tm223404-1_def14a - none

DEF 14A 1 tm223404-1_def14a.htm DEF 14A tm223404-1_def14a - none - 18.2813578s

TABLE OF CONTENTS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

☑

Filed by the Registrant

☐

Filed by a Party other than the Registrant

		Check the appropriate box:
		☐				Preliminary Proxy Statement
		☐				CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
		☑				Definitive Proxy Statement
		☐				Definitive Additional Materials
		☐				Soliciting Material under §240.14a-12

Service Properties Trust

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

		Payment of Filing Fee (Check the appropriate box):
		☑				No fee required.
		☐				Fee paid previously with preliminary materials.
		☐				Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

TABLE OF CONTENTS

Notice of 2022 Annual Meeting
of Shareholders and Proxy Statement

[MISSING IMAGE: lg_serviceprotrust-pn.jpg]

Wednesday, June 15, 2022 at 9:30 a.m., Eastern time

Live Webcast Accessible at
https://www.viewproxy.com/ServicePropertiesTrust/2022

TABLE OF CONTENTS

[MISSING IMAGE: tm223404d1-page_busine4c.jpg]

TABLE OF CONTENTS

LETTER TO OUR SHAREHOLDERS
FROM YOUR BOARD OF TRUSTEES

Dear Fellow Shareholders:

Please join us for our 2022 Annual Meeting of Shareholders, which will be held virtually at 9:30 a.m. on Wednesday, June 15, 2022. The business to be conducted at the meeting is explained in the attached Notice of Meeting and Proxy Statement. We believe furnishing these materials over the internet expedites your receipt of these important materials while reducing the cost and environmental impact of our annual meeting.

In 2021, our hotel portfolio, like the travel industry overall, faced continued challenges from the COVID-19 pandemic. However, the fourth quarter marked a period of stability in the overall recovery of our hotel portfolio, as normal seasonality and the impact of the Omicron variant were offset by solid extended stay occupancy and continued leisure demand.

During 2021, we transferred the management and branding of 94 hotels to Sonesta International Hotels Corporation, which is now our largest hotel manager, and in which we own a 34% stake. In January 2022, as a result of the transition of the 94 hotels and the business disruptions caused by the COVID-19 pandemic, we amended our management agreements with Sonesta to, among other things, reset the owner’s priority and minimum performance thresholds, provide for the renovation of the portfolio, add trade restrictions and allow us to sell 68 hotels which no longer meet our investment criteria. We also amended our management agreements with Hyatt Hotels Corporation and Radisson Hospitality Inc. to bolster those portfolios. As a result, we believe we have taken important steps to create a stronger hotel portfolio with improved coverage of our owner’s priority return and improved liquidity.

Also during 2021, our largest net lease tenant, TravelCenters of America Inc. (TA), increased its net income 430% over the prior year and continues to successfully execute on its transformation plan to improve operational efficiency and profitability. Our net lease retail collections are strong, and provide steady, reliable cash flows that largely cover our debt service and corporate overhead.

We continue to monitor changing events and circumstances with an eye to managing for the global good, mitigating the negative impact of the pandemic on our business and best positioning us for stability and recovery. We take seriously our role in the oversight of our Company’s long term business strategy, which we believe is the best path to long term value creation for our shareholders.

We thank you for your investment in our Company and for the trust you place in us to oversee your interests in our business.

April 11, 2022

				Laurie B. Burns			William A. Lamkin
				Robert E. Cramer			John G. Murray
				Donna D. Fraiche			Adam D. Portnoy
				John L. Harrington

TABLE OF CONTENTS

NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS OF SERVICE PROPERTIES TRUST

