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RMR Group Inc. (The)
Shareholder Annual Meeting in a DEF 14A on 01/12/2022   Download
SEC Document
SEC Filing
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.       )

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Soliciting Material under §.240.14a-12
The RMR Group Inc.
(Name of Registrant as Specified In Its Charter)
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Notice of 2022 Annual Meeting
of Shareholders and Proxy Statement
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Thursday, March 10, 2022 at 9:30 a.m., Eastern time
Live Webcast Accessible at
https://www.virtualshareholdermeeting.com/RMR2022

 
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LETTER TO OUR SHAREHOLDERS FROM YOUR BOARD OF DIRECTORS
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Dear Fellow Shareholders:
Please join us for our 2022 Annual Meeting of Shareholders, which will be held virtually at 9:30 a.m. on Thursday, March 10, 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 lowering costs and reducing the environmental impact of our annual meeting.
Your Board takes seriously our role in the oversight of our Company’s long term business strategy, which is the best path to long term value creation for you, our shareholders. Although we continued to face challenges from the COVID-19 pandemic during 2021, we successfully navigated these challenges and pursued opportunities for growth. Some of our successes and accomplishments include:

Increasing our total assets under management to $32.7 billion, including increasing our private real estate assets under management by 107% year over year.

Being recognized by the Boston Business Journal as one of the fastest growing middle market companies in Massachusetts for the second consecutive year and by the U.S. Environmental Protection Agency as an “ENERGY STAR Partner of the Year” for the third consecutive year. We also won the IREM (Institute of Real Estate Management) Excellence award for 2021 for our commitment to the profession, our extraordinary achievements and the positive impact we have on our communities and were named as one of the Top Places to Work in Massachusetts by The Boston Globe for the second consecutive year.

Guiding our clients to multiple successes, including Sonesta’s completion of its acquisition of RLH Corporation, establishing Sonesta as one of the largest hotel companies and expanding its franchising capabilities and Tremont Mortgage Trust’s merger with and into RMR Mortgage Trust to form Seven Hills Realty Trust, a larger, more diversified mortgage real estate investment trust with a more expanded capital base than its predecessor companies.

Returning excess capital to shareholders by paying a special dividend of $7.00 per share reflecting our strong financial position and confidence in our financial future.
We continue to monitor changing events and circumstances with an eye to managing for the global good, mitigating the negative impact on our business and best positioning us for growth.
We thank you for your investment in our Company and for the confidence you put in this Board to oversee your interests in our business.
January 12, 2022
Jennifer B. Clark
Ann Logan
Rosen Plevneliev
Adam Portnoy
Jonathan Veitch
Walter C. Watkins, Jr.
 

 
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NOTICE OF 2022 ANNUAL MEETING OF SHAREHOLDERS OF THE RMR GROUP INC.
Location:
Live Webcast Accessible at https://www.virtualshareholder
meeting.com/RMR2022
Date:
Thursday, March 10, 2022
Time:
9:30 a.m., Eastern time
   
Agenda:

Elect the Director nominees identified in the accompanying Proxy Statement to our Board of Directors;

Advisory vote to approve executive compensation;

Advisory vote on the frequency of future shareholder advisory votes relating to our executive compensation;

Approve The RMR Group Inc. Amended and Restated 2016 Omnibus Equity 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 January 6, 2022.
Attending the 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, directors and employees, the 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 the Annual Meeting by visiting https://www.virtualshareholdermeeting.com/RMR2022 and entering the 16 digit control number located on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form.

Beneficial Owners: If you are a shareholder as of the close of business on the record date who holds shares indirectly through a brokerage firm, bank or other nominee, you may participate in the Annual Meeting by visiting https://www.virtualshareholdermeeting.com/RMR2022 and entering the 16 digit control number located on your Notice Regarding the Availability of Proxy Materials, proxy card or voting instruction form. Please follow the instructions from your bank, broker or nominee included with these proxy materials, or contact your bank, broker or nominee to request a control number if needed.
Please see the accompanying Proxy Statement for additional information.
By Order of our Board of Directors,
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Jennifer B. Clark
Managing Director, Executive Vice President,
General Counsel and Secretary
January 12, 2022
 

 
TABLE OF CONTENTS
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PROXY STATEMENT
The Board of Directors (our “Board”) of The RMR Group Inc., a Maryland corporation (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, directors and employees, our annual meeting will be held virtually via live webcast on Thursday, March 10, 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 January 12, 2022.
Only owners of record of shares of common stock of our Company as of the close of business on January 6, 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 shares of our Class A Common Stock (“Class A Common Shares”) are entitled to one vote for each Class A Common Share, holders of shares of our Class B-1 Common Stock (“Class B-1 Common Shares”) are entitled to ten votes for each Class B-1 Common Share and holders of shares of our Class B-2 Common Stock (“Class B-2 Common Shares,” and, together with Class A Common Shares and Class B-1 Common Shares, “Common Shares”) are entitled to ten votes for each Class B-2 Common Share. Holders of our Class A Common Shares, Class B-1 Common Shares and Class B-2 Common Shares will vote as a single class on all matters at our 2022 Annual Meeting. Our Class A Common Shares are listed on The Nasdaq Stock Market LLC (“Nasdaq”). On January 6, 2022, there were 15,485,011 Class A Common Shares, 1,000,000 Class B-1 Common Shares and 15,000,000 Class B-2 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 THURSDAY, MARCH 10, 2022.
The Notice of 2022 Annual Meeting, Proxy Statement and Annual Report to Shareholders for the fiscal year ended September 30, 2021 are available at www.proxyvote.com.
 

 
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 Directors
Page 9
FOR
Plurality of all votes cast
2 Advisory vote to approve executive compensation
Page 22
FOR
Majority of all votes cast*
3 Advisory vote on the frequency of future advisory votes to approve executive compensation
Page 37
EVERY YEAR
(“1 Year” on proxy card)
Majority of all votes cast*
4 Approval of The RMR Group Inc. Amended and Restated 2016 Omnibus Equity Plan
Page 38
FOR
Majority of all votes cast
5 Ratification of independent auditors
Page 45
FOR
Majority of all votes cast*
*
Nonbinding 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 March 9, 2022 to authorize a proxy VIA THE INTERNET.
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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 March 9, 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.
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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.
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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.
 
THE RMR GROUP INC.
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2022 Proxy Statement   1

 
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS
Board Composition
We are currently governed by a six member Board of Directors. Ensuring our Board is comprised of Directors who bring diverse viewpoints and perspectives, exhibit a variety of skills, professional experience and backgrounds and effectively represent the long-term interests of 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 Directors to Managing Directors, and created more skill mix and diversity.
Sustainability
We understand the importance of leading a sustainable business and regularly consider ways to improve our internal culture and the communities in which we operate. Our annual sustainability report can be found at https://www.rmrgroup.com/corporate-sustainability. In this “Sustainability” section, unless the context requires otherwise, references to “we,” “us” and “our” refer to The RMR Group Inc. and The RMR Group LLC (“RMR LLC”). Highlights of our Environmental, Social and Governance (“ESG”) strategies are as follows:
Environmental. We understand the importance of environmental sustainability and seek to mitigate the impact of the properties we manage through strategies and best practices that enhance competitiveness and optimize operational efficiency. We have incorporated specific sustainability objectives into our overall business strategy and portfolio management through the following programs:

Environmental surveys are conducted prior to acquiring a property.

Environmental safety checklists at the property level are reviewed quarterly.

Environmental safety training for engineers is conducted annually with 100% participation.

Waste programs include diversion, rightsizing, education and expense management.

Environmental-friendly cleaning and pest control support indoor environmental quality.

Number of ENERGY STAR and Leadership in Energy and Environmental Design (“LEED”) certified buildings continue to increase each year.

Energy costs managed through supply contracts in deregulated energy markets.
We received the ENERGY STAR® Partner of the Year Award for the third consecutive year for our outstanding efforts as a Service and Product Provider in executing ENERGY STAR related activities at buildings we manage on behalf of our clients.
Social. We believe the foundation of our success begins with ensuring our employees are given the opportunity to participate in first-in-class benefits programs and competitive salaries. We aim to attract professionals that seek out and capture synergies throughout the organization and their personal lives while advancing social and environmental stewardship. Diversity within our teams helps drive individual and group performance that benefits us and our clients.

Employees and Equal Opportunity. As of September 30, 2021, we employed approximately 600 real estate professionals, including 46% in our corporate office and 54% across our more than 30 offices throughout the United States. The average tenure of our employees was 6.3 years. We ensure employees receive competitive salaries and benefits and we aim to attract professionals who will uphold our values of social and environmental stewardship.
We are 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. Throughout our organization, including our Board, we are committed to racial equality and fostering a culture of diversity and inclusion. We have made
 
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diversity and inclusion an important part of our hiring, retention and development programs. As of September 30, 2021, 37% and 27% of our approximately 600 employees were female and non-white, respectively.

