Edward Aldag Jr.
About Edward Aldag Jr.
Founder of Medical Properties Trust (MPT) and current Chairman, President and CEO; Director since 2004; age 61; University of Alabama (Finance) . Under his leadership, MPT grew into a hospital-focused REIT with ~396 facilities and ~$14B of assets across the U.S., Europe, and Colombia . Company performance context: 5-year revenue and EBITDA trends are volatile post-2022, with net income losses in 2023–2024; TSR since 2021 has sharply declined (value of $100 investment: 2021=$124.60, 2022=$63.54, 2023=$31.62, 2024=$28.07) . Anti-hedging/anti-pledging and ownership guidelines (CEO 6x salary) apply and the CEO is in compliance .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Medical Properties Trust (NYSE: MPW) | Founder; Chairman, President & CEO; Director | 2003–present (Director since 2004) | Built the only hospital-focused net-lease REIT; scaled to ~396 facilities and ~$14B assets; led global expansion and portfolio re-tenanting post-Steward exposure . |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Children’s of Alabama | Director; slated to become Chairman in late 2025 | ~8 years; Chair-designate 2025 | Governance and philanthropy at leading pediatric hospital . |
| Alabama Children’s Hospital Foundation | Vice Chair; Chair of Investment Committee; Executive, Finance & Audit Committees | n/a | Oversight of investments and governance . |
| Mitchell’s Place; Birmingham Education Foundation; American Sports Medicine Institute; Birmingham Business Alliance | Board member/executive committee | n/a | Community and education leadership . |
| Infracore SA (private) | Director | Since May 2019 | Board oversight at Swiss healthcare real estate firm . |
| Générale-Beaulieu Immobilière SA (private) | Director | Since June 2020 | Governance at Swiss medical real estate company . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 | Notes |
|---|---|---|---|---|
| Base salary ($) | 1,000,000 | 1,000,000 | 1,000,000 | No increase since 2018 . |
| “Bonus” ($) | 600,000 | 400,000 | 500,000 | Separate from formulaic non‑equity plan . |
| All other comp ($) | 145,213 | 113,662 | 141,746 | Includes 401(k) match, health, auto ($12k), tax prep/financial planning (up to $25k), life insurance reimbursements (up to $20k, CPI‑indexed) and tax gross-ups on certain perqs . |
Summary Compensation Table totals for Aldag: 2022=$16,025,513; 2023=$17,854,051; 2024=$16,388,255 .
Performance Compensation
Annual Cash Bonus (2024) – Structure and Payout
Target opportunity: 200% of salary (Threshold 100%; Max 300%). 2024 payout at 128% of target (Non‑Equity Incentive Plan comp $2,056,599; combined with “Bonus” totaled $2,556,599) .
| Metric | Weight | Target | Actual | Payout result |
|---|---|---|---|---|
| Leverage: Reduction of Net Debt ($mm) | 25% (supplemental increased to 30%) | 750 | 1,301 | Above maximum; “Supplemental Performance” achieved . |
| Leverage: Remaining Near-Term Maturities ($mm) | 25% | 1,350 | 1,690 | Around threshold/target (excludes early‑2025 refinancing) . |
| Reduction of OpEx vs FY22 | 15% (to 20% if supplemental) | 6% | 11.8% | “Supplemental Performance” achieved . |
| Tenant-Related Objectives | 15% | Multi‑item target | Target | Target achieved (re‑tenant/sell ~100% Steward; reduce Steward to 0%; no PHP proceeds; CT sale not done) . |
| Corporate-Related Objectives | 20% | Multi‑item | Target/Max | Max for ESG/strategic relationships; target for outreach/leadership bench . |
Equity Awards and Vesting
| Award | Grant date/terms | 2024 Target Value ($) | Hurdles / Vesting | Status |
|---|---|---|---|---|
| Time‑based Restricted Shares | 3/8/2024; vest equal quarterly over 3 years | 3,650,000 | Service‑based; quarterly vesting | Ongoing; dividends begin at grant . |
| 2024 Stock Price Performance Award (cash‑settled RSUs) | 3/8/2024; 4‑year performance period to 12/31/2027 | 8,856,000 | Earn only on stock price hurdles (20‑day avg): $7.00 (100%), $8.50 (200%), $10.00 (300%); then vest quarterly over 1 year post‑certification (or full vest at final certification) | No units earned in 2024; minimum requires +67% over $4.18 grant price . |
Outstanding equity at 12/31/2024: 804,240 unvested time‑based shares (incl. 115,191 vested 1/1/2025; 106,915 vesting through 1/1/2026; 582,134 vesting through 1/1/2027); 2,495,533 unearned performance units (2022, 2023, 2024 awards) . 2024 realized vesting (all NEOs table): Aldag 991,752 shares vested value $4,956,205 .