	Location: Live Webcast Accessible at https://www.viewproxy.com/ ServicePropertiesTrust/2022 Date: Wednesday, June 15, 2022 Time: 9:30 a.m., Eastern time			Agenda: • Elect the Trustee nominees identified in the accompanying Proxy Statement to our Board of Trustees; • Advisory vote to approve executive compensation; • Approve the Amended and Restated 2012 Equity Compensation Plan; • Ratify the appointment of Deloitte & Touche LLP as our independent auditors to serve for the 2022 fiscal year; and • Transact such other business as may properly come before the meeting and at any postponements or adjournments of the meeting.
				Record Date: You can vote if you were a shareholder of record as of the close of business on March 22, 2022.
				Attending Our 2022 Annual Meeting: Due to the continuing public health impact of the COVID-19 pandemic and to protect the health and well-being of our shareholders and other stakeholders, our 2022 Annual Meeting will be a completely virtual meeting of shareholders which will be conducted exclusively by webcast. No physical meeting will be held. • Record Owners: If you are a shareholder as of the close of business on the record date who holds shares directly, you may participate in our 2022 Annual Meeting via internet webcast by visiting the following website and following the registration and participation instructions contained therein: https://www.viewproxy.com/ServicePropertiesTrust/2022. Please have the control number located on your proxy card or voting information form available. • Beneficial Owners: If you are a shareholder as of the record date who holds shares indirectly through a brokerage firm, bank or other nominee, you must register in advance to attend our 2022 Annual Meeting. You will need to present evidence of your beneficial ownership of shares. You will not be able to vote your shares at our 2022 Annual Meeting without a legal proxy. Beneficial owners should complete the registration process at least three days in advance of our 2022 Annual Meeting to ensure that all documentation and verifications are in order.
				Please see the accompanying Proxy Statement for additional information.
				By Order of our Board of Trustees, Jennifer B. Clark Secretary April 11, 2022

TABLE OF CONTENTS

	PLEASE VOTE			1
	PROXY SUMMARY			2
	CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS			4
	Review of Corporate Governance Policies and Shareholder Engagement			4
	Board Composition, Expansion and Refreshment			4
	Process for Selecting Trustees			5
	ISG Corporate Governance Framework			5
	Shareholder Engagement and Outreach			6
	Sustainability			6
	Key Responsibilities of Our Board			14
	Our Board’s Role in Oversight of Risk Management			14
	Trustee Independence			15
	Executive Sessions of Independent Trustees			16
	Board Leadership Structure			16
	Lead Independent Trustee			16
	Code of Business Conduct and Ethics and Committee Governance			17
	Prohibition on Hedging			17
	Recommendations for Trustees			17
	Communications with Our Board			18
	Shareholder Nominations and Other Proposals			18
	PROPOSAL 1: ELECTION OF TRUSTEES			19
	Trustee Nominees to be Elected at Our 2022 Annual Meeting			22
	Continuing Trustees			25
	Executive Officers			26
	BOARD COMMITTEES			27
	Audit Committee			27
	Compensation Committee			27
	Nominating and Governance Committee			27
	BOARD MEETINGS			28
	TRUSTEE COMPENSATION			28
	Compensation of Trustees			28
	Trustee Share Ownership Guidelines			28
	Fiscal Year 2021 Trustee Compensation			29
	OWNERSHIP OF OUR EQUITY SECURITIES			30
	Trustees and Executive Officers			30
	Principal Shareholders			31
	PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION			32
	COMPENSATION DISCUSSION AND ANALYSIS			33
	Compensation Overview			33
	Compensation Philosophy			35
	Overview of 2021 Compensation Actions			35
	Analysis of 2021 Awards under the Share Award Plan			36
	Frequency of Say on Pay			37
	REPORT OF OUR COMPENSATION COMMITTEE			38
	COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION			38
	EXECUTIVE COMPENSATION			39
	Summary Compensation Table			39
	2021 Grants of Plan Based Awards			40
	2021 Outstanding Equity Awards at Fiscal Year End			40

TABLE OF CONTENTS

	2021 Stock Vested			41
	Potential Payments upon Termination or Change in Control			41
	Pay Ratio			41
	PROPOSAL 3: APPROVAL OF THE AMENDED AND RESTATED 2012 EQUITY COMPENSATION PLAN			42
	PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS			46
	Audit Fees and All Other Fees			47
	Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors			47
	Other Information			48
	REPORT OF OUR AUDIT COMMITTEE			49
	FREQUENTLY ASKED QUESTIONS			50
	RELATED PERSON TRANSACTIONS			55
	OTHER INFORMATION			56
	ANNEX A—AMENDED AND RESTATED 2012 EQUITY COMPENSATION PLAN			A-1
	ANNEX B—CERTAIN RELATED PERSON TRANSACTIONS			B-1

PROXY STATEMENT

The Board of Trustees (our “Board”) of Service Properties Trust, a Maryland real estate investment trust (the “Company,” “we,” “us” or “our”) is furnishing this proxy statement and accompanying proxy card (or voting instruction form) to you in connection with the solicitation of proxies by our Board for our 2022 annual meeting of shareholders. Due to the continuing public health impact of the COVID-19 pandemic and to protect the health and well-being of our shareholders and other stakeholders, our annual meeting will be held virtually via live webcast on Wednesday, June 15, 2022, at 9:30 a.m., Eastern time, subject to any postponements or adjournments thereof (the “2022 Annual Meeting”). We are first making these proxy materials available to shareholders on or about April 11, 2022.