Board Diversity. As of September 30, 2021, our Board of Directors composition included 50% of members from underrepresented communities, including 33% female and 17% African American. Our Board has satisfied the diversity standards under the new Nasdaq listing rule in advance of its effective time.

Employee Engagement, Education and Training. Our employee engagement initiatives align with our goal of being an employer of choice with a thriving workforce that encourages career enrichment and positions us for growth. Our programs are carefully designed for hiring, developing and retaining the best talent in the real estate industry. Our recruiting programs, on-boarding and retention programs and our development and on-going training programs currently include the following:

LiveWell Employee Wellness Program: Our 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, we 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: We offer 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: Our 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 is scheduled to kick off in early 2022.

Next Generation Executive Program: In 2021 and 2022, we are 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.
We also prioritize on-going education and training for all employees across our 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, we made it a strategic focus to develop the next generation of qualified building engineers. Our Engineering Development Program standardizes the recruitment and development of engineering candidates to prepare them for open positions and to plan for future engineering needs. We recruit 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 our employees seek out credentials and association memberships, with any membership costs reimbursed by us. Examples of credentials and association memberships include: BOMA 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.
 
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2022 Proxy Statement   3

 
In 2021, we were 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, and we received the Excellence Award from the Institute of Real Estate Management. In 2020, we were 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, we received the Real Estate Management Excellence Award for Employee & Leadership Development from the Institute of Real Estate Management and were ranked 75th on Fortune Magazine’s list of 100 fastest growing companies.
Governance

Board and Management Diversity. We are an equal opportunity employer that believes workforce excellence starts at the highest levels of our organization and extends to every employee within our organization. Members of our and our clients’ leadership teams are comprised of individuals who exhibit ethics and integrity, have business acumen, sound judgment and a strong record of achievements. All of our Board and its committees include members of diverse backgrounds, perspectives and experiences, including professional experience, skills and community membership.

Inclusive Work Culture. We seek to attract and retain top talent through an inclusive work culture with leadership programs and initiatives like the RMR Leans In program, Accelerated Women in Leadership Program, Managing with Impact and other internal investments in broad-based training and development.

ESG Program. Our ESG program is managed within the functional groups that perform environmental, social and governance activities. These functional groups, including Investor Relations, Engineering and Human Resources, report to members of the executive committee, which oversees all ESG activities. Our independent board members and those of our clients review our ESG program performance and provide feedback that helps shape existing and new initiatives. We have a broad range of corporate governance and sustainability policies, guidelines and procedures designed to encourage consideration of ESG criteria in the broader context of investment and property management and to ensure compliance with applicable laws.
To learn more about our sustainability initiatives, visit www.rmrgroup.com/corporate-sustainability.
Key Responsibilities of Our Board
Oversight of Strategy
Oversight of Risk
Succession Planning

Our Board oversees and monitors strategic planning.

Business strategy is a key focus of our Board and embedded in the work of Board committees.

Company management is charged with executing business strategy and provides regular performance updates to our Board.

Our Board oversees risk management.

Board committees, which meet regularly and report back to our full Board, play significant roles in carrying out the risk oversight function.

Company management is charged with managing risk, through robust internal processes and effective internal controls.

Our Board oversees succession planning and talent development for senior executive positions.

Our Nominating and Governance Committee makes an annual report to our Board on succession planning.

In the event of a succession, our entire Board may work with our Nominating and Governance Committee, or the Independent Directors, as applicable, to nominate and evaluate potential successors.
Our Board’s Role in Oversight of Risk Management
Our Board is elected by our shareholders to oversee our business and long term strategy. As part of fulfilling its responsibilities, our Board oversees the safeguarding of our assets, the maintenance of appropriate
 
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financial and other internal controls and our compliance with applicable laws and regulations. Inherent in these responsibilities is our Board’s understanding and oversight of the various risks we face. Our Board considers that risks should not be viewed in isolation and should be considered in virtually every business decision and as part of our business strategy.
Our Board oversees risk as part of its general oversight of our Company. Oversight of risk is addressed as part of various Board and Board committee activities and through regular and special Board and Board committee meetings. Our day to day business is conducted by our management, and our management and our Director of Internal Audit are responsible for incorporating risk management in their activities. Our Director of Internal Audit reports to our Audit Committee and provides us with advice and assistance with our risk management function.
In discharging their oversight responsibilities, our Board and Board committees review regularly a wide range of reports management, internal audit and service providers provide, including:

reports on market and industry conditions;

reports on the impact of the COVID-19 pandemic on our business;

operating and regulatory compliance reports;

financial reports;

reports on risk management and ESG activities and initiatives;

regulatory and legislative updates that may impact us;

reports on the security of our information technology processes and our data; and

legal proceedings updates and reports on other business related matters.
Our Board and Board committees discuss these matters among themselves and with our management, our Director of Internal Audit, legal counsel, our independent auditors and other professionals, as appropriate.
Our Audit Committee takes a leading role in helping our Board fulfill its responsibilities for oversight of our financial reporting, internal audit function, risk management, including cybersecurity, and our compliance with legal and regulatory requirements. Our Board and Audit Committee review periodic reports from our independent auditors regarding potential risks, including risks related to our internal control over financial reporting. Our Audit Committee also reviews, approves and oversees an internal audit plan developed by our Director of Internal Audit with the goal of helping us systematically evaluate the effectiveness of our risk management, control and governance processes on an annual basis. Our Audit Committee meets at least quarterly and reports its findings to our Board. Our Audit Committee also meets periodically with our Director of Internal Audit to review the results of our internal audits, and directs or recommends to our Board actions or changes it determines appropriate to enhance or improve the effectiveness of our risk management.
Our Audit Committee considers risks related to cybersecurity and receives regular reports from our management regarding cybersecurity risks and countermeasures being undertaken or considered by us, including updates on the internal and external cybersecurity landscape and relevant technical developments.
Our Compensation Committee whose responsibilities are detailed in its charter, among other responsibilities, reviews the goals and objectives of our executive compensation program; reviews and approves annually the compensation paid by us to each of our executive officers; reviews and considers the incentives and risks associated with our compensation policies and practices; and evaluates the performance of our Director of Internal Audit. Also, our Compensation Committee and our Board consider that we have a share award program that requires share awards to executive officers to vest over a period of years. We believe that the use of share awards vesting over time rather than stock options mitigates the incentives for our management to undertake undue risks and encourages our management to make longer term and appropriately risk balanced decisions.
It is not possible to identify all of the risks that may affect us or to develop processes and controls to eliminate all risks and their possible effects, and processes and controls employed to address risks may be
 
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2022 Proxy Statement   5

 
limited in their effectiveness. Moreover, it is necessary for us to bear certain risks to achieve our objectives. As a result of the foregoing and other factors, our ability to manage risk is subject to substantial limitations.
To learn more about the risks we face, you can review the matters discussed in Part I, Item 1A. “Risk Factors” and “Warning Concerning Forward Looking Statements” in our Annual Report to Shareholders for the fiscal year ended September 30, 2021 (the “Annual Report”). The risks described in the Annual Report are not the only risks we face. Additional risks and uncertainties not currently known or that may currently be deemed to be immaterial also may materially adversely affect our business, financial condition or results of operations in future periods.
Director Independence
Under the corporate governance listing standards of the Nasdaq, to be considered independent:

a director must not have a disqualifying relationship, as defined in the corporate governance section of the Nasdaq rules; and

our Board must affirmatively determine that the director otherwise has no relationship which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. To facilitate the director independence assessment process, our Board has adopted written Governance Guidelines as described below.
Our Board is comprised of six Directors, including four Independent Directors and two Managing Directors. Under our bylaws (our “Bylaws”), so long as the number of directors is less than five, at least one director must meet the qualifications of a Managing Director and, so long as the number of directors is five or greater, at least two directors must meet the qualifications of a Managing Director. As set forth in our Bylaws, Independent Directors are Directors who are not employees of our Company or any of our subsidiaries, are not involved in our or our subsidiaries’ day to day activities and are persons who qualify as independent under the applicable rules of the Nasdaq and the Securities and Exchange Commission (the “SEC”). As set forth in our Bylaws, Managing Directors are Directors who are not Independent Directors and who have been employees of our Company or any of our subsidiaries or involved in our day to day activities, or the activities of any of our subsidiaries or any of their predecessors for at least one year prior to such Director’s election.
Our Board affirmatively determines whether Directors have a direct or indirect material relationship with us, including our subsidiaries, other than serving as our Directors or directors of our subsidiaries. In making independence determinations, our Board observes the Nasdaq and SEC criteria, as well as the criteria set forth in our governing documents. When assessing a Director’s relationship with us, our Board considers all relevant facts and circumstances, not merely from the Director’s standpoint, but also from that of the persons or organizations with which the Director has an affiliation. Based on this review, our Board has determined that Ann Logan, Rosen Plevneliev, Jonathan Veitch and Walter C. Watkins, Jr. currently qualify as independent directors under applicable Nasdaq and SEC criteria and as Independent Directors under our governing documents. In making these independence determinations, our Board reviewed and discussed additional information provided by us and the Directors with regard to each of the Directors’ relationships with us and our affiliates and those companies to which we or our affiliates provide management or advisory services, as applicable. Our Board has concluded that none of these four Directors possessed or currently possesses any relationship that could impair his or her judgment in connection with his or her duties and responsibilities as a Director of our Company or that could otherwise be a direct or indirect material relationship under applicable Nasdaq and SEC standards.
Executive Sessions of Independent Directors
Pursuant to our Governance Guidelines, our Independent Directors are expected to meet in regularly scheduled meetings at which only Independent Directors are present. Our Independent Directors also meet separately with our officers, with our Director of Internal Audit and with our independent auditors. The presiding Director for purposes of leading Independent Director sessions will be the Chair of our Audit Committee, unless the Independent Directors determine otherwise.
 
