Stewart Bainum Jr.
CHOICE HOTELS INTERNATIONAL INC /DEAbout Stewart W. Bainum, Jr.
Chairman of the Board of CHH; age 78; director since 1976 (except 1996–1997). Not independent under NYSE standards; he beneficially owns ~21% of CHH and, together with Bainum family affiliates, controls ~42% of voting power, giving him a major shareholder’s perspective and long institutional memory of the brand’s growth from ~290 hotels to >7,500 across 22 brands .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Choice Hotels International, Inc. | Chairman of the Board | Oct 1997–present; previously Mar 1987–Nov 1996 | Long-standing leadership; primary liaison with senior management; major shareholder perspective . |
| Manor Care, Inc. | Chairman and CEO (CEO through 9/1998; Chairman through 9/2001) | Mar 1987–Sep 1998 (CEO); Sep 1998–Sep 2001 (Chairman) | Led large health services enterprise; public company board/management experience . |
| Manor Care of America, Inc.; ManorCare Health Services, Inc. | President & CEO; Vice Chairman | President/CEO 1987–1998; Vice Chairman 1982–1987 | Operating and executive experience in health care . |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| White Oak Legacy, Inc. (f/k/a Realty Investment Co., Inc.) | Director; Chairman | Director 2005–2016; Chairman 2005–2009 | Real estate investment/management oversight . |
| Sunburst Hospitality Corporation | Director; Chairman | Director 1996–2016; Chairman 1996–2009 | Hotel developer/operator governance; franchise operations perspective . |
| SunBridge Manager LLC | Director | Dec 2014–Dec 2016 | Private investment management oversight . |
| Manor Care, Inc. | Director | Sep 1998–Sep 2002 | Public company governance experience . |
Board Governance
- Role and independence: Chairman; not independent; no committee memberships; Lead Independent Director is Gordon A. Smith (chairs executive sessions; manages CEO performance review). Four independent director executive sessions held in 2024 .
- Attendance: Board met 4 times in 2024; all directors attended ≥75% of Board and committee meetings; all attended the 2024 Annual Meeting .
- Committee composition (all independent): Audit; Human Capital & Compensation; Corporate Governance & Nominating; Diversity. Chairs: Audit—William L. Jews; HCC—John P. Tague; CGN—Ervin R. Shames; Diversity—Liza K. Landsman .
- Shareholder engagement & say‑on‑pay: 99% support in May 2024; outreach to holders of >90% of shares; feedback considered in compensation decisions .
- Policies: Clawback (cash and equity) compliant with NYSE; hedging generally prohibited with limited exception for Bainum family directors for certain indirectly held shares; pledging prohibited for associates (employees) but permitted for directors with Company approval; no directors currently have pledged Company shares .
Fixed Compensation
| Component | 2024 | 2025 (effective Jan 1) | Notes |
|---|---|---|---|
| Annual salary – cash | $150,000 | $150,000 | Paid as part of Chairman employment agreement . |
| Annual salary – equity | $300,000 (time‑vested stock) | $350,000 (time‑vested stock) | Vests in three equal installments on first, second, third anniversaries . |
| Office space support | $96,000 Company-paid (2024) | $10,000 paid in 2024 toward 2025 extension | Workspace agreement extended beginning Jan 1, 2025 . |
| Benefit participation | Eligible for 401(k) and non‑qualified deferred compensation plans | Eligible | Per employment agreement . |
Performance Compensation
- No performance-based incentives disclosed for the Chairman role (equity is time-vested). Current unvested restricted stock position and vesting cadence are noted below .
| Equity Award | Unvested Shares | Vesting Detail |
|---|---|---|
| Restricted Stock (Chairman) | 4,954 | Vests in equal installments during 2025–2028 (specific grant), while annual Chairman equity salary awards vest over three years from grant date . |
Other Directorships & Interlocks
| Entity | Relationship | Financial Magnitude (2024) | Notes |
|---|---|---|---|
| Sunburst Hospitality Corporation | CHH franchisee; Bainum family controls; Brian B. Bainum is director/owner; Stewart W. Bainum Jr. owns a controlling interest alongside family | ~$1.8 million in franchising/royalty/marketing/reservation fees; $505,000 of franchise incentive acquisition cost payments | Historic Strategic Alliance and Omnibus Amendment terms preserved via addenda; master development agreements provide regional exclusivity for WoodSpring (2019) . |
| Corporate aircraft subleases | Leases with Bainum family members (Stewart, Jane, Bruce, Roberta) for personal use; Company recovers costs consistent with third-party terms | Company expects to receive $12,392 for Bainum family flight hours (2024) | Terms approved under Related Party Transaction Policy . |
| Chairman’s office space | Company workspace agreement for Chairman | $96,000 paid in 2024; 12‑month extension executed for 2025; $10,000 paid in 2024 relating to 2025 extension | Approved arrangements per policy . |
Expertise & Qualifications
- Major shareholder perspective and decades-long CHH leadership; deep hospitality/real estate experience across White Oak Legacy, Sunburst, and Manor Care; extensive public and private board leadership .
- Provides continuity, historical context, and development/operations insight for franchising and brand strategy .
Equity Ownership
| Holder | Beneficial Ownership | Right to Acquire (Options within 60 days) | Unvested Restricted Stock | % of Shares Outstanding |
|---|---|---|---|---|
| Stewart W. Bainum, Jr. | 9,609,372 shares (includes SBDOT, White Oak-related shares, certain trusts) | — | 4,954 | 20.60% . |
| Bainum family & affiliates (aggregate) | 19,725,683 shares with voting rights (aggregate family/White Oak) | — | — | ~42.3% of outstanding shares . |
Additional alignment policies:
- Director stock ownership guidelines apply to non‑employee directors (5x cash retainer, currently $412,500); all directors meet or are within 5‑year ramp; non‑employee director retainers increased to $85,000 cash and $175,000 stock after 2025 Annual Meeting (Stewart is an employee director and does not receive non‑employee director compensation) .
- Hedging generally prohibited, with a limited exception for Bainum family directors for certain indirectly held shares; pledging permitted for directors with approval; no current director pledges .
Governance Assessment
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Positives
- Separate Chair/CEO structure with active Lead Independent Director and regular executive sessions; all key board committees are fully independent .
- Strong shareholder engagement and pay practices support (99% say‑on‑pay); robust clawback and ownership policies; formal related‑party transaction approvals .
- Board recommending move toward simple majority vote standards in organizational documents—potentially reduces entrenchment risks associated with supermajority voting .
-
RED FLAGS
- Concentrated control: Bainum family ~42% voting power can materially influence outcomes; Chairman personally ~21% ownership; combined control can impede minority shareholder initiatives without family support .
- Related‑party exposure: Ongoing franchise and incentive payments to Sunburst (family‑controlled) and corporate aircraft subleases with Bainum family; continued office space arrangements for Chairman—necessitate rigorous independent oversight .
- Hedging exception for Bainum family directors on certain indirectly held shares; director pledging allowed with approval (no current pledges) — policy exceptions reduce alignment robustness relative to peers .
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Implications for investors
- Governance effectiveness benefits from independent committee structure and active LID, but concentrated ownership and recurring related‑party ties heighten conflict-of-interest risk. Monitoring of related party terms, board independence in approvals, and progress on voting standard reforms is critical to investor confidence .