Adam Portnoy
About Adam Portnoy
Adam Portnoy, age 54, is a Managing Trustee of Diversified Healthcare Trust (DHC) since 2007 and has served as Chair of the Board since 2019. He is not independent under Nasdaq/SEC criteria and DHC’s governing documents due to his executive role at The RMR Group LLC (RMR), DHC’s external manager . In 2024, DHC’s Board held 6 meetings and each Trustee then in office attended at least 75% of Board and applicable committee meetings and attended the 2024 annual meeting of shareholders .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| The RMR Group Inc. (RMR Inc.) | President & CEO | Since 2015 (shortly after formation) | Oversees governance of RMR-managed public clients and shared services . |
| The RMR Group LLC (RMR) | President & CEO; Director | CEO since 2005; Director since 2006 until June 5, 2015 (when RMR became a majority-owned subsidiary of RMR Inc.) | Leads management of DHC and other RMR Clients . |
| Tremont Realty Capital LLC | Director | Since March 2016 | Oversight of real estate finance activities . |
| ABP Trust | Sole trustee, controlling shareholder, officer | Ongoing | Controls entities including Sonesta; significant influence across related-party ecosystem . |
| Sonesta International Hotels Corporation (+ parent) | Director and controlling shareholder | Ongoing | Hotel platform interlock within RMR ecosystem . |
| AlerisLife Inc. | Sole director since acquisition by ABP Trust | Since March 2023 | Senior living operator; aligns with DHC SHOP operations footprint . |
External Roles
| Company | Board Role | Since | Notes |
|---|---|---|---|
| Service Properties Trust (SVC) | Trustee | 2007 | RMR-managed . |
| Office Properties Income Trust (OPI) | Trustee | 2009 | RMR-managed . |
| Seven Hills Realty Trust (SEVN) (+ predecessor Tremont Mortgage Trust) | Trustee | 2009 (SEVN), 2017-2021 predecessor | RMR-managed . |
| The RMR Group Inc. (RMR Inc.) | Director | 2015 | Parent of RMR; listed company . |
| Industrial Logistics Properties Trust (ILPT) | Trustee | 2017 | RMR-managed . |
| TravelCenters of America Inc. | Chair; Director | 2019–May 2023 (acquired by BP) | Former RMR-managed public client . |
| AlerisLife Inc. | Chair; Director | 2019–March 2023 (acquired by ABP Trust) | Senior living operator (Five Star division) . |
Board Governance
- Role: Managing Trustee; Chair of the Board; no committee memberships .
- Independence: Not independent (Managing Trustee) .
- Lead Independent Trustee: Lisa Harris Jones .
- Committees are fully independent; composition and 2024 meetings: Audit (Chair: Dawn Neher; 8 meetings), Compensation (Chair: Phyllis Hollis; 5 meetings), Nominating & Governance (Chair: Jeffrey Somers; 1 meeting) .
- Executive sessions: Independent Trustees meet at least twice per year; presided by Lead Independent Trustee .
- Board refreshment and annual elections: Board declassified; all Trustees stand for annual election; proxy access in bylaws; resignation policy for majority-withhold outcomes .
Fixed Compensation
| Component | Amount | Terms | 2024 Recipient Status |
|---|---|---|---|
| Annual cash retainer (Independent Trustees) | $85,000 | Prorated for new Trustees; chair/lead fees extra | Managing Trustees do not receive cash . |
| Committee Chair fees | Audit $20,000; Compensation $15,000; N&G $15,000 | Additional to retainer | N/A (Managing Trustee) . |
| Lead Independent fee | $17,500 | Additional to retainer | N/A (Managing Trustee) . |
| Trustee stock award (all Trustees) | $90,000 | 37,037 shares granted; fully vested on grant date | Received by Adam Portnoy in 2024 . |
- In 2024, Adam Portnoy’s Trustee compensation: cash $0; stock awards $90,000; total $90,000 .
Performance Compensation
- Director equity awards for Trustees are time-based and fully vested upon grant; no performance metrics or options are used for Trustee compensation .