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Board Leadership Structure
All Directors play an active role in overseeing our business both at our Board and committee levels. As set forth in our Governance Guidelines, the core responsibility of our Directors is to exercise sound, informed and independent business judgment in overseeing our Company and our strategic direction. Our Directors are skilled and experienced leaders and currently serve or have served as members of senior management in public and private for profit and nonprofit organizations, and also have served as government officials and in academia. Our Directors may be called upon to provide solutions to various complex issues and are expected to, and do, ask hard questions of our officers and advisers. Our Board is small, which facilitates informal discussions and communication from our management to our Board and among Directors. We do not have a Chair of the Board or a lead Independent Director.
Our Chief Financial Officer and Treasurer and our Director of Internal Audit regularly attend Board and Board committee meetings. Special meetings of our Board may be called at any time by the President or by a majority of the Directors then in office. Our Managing Directors, in consultation with our management and our Director of Internal Audit, set the agenda for Board meetings. Other Directors may suggest agenda items as well. Discussions at Board meetings are led by the Managing Director, the Independent Director or a member of management who is most knowledgeable on a subject.
Four of our Directors are independent under the applicable Nasdaq and SEC criteria and our governing documents. All of the members of our Audit Committee, Nominating and Governance Committee and Compensation Committee are independent under the applicable listing requirements and rules of the Nasdaq and other applicable laws, rules and regulations, including those of the SEC. As set forth in our governing documents, two of our Directors are Managing Directors, persons who have been employees of our Company or our subsidiaries or involved in our day to day activities or in the day to day activities of any of our subsidiaries or any of their predecessors for at least one year prior to such Director’s election.
Code of Business Conduct and Ethics and Committee Governance
Our Board is committed to corporate governance that promotes the long term interests of our shareholders. Our Board has established Governance Guidelines that provide a framework for effective governance. Our Board regularly reviews developments in corporate governance and updates our Governance Guidelines and other governance materials as it deems necessary and appropriate.
We have also adopted a Code of Business Conduct and Ethics (the “Code”) to, among other things, provide guidance to our Directors, officers and employees to ensure compliance with applicable laws and regulations.
Our Board has an Audit Committee, Compensation Committee and Nominating and Governance Committee. Our Audit Committee, Compensation Committee and Nominating and Governance Committee each have adopted a written charter, and each Board committee reviews its written charter on an annual basis to consider whether any changes are required.
Our Audit Committee, Compensation Committee and Nominating and Governance Committee are comprised entirely of Independent Directors under applicable Nasdaq rules who also meet the independence criteria applicable to audit committees under the Sarbanes-Oxley Act of 2002 and the SEC’s implementing rules under that law.
We are a “controlled company” under the rules of the Nasdaq because Adam Portnoy holds more than 50% of our voting power. Although that would allow our Compensation Committee and Nominating and Governance Committee to include Independent Directors and Managing Directors, both committees are comprised solely of Independent Directors.
Our corporate governance materials are available for review in the governance section of our website, including our Governance Guidelines, the charter for each Board committee, the Code and information about how to report concerns or complaints about accounting, internal accounting controls or auditing matters and any violations or possible violations of the Code and how to communicate with our Directors, individually or as a group. To access these documents on our website visit www.rmrgroup.com. We intend to satisfy the
 
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2022 Proxy Statement   7

 
requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Code that apply to the principal executive officer, principal financial officer or controller, or persons performing similar functions, by posting such information on our website.
Prohibition on Hedging
Our Insider Trading Policies and Procedures expressly prohibit members of our Board and our officers from engaging in hedging transactions involving our securities and those of any public company to which RMR LLC or its affiliates provide management services.
Nominations for Directors
Our Nominating and Governance Committee is responsible for identifying and evaluating nominees for Director and for recommending to our Board nominees for election at each annual meeting of shareholders. Our Nominating and Governance Committee may consider candidates suggested by our Directors, officers or shareholders or by others. Shareholders who would like to recommend a nominee for the position of Director should submit their recommendations in writing by mail to the Chair of our Nominating and Governance Committee, c/o The RMR Group Inc., Secretary, at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@rmrgroup.com. Any such recommendation should include a description of the candidate’s qualifications for Board service, the candidate’s written consent to be considered for nomination and to serve if nominated and elected, as well as the addresses and telephone numbers for contacting the shareholder and the candidate for more information. Our Nominating and Governance Committee may request additional information about the shareholder recommended nominee or about the shareholder recommending the nominee. Recommendations by shareholders will be considered by our Nominating and Governance Committee in its discretion using the same criteria as other candidates it considers.
Communications with Our Board
Our Board has established a process to facilitate communication by shareholders and other interested parties with Directors. Communications should be addressed to Directors in care of the Secretary, The RMR Group Inc., Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458 or by email to secretary@rmrgroup.com.
Shareholder Nominations and Other Proposals
Deadline to Submit Nominations and Proposals for the 2023 Annual Meeting of Shareholders for Purposes of Rule 14a-4(c)(1): To be timely for purposes of Rule 14a-4(c)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), shareholder nominations and proposals intended to be made at the 2023 annual meeting of shareholders must be received by us not later than November 28, 2022; provided, that, if the date of the 2023 annual meeting of shareholders is more than 30 days earlier or later than March 10, 2023, then a shareholder’s notice must be so delivered a reasonable time before we send our proxy materials for the 2023 annual meeting of shareholders to our shareholders.
Deadline to Submit Proposals for the 2023 Annual Meeting of Shareholders for Purposes of Rule 14a-8: Shareholder proposals pursuant to Rule 14a-8 under the Exchange Act must be received at our principal executive office on or before September 14, 2022 in order to be eligible to be included in the proxy statement for the 2023 annual meeting of shareholders; provided, that, if the date of the 2023 annual meeting of shareholders is more than 30 days before or after March 10, 2023, such a proposal must be submitted within a reasonable time before we begin to print our proxy materials. Under Rule 14a-8, we are not required to include shareholder proposals in our proxy materials in certain circumstances or if conditions specified in the rule are not met.
 
8   THE RMR GROUP INC.
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2022 Proxy Statement

 
PROPOSAL 1: ELECTION OF DIRECTORS
Upon the recommendation of our Nominating and Governance Committee, our Board has nominated Jennifer B. Clark and Adam Portnoy for election as Managing Directors and Ann Logan, Rosen Plevneliev, Jonathan Veitch and Walter C. Watkins, Jr. for election as Independent Directors. Each Director nominee currently serves on our Board. If elected, each nominee would serve until our 2023 annual meeting of shareholders and until his or her successor is duly elected and qualifies, subject to the individual’s earlier death, resignation, retirement, disqualification or removal.
We expect that each nominee for election as a Director will be able to serve if elected. However, if a nominee should become unable or unwilling to serve, proxies may be voted for the election of a substitute nominee designated by our Board.
 
THE RMR GROUP INC.
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2022 Proxy Statement   9

 
Director Criteria, Qualifications, Experience and Tenure
Our Board performs an assessment of the skills and the experience needed to properly oversee the interests of our Company. Generally, our Board reviews both the short- and long-term strategies of our Company to determine what current and future skills and experience are required of our Board in exercising its oversight function and in the context of our strategic priorities. Our Nominating and Governance Committee and our Board consider the qualifications, characteristics and skills of Directors and Director candidates individually and in the broader context of our Board’s overall composition when evaluating potential nominees for election as Director.
Our Board believes that its members should:

exhibit high standards of integrity and ethics;

have business acumen, practical wisdom, ability to exercise sound judgment in a congenial manner and be able to make independent analytical inquiries;

have a strong record of achievements;

have knowledge of the asset management industry, commercial real estate (“CRE”) industry and real estate investment trusts (“REITs”);

have diverse perspectives, backgrounds and experiences, including professional background, skills and community membership; and

be committed to serve on our Board over a period of years in order to develop knowledge about our operations and have sufficient time and availability to devote to Board and committee matters.
In addition, our Board has determined that our Board, as a whole, should strive to have the right mix of characteristics and skills necessary to effectively perform its oversight responsibilities. Our Board believes that Directors with one or more of the following professional skills or experiences can assist in meeting this goal:

work experience with a proven record of success in his, her or their field;

risk oversight/management expertise;

accounting and finance, including a high level of financial literacy and understanding of the impact of financial market trends on the real estate industry;

operating business and/or transactional experience;

management/leadership experience;

knowledge of our historical business activities;

familiarity with client sectors;

familiarity with the public capital markets;

experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing;

service on other public company boards and committees;

qualifying as a Managing Director in accordance with the requirements of our governing documents; and

qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our governing documents.
Board Diversity Matrix
The Nominating and Governance Committee is committed to continuing to identify and recruit highly qualified director candidates with diverse experiences, perspectives, and backgrounds to join our Board. The table below provides certain information regarding the composition of our Board. Our Board has satisfied the requirements of Nasdaq Rule 5605(f) ahead of its effective time. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f) and related instructions.
 