Pay-versus-Performance and TSR
| Year | Company TSR ($ per $100) | Stock price (FY end, $) | Net income ($mm) |
|---|---|---|---|
| 2020 | 109.05 | 21.79 | 431.5 . |
| 2021 | 124.60 | 23.63 | 656.0 . |
| 2022 | 63.54 | 11.14 | 902.6 . |
| 2023 | 31.62 | 4.91 | (556.5) . |
| 2024 | 28.07 | 3.95 | (2,410.3) . |
“Actual Realized Compensation” (supplemental disclosure) for Aldag: 2022=$13,378,820; 2023=$8,737,700; 2024=$5,767,503, demonstrating alignment with stock price declines .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 4,116,016 shares (<1%); includes 689,049 unvested restricted shares not sellable/pledgeable . |
| Vested vs unvested | Unvested time‑based shares: 804,240 at 12/31/2024 with scheduled quarterly vesting through 1/1/2027 . |
| Performance awards unearned | 2,495,533 units outstanding across 2022–2024 programs (unearned as of 12/31/2024) . |
| Options | Company has not granted stock options to NEOs (historically none since 2004 director grants) . |
| Ownership guidelines | CEO 6x base salary; company notes compliance (“Yes”) . |
| Hedging/pledging | Prohibited; policy also requires pre‑authorization for transactions . |
Insider selling pressure: Quarterly time‑based vesting and any future earned performance units may create periodic liquidity events; hedging/pledging bans reduce leverage‑related selling risk .
Employment Terms
| Provision | Key terms |
|---|---|
| Agreement | Founder agreement (since 2003); initial 3‑year term with automatic 1‑year evergreen renewals . |
| Severance (without cause/good reason/disability) | Lump sum = 3x (salary + average bonus; highest bonus for Aldag) + prorated annual incentive; continued welfare benefits 5 years (Aldag) + life insurance reimbursement and associated taxes 5 years; full acceleration of unvested equity; continued health coverage for family until earlier of age 65 or comparable benefits via new employer . |
| Change of Control (CoC) | Single‑trigger equity vesting; cash benefit generally = largest 12‑month cash compensation ×3 if terminated for cause/by executive without good reason “in connection with” CoC; CoC excise tax 4999 gross‑up obligation in legacy founder agreements (company states no new contracts will include gross‑ups) . |
| 2024 Stock Price Performance Award treatment | On CoC: cash payment up to 300% of target less prior settlements × CoC price; qualifying termination (without cause/good reason/death/disability/retirement 65+ with notice): cash based on 300% of target × 5‑day average price at termination, less prior settlements . |
| Non‑compete / non‑solicit | 18 months post‑termination (except company without‑cause or exec good‑reason terminations) . |
| Perquisites | Annual physical; car allowance ($1,000/mo); tax prep/financial planning reimbursement (to $25,000); life/disability insurance reimbursements and related tax gross‑ups . |
| Potential payout sizing (12/31/2024) | CoC scenario cash severance $12,358,280; equity acceleration value $29,837,627; “not for cause/good reason/disability” cash severance $11,758,280 (excludes est. tax payment $5,442,000); equity acceleration same $29,837,627 . |
Board Governance
- Board service: Director since 2004; dual role as Chairman and CEO; not independent .
- Committees: Investment Committee (Chair); Environmental & Social Responsibility; Risk .
- Independence structure: Lead Independent Director (Michael G. Stewart) with defined authorities; majority‑independent board and independent committee chairs .
- Attendance/executive sessions: In 2024, the Board met 7×; all incumbents attended ≥75% of Board and committee meetings; regular executive sessions of independent directors .
- Director pay: Non‑employee directors receive cash retainers (base $115k; lead independent +$50k; chair retainers $30–35k) and equity (29,914 shares in 2024) vesting quarterly over 3 years; executives receive no additional director compensation .
Dual‑role implications: Founder‑led structure with CEO as Chair can pose independence concerns; mitigations include a lead independent director, independent committee chairs, annual self‑evaluation, and regular executive sessions .
Compensation Structure Analysis
- Shift to stock‑price based LTIs: 2024 replaced operating metrics with stock price hurdles requiring ≥67% appreciation before any payout; aligns upside tightly with equity value creation but can reduce retention value in prolonged downturns .
- Cash vs equity mix: ~70% of CEO compensation is variable/at‑risk; base salary <10% of pay; time‑based shares vest quarterly (retention) and performance RSUs dominate LTIs (alignment) .
- Discretionary elements: Separate “Bonus” line persisted ($500k in 2024) alongside formulaic plan .
- Peer group: 2024 peer set refined to remove outsized names (e.g., Welltower) and add more size‑aligned firms (e.g., W. P. Carey) .