Only owners of record of our common shares of beneficial interest (“Common Shares”) as of the close of business on March 22, 2022, the record date for our 2022 Annual Meeting, are entitled to notice of, and to vote at, the meeting and at any postponements or adjournments of the meeting. Holders of Common Shares are entitled to one vote for each Common Share held on the record date. Our Common Shares are listed on The Nasdaq Stock Market LLC (“Nasdaq”). On March 22, 2022, there were approximately 165,091,533 Common Shares issued and outstanding.

The mailing address of our principal executive office is Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.

		IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR OUR 2022 ANNUAL MEETING TO BE HELD ON WEDNESDAY, JUNE 15, 2022.
		The Notice of 2022 Annual Meeting, Proxy Statement and Annual Report to Shareholders for the fiscal year ended December 31, 2021 are available at www.proxyvote.com.

TABLE OF CONTENTS

PLEASE VOTE

Please vote to play a part in our future. Nasdaq rules do not allow a broker, bank or other nominee who holds shares on your behalf to vote on nondiscretionary matters without your instructions.

PROPOSALS THAT REQUIRE YOUR VOTE

PROPOSAL	MORE INFORMATION	BOARD RECOMMENDATION	VOTES REQUIRED FOR APPROVAL
1 Election of Trustees	Page 19	✓ FOR	Majority of all votes cast
2 Advisory vote to approve executive compensation*	Page 32	✓ FOR	Majority of all votes cast
3 Approval of the Amended and Restated 2012 Equity Compensation Plan	Page 42	✓ FOR	Majority of all votes cast
4 Ratification of independent auditors*	Page 46	✓ FOR	Majority of all votes cast

Non-binding advisory vote.

You can vote in advance in one of three ways:

	via the internet			Visit www.proxyvote.com and enter your 16 digit control number provided in your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form before 11:59 p.m., Eastern time, on June 14, 2022 to authorize a proxy VIA THE INTERNET.
	by phone			Call 1-800-690-6903 if you are a shareholder of record and 1-800-454-8683 if you are a beneficial owner before 11:59 p.m., Eastern time, on June 14, 2022 to authorize a proxy BY TELEPHONE. You will need the 16 digit control number provided on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form.
	by mail			Sign, date and return your proxy card if you are a shareholder of record or voting instruction form if you are a beneficial owner to authorize a proxy BY MAIL.

If the meeting is postponed or adjourned, these times will be extended to 11:59 p.m., Eastern time, on the day before the reconvened meeting.

PLEASE VISIT: www.proxyvote.com

•

To review and download easy to read versions of our Proxy Statement and Annual Report.

•

To sign up for future electronic delivery to reduce the impact on the environment.

2022 Proxy Statement

TABLE OF CONTENTS

PROXY SUMMARY

This proxy summary highlights information which may be provided elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement.

ELIGIBILITY TO VOTE

You can vote if you were a shareholder of record at the close of business on March 22, 2022, the record date for our 2022 Annual Meeting.

HOW TO CAST YOUR VOTE (Page 50)

You can vote by any of the following methods:

•

By Telephone or Internet. All shareholders of record can authorize a proxy to vote their shares by touchtone telephone by calling 1-800-690-6903, or through the internet at www.proxyvote.com, using the procedures and instructions described in your Notice Regarding the Availability of Proxy Materials or proxy card.

•

By Written Proxy. All shareholders of record also can submit voting instructions by written proxy card. If you are a shareholder of record and receive a Notice Regarding the Availability of Proxy Materials, you may request a written proxy card by following the instructions included in the notice.

•

Electronically at our 2022 Annual Meeting. All shareholders of record may vote electronically at the meeting. Beneficial owners may vote electronically at our 2022 Annual Meeting if they have a legal proxy.

