial performance as well as his or her contribution to our growth and productivity. In addition, historical internal practices for stock awards were also reviewed and used as a basis for determining individual award amounts.

During the period analyzed, it was difficult to compare to the Advisory peer group since one company’s market capitalization dropped more than half as compared to the prior year value, and the other company recently hired its chief financial officer. The value of the equity grant ofawarded in June, 2021 to our CEO was near the 75^th percentile of comparable values for the advisor peer groupChief Executive Officer and other named executive officers were below the 25^th percentile of the self-managed peer group.  Other executive officers grants were slightly above the 25^th percentile of the advisor peer group and below the 25^th percentile of the self-managedcomparable asset and dividend yield peer group. The Compensation Committee believes that the compensation of our named executive officers during 20182021 is reasonable in comparison to market rates based on the review of the compensation levels and TSR performance of the selected peer group.

2019 Compensation:

Commencing in 2019, our Compensation Committee plans to consider the granting of performance based restricted stock awards for our named executive officers. Such awards may be based upon performance metrics and indicators such as, but not limited to, the following: funds from operations; adjusted funds from operations, and; total shareholder return compared to one or more external indices such as the NAREIT U.S. Real Estate index for Healthcare REITs or the Morgan Stanley Capital International U.S. REIT Index.

We anticipate that the chief element of our compensation program will continue to be the periodic granting of long-term incentive awards issued pursuant to the terms of the 2007 Amended and Restated Plan. We do not intend to pay cash compensation in the form of an annual base salary to our named executive officers in 2019.2022. The peer group and market data prepared by the human resource personnel of our Advisor during 20192022 will be reviewed by our outside consultant for accuracy and reasonableness.

Rewards/Compensation Risk Analysis:

Since we typically pay no cash compensation and have historically had no incentive plans that are directly correlated to earnings, revenues or cash flows, we believe there were no excessive risks encouraged by the Trust’s stock-based compensation awards and that the awards do not produce compensation that have a material impact on the financial performance of the Trust.

Summary:

The foregoing discussion describes: (i) the compensation objectives and policies that were utilized with respect to our named executive officers and other personnel during 2018,2021, and; (ii) our anticipated compensation program for 2019.2022.

In the future, as the Compensation Committee continues to review each element of the executive compensation program with respect to our named executive officers and other personnel, the objectives of our executive compensation program, as well as the methods that the Compensation Committee utilizes to determine both the types and amounts of compensation to award to our named executive officers and other personnel, may change.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management; and based on the review and discussions, the Compensation Committee recommended to the Board of Trustees that the Compensation Discussion and Analysis be included in the Trust’s Proxy Statement.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCompensation Committee Interlocks And Insider Participation

The Compensation Committee of the Board of Trustees is currently composed of Gayle L. Capozzalo, Robert F. McCadden and Michael Allan Domb. All of the members of the Compensation Committee are Independent Trustees and no member of the Compensation Committee or any person who served as a member of the Compensation Committee during any part of 20182021 has ever been one of our officers or employees, nor has had any relationship with us that requires disclosure.