- Say‑on‑pay: Company acknowledges lower support over the past two years; responded with more disclosure (Actual Realized Compensation) and program changes (stock‑price LTIs; refined bonus metrics) and engagement with holders representing 42% of shares .
Related Party Transactions (and Red Flags)
- Employment of family members: In 2024, two of Aldag’s family members were employed at MPW in non‑executive roles (compensation $120k–$345k); Johnson Healthcare Real Estate (where an Aldag family member works in a non‑executive role) received ~$1.9M for project management; transactions reviewed per related‑party policy .
- Hedging/pledging: Prohibited by policy (alignment positive) .
- Gross‑ups: Legacy founder agreements include CoC excise tax gross‑up exposure; company states no new agreements will include such provisions (shareholder‑unfriendly feature retained for founders) .
Performance & Track Record (financial context)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|---|
| Revenues ($) | 900,192,000* | 1,173,375,000* | 1,173,033,000* | 675,481,000* | 883,163,000* |
| EBITDA ($) | 1,124,810,000* | 1,400,953,000* | 1,390,060,000* | 387,978,000* | 713,743,000* |
| Net Income ($) | 431,450,000* | 656,021,000* | 902,597,000* | (556,476,000)* | (2,410,271,000)* |
| Values retrieved from S&P Global.* |
Strategic execution noted by the Board in 2024–2025: ~$1.85B asset monetizations with >$450M gains; addressed ~$3.9B of maturities; reduced net debt by ~$1.5B vs 2022; re‑tenanting of ~$1.5B of Steward facilities to six new operators; secured long‑dated, fixed‑rate financings; completed $2.5B senior secured notes offering in Feb‑2025 .
Compensation Committee Analysis
- Composition: Independent directors C. Reynolds Thompson III (Chair), Michael G. Stewart, D. Paul Sparks Jr.; independent consultant Gressle & McGinley retained; assessed free of conflicts .
- Process: Annual goal‑setting; benchmarking REIT peer group; heavy variable pay; formal clawback policy adopted Nov 2023 (plus legacy 2013 clawback) .
- 2024 bonus design: Transparent, measurable categories with supplemental performance features; overall CEO payout at 128% of target .
Equity Ownership & Vesting Detail (CEO)
| Item | Quantification / schedule |
|---|---|
| Time‑based shares unvested at 12/31/2024 | 804,240; includes 115,191 vested 1/1/2025; 106,915 vest quarterly through 1/1/2026; 582,134 vest quarterly through 1/1/2027 . |
| Performance awards unearned | 2022 award (280,438 shares), 2023 award (415,095), 2024 award (1,800,000 RSUs) remained unearned at 12/31/2024; 45,871 shares from prior awards vested 1/1/2025 . |
| 2024 stock‑price hurdles | $7.00 (100%), $8.50 (200%), $10.00 (300%) during 4‑year period; cash‑settled upon vest . |
Board Service and Director-Specific Items
- Committees served by Aldag: Investment (Chair), Environmental & Social Responsibility, Risk .
- Independence status: Executive; not independent .
- Lead Independent Director: Michael G. Stewart; presides over executive sessions, agenda input, liaison to Chair/CEO .
- Meeting attendance: All incumbents ≥75% of 2024 meetings; Board met 7×; committee activity disclosed .
- Director compensation: Executives receive no additional pay for Board service (non‑employee program detailed above) .
Say-on-Pay & Shareholder Feedback
- Lower support in recent two years; company expanded disclosure (Actual Realized Compensation) and redesigned LTI for CEO/CFO to stock‑price hurdles; enhanced outreach to holders representing 42% of outstanding shares .
Risk Indicators & Red Flags
- Legacy excise tax gross‑ups and single‑trigger CoC equity vesting for founders (shareholder‑unfriendly) .
- Related‑party optics: family employment and payments to third‑party firm employing an Aldag family member, though disclosed and reviewed under policy .
- Material equity overhang and quarterly vesting may create periodic selling/tax‑withholding pressure, though hedging/pledging is banned .
Investment Implications
- Alignment: 2024 LTI pays only with substantial stock appreciation (≥+67%), improving pay‑for‑performance optics; CEO’s Actual Realized Compensation fell markedly with stock decline .
- Retention vs. performance: Quarterly time‑vested equity supports retention; however, absence of earned performance awards to date means limited realized upside unless equity thesis turns, potentially incentivizing stock‑price‑centric strategy over near‑term FFO growth .
- Governance trade‑offs: Founder‑led structure with CEO as Chair offset by a strong lead independent director and independent committees, but legacy gross‑ups/single‑trigger vesting remain governance headwinds .
- Catalyst path: Debt reduction, re‑tenanting, asset monetization and fixed‑rate financings suggest balance sheet repair; equity awards focused on price can amplify management focus on market value recovery, which, if achieved, could trigger sizable performance payouts but simultaneously signal stock upside momentum .