CORPORATE GOVERNANCE PRINCIPLES (Page 4)

We pride ourselves on continuing to observe and implement best practices in our corporate governance.

SUSTAINABILITY (Page 6)

We have a long-standing commitment to our shareholders and other stakeholders to conduct our business in an environmentally and socially responsible manner.

VOTING (Page 1, 19, 32, 42 and 46)

PROPOSAL	BOARD RECOMMENDATION	VOTES REQUIRED FOR APPROVAL
1 Election of Trustees	✓ FOR	Majority of all votes cast
2 Advisory vote to approve executive compensation*	✓ FOR	Majority of all votes cast
3 Approval of the Amended and Restated 2012 Equity Compensation Plan	✓ FOR	Majority of all votes cast
4 Ratification of independent auditors*	✓ FOR	Majority of all votes cast

Non-binding advisory vote.

2022 Proxy Statement

TABLE OF CONTENTS

PROPOSAL 1: ELECTION OF TRUSTEES (Page 19)

Upon the recommendation of our Nominating and Governance Committee, our Board has nominated Laurie B. Burns, Robert E. Cramer, Donna D. Fraiche and William A. Lamkin as Independent Trustees and Adam D. Portnoy as a Managing Trustee. Presented below is the expected composition of our Board immediately following our 2022 Annual Meeting, assuming the election of the Trustee nominees.

NAME OF TRUSTEES	INDEPENDENT	COMMITTEE MEMBERSHIP
Laurie B. Burns	✓	Audit Compensation (Chair) Nominating and Governance
Robert E. Cramer	✓	Audit Compensation Nominating and Governance (Chair)
Donna D. Fraiche	✓	Audit Compensation Nominating and Governance
John L. Harrington	✓	Audit Compensation Nominating and Governance
William A. Lamkin	✓	Audit (Chair) Compensation Nominating and Governance
John G. Murray		None
Adam D. Portnoy		None

PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
(Page 32)

COMPENSATION DISCUSSION AND ANALYSIS (Page 33)

Our compensation structure is unique because of our relationship with our manager, The RMR Group LLC (“RMR”). Our business management agreement with RMR is designed to incentivize RMR to provide the highest quality services to us. Our Compensation Committee believes that our executive compensation program is appropriately designed to incentivize strong performance over the long term.

PROPOSAL 3: APPROVAL OF THE AMENDED AND RESTATED 2012 EQUITY COMPENSATION PLAN (Page 42)

PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS (Page 46)

2022 Proxy Statement

TABLE OF CONTENTS

CORPORATE GOVERNANCE PRINCIPLES
AND BOARD MATTERS

Review of Corporate Governance Policies and Shareholder Engagement

Our Board is committed to upholding the values of good corporate governance. In recognition of the relationship between corporate governance and long term performance, and as a result of our ongoing engagement with our shareholders, our Board continues to proactively evaluate our corporate governance principles. Based on these principles, over the past two years our Board:

•

expanded our Board by adding two Trustees with deep industry experience and increased the size of our Board to seven members and the percentage of our Board comprised of Independent Trustees to 71%;

•

amended our Declaration of Trust to declassify our Board so that all of our Trustees will stand for election annually beginning with our 2023 annual meeting of shareholders, a measure which was supported by more than 73% of our shareholders;

•

conducted a shareholder outreach to all of our shareholders who hold 1% or more of our Common Shares;

•

retained Korn Ferry, a leading executive search and consulting firm, to identify and vet candidates to expand and refresh our Board; and

•

enhanced our compensation and sustainability disclosure and reporting in response to shareholder feedback.

This year, our Board continued to engage Korn Ferry to assist in board refreshment and expansion. We also conducted a shareholder outreach to all of our shareholders who hold 1% or more of our Common Shares and actively engaged with shareholders who hold more than 38% of our Common Shares.

We appreciate your support of our Board on these initiatives.

Board Composition, Expansion and Refreshment

We are currently governed by a seven member Board of Trustees, including five Independent Trustees and two Managing Trustees. In 2020, with the support of more than 73% of our shareholders, we amended our Declaration of Trust to declassify our Board. Beginning with our 2021 Annual Meeting, the Trustees whose terms expire at an annual meeting will stand for election at the meeting for one-year terms and all Trustees will stand for election at the 2023 annual meeting of shareholders and, thereafter, for one-year terms.