10   THE RMR GROUP INC.
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2022 Proxy Statement

 
Total Number of Directors
6
Part I: Gender Identity Female Male Non-Binary Did Not
Disclose
Gender
Directors 2 4
Part II: Demographic Background
African American or Black 1
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White 2 3
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic Background
A plurality of all the votes cast is required to elect a Director at our 2022 Annual Meeting.
The names, principal occupations and certain other information and the nominees for Directors, as well as a summary of the key experiences, qualifications, attributes and skills that led our Nominating and Governance Committee and our Board to conclude that such persons are currently qualified to serve as Directors, are set forth on the following pages.
Our Board of Directors recommends a vote “FOR” the election of all Director nominees.
 
THE RMR GROUP INC.
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2022 Proxy Statement   11

 
Directors and Director Nominees to be Elected at Our 2022 Annual Meeting
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Jennifer B. Clark
Age: 60
Managing Director since 2018
Term: Term expiring at our 2022 Annual Meeting
Board Committees: None
Other RMR Managed Public Company Boards(1):

Five Star Senior Living Inc. (since 2020)

Office Properties Income Trust (since 2021)
Other Non-RMR Managed Public
Company Boards: None
Ms. Clark has been our Executive Vice President, General Counsel and Secretary since shortly after our formation in 2015. Ms. Clark joined RMR LLC in 1999 as a vice president; she became a senior vice president in 2006, an executive vice president and general counsel in 2008 and secretary in 2015. Ms. Clark serves as secretary of Diversified Healthcare Trust, Industrial Logistics Properties Trust, Service Properties Trust, Office Properties Income Trust, Seven Hills Realty Trust (formerly known as RMR Mortgage Trust), Five Star Senior Living Inc. and TravelCenters of America Inc. Ms. Clark also serves as an officer of ABP Trust, our controlling shareholder, director and secretary of Sonesta Holdco Corporation, director, executive vice president and general counsel and secretary of Tremont Realty Capital LLC (formerly known as Tremont Realty Advisors LLC). Ms. Clark also served as a trustee of Diversified Healthcare Trust from 2018 to June 2021, a trustee of RMR Mortgage Trust (now known as Seven Hills Realty Trust) from 2019 to January 2021 and chief legal officer of RMR Mortgage Trust from 2002 to January 2021. Until Tremont Mortgage Trust’s merger with and into RMR Mortgage Trust, Ms. Clark served as secretary of Tremont Mortgage Trust. Until RMR Advisors LLC’s merger with and into Tremont Realty Capital LLC on January 6, 2021, Ms. Clark served as a director of RMR Advisors LLC from 2016 and as its president and chief executive officer from 2019, and prior to that as its executive vice president, general counsel and secretary from October 2017 through December 2018, as vice president and chief legal officer from 2007 through September 2017, and as secretary since 2004. Prior to joining RMR LLC, Ms. Clark was a partner at the law firm of Sullivan & Worcester LLP.
Specific Qualifications, Attributes, Skills and Experience:

Professional skills and experience in legal, corporate governance and real estate matters;

Leadership position with RMR LLC and demonstrated management ability;

Extensive experience in, and knowledge of, the commercial real estate industry and REITs;

Institutional knowledge earned through prior service as an officer of our Company and in leadership positions with RMR LLC;

Identifies as female; and

Qualifying as a Managing Director in accordance with the requirements of our Bylaws.
(1)
RMR LLC or its subsidiaries currently provide management services to seven public companies, including the following five public companies that do not have any employees of their own: Diversified Healthcare Trust (Nasdaq: DHC), Industrial Logistics Properties Trust (Nasdaq: ILPT), Office Properties Income Trust (Nasdaq: OPI), Service Properties Trust (Nasdaq: SVC) and Seven Hills Realty Trust (Nasdaq: SEVN). For these companies with no employees, RMR LLC or its subsidiaries provide all business operations and functions pursuant to the terms of the applicable management agreements with those companies. RMR LLC also provides management services to two public operating companies, Five Star Senior Living Inc. (Nasdaq: FVE) and TravelCenters of America Inc. (Nasdaq: TA), both of which have their own employees but some members of the senior leadership of these companies are also RMR LLC employees.
 
12   THE RMR GROUP INC.
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2022 Proxy Statement

 
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Ann Logan
Age: 67
Independent Director since 2015
Term: Term expiring at our 2022 Annual Meeting
Board Committees:

Audit (Chair)

Compensation

Nominating and Governance
Other RMR Managed Public Company Boards(1): None
Other Non-RMR Managed Public Company Boards: None
Ms. Logan was previously employed in various executive capacities at Fannie Mae, a U.S. Government sponsored enterprise with various classes of publicly owned securities, including as executive vice president of the single family mortgage business from 1998 to 2000 and as executive vice president and chief credit officer from 1993 to 1998. Since her employment at Fannie Mae, Ms. Logan has been involved in a number of nonprofit organizations, including serving on the boards of The Washington School for Girls and Georgetown Preparatory School, and as chair of the board of trustees of Bryn Mawr College. Ms. Logan previously served from 2005 to 2010 as a member of the board of directors of PHH Corporation, a New York Stock Exchange listed company providing real estate mortgage and automotive fleet services, where she was chair of the risk management committee and served on the audit and compensation committees.
Specific Qualifications, Attributes, Skills and Experience:

Experience in the real estate mortgage and credit industries;

Valuable perspective on the broader real estate industry;

Professional skills, training and expertise in finance and risk management matters;

Demonstrated management ability;

Service on boards and board committees and experience as a senior executive of a public company;

Identifies as female; and
Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
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Rosen Plevneliev
Age: 57
Independent Director since 2017
Term: Term expiring at our 2022 Annual Meeting
Board Committees:

Audit

Compensation

Nominating and Governance (Chair)
Other RMR Managed Public Company Boards(1): None
Other Non-RMR Managed Public Company Boards: None
Mr. Plevneliev is the former president of the Republic of Bulgaria, having served from January 22, 2012 to January 22, 2017. From 2009 to 2011, he served as Bulgaria’s Minister of Regional Development and Public Works, overseeing the country’s infrastructure, communications and development projects. Prior to government service, Mr. Plevneliev was a partner and chief executive officer of IRIS International Ltd, a construction management firm that he founded in 1990, and managed several prominent projects in Germany and Bulgaria, including the Reichstag, Munich Airport and the Sofia Business Park, the first business park in Bulgaria and the largest office park in southeastern Europe. Mr. Plevneliev is a former member of the board of directors of the American Chamber of Commerce in Bulgaria, the board of the Confederation of Employers and Industrialists in Bulgaria and the board of the “For Our Children” Foundation.
Specific Qualifications, Attributes, Skills and Experience:

Executive experience and demonstrated leadership ability as a former head of state;

Experience heading large scale real estate construction and development projects in both the public and private sectors;

Experience as a senior executive of a construction management company;

Bulgarian national;

Identifies as male; and
Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
 
THE RMR GROUP INC.
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2022 Proxy Statement   13

 
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Adam Portnoy
Age: 51
Managing Director since 2015
Term: Term expiring at our 2022 Annual Meeting
Board Committees: None
Other RMR Managed Public Company Boards(1):

Diversified Healthcare Trust (since 2007)

Service Properties Trust (since 2007)

Office Properties Income Trust (since 2009)

Seven Hills Realty Trust, including its predecessor companies (formerly known as RMR Mortgage Trust since 2009)

Industrial Logistics Properties Trust (since 2017)

Five Star Senior Living Inc. (since 2018)

