Adam Portnoy
About Adam Portnoy
Adam Portnoy is a Managing Trustee and Chair of the Board of Service Properties Trust (SVC), serving on the Board since 2007 and as Chair since 2019; he is not an independent trustee under Nasdaq and SEC criteria and SVC’s governing documents . Age 54 (as of the 2025 proxy), Portnoy’s core credentials span asset management, commercial real estate (CRE), REIT governance, investment banking and private equity through his leadership of The RMR Group and multiple public boards of RMR-managed clients . The Board states his day-to-day leadership of RMR and deep familiarity with SVC’s business provide valuable insight for SVC’s Board .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| The RMR Group Inc. (RMR Inc.) | President & CEO | Since 2015 | Leads the managing member of RMR; governance and compensation interfaces with SVC via management agreements . |
| The RMR Group LLC (RMR) | President & CEO | Since 2005; Director 2006–2015 | RMR is SVC’s external manager; fees and oversight central to related-party considerations . |
| ABP Trust | Sole trustee, controlling shareholder, officer | Ongoing | Controls Sonesta; ABP Trust holds 1,672,783 SVC shares counted in Portnoy’s beneficial ownership . |
| Sonesta International Hotels Corporation | Director and controlling shareholder (via parent) | Ongoing | Sonesta manages 181 of SVC’s 206 hotels; significant fee flows and owner’s priority returns . |
| AlerisLife, Inc. | Sole director (post-acquisition by ABP Trust) | Since Mar 2023 | Prior RMR Client board; now controlled via ABP Trust . |
| Tremont Realty Capital LLC | Director | Since Mar 2016 | Part of broader RMR network . |
| Investment banking/private equity (DLJ, IFC) | Various roles | Prior to RMR leadership | Finance background informs capital markets and M&A perspective . |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Diversified Healthcare Trust (DHC) | Managing Trustee/Director | Since 2007 | RMR-managed REIT . |
| Office Properties Income Trust (OPI) | Managing Trustee/Director | Since 2009 | RMR-managed REIT . |
| Seven Hills Realty Trust (SEVN) and predecessors | Director | Since 2009 | RMR-managed mortgage REIT . |
| The RMR Group Inc. | Director | Since 2015 | Parent of RMR; governance interlock . |
| Industrial Logistics Properties Trust (ILPT) | Director | Since 2017 | RMR-managed REIT . |
| TravelCenters of America Inc. (TA) | Director; Chair of board | 2018–May 2023 | RMR Client until BP acquisition . |
| AlerisLife Inc. | Director; Chair of board | 2018–Mar 2023 | RMR Client until ABP Trust acquisition . |
| Tremont Mortgage Trust | Director | 2017–Sep 2021 | Merged into SEVN . |
| Pioneer Institute | Chair of board | Ongoing | Civic role . |
| Greater Boston Chamber of Commerce | Executive committee member | Ongoing | Civic role . |
Board Governance
- Role and independence: Managing Trustee; Chair of SVC’s Board; not independent .
- Committee memberships: None; all committees are composed solely of independent trustees .
- Board composition: Post-2025 meeting expected to be 7 trustees, 71% independent; Lead Independent Trustee is Donna D. Fraiche .
- Attendance: In 2024, each trustee attended at least 75% of Board and applicable committee meetings; all attended the 2024 annual meeting .
- Governance practices: Proxy access, declassified board (annual elections), shareholder outreach (engaged ~68% of shares in 2024) .
- Hedging prohibition: Insider Trading Policy prohibits hedging transactions by trustees/officers .
Fixed Compensation
| Year | Cash Fees (Trustee) | Equity Awards (Trustee) | Vesting | Total |
|---|---|---|---|---|
| 2024 | $0 (Managing Trustees do not receive cash) | $89,997 (18,255 shares; closing price on 6/14/2024) | Trustee share awards fully vested on grant date | $89,997 |
| 2023 | $0 (Managing Trustees do not receive cash) | $62,720 (7,000 shares; closing price on 6/13/2023) | Trustee share awards fully vested on grant date | $62,720 |
Performance Compensation
| Component | Disclosure | Metrics |
|---|---|---|
| Director/Trustee compensation | No performance-based components disclosed for trustees; awards are time-vested and fully vested on grant date | N/A |
Other Directorships & Interlocks
| Company | Relationship to SVC | Interlock Type |
|---|---|---|
| RMR Inc., RMR LLC | SVC’s external manager; Portnoy is President & CEO and director of parent | Management and board interlock |
| Sonesta International Hotels | Manages majority of SVC hotels; controlled by ABP Trust (Portnoy) | Controller/operator interlock |
| DHC, OPI, ILPT, SEVN | Other RMR-managed public clients where Portnoy serves on boards | Multiple board interlocks |
Expertise & Qualifications
- Extensive experience in asset management, CRE/REITs, investment banking and private equity through leadership at RMR and service on multiple public boards .