Ensuring our Board is comprised of Trustees who bring diverse viewpoints and perspectives, have a variety of skills, professional experience and backgrounds and effectively represent the long term interests of our shareholders is a top priority of our Board and our Nominating and Governance Committee. Our Board continues to actively evaluate its composition. Our Board’s expansion and refreshment activities have increased the ratio of Independent Trustees to Managing Trustees, created more skill mix and diversity and ensured a smooth transition as Trustees retire from our Board. Our Nominating and Governance Committee and our Board have an ongoing engagement with Korn Ferry, a leading executive search and consulting firm, to act as an advisor and to assist our Nominating and Governance Committee in:

•

identifying and evaluating potential trustee candidates;

•

creating an even playing field among candidates identified regardless of source;

•

using the criteria, evaluations and references to prioritize candidates for consideration regardless of source; and

•

assisting in attracting and vetting candidates.

2022 Proxy Statement

TABLE OF CONTENTS

Process for Selecting Trustees

Our Nominating and Governance Committee screens and recommends candidates for nomination by our full Board. Our Nominating and Governance Committee is assisted with its recruitment efforts by its ongoing engagement with Korn Ferry, which recommends candidates that satisfy our Board’s criteria. They also provide research and pertinent information regarding candidates, as requested.

[MISSING IMAGE: tm223404d1-fc_debthpn.jpg]

ISG Corporate Governance Framework

We follow the Investor Stewardship Group’s (“ISG”) Corporate Governance Framework for U.S. Listed Companies, as summarized below:

ISG Principle			Our Practice
Principle 1: Boards are accountable to shareholders.			• We amended our Declaration of Trust to declassify our Board. Beginning in 2023, all of our Trustees will stand for election annually. • We adopted a proxy access bylaw.
Principle 2: Shareholders should be entitled to voting rights in proportion to their economic interest.			• We do not have a dual class structure; each shareholder gets one vote per share.
Principle 3: Boards should be responsive to shareholders and be proactive in order to understand their perspectives.			• In 2021, our proactive shareholder outreach extended to all of our shareholders who hold 1% or more of our Common Shares. We had active engagements with shareholders owning 38.14% of our Common Shares. • Our engagement topics included the impact of the COVID-19 pandemic on our business, governance reform priorities, sustainability and social strategy, Board composition, leadership and refreshment, succession planning and executive compensation program disclosure.
Principle 4: Boards should have a strong, independent leadership structure.			• We have a Lead Independent Trustee with clearly defined duties and robust responsibilities that are disclosed to shareholders. • Our Board considers the appropriateness of its leadership structure at least annually. • We have strong Independent Committee Chairs.

2022 Proxy Statement

TABLE OF CONTENTS

ISG Principle			Our Practice
Principle 5: Boards should adopt structures and practices that enhance their effectiveness.			• 71% of Board members are independent. • Our Board is comprised of 29% women. • We have an active Board refreshment plan, including an ongoing engagement with an executive search and consulting firm to identify and evaluate candidates to expand and refresh our Board; four new Board members have joined our Board in the last seven years. • Our Trustees then in office attended at least 75% of all Board and applicable committee meetings in 2021, and each of our Trustees then in office attended the 2021 annual meeting of shareholders.
Principle 6: Boards should develop management incentive structures that are aligned with the long term strategy of the company.			• Our Compensation Committee annually reviews and approves incentive compensation program design, goals and objectives for alignment with compensation and business strategies. • Although we do not pay any cash compensation directly to our officers and have no employees, we have adopted the 2012 Equity Compensation Plan (the “Share Award Plan”) to reward our named executive officers and other employees of RMR who provide services to us and to align their interests with those of our shareholders. • RMR’s compensation is tied to our performance.

Shareholder Engagement and Outreach

We conduct shareholder outreach throughout the year to engage with shareholders on issues important to them. Our Board receives reports on this engagement as well as any specific issues to be addressed.