TravelCenters of America Inc. (since 2018)
Other Non-RMR Managed Public
Company Boards: None
Mr. Portnoy has been our President and Chief Executive Officer since shortly after our formation in 2015. Mr. Portnoy has been the president and chief executive officer of RMR LLC since 2005 and was a director of RMR LLC from 2006 until June 5, 2015 when RMR LLC became a majority owned subsidiary of our Company and we became RMR LLC’s managing member. Mr. Portnoy serves as the chair of the boards of Diversified Healthcare Trust, Industrial Logistics Properties Trust, Office Properties Income Trust, Seven Hills Realty Trust (formerly known as RMR Mortgage Trust), Service Properties Trust, Five Star Senior Living Inc. and TravelCenters of America Inc. Until RMR Advisors LLC’s merger with and into Tremont Realty Capital LLC on January 6, 2021, Mr. Portnoy was a director of RMR Advisors LLC from 2007, and he served as its president from 2007 to September 2017 and its chief executive officer from 2015 to September 2017. Mr. Portnoy has been a director of Tremont Realty Capital LLC (formerly known as Tremont Realty Advisors LLC) since March 2016 and served as its president and chief executive officer from March 2016 through December 2017. Mr. Portnoy is the sole trustee and controlling shareholder and an officer of ABP Trust. Mr. Portnoy is a director and the controlling shareholder of Sonesta Holdco Corporation. Mr. Portnoy served as president and chief executive officer of RMR Mortgage Trust (now known as Seven Hills Realty Trust) from 2007 to 2015 and as president of Office Properties Income Trust from 2009 to 2011. Mr. Portnoy was a managing trustee of Select Income REIT from 2011 until it merged with a wholly owned subsidiary of Office Properties Income Trust in December 2018 and a managing trustee of Tremont Mortgage Trust from 2017 until it merged with and into Seven Hills Realty Trust in September 2021. Prior to joining RMR LLC in 2003, Mr. Portnoy held various positions in the finance industry and public sector, including working as an investment banker at Donaldson, Lufkin & Jenrette and working in private equity at DLJ Merchant Banking Partners and at the International Finance Corporation (a member of The World Bank Group). In addition, Mr. Portnoy previously founded and served as chief executive officer of a privately financed telecommunications company. Mr. Portnoy currently serves as the Honorary Consul General of the Republic of Bulgaria to Massachusetts, as chair of the board of directors of the Pioneer Institute, as a member of the executive committee of the board of directors of the Greater Boston Chamber of Commerce and as a member of the AJC New England’s Leadership Board, and previously served on the board of governors for the National Association of Real Estate Investment Trust and the board of trustees of Occidental College.
Specific Qualifications, Attributes, Skills and Experience:

Extensive experience in, and knowledge of, the asset management and commercial real estate industries and REITs;

Key leadership position with us and our subsidiaries and demonstrated management ability;

Public company director service;

Experience in investment banking and private equity;

Institutional knowledge earned through prior service on the boards of trustees and directors of our clients and familiarity with our clients’ businesses;

Identifies as male; and

Qualifying as a Managing Director in accordance with the requirements of our Bylaws.
 
14   THE RMR GROUP INC.
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2022 Proxy Statement

 
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Jonathan Veitch
Age: 62
Independent Director since 2020
Term: Term expiring at our 2022 Annual Meeting
Board Committees:

Audit

Compensation

Nominating and Governance
Other RMR Managed Public Company Boards(1): None
Other Non-RMR Managed Public Company Boards: None
Mr. Veitch served as President of Occidental College (“Occidental”), a nationally-recognized private liberal arts college, and as a member of the board of trustees of Occidental and a member of the audit committee of the board, from 2009 to June 2020. Prior to becoming President of Occidental, Mr. Veitch held various leadership and management positions with The New School since 1996. Mr. Veitch has received numerous grants and awards in academia, and he has authored numerous publications and articles. Mr. Veitch holds a doctorate in American History from Harvard University.
Specific Qualifications, Attributes, Skills and Experience:

Professional skills and experience in governance matters;

Management experience and demonstrated leadership ability;

Identifies as male; and

Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
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Walter C. Watkins, Jr.
Age: 75
Independent Director since 2015
Term: Term expiring at our 2022 Annual Meeting
Board Committees:

Audit

Compensation (Chair)

Nominating and Governance
Other RMR Managed Public Company Boards(1): None
Other Non-RMR Managed Public Company Boards: None
Mr. Watkins is the principal of WCW Enterprises, LLC, which he founded in 2000 to provide business consulting services and manage certain private investments. Prior to founding WCW Enterprises, Mr. Watkins served in various executive capacities at Bank One Corporation (the successor to First Chicago NBD, NBD Bancorp and National Bank of Detroit) from 1968 to 2000, including serving as executive vice president and president of Bank One, Michigan. As executive vice president, he was responsible for middle market banking in Michigan, Ohio and Kentucky, from 1998 to 2000. As president of Bank One, Michigan, he was the bank’s primary public spokesman, community liaison and business coordinator for the state of Michigan. Mr. Watkins served as the chief development officer for the City of Detroit from 2002 to 2006 and the interim chief executive officer of Detroit Regional Convention Facility Authority from 2009 to 2010. Mr. Watkins is a director of the Omega Historic Preservation Foundation. His past board affiliations include Health Alliance Plan, Detroit Economic Growth Corporation, Detroit Medical Center, Detroit Regional Chamber of Commerce, United Way of Southeast Michigan and Fisk University.
Specific Qualifications, Attributes, Skills and Experience:

Demonstrated business leadership as a successful entrepreneur;

Work on community boards and committees;

Experience as a senior executive officer of a large banking business;

Financial background;

African American;

Identifies as male; and

Qualifying as an Independent Director in accordance with the requirements of the Nasdaq, the SEC and our Bylaws.
 
THE RMR GROUP INC.
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2022 Proxy Statement   15

 
Executive Officers
Our executive officers serve at the discretion of our Board. There are no family relationships among any of our Directors or executive officers.
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Adam Portnoy
Age: 51
President and Chief Executive Officer of our Company since 2015
President and Chief Executive Officer of RMR LLC since 2005
Mr. Portnoy’s background and qualifications are described above.
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Jennifer B. Clark
Age: 60
Executive Vice President, General Counsel and Secretary of our Company since 2015
Executive Vice President and General Counsel of RMR LLC since 2008
Ms. Clark’s background and qualifications are described above.
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Matthew P. Jordan
Age: 46
Executive Vice President of our Company since 2018
Chief Financial Officer and Treasurer of our Company since 2015
Executive Vice President, Chief Financial Officer and Treasurer of RMR LLC since 2017
Mr. Jordan joined RMR LLC in April 2012 as chief accounting officer; he became senior vice president, chief financial officer and treasurer of RMR LLC in November 2012; and he became an executive vice president of RMR LLC in October 2017 while continuing to serve as RMR LLC’s chief financial officer and treasurer. Mr. Jordan has served as a managing trustee of Seven Hills Realty Trust (formerly known as RMR Mortgage Trust) since January 2021. Mr. Jordan was a managing trustee of Tremont Mortgage Trust from January 2021 until it merged with and into Seven Hills Realty Trust in September 2021. Mr. Jordan was an executive vice president, chief financial officer and treasurer of RMR Advisors LLC from October 2017 until January 6, 2021, when RMR Advisors LLC merged with and into Tremont Realty Capital LLC (formerly known as Tremont Realty Advisors LLC). Mr. Jordan has been a director, president and chief executive officer of Tremont Realty Capital LLC since January 2021; he was the executive vice president from October 2017 to December 2020, was previously treasurer and chief financial officer from its formation in 2016 to December 2020 and a vice president from its formation until October 2017. Prior to joining RMR LLC, Mr. Jordan was employed at Stanley Black & Decker from July 2011 until April 2012 and before then at Ernst & Young LLP. Mr. Jordan is a certified public accountant.
 
