Adam Portnoy
RMR GROUPAbout Adam Portnoy
Adam D. Portnoy (age 54) is Chair of the Board (since 2022), Managing Director (director since 2015), President and Chief Executive Officer of The RMR Group Inc.; he has served as President and CEO of RMR LLC since 2005 and holds extensive leadership roles across RMR-managed public clients and ABP Trust, RMR’s controlling shareholder . Under his leadership in fiscal 2024, RMR expanded private capital AUM by 66% to nearly $13 billion and increased its quarterly dividend by 12.5% to $0.45 per share, while executing 12 million square feet of leasing and $4.5 billion of financings for clients . Over 2021–2024, RMR’s cumulative TSR moved from 150.68 to 137.33 against peer TSR of 162.57 to 203.42, with net income of $53.1 million in 2024 (Pay Versus Performance disclosure) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| The RMR Group Inc. | Chair of the Board | 2022–present | Board leadership; governance and strategy oversight |
| The RMR Group Inc. | Managing Director; President & CEO | 2015–present | Public company leadership since formation; capital formation and strategy |
| The RMR Group LLC | President & CEO | 2005–present | Operates core asset/real estate management platform |
| ABP Trust | Sole trustee, controlling shareholder, officer | Ongoing | Controls 91.1% of RMR voting power via Class B-1/B-2 structure |
| Diversified Healthcare Trust (DHC) | Chair of board; Managing Trustee | Since 2007 | Oversees strategy for RMR-managed healthcare REIT |
| Service Properties Trust (SVC) | Chair of board; Managing Trustee | Since 2007 | Oversees strategy for hotel/net lease REIT |
| Office Properties Income Trust (OPI) | Chair of board; Managing Trustee | Since 2009 | Oversees strategy for office REIT |
| Seven Hills Realty Trust (SEVN) | Chair of board; Managing Trustee | Since 2009 (incl. predecessors) | Oversees strategy for mortgage REIT; Tremont affiliate advisor |
| Industrial Logistics Properties Trust (ILPT) | Chair of board; Managing Trustee | Since 2017 | Oversees strategy for industrial/logistics REIT |
| TravelCenters of America (TA) | Director; Chair of board | 2018–May 2023 | Led through sale to BP Products North America in 2023 |
| AlerisLife Inc. | Director; Chair (to Mar 2023); Sole director post-acquisition | 2018–present | Governance through acquisition by ABP Trust in Mar 2023 |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Sonesta International Hotels Corporation (and parent) | Director and controlling shareholder | Ongoing | Significant related-party ecosystem with SVC |
| Republic of Bulgaria | Honorary Consul General (MA) | Ongoing | Diplomatic/relationship capital |
| Massachusetts Opportunity Alliance, Inc. | Co-Chair | Ongoing | Regional economic engagement |
| Massachusetts High Technology Council | Board Member | Ongoing | Technology policy/advocacy exposure |
| Pioneer Institute | Chair of Board | Ongoing | Public policy leadership network |
| Greater Boston Chamber of Commerce | Executive Committee Member | Ongoing | Business community leadership |
| AJC New England | Leadership Board | Ongoing | Civic engagement |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 375,000 | 375,000 | 375,000 |
| Annual Cash Bonus ($) | 2,900,000 | 3,200,000 | 2,880,000 |
| Total Cash ($) | 3,275,000 | 3,575,000 | 3,255,000 |
Notes:
- Bonuses are discretionary; no preset performance targets or guaranteed bonuses; compensation emphasizes “pay-for-performance” through holistic evaluations (no tax gross-ups; annual salary cap) .