- Institutional knowledge of SVC’s business and RMR client ecosystem; Board cites value from day-to-day familiarity with operations .
Equity Ownership
| As of Date | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| Mar 18, 2025 | 1,917,725 | 1.15% | Includes 1,672,783 shares owned by ABP Trust; voting/investment power may be deemed shared due to Portnoy’s role as sole trustee . |
| Mar 25, 2024 | 1,848,282 | 1.11% | Includes 1,672,783 shares owned by ABP Trust; same shared power note applies . |
| Ownership guideline | 35,000 shares minimum | Met | All trustees have met or are expected to meet guideline timelines . |
| Hedging/Pledging | Hedging prohibited | Policy | Insider Trading Policy prohibits hedging; no pledging disclosure noted . |
Related-Party Exposure (Key Figures)
| Related Party Item (FY2024 unless noted) | Amount | Context |
|---|---|---|
| RMR business management fees (net) | ~$29.7 million | Based on lower of property cost or market cap; no incentive fee in 2024 . |
| RMR property management & construction supervision fees | ~$12.0 million | Net lease portfolio and certain hotel renovations . |
| Reimbursements to RMR | ~$4.4 million | Central accounting/internal audit/assigned personnel and property-level payroll . |
| Combined D&O insurance premium (SVC share) | ~$0.1 million | SVC participates in combined policy with RMR Inc. and other RMR clients . |
| RMR credit facility pledge consent | N/A (qualitative) | SVC consented to pledge/assignment of RMR’s interest in SVC management agreements under Citibank credit/security agreements (Jan 2025) . |
| Sonesta-managed hotels | 181 of SVC’s 206 | ~50% of historical real estate investment . |
| Sonesta returns realized (Owner’s Priority Return flows) | $189.4 million | Returns under Sonesta agreements in 2024 . |
| Sonesta hotel capex funded by SVC | $258.3 million | Increased annual owner’s priority return by $15.5 million . |
| Annual owner’s priority return (as of 12/31/2024) | $356.2 million | Under Sonesta agreements . |
| Amounts owed: SVC → Sonesta (capex/other) | $18.2 million | As of 12/31/2024 . |
| Amounts owed: Sonesta → SVC | $3.9 million | As of 12/31/2024 . |
| Sonesta management/reservation/system & loyalty fees | $119.6 million | 2024 . |
| Sonesta procurement & construction supervision fees | $2.9 million | 2024 . |
| Working capital advanced to Sonesta | $46.5 million | Based on rooms; net of returns on terminated agreements . |
| Capital contribution to Sonesta | $15.3 million | 2024 contributions to support franchising/growth; SVC maintained 34% ownership . |
Governance Assessment
- Independence and interlocks: Portnoy is a non-independent Managing Trustee and Chair, with simultaneous leadership of RMR and control of Sonesta (via ABP Trust), creating extensive interlocks across SVC’s manager and largest hotel operator—a structural conflict risk that demands robust disinterested oversight .
- Committee safeguards: All Board committees are independent; SVC’s Governance Guidelines require majority disinterested trustee approval (or majority Board plus majority independent trustees if none disinterested) for related-party transactions—annexed transactions were reviewed/approved per policy .
- Engagement and process: Board refreshment/declassification and proxy access, plus annual shareholder outreach (~68% of shares engaged in 2024), and annual say-on-pay votes indicate investor-focused practices .
- Attendance and alignment: Trustees met attendance thresholds in 2024; share ownership guidelines are met; trustees (including Portnoy) receive equity-only trustee compensation, which fully vests at grant—no performance-based director pay .
Red flags
- Controller/operator nexus: ABP Trust control of Sonesta, which manages most SVC hotels, combined with Portnoy’s controlling roles, elevates related-party transaction risk and potential conflicts around fees, capex, and owner’s priority return determinations .
- Manager dependence and fees: Significant reliance on RMR for all corporate functions and property operations, with sizable annual fees and reimbursements; consent to pledge of management agreements under RMR’s credit facility highlights counterparty/contract exposure .
- Multi-board commitments: Extensive simultaneous service on boards of multiple RMR-managed issuers may dilute time/attention, though SVC asserts integration with his day-to-day work mitigates this concern .
SVC’s mitigating controls
- Independent committees, disinterested approval process, and explicit hedging prohibitions for insiders; related-party dealings disclosed in Annex B and approved per policy .
Notes
- Portnoy’s status: The user referred to him as an “independent director,” but SVC’s proxy states he is a Managing Trustee (non-independent) and Chair of the Board .