16   THE RMR GROUP INC.
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2022 Proxy Statement

 
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Jennifer F. Francis
Age: 57
Executive Vice President of RMR LLC since 2020
Ms. Francis joined RMR LLC in 2006 and became a senior vice president of RMR LLC in 2014 and an executive vice president of RMR LLC in 2020. Ms. Francis is responsible for the asset management division of RMR LLC, which includes, office, industrial, senior living and hotel asset management. Ms. Francis has been a managing trustee of Diversified Healthcare Trust since June 2021, its chief executive officer since June 2021 and its president since 2018. She previously also served as chief operating officer of Diversified Healthcare Trust from 2018 until June 2021. Prior to joining RMR LLC, Ms. Francis was a partner at CBRE/NE Partners, where she performed brokerage and corporate advisory services for large corporate clients on their national commercial real estate portfolios. Previously, Ms. Francis was a vice president at The Gunwyn Company where she was responsible for the asset management of a portfolio of commercial, retail and residential assets. Ms. Francis has over 30 years of experience working in the commercial real estate industry. She is on the executive board of the American Seniors Housing Association (ASHA), a member of the Nareit 2021 Advisory Board of Governors, a member of the National Association of Industrial and Office Properties (NAIOP) and a member of the Commercial Real Estate Women (CREW).
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John G. Murray
Age: 61
Executive Vice President of RMR LLC since 2001
Mr. Murray has served in various capacities with RMR LLC and its affiliates since 1993, including as an executive vice president of RMR LLC since 2001 and as a senior vice president of RMR LLC from 1993 to 2001. Mr. Murray has been a managing trustee and chief executive officer of Service Properties Trust since 2018 and its president since 1996. He also previously served as Service Properties Trust’s chief operating officer from 1996 until June 2018 and its chief financial officer and treasurer from 1995 to 1996. Mr. Murray has also been a managing trustee and the president and chief executive officer of Industrial Logistics Properties Trust since 2018. Mr. Murray also serves as a director of Sonesta Holdco Corporation. From 2014 to 2017, Mr. Murray served as a member of the board of directors of the American Hotel & Lodging Association representing the owners’ segment of the association. Prior to joining RMR LLC, Mr. Murray was employed at Fidelity Brokerage Services Inc. and at Ernst & Young LLP.
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Jonathan M. Pertchik
Age: 55
Executive Vice President of RMR LLC since 2019
Since December 2019, Mr. Pertchik has been an executive vice president of RMR LLC and chief executive officer and a managing director of TravelCenters of America Inc. Mr. Pertchik is responsible for all travel center operations at RMR LLC. Prior to joining RMR LLC, Mr. Pertchik served as the chief executive officer of InTown Suites, Inc., a large extended stay hotel chain in the United States, from July 2014 to April 2019. From February 2013 to June 2014, Mr. Pertchik served as the chief executive officer of ST Residential, LLC, an owner and manager of luxury condominiums, apartment projects, hotels, and office and retail spaces, where he had previously served as chief operating officer from March 2010 to February 2013. Prior to joining ST Residential, Mr. Pertchik held various executive management positions at WCI Communities, a luxury homebuilder and developer from 2007 to January 2010, and had been a senior vice president and managing principal at The Staubach Company, a leading national real estate tenant representative, from 1999 to 2006. Additionally, Mr. Pertchik served as a member of the board of directors of AV Homes, Inc., a publicly-traded homebuilder, from July 2014 until its sale in October 2018, and has served as a member of the board of directors of Lenkbar, Inc., a private inventor, designer, engineer and manufacturer of medical device products since December 2014.
 
THE RMR GROUP INC.
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2022 Proxy Statement   17

 
BOARD COMMITTEES
Audit Committee
Members
Ann Logan (Chair)
Rosen Plevneliev
Jonathan Veitch
Walter C. Watkins, Jr.
9 meetings in the fiscal year ended September 30, 2021
Our Audit Committee is comprised solely of Independent Directors. Its primary role is to help our Board fulfill its oversight responsibilities related to the integrity of our financial statements and financial reporting process, the qualifications, independence and performance of our independent registered public accounting firm, the performance of our internal audit function, risk management and our compliance with legal and regulatory requirements. Our Audit Committee is responsible for the appointment, compensation, retention and oversight, and the evaluation of the qualifications, performance and independence, of our independent auditors and the resolution of disagreements between our management and our independent auditors. Our independent auditors report directly to our Audit Committee. Our Audit Committee also has final authority and responsibility for the appointment and assignment of duties to our Director of Internal Audit. Our Audit Committee reviews the overall audit scope and plans of the audit with our independent auditors. Our Audit Committee also reviews, with our management and our independent auditors, our quarterly reports on Form 10-Q, annual reports on Form 10-K and earnings releases.
Our Board has determined that each member of our Audit Committee is financially literate and that Ms. Logan is our Audit Committee’s “financial expert.”
Compensation Committee
Members
Walter C. Watkins, Jr. (Chair)
Ann Logan
Rosen Plevneliev
Jonathan Veitch
4 meetings in the fiscal year ended September 30, 2021
Our Compensation Committee is comprised solely of Independent Directors. Our Compensation Committee’s primary responsibilities pertain to overseeing our compensation and employee benefit programs as they apply to executive compensation and annually reviewing and approving the compensation paid by us to each of our executive officers. Our Compensation Committee also evaluates the services provided by the person serving as our Director of Internal Audit and approves the compensation paid by us to such person. Our Compensation Committee also approves (subject to applicable shareholder approval), evaluates and administers all our equity compensation plans.
Nominating and Governance Committee
Members
Rosen Plevneliev (Chair)
Ann Logan
Jonathan Veitch
Walter C. Watkins, Jr.
1 meeting in the fiscal year ended September 30, 2021
Our Nominating and Governance Committee is comprised solely of Independent Directors. Its primary role is to identify individuals qualified to become Board members, consistent with criteria approved by our Board, and to recommend candidates to our entire Board for nomination or selection as Board members for each annual meeting of shareholders or when vacancies occur; to develop and recommend to our Board governance principles for our Company; and to oversee the evaluation of our Board and, to the extent not overseen by our Compensation Committee or a committee composed entirely of Directors meeting the independence requirements of the rules of the Nasdaq, Company management. Under its charter, our Nominating and Governance Committee is also responsible for considering and reporting on our succession planning to our Board.
 
18   THE RMR GROUP INC.
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2022 Proxy Statement

 
BOARD MEETINGS
In the fiscal year 2021, our Board held five meetings. In the fiscal year 2021, each then Director attended 75% or more of the aggregate of all meetings of our Board and the committees on which he or she served or that were held during the period in which the Director served as a Director or committee member. Our policy with respect to Board members’ attendance at meetings of our Board and annual meetings of shareholders can be found in our Governance Guidelines, the full text of which appears at our website, www.rmrgroup.com.
DIRECTOR COMPENSATION
Compensation of Directors
Our Board believes that competitive compensation arrangements are necessary to attract and retain qualified Independent Directors. Under the currently effective Director compensation arrangements, each Independent Director received an annual fee of $85,000 for services as a Director. The annual fee for any new Independent Director is prorated for the initial year. Each Independent Director and Managing Director received an award of 3,000 Class A Common Shares in fiscal year 2021 for serving as a Director.
Each Independent Director who served as a committee chair of our Audit, Compensation or Nominating and Governance Committees received an additional annual fee of $17,500, $12,500 and $12,500, respectively. Directors were reimbursed for travel expenses they incurred in connection with their responsibilities as Directors and for out of pocket costs they incurred in connection with their attending certain continuing education programs, if any.
Fiscal Year 2021 Director Compensation
The following table details the total compensation of our Directors for the fiscal year ended September 30, 2021 for services as a Director.
Name
Fees Earned or
Paid in Cash($)(1)
Stock Awards($)(2)
All Other
Compensation($)
Total($)
Jennifer B. Clark(3)
128,550
128,550
Ann Logan
102,500
128,550
231,050
Rosen Plevneliev
97,500
128,550
226,050
Adam Portnoy(3)
128,550
128,550
Jonathan Veitch
85,000
128,550
213,550
Walter C. Watkins, Jr.
97,500
128,550
226,050
(1)
The amounts reported in the Fees Earned or Paid in Cash column reflect the cash fees earned by each Independent Director in fiscal year 2021, consisting of an $85,000 annual cash fee and, for each of Ms. Logan and Messrs. Plevneliev and Watkins, an additional $17,500, $12,500 and $12,500, respectively, for service as a committee chair in fiscal year 2021.
(2)
Equals 3,000 Class A Common Shares multiplied by the closing price of such shares on the award date, March 11, 2021. Amounts shown are also the compensation cost for the award recognized by us for financial reporting purposes pursuant to Financial Accounting Standards Board Accounting Standards CodificationTM Topic 718, “Compensation—Stock Compensation” (“ASC 718”) (which equals the closing price of the shares on the award date, multiplied by the number of shares subject to the award). No assumptions were used in this calculation. All awards are fully vested on the award date.
(3)
Managing Directors do not receive cash compensation for their services as Directors. The compensation of Mr. Portnoy and Ms. Clark for their services as our executive officers is not included here and is described below under “Executive Compensation.”
 