Performance Compensation
| Component | Detail | Vesting | FY 2024 Amount |
|---|---|---|---|
| RMR stock award (officer) | 12,249 Class A shares granted 9/11/2024 | 20% on grant; 20% annually next 4 anniversaries | $299,978 grant-date fair value |
| RMR director stock award | 4,219 Class A shares granted 3/27/2024 | Fully vested at grant (director grant) | $99,990 |
| Client equity awards (DHC) | 74,626 (9/11/24); 37,037 (5/31/24) | Time-based as per client plans | $339,997 aggregate |
| Client equity awards (ILPT) | 23,760 (9/11/24); 23,316 (5/30/24) | Time-based | $204,998 aggregate |
| Client equity awards (OPI) | 58,685 (9/11/24); 11,627 (6/13/24) | Time-based | $149,997 aggregate |
| Client equity awards (SVC) | 56,433 (9/11/24); 18,255 (6/14/24) | Time-based | $339,995 aggregate |
| Client equity awards (SEVN) | 8,480 (9/11/24); 4,735 (5/30/24) | Time-based | $174,981 aggregate |
| Total stock awards (PEO column) | Includes RMR and client awards | See above | $1,609,936 |
Additional terms and metrics:
- RMR equity awards are time-based; Committee uses a dollar-value grant methodology (e.g., $300,000 for CEO in 2024), not share counts; no formulaic performance metrics or TSR hurdles are used for annual bonuses .
- Change-in-control (COC) treatment: double-trigger acceleration of unvested awards if terminated without cause within two years post-COC; performance conditions (if any) deemed at target upon qualifying termination .
- Potential acceleration value for a Termination Event (as of 9/30/2024): 23,799 shares; $604,019 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership – Class A Common | 1,211,561 shares (7.6% of Class A) |
| Class B-1 Common | 1,000,000 shares (100% of B-1); convertible into 1,000,000 Class A |
| Class B-2 Common paired with RMR LLC units | 15,000,000 shares (100% of B-2); redeemable into Class A (cash settlement at RMR option) |
| Combined voting power | 91.1% (via ABP Trust and affiliated holdings) |
| Control status | RMR is a “controlled company” under Nasdaq due to Adam Portnoy’s >50% voting power |
| Hedging/pledging | Hedging by directors/officers expressly prohibited by Insider Trading Policy . The ownership tables present beneficial holdings; the cited sections do not disclose a separate pledged-share line item . |
Vesting and potential selling pressure:
- Time-based vesting (20% immediate, then 20% annually over four years) staggers liquidity events; as of 9/30/2024, unvested RMR and client shares are disclosed in detail in “Outstanding Equity Awards” tables, which reflects multi-issuer unvested exposure .
Employment Terms
| Term | Provision |
|---|---|
| Employment agreement | None; no individual employment agreements for named executive officers |
| Severance | No salary/bonus multiples disclosed; equity awards accelerate per plan upon qualifying termination/COC (double-trigger) |
| Clawback | Awards subject to Company compensation recovery policy; forfeiture for certain misconduct |
| Non-compete / non-solicit | Not disclosed in cited sections (plan-level terms govern awards) |
| Hedging | Prohibited for directors and officers per Insider Trading Policy |
Board Governance
| Topic | Detail |
|---|---|
| Roles | Chair of the Board (since 2022); Managing Director; not independent under Nasdaq/SEC standards |
| Lead Independent Director | Rosen Plevneliev; defined responsibilities (exec sessions, agendas, liaison, etc.) |
| Committees | Audit; Compensation; Nominating & Governance – composed entirely of independent directors |
| Attendance | In FY2024 each director attended ≥75% of board/committee meetings; 5 board meetings held |
| Director compensation | Managing Directors receive no cash fees; all directors (including Managing Directors) receive an annual $100,000 equity grant (4,219 shares on 3/27/2024) |
| Controlled company | Despite controlled status, Compensation and Nominating & Governance Committees are fully independent |
Dual-role implications:
- CEO + Chair + controlling voting power concentrates authority; independent committees and a Lead Independent Director structure are in place to mitigate governance risks .