- Share Award Plan mechanics (for officers and service providers; Trustees may receive Unrestricted Shares): unvested awards accelerate upon Change in Control or Termination Event (RMR ceasing to be manager); Trustees’ annual grants have been fully vested at grant date, so acceleration is not applicable to those grants .
Other Directorships & Interlocks
| Entity | Relationship to DHC | Nature of Interlock/Transaction |
|---|---|---|
| RMR / RMR Inc. | External manager; governance framework | Business management fees $16.5m (2024, net of amortization); property/construction mgmt fees $7.7m; reimbursements approx. $15.0m; office space rent ~$0.5m; pooled D&O insurance premium $0.4m . |
| AlerisLife (Five Star division) | SHOP manager | Five Star mgmt fees ~$42.5m (2024); subleases rehab space; DHC rent ~$0.7m; AlerisLife cash dividend $50m (Feb 14, 2025); DHC pro rata $17.0m . |
| ABP Trust | Controlling shareholder of AlerisLife; large holder in DHC | DHC bought ~34% AlerisLife from ABP Trust for $15.5m (Feb 16, 2024) . |
| RMR Employees | Service providers to DHC | DHC granted 881,767 Common Shares (~$3.0m) in 2024 to officers/employees of RMR; repurchased 268,221 shares to satisfy withholding on vesting . |
Expertise & Qualifications
- Deep experience in asset management, commercial and residential real estate, and REIT governance through leadership of RMR and board roles across RMR-managed public companies .
- Finance background including investment banking/private equity; extensive public company board service and sector familiarity (healthcare real estate, hotels, logistics, offices, mortgage REITs) .
Equity Ownership
| Holder | Shares Beneficially Owned | % Outstanding | Notes |
|---|---|---|---|
| Adam Portnoy | 23,569,485 | 9.77% | Includes 23,250,019 shares owned by ABP Trust; voting/investment power may be deemed shared as sole trustee; approx. 241,236,272 shares outstanding at 3/13/2025 . |
- Trustee share-ownership guideline: 100,000 shares within specified timelines; as of March 13, 2025, all Trustees have met or are expected to meet the guideline .
- Insider Trading Policy: Hedging is expressly prohibited for Trustees and officers; blackout and pre-clearance procedures apply .
- Bylaw ownership limits to preserve tax benefits: restrictions on transfers >5% (post Nov 1, 2023) and mechanisms to deem excess securities; Vanguard is excepted holder under Declaration of Trust; new limitations adopted Nov 1, 2023 .
Governance Assessment
- Committee assignments: Portnoy has no committee roles; committees are fully independent, which mitigates direct influence on audit/compensation/nominating processes .
- Conflicts and related-party exposure (RED FLAGS): Extensive interlocks as Chair of DHC and CEO of RMR; RMR receives significant fees and reimbursements from DHC; ABP Trust is a large DHC holder and controlled by Portnoy; DHC re-acquired AlerisLife stake from ABP Trust; pooled D&O insurance among RMR Clients. All related transactions are subject to disinterested Trustee approval per governance guidelines, but concentration of control can impact perceived independence and investor confidence .
- Attendance and engagement: Board met 6 times in 2024; each Trustee attended at least 75% of meetings and the annual meeting; indicates baseline engagement .
- Shareholder safeguards: Annual elections, proxy access, resignation policy on majority-withhold, enhanced bylaws limiting >5% transfers to preserve tax assets—positives for governance structure .
Director Compensation (Trustees)
| Trustee | 2024 Cash Fees | 2024 Stock Awards | Total |
|---|---|---|---|
| Adam Portnoy (Managing Trustee) | $0 | $90,000 | $90,000 |
| Independent Trustee structure (reference) | $85,000 base; Chair/Lead fees as applicable | $90,000 annual grant | Varies by role |
Say-on-Pay & Shareholder Feedback
| Year | For | Against | Abstain | Broker Non-Votes |
|---|---|---|---|---|
| 2024 | 154,465,115 | 37,498,438 | 252,092 | 28,024,770 |
| 2025 | 162,374,717 | 8,618,238 | 187,352 | 30,246,011 |
- 2025 equity plan approval: For 164,766,615; Against 6,237,228; Abstain 176,464; Broker Non-Votes 30,246,011 .