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2022 Proxy Statement   19

 
OWNERSHIP OF OUR EQUITY SECURITIES
Directors and Executive Officers
The following table sets forth information regarding the beneficial ownership of then outstanding Common Shares by each person we know to be the beneficial owner of more than 5% of the respective classes of Common Shares, each Director and Director Nominee, each of our named executive officers, and our Directors and executive officers as a group, all as of January 6, 2022. Unless otherwise noted, to our knowledge, voting power and investment power in Class A Common Shares are exercisable solely by the named person, all percentages of ownership for Class A Common Shares are based on 15,485,011 Class A Common Shares outstanding as of January 6, 2022, and the principal business address of the named beneficial owner is Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458.
Name of Beneficial Owner
Class A
Common Shares*
Class B-1
Common Shares
Class B-2
Common Shares
Combined
Voting
Power
Number
%
Number
%
Number
%
%
ABP Trust
1,090,564(1) 6.6% 1,000,000 100.0% 15,000,000 100.0%
91.2%
Directors, Director Nominees and Executive Officers:
Adam Portnoy
1,170,502(1)(2) 7.1% 1,000,000(2) 100.0% 15,000,000(2) 100.0%
91.3%
Jennifer B. Clark
32,651 **%
**%
Matthew P. Jordan
27,201 **%
**%
John G. Murray
20,666 **%
**%
Ann Logan
17,578 **%
**%
Walter C. Watkins, Jr.
15,000 **%
**%
Rosen Plevneliev
11,475 **%
**%
Jennifer F. Francis
10,754 **%
**%
Jonathan M. Pertchik
9,520 **%
**%
Jonathan Veitch
6,000 **%
**%
All executive officers and directors as a group (10
persons)
1,321,347(1) 8.0% 1,000,000 100.0% 15,000,000 100%
91.4%
*
Amounts exclude fractional shares.
**
Indicates less than 1.0%.
(1)
Beneficial ownership of Class A Common Shares by ABP Trust and Adam Portnoy in the table above reflects the 1,000,000 Class A Common Shares issuable upon conversion of the Class B-1 Common Shares owned by ABP Trust and beneficially owned by Adam Portnoy. These numbers exclude 15,000,000 Class A Common Shares issuable upon redemption of the class A membership units of RMR LLC (which are paired with 15,000,000 Class B-2 Common Shares) owned by a subsidiary of ABP Trust and beneficially owned by ABP Trust and Adam Portnoy. At our option, we may elect to pay cash in lieu of Class A Common Shares for some or all of such redeemed class A membership units. Amounts exclude fractional shares. For purposes of calculating the percentages of ownership of ABP Trust and Adam Portnoy, the 1,000,000 Class A Common Shares issuable upon conversion of the Class B-1 Common Shares are deemed outstanding.
(2)
This number represents (or in the case of Class A Common Shares, includes) shares owned by ABP Trust. Voting and investment power with respect to the shares owned by ABP Trust may be deemed to be shared by Adam Portnoy as the president and chief executive officer, a beneficial owner and the sole trustee of ABP Trust.
 
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Principal Shareholders
Set forth in the table below is information about the number of Class A Common Shares held by persons not listed above that we know to be the beneficial owners of more than 5.0% of the outstanding Class A Common Shares.
Name and Address
Aggregate
Number of
Shares
Beneficially
Owned*
Percent of
Outstanding
Shares**
Additional Information
The Vanguard Group, Inc.
   (“Vanguard”)
   100 Vanguard Boulevard
   Malvern, Pennsylvania 19355
2,205,719
14.2%
Based on a Schedule 13G/A filed with the SEC on February 10, 2021 by Vanguard reporting that, at December 31, 2020 Vanguard beneficially owned 2,205,719 Class A Common Shares and had shared voting power over 32,176 Class A Common Shares, sole dispositive power over 2,161,928 Class A Common Shares and shared dispositive power over 43,791 Class A Common Shares.
BlackRock, Inc. (“BlackRock”)
   55 East 52nd Street
   New York, New York 10055
1,377,336
8.9%
Based on a Schedule 13G filed with the SEC on February 1, 2021 by BlackRock reporting that, at December 31, 2020, BlackRock beneficially owned 1,377,336 Class A Common Shares and had sole voting power over 1,308,774 Class A Common Shares and sole dispositive power over 1,377,336 Class A Common Shares.
*
Beneficial ownership is shown as of December 31, 2020.
**
The percentage indicated is based on 15,485,011 Class A Common Shares outstanding as of January 6, 2022.
 
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2022 Proxy Statement   21

 
PROPOSAL 2: ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
As required by Section 14A of the Exchange Act, we are seeking a nonbinding advisory vote from our shareholders to approve the compensation of our named executive officers as described in the “Compensation Discussion and Analysis” section beginning on page 23 and the “Executive Compensation” section beginning on page 30.
Our Board recommends that shareholders vote “FOR” the following resolution:
RESOLVED: That the shareholders of the Company approve, on a nonbinding, advisory basis, the compensation paid by the Company to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the “Compensation Discussion and Analysis” in this Proxy Statement.
Because your vote is advisory, it will not be binding upon our Board or Compensation Committee. However, our Board values shareholders’ opinions and our Compensation Committee will take into account the outcome of the vote when considering future executive compensation decisions.
Approval of the advisory vote to approve executive compensation requires the affirmative vote of a majority of all the votes cast, in person or by proxy, at our 2022 Annual Meeting.
Our Board of Directors recommends a vote “FOR” the advisory vote to approve executive compensation.
 
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes the fiscal year 2021 compensation of our named executive officers. For fiscal 2021, our named executive officers1 were:

Adam Portnoy, our Managing Director, President and Chief Executive Officer

Jennifer B. Clark, our Managing Director, Executive Vice President, General Counsel and Secretary

John G. Murray, our Executive Vice President

Jennifer F. Francis, our Executive Vice President

Jonathan M. Pertchik, our Executive Vice President

Matthew P. Jordan, our Executive Vice President, Chief Financial Officer and Treasurer
Compensation Overview
We strive to maintain an executive compensation program which reflects best practices. We compensate our executive officers with a combination of base salary, cash bonus and equity compensation awards, and we also recommend to certain of our clients that they award equity to our executive officers as well. Our executive compensation program is intended to recognize each executive officer’s scope of responsibilities, reward demonstrated performance and leadership and motivate continued employment and high levels of service. One of our executive officers, Jonathan Pertchik, is also an executive officer of one of our clients, TravelCenters of America Inc. (“TA”), and dedicates most of his time to that company. Accordingly, the TA compensation committee determines Mr. Pertchik’s cash compensation, and the cash compensation we pay to Mr. Pertchik is based on a percentage allocation of his business time and efforts to TA and to us. Because at least 80% of Mr. Pertchik’s business time was devoted to services to TA during 2021, 80% of his total cash compensation (that is, the combined base salary and cash bonus paid by us and TA) was paid by TA and the remainder was paid by us. We believe the compensation we paid to Mr. Pertchik reasonably reflected his division of business time and efforts; however, periodically Mr. Pertchik may divide his business time and efforts differently than he does currently and his compensation from us may become disproportionate to this division.
The competition for executive talent is strong both nationally and locally where our clients are headquartered. Our ability to attract, retain and appropriately reward our executive officers is essential to maintaining our business results. Our Compensation Committee’s goals are to have comprehensive compensation programs that incentivize and reward executives toward achievement of our operational, financial and strategic goals. This includes maintaining a “pay-for-performance” culture, in which substantial portions of total compensation are “at risk” and based upon attainment of our business objectives and our executives’ performance and skills. Our compensation program is also designed to align executives’ interests with those of our shareholders, our clients and their shareholders and to incentivize our executives based upon our performance and the performance of our clients. Awards of equity-based compensation encourage executives to focus on long-term growth and are tied to the interests of shareholders.
Summary of 2021 Named Executive Officer Compensation.

In 2021, we paid each of our named executive officers cash compensation for services provided by the officers to us and our clients. The cash compensation comprised base salary and discretionary cash bonus.

We did not provide guaranteed cash bonuses to our named executive officers during 2021 and did not set specific performance targets on which bonuses would be payable to them. Instead, the annual cash bonuses we paid to our named executive officers in 2021 were based on a performance evaluation conducted by our Managing Director, President and Chief Executive Officer regarding the other executive officers’ performances. These evaluations were presented to our Compensation Committee, and our Compensation Committee also evaluated our Managing Director, President and
1
For 2021, we have provided compensation disclosure for all six of our executive officers, rather than just for the five executive officers required under applicable SEC rules.
 
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2022 Proxy Statement   23

 
Chief Executive Officer’s performance. The ongoing impact of the COVID-19 pandemic on our business and our improved financial performance were considered in determining increases in base salary payments and cash bonuses.

As part of these considerations, we awarded 10,000 Class A Common Shares with a grant date fair value of $338,000 to Mr. Portnoy, and 5,000 Class A Common Shares to each of Messrs. Jordan, Murray and Pertchik and Mses. Clark and Francis with a grant date value of $169,000.

Our named executive officers also received equity awards from our clients, and Mr. Pertchik, TA’s Managing Director and Chief Executive Officer, also received cash compensation from TA. These equity awards and cash compensation are determined by the compensation committees of the applicable client, which are comprised solely of independent board members.
Named Executive Officer Compensation Philosophy and Process.
The key principle of our compensation philosophy for all employees, including our named executive officers, is to pay for performance. We maintain a rigorous and thorough talent and compensation review process to ensure that our employees are in appropriate roles that maximize their full potential. This process also ensures that there is strong leadership guiding employees and that there is a succession and development plan for each role. Our goal is to make employee and leadership development an integral part of our culture, supporting each employee and our and our clients’ continued success.
Our named executive officer compensation planning process incorporates key areas of evaluation, including:

external market data;

internal benchmarking; and

quantitative and qualitative assessments of our company, group and individual performance.
Named Executive Officer Compensation Practices. Our pay for performance compensation philosophy is reflected in our compensation practices, which for 2021 included the following:

No guaranteed salary increases or guaranteed cash bonuses

No specific performance targets on which bonuses would be paid

No specific incentive or additional performance awards for growing assets under management or for exceeding return benchmarks

No excessive perquisites

No tax gross-ups

Annual assessment of named executive officer compensation against peer companies and best practices

Holistic performance evaluations

Annual salary cap
Components of the Named Executive Officers’ Compensation. Our executive compensation program includes an annual base salary, a cash bonus and an equity award. In addition to the Class A Common Shares we award to our named executive officers, our named executive officers also receive equity awards from our clients, and Mr. Pertchik received cash compensation from TA. These equity awards and cash compensation are determined by the compensation committees of the applicable client, which are comprised solely of independent board members. The cash bonuses we pay to our named executive officers are discretionary in amount and are based on a performance evaluation. The evaluation involves an analysis of both (i) our overall performance and the overall performance of our clients, and (ii) the performance of the individual officer and his, her or their contributions, and services provided, to us and our clients. We believe this evaluation process allows us to link pay with performance in the closest way possible and provides us with the flexibility necessary to take all relevant factors into account in determining the bonus amounts, including the named executive officer’s ability to react to changing circumstances that impact our business and the businesses of our clients, including this year, the ongoing impact of the COVID-19 pandemic on our business.
 