Director Compensation (as Director)
| Component | FY 2024 Amount |
|---|---|
| Cash retainer (Managing Director) | $0 (Managing Directors do not receive cash fees) |
| Equity grant (fully vested on grant date) | $99,990 (4,219 Class A shares on 3/27/2024) |
Related Party Transactions (Governance Red Flags)
| Related party | FY2024 revenue recognized by RMR LLC (000s) | Notes |
|---|---|---|
| DHC | 151,635 | Managed Equity REIT; Portnoy is chair/managing trustee |
| ILPT | 72,472 | Managed Equity REIT |
| OPI | 241,957 | Managed Equity REIT |
| SVC | 280,519 | Managed Equity REIT; Sonesta manages many of SVC’s hotels |
| SEVN | 11,830 | Mortgage REIT advised by Tremont (RMR subsidiary) |
| Private capital (AlerisLife, Sonesta, others) | 95,978 | Includes Sonesta and other affiliated entities |
| Total | 854,391 | Includes $92,088 equity-based comp reimbursements and $608,688 other reimbursables |
Additional related party items:
- RMR leases office space from ABP Trust and certain REITs (aggregate rent expense $5.6 million in FY2024); tax receivable agreement payments to ABP Trust ($2.4 million in FY2024); ABP Trust/Portnoy control 50.9% economic interest in RMR LLC and 91.1% voting power in RMR .
Performance & Track Record (selected disclosures)
| Measure | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|
| PEO total comp (Summary Table) ($) | 4,274,081 | 4,148,594 | 4,212,670 | 4,916,896 |
| PEO “compensation actually paid” ($) | 4,415,059 | 3,950,171 | 4,232,826 | 5,002,711 |
| RMR cumulative TSR ($100 base) | 150.68 | 112.28 | 123.65 | 137.33 |
| Peer cumulative TSR ($100 base) | 162.57 | 125.39 | 125.50 | 203.42 |
| Net income ($000s) | 81,013 | 77,468 | 127,771 | 53,129 |
Other execution highlights:
- 2024 AUM expansion in private capital (+66% to nearly $13B) and 12.5% dividend increase; operational wins include 12M sqft of leasing and $4.5B of financings for clients .
Compensation Committee Analysis & Shareholder Feedback
- Program design: Discretionary annual bonuses (no preset financial targets); time-based equity; no tax gross-ups; annual salary cap .
- Peer group update in FY2024: Brookfield, Bridge Investment Group, Cohen & Steers, Kennedy-Wilson, RITHM Capital (shifted from megacap alts) .
- Say-on-Pay: ~98% approval at 2024 annual meeting; no program changes in response .
Governance, Compliance, and Risk Indicators
- Hedging: Prohibited for directors and officers .
- Clawback/forfeiture: Plan provides for misconduct-related forfeiture and application of Company recovery policy .
- Controlled company dynamics: Despite control (91.1% voting power), committees are fully independent; robust Lead Independent Director role .
- Leadership bench/succession: 2025 executive promotions (CFO to COO; new CFO appointed), indicating succession depth across operating platform .
Investment Implications
- Alignment vs. control risk: Portnoy’s very large economic/voting stake tightly aligns interests long-term but concentrates power; independent committees and a strong Lead Independent Director partially mitigate governance concerns .
- Pay-for-performance calibration: Discretionary, non-formulaic bonus framework and time-based equity afford flexibility across cycles but provide limited direct linkage to explicit financial metrics; shareholder support remains high (98% Say-on-Pay) .
- Liquidity/overhang: Multi-issuer, time-based vesting spreads potential selling pressure; as of 9/30/24, ~23.8k RMR shares would accelerate upon a qualifying termination ($604k at $25.38) and additional client shares also vest per respective plans .
- Related-party complexity: Extensive intra-platform transactions (fees, leases, equity awards) can be value-accretive through operating leverage but increase perceived conflicts; oversight processes and disclosure are in place, yet investors should monitor economics at RMR vs. managed clients over time .
- Execution indicators: 2024 AUM growth and dividend increase support confidence in the private capital strategy; however, TSR lagged the updated peer group over 2021–2024, suggesting continued need for sustained operating momentum and capital formation to close the gap .