[MISSING IMAGE: tm223404d1-fc_sharengag4c.jpg]

Sustainability

Overview. Our business strategy incorporates a focus on sustainable approaches to operating our properties in a manner that benefits our shareholders, tenants and the communities in which we are located. As a REIT, we are prohibited by tax law from operating our hotel properties and all of our other properties are leased to third parties pursuant to which leases those third party tenants assume operating responsibilities for their properties. However, we encourage our managers and tenants to operate our properties in ways that improve the economic performance of their operations, while simultaneously managing energy and water consumption, as well as greenhouse gas emissions.

Our environmental sustainability and community engagement strategies are primarily implemented by our managers and tenants and focus on a complementary set of objectives, including the following:

•

Responsible Investment: We seek to invest capital in our properties that both improves environmental performance and enhances asset value. During the acquisition of properties, RMR assesses, among other things, environmental sustainability opportunities and physical and policy driven climate related risks as part of the due diligence process.

2022 Proxy Statement

TABLE OF CONTENTS

•

Environmental Stewardship: We seek to improve the environmental footprint of our properties, including by reducing energy consumption and water usage, especially when doing so may reduce operating costs and enhance the properties’ competitive position. Although our tenants and hotel managers oversee most of the property maintenance and improvements, RMR’s asset management group works cooperatively with them whenever possible to leverage opportunities to make our properties more environmentally friendly and efficient. Working with our hotel managers, we have:

○

initiated programs to reduce energy and water use;

○

implemented various initiatives to encourage recycling of plastics, paper and metal or glass containers;

○

when renovating hotels, used energy efficient products, including lighting, windows and heating, ventilation and air conditioning equipment, and many appliances in extended stay hotels are ENERGY STAR® rated; and

○

installed electric car charging stations at some of our hotels and travel centers.

•

Investments in Human Capital: We have no employees of our own. We rely on our manager, RMR, and our hotel managers to hire, train, and develop a workforce that meets the needs of our business, contributes positively to our society and helps reduce our impact on the natural environment.

RMR employs approximately 600 real estate professionals across the United States. In 2021, RMR was recognized by The Boston Globe for the second consecutive year as one of The Top Places to Work in Massachusetts in the Large Employers category, received the Excellence Award from the Institute of Real Estate Management, and was recognized by the EPA as an “ENERGY STAR Partner of the Year, Sustained Excellence.” In 2020, RMR was recognized by the Boston Business Journal as the “Fastest Growing Middle Market Company in Massachusetts,” and by Commercial Property Executive as 9th in its list of Top Commercial Property Management Companies. In 2019, RMR received the Real Estate Management Excellence Award for Employee & Leadership Development from the Institute of Real Estate Management and was ranked 75th on Fortune Magazine’s list of 100 fastest growing companies.

RMR’s recruiting programs, on-boarding, retention programs and its development and training programs currently include the following:

○

LiveWell Employee Wellness Program: RMR’s LiveWell program has steadily gained traction since it was launched in 2016 with the goal of providing resources and incentives to enhance employees’ physical, emotional and financial wellness. LiveWell includes a range of educational presentations, webinar series and wellness competitions.

○

Managing with Impact: Since 2016, RMR hosted Managing with Impact workshops for managers throughout the company to expand their perspectives and increase their confidence as a new manager. Within their first year, managers complete the workshop and learn how to effectively delegate, solve problems and give meaningful performance feedback.

○

Tuition Reimbursement Program: RMR offers tuition assistance up to $20,000 annually for work-related education from accredited colleges and universities in order to deepen employees’ skillsets and support personal enrichment.

○

Accelerated Women in Leadership Program: RMR’s Accelerated Women in Leadership Program (“AWLP”) is a targeted learning experience that helps women strengthen and leverage their contribution and impact as professionals and leaders. Participants explore a variety of topics that help them manage biases that can be limiting, strengthen their executive presence, influence and negotiate more effectively, and integrate work and home life. In 2020 and 2021, two cohorts of women professionals participated in AWLP. A third cohort kicked off in the first quarter of 2022.

○

Next Generation Executive Program: In 2021 and 2022, RMR is sponsoring three rising leaders in The Partnership, Inc.’s Next Generation Executive Program (“NGE”). Admission to NGE is highly competitive and limited to a select group of America’s most promising multicultural leaders. The program prepares future leaders to meet the unique challenges facing today’s senior executive. Program areas include strategic innovation, organizational change, operating in a global market, team leadership and executive resiliency.