- Auditor ratification: 2025 For 199,066,139; Against 2,225,458; Abstain 134,721 ; 2024 For 187,203,902; Against 32,665,377; Abstain 371,136 .
Related Party Transactions (Detail)
| Counterparty | Transaction | Amount/Date | Notes |
|---|---|---|---|
| RMR business mgmt fee | 2024 net fees | ~$16.5m | Net of ~$3.0m amortization related to former RMR Inc. investment . |
| RMR property/construction mgmt fees | 2024 net fees | ~$7.7m | Net of ~$0.8m amortization . |
| RMR reimbursements | 2024 | ~$15.0m | Internal audit/accounting and property-level personnel costs . |
| RMR office leases | 2024 rental income | ~$0.5m | Property management offices; terminable if RMR agreements end . |
| D&O insurance pooling | Premium per year (FY 2023–2025 policy years) | $0.4m | Combined policy among RMR Clients and RMR Inc. . |
| AlerisLife dividend | Paid Feb 14, 2025 | $50.0m total; DHC share $17.0m | Pro rata to shareholders . |
| Five Star management | 2024 fees | ~$42.5m | SHOP communities management fees . |
| AlerisLife share purchase | Feb 16, 2024 | ~$15.5m | DHC acquired ~34% of AlerisLife from ABP Trust at $1.31/share . |
| DHC share grants to RMR employees | 2024 | 881,767 shares (~$3.0m) | Annual awards; DHC repurchased 268,221 shares for withholding . |
Equity Plan & Change-in-Control Provisions
- Second Amended and Restated 2012 Equity Compensation Plan approved May 29, 2025: increased share pool to 8,750,000 and extended to May 29, 2035 .
- CIC/Termination Event: Unvested awards vest upon company Change in Control or if RMR ceases to be manager/shared services provider (Termination Event). Trustees’ annual grants are fully vested at grant date, but officer/service-provider awards may be subject to vesting schedules .
RED FLAGS
- Extensive related-party network anchored by Portnoy’s roles at RMR, ABP Trust, AlerisLife, and multiple RMR Clients, alongside material fees and equity grants—heightened conflict risk despite disinterested Trustee approvals and independent committee structures .
- Large beneficial ownership (9.77%) via ABP Trust implies significant voting influence and potential control dynamics; mitigated by bylaw restrictions limiting transfers ≥5% to preserve tax assets .
- Equity plan expansion and broad participant eligibility (Trustees, officers, RMR employees, consultants) can increase dilution/overhang, though burn rate and overhang disclosures show modest historical usage (0.4% 3-year average; 2.5% overhang with plan increase) .
Governance Signals (Implications)
- Positive signals: Annual elections, proxy access, independent committees, formal resignation policy, robust disclosure of related-party transactions and sustainability practices .
- Investor caution: Concentration of decision-making within RMR ecosystem and ABP Trust ownership increases perceived conflict and potential agency risk; monitor committee independence in practice, transaction approvals, and shareholder vote trends (notably strong 2025 say-on-pay and equity plan approvals) .
Appendix: Committee Membership Matrix (Post-2025 Annual Meeting)
| Trustee | Audit | Compensation | N&G |
|---|---|---|---|
| Adam Portnoy (Chair of Board) | — | — | — |
| Alan Felder (Ind.) | Member | — | — |
| Lisa Harris Jones (Lead Ind.) | Member | Member | Member |
| Phyllis M. Hollis (Ind.) | Member | Chair | — |
| Dawn K. Neher (Ind.) | Chair | Member | — |
| Jeffrey P. Somers (Ind.) | Member | Member | Chair |
| Christopher J. Bilotto (Managing) | — | — | — |