2022 Proxy Statement

TABLE OF CONTENTS

RMR also prioritizes on-going education and training for all employees across their organization as follows:

○

Engineering Development Program: Given the increasing challenges within the real estate industry of attracting a qualified and diverse pool of engineers throughout the country, RMR made it a strategic focus to develop the next generation of qualified building engineers. RMR’s Engineering Development Program standardizes the recruitment and development of engineering candidates to prepare them for open positions and to plan for future engineering needs. RMR recruits from various trade schools and job fairs to identify candidates for the two-year program with a curriculum that includes specific onboarding plans for training in electrical, HVAC, or plumbing trades and covers a range of essential engineering staff development topics.

○

Industry Associations & Credentials: In order to further their professional development, many of RMR’s employees seek out credentials and association memberships, with any membership costs reimbursed by RMR. Examples of credentials and association memberships include: Building Owners and Managers Association Membership and Event Participation, Certified Property Manager, Certified Public Accountant, National Association of Industrial and Office Properties, LEED Accredited Professional, Certified Energy Manager and Fitwel Ambassador.

•

Corporate Citizenship: We seek to be a responsible corporate citizen and to strengthen the communities in which we own properties through our policies and charitable giving. RMR regularly encourages its employees to engage in a variety of charitable and community programs, including participation in an RMR company-wide service day and a charitable giving matching program.

•

Diversity & Inclusion: We value a diversity of backgrounds, experience and perspectives. Our Board is comprised of 29% women and 14% members of underrepresented communities. We have no employees of our own but our manager, RMR, is an equal opportunity employer with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status. Our hotel managers are committed to racial equality and fostering a culture of diversity and inclusion. As of September 30, 2021, 37% and 27% of RMR’s employees were female and members of underrepresented communities, respectively.

RMR has made diversity and inclusion an important part of its hiring, retention and development programs. RMR has enhanced its hiring policies to support increasing diversity within its workforce. For every open position not filled by internal candidates, hiring managers are required to have at least one qualified woman or member of underrepresented community candidate in the final round interviews before an offer is extended to fill the position. An RMR manager who is a woman and/or member of an underrepresented community is required to be part of the final round interview team. In addition, RMR works with strategic industry partners like Commercial Real Estate Women (CREW) and The Partnership, Inc. for posting new positions and supporting multicultural professionals.

To learn more about RMR’s and our sustainability initiatives, visit www.rmrgroup.com/corporate-sustainability.

Sustainability Accounting Metrics. The following disclosures are informed by the guidance of the Sustainability Accounting Standards Board (“SASB”) Industry Standard for Real Estate Version 2018-10. To the extent an accounting metric, as defined by the SASB Standard, is not applicable to our portfolio or data to report on the applicable accounting metric is not available to us, we have not made any disclosure.

For the following disclosures, our properties are reported in two operating segments, Hotel and Net Lease, and is consistent with how these properties and our operating results are presented in our other Securities and Exchange Commission (“SEC”) filings. The information presented is as of December 31, 2021, unless otherwise noted. Additionally, for all sustainability accounting metrics, Same Property includes properties owned and were operated continuously by our managers and tenants since January 1, 2020.

In 2020 and 2021 the COVID-19 pandemic, along with local, state and Federal social distancing recommendations, created an environment of reduced building utilization. This lower property utilization is evident in the presented sustainability metrics below. It is our expectation that, in a post-pandemic environment as businesses return to normal and our property utilization improves, the energy and water consumption of our properties will increase above 2020 or 2021 levels.

2022 Proxy Statement

TABLE OF CONTENTS

Energy management integration discussion (SASB Accounting Metric Code: IF-RE-130a.5).

Our managers deploy energy management best practices that improve the economic performance of their operations, which include:

○

Centralized utility bill processing and payment system;

○

ENERGY STAR® benchmarking (hotel properties);

○

Real-time energy monitoring (hotel properties);

○

Light Emitting Diodes (LED) lighting upgrades; and

○

Energy performance review for end-of-life heating, ventilation and air conditioning (HVAC) equipment replacements.

These energy management efforts reduce energy usage helping to generate both economic and environmental benefits.

Sections II, III and IV below provide SASB-aligned energy-related metrics.

II.

Energy consumption data coverage as a percentage of total floor area, by property subsector (SASB Accounting Metric Code: IF-RE-130a.1).

The following illustrates energy data available as compared to the total population of our properties, by subsector.

[MISSING IMAGE: tm223404d1-bc_enrgydatapn.jpg]

The energy data for all Hotel and a majority of Net Lease properties is managed directly by third party operators or tenants, respectively. Data that is shared with us is reported in these SASB Accounting Metrics.

2022 Proxy Statement

TABLE OF CONTENTS

III.

Total energy consumed in gigajoules (GJ) by portfolio area with data coverage, percentage grid electricity and percentage renewable, by subsector (SASB Accounting Metric Codes: IF-RE-130a.2).

[MISSING IMAGE: tm223404d1-bc_enrgycon4c.jpg]

None, or 0%, of the renewable energy consumed was directly purchased through power purchase agreements or by other explicit contractual means. Approximately 10.5% and 9.4% of the total energy consumed for Hotel and Net Lease, respectively, was renewable by default using location-based calculation methodology for grid electricity.

IV.

Same Property percentage change in energy consumption for the portfolio area with data coverage, by subsector (SASB Accounting Metric Code: IF-RE-130a.3).

[MISSING IMAGE: tm223404d1-bc_enrgygrd4c.jpg]

Percentage of eligible portfolio that (i) has obtained an energy rating and (ii) is certified to ENERGY STAR® (SASB Accounting Metric Code: IF-RE-130a.4).

84% of our Hotel properties are eligible to earn an ENERGY STAR® certification based on size, use profile and occupancy profile requirements established by the EPA. 10% of Hotel properties are

2022 Proxy Statement

TABLE OF CONTENTS

rated and 0% are certified. Energy ratings and certifications are performed using the EPA’s Portfolio Manager online benchmarking tool. 0% of Net Lease properties are eligible for an energy rating. None of the Net Lease properties are rated and none are certified.

VI.

Water management integration discussion (SASB Accounting Metric Code: IF-RE-140a.4).

Managers are strongly encouraged to use water management practices that reduce operating costs as well as their impact on the consumption of natural resources. These best practices include upgrades for indoor plumbing fixtures, low-flow water closets and urinals, low-flow flush valves, low-flow automatic faucet controls, low-flow faucet aerators and shower heads, water-efficient landscaping and cooling tower water management, among others.

Sections VII, VIII and IX below provide SASB-aligned water-related metrics.

VII.

Water withdrawal data coverage as a percentage of total floor area and percentage in regions with High or Extremely High Baseline Water Stress (“BWS”) (SASB Accounting Metric Code: IF-RE-140a.1).

[MISSING IMAGE: tm223404d1-bc_waterdt4c.jpg]

Baseline Water Stress measures total annual water withdrawals (municipal, industrial, and agricultural) expressed as a percent of the total annual available flow. Higher values indicate more users are competing for available resources.

2022 Proxy Statement

TABLE OF CONTENTS

VIII.

Total water withdrawn by portfolio area with data coverage and percentage in regions with High or Extremely High Baseline Water Stress, by subsector (SASB Accounting Metric Code: IF-RE-140a.2).

[MISSING IMAGE: tm223404d1-bc_waterpn.jpg]

IX.

Same Property percentage change in water withdrawn for portfolio area with data coverage, by subsector (SASB Accounting Metric Code: 140a.3).

[MISSING IMAGE: tm223404d1-bc_sameprop4c.jpg]

Description of approach to measuring, incentivizing, and improving sustainability impacts of tenants (SASB Accounting Metric Code: IF-RE-410a.3).

On our behalf, RMR collaborates with our hotel managers and net leased retail tenants to capture environmental data for our properties. Engaging with our managers and tenants that manage data directly, RMR has increased visibility into operational performance for our properties. This effort has provided insight for over 15.2 million square feet of Hotel and Net Lease properties. RMR’s asset managers encourage our hotel managers and Net Lease tenants to operate our properties in ways

2022 Proxy Statement

TABLE OF CONTENTS

that improve the economic performance of their operations, while simultaneously managing energy and water consumption, as well as greenhouse gas emissions.

XI.

Area of properties located in FEMA Special Flood Hazard Areas or foreign equivalent, by property subsector (SASB Accounting Metric Code: IF-RE-450a.1).

[MISSING IMAGE: tm223404d1-bc_femapn.jpg]

SEC Form DEF 14A filed by Service Properties Trust