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We also annually award Class A Common Shares to our named executive officers. One fifth of the shares awarded vests on the award date and an additional one fifth vests on each of the next four anniversaries of the award date, subject to the named executive officer continuing to render significant services to us or to one of our clients and to accelerated vesting under certain circumstances. The table below describes the objectives supported by each of our primary compensation elements, along with an overview of the key design features of each element.
Compensation Element
What It Does
Key Measures
Base Salary

Provides a level of fixed pay appropriate to an executive’s role and responsibilities

Evaluated on an annual basis

Experience, duties and scope of responsibility

Internal and external market factors
Discretionary Cash Bonus

Provides a competitive annual cash incentive opportunity

Links executives’ interests with shareholders’ interests

Incentivizes and rewards superior group, individual and Company performance

Based on holistic performance evaluation
Equity Compensation

Links executives’ interests with long-term interests of shareholders

Incentivizes and rewards superior group, individual and Company performance

Based on holistic performance evaluation by our Compensation Committee
Named Executive Officer Pay Mix. Our compensation program is designed so that the majority of compensation is performance based to promote alignment of our named executive officers’ interests with those of our shareholders, our clients and their shareholders.
The base salary payments of our named executive officers (which represent the fixed portion of their compensation packages) are reviewed annually and may be adjusted as we deem appropriate. We historically adjust salary payments on October 1, the first day of our fiscal year. During 2021, each of our named executive officers, other than Mr. Pertchik, received a base salary of $350,000. Mr. Pertchik received a base salary of $375,000, of which we paid $75,000 and TA paid $300,000.
Our Compensation Committee considers a number of factors in determining bonus compensation, including our and our clients’ overall financial performance. For fiscal year 2021, our Compensation Committee considered the increases in our management and advisory services revenues and our assets under management as well as certain significant transactions by our clients (collectively, the “Client Company Transactions”) in which our named executive officers played a significant role. For example, our Compensation Committee considered among others (i) Sonesta International Hotels Corporation’s completion of its acquisition of RLH Corporation, its emergence as one of the largest hotel companies and its expansion of its franchising capabilities, (ii) Tremont Mortgage Trust’s (“TRMT”) merger with and into RMR Mortgage Trust (“RMRM”) to form Seven Hills Realty Trust (“SEVN”), a larger, more diversified mortgage REIT with a more expanded capital base than its predecessor companies, (iii) significant transitions in the business relationships between Diversified Healthcare Trust (“DHC”) and Five Star Senior Living Inc. (“FVE”) and among Service Properties Trust (“SVC”) and its hotel managers and (iv) significant acquisitions and dispositions by our clients.
We also awarded Class A Common Shares to each of our named executive officers for 2021 as described above.
Because the year-end bonus is discretionary and based on a number of factors, there is no pre-set pay mix that applies to the compensation of our named executive officers as a whole.
 
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Overview of 2021 Compensation Actions
Our Compensation Committee evaluated and administered our executive compensation program. This evaluation typically includes an assessment of our and our clients’ performance, the effectiveness of existing programs in achieving the goals of the program, developments in our business situation and goals, executive compensation best practices, tax and accounting considerations and other factors as our Compensation Committee determines appropriate to consider from time to time. As part of this evaluation, our Compensation Committee received input from our President and Chief Executive Officer (with respect to executives other than himself).
These evaluations also typically include an assessment of the risk associated with the program and each element thereof and also take into account developments in the overall market for executive talent. Our Compensation Committee does not engage in any formal compensation benchmarking, but does take note of compensation practices and trends from an identified peer group of companies in making its decisions. For fiscal 2021, the peer group of companies which informed Compensation Committee decisions consisted of the following: Apollo Global Management, Inc., Ares Management Corporation, The Blackstone Group Inc., The Carlyle Group Inc. and KKR & Co. Inc.
Our Compensation Committee also does not have rules or policies with respect to allocation of compensation to short or long term vehicles or as between cash or non-cash elements of compensation; such determinations are made by our Compensation Committee on a discretionary basis under the facts and circumstances applicable from time to time.
In September 2021, the Chair of our Compensation Committee met with our Managing Director, President and Chief Executive Officer, Adam Portnoy, and the chairs (and expected, and later future, chair in the case of SEVN) of the compensation committees of our public clients, which included: DHC; Industrial Logistics Properties Trust (“ILPT”); Office Properties Income Trust (“OPI”); SVC; SEVN; FVE; and TA. The purposes of this meeting were, among other things, to discuss compensation philosophy and factors that may affect compensation decisions, to discuss the base salaries of our executive officers for the fiscal year 2022, to consider the compensation payable to our Director of Internal Audit (who provides services to us and to our clients), to consider the allocation of internal audit and related services costs among us and our clients, to provide a comparative understanding of potential share awards by us and our clients and to hear and consider our recommendations and those from our clients concerning potential share awards and the vesting of those shares, which were in part based on the results of our review of current market practices with respect to executive compensation, and specifically of our and our clients’ peer groups, and shareholder feedback received during shareholder outreach with respect to the percentage of executive officer compensation received in share awards. The share awards made by our clients are considered to be appropriate comparisons because of the similarities between certain services we require from our share awardees and the services provided by awardees providing similar services to our clients. Subsequent to this meeting, the members of our Compensation Committee held a meeting at which our Compensation Committee Chair provided a report of the information discussed with Mr. Portnoy and others, and made recommendations for share awards to our named executive officers. Our Compensation Committee then discussed these recommendations and other factors, including the following factors for the 2021 share awards: (i) the value of the proposed share awards; (ii) the historical awards previously awarded to these named executive officers and the corresponding values at the time of the awards; (iii) our recommendations as presented by Mr. Portnoy; (iv) the value of share awards to executive officers providing comparable services at our public clients; (v) the scope of, and any changes to, the responsibilities assigned to, or assumed by, these named executive officers during the past year and on a going forward basis; (vi) the length of historical services by these named executive officers; (vii) our Compensation Committee’s assessment of the quality of the services provided by these named executive officers in carrying out those responsibilities; and (viii) our financial and operating performance in the past year and our perceived future prospects. Our Compensation Committee considered these multiple factors in determining whether to increase or decrease the amounts of the prior year’s awards. There was no formulaic approach in the use of these various factors in determining the number of shares to award to each named executive officer. The share amounts we awarded were determined by our Compensation Committee on a discretionary basis, using the various factors. The named executive officers did not participate in these meetings and were not involved in determining or recommending
 
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the amount or form of compensation they received from us. The share amounts awarded by our clients were determined by their compensation committees.
Analysis of 2021 Cash Compensation
As discussed above, our compensation program is designed so that the majority of compensation is performance based to promote alignment of our named executive officers’ interests with those of our shareholders. Our Compensation Committee determines the cash compensation of our executive officers who do not also receive cash compensation from our clients. Mr. Pertchik’s cash compensation is determined by the TA compensation committee, and we pay a portion of this amount.
Base Salary. The base salary payments for our named executive officers (which represents the fixed portion of their compensation packages) are reviewed annually and may be adjusted as we deem appropriate. We have historically set annual caps on annual base salary for our executive officers who do not also receive cash compensation from our clients, with a cap for fiscal year 2021 of $350,000. We historically adjust salary payments on October 1, the first day of our fiscal year. Each of our named executive officers, other than Mr. Pertchik, received an annual base salary of $350,000. Mr. Pertchik received a base salary of $375,000, of which we paid $75,000 and TA paid $300,000. These annual base salary levels are consistent with our pay for performance philosophy, which emphasizes “at risk” compensation as a larger proportion of named executive officer compensation. On an aggregated basis, in 2021, our named executive officers received 14.6% of their total cash compensation in the form of base salary payments and the remaining 85.4% in the form of performance-based discretionary bonuses. The foregoing amounts exclude cash compensation TA paid to Mr. Pertchik.
Annual Cash Bonuses. Annual cash bonuses are a key component of our named executive officer compensation and represented the majority of compensation we paid to each of our named executive officers for our 2021 fiscal year. We did not provide guaranteed cash bonuses to any of our named executive officers for fiscal year 2021 and did not set specific performance targets on which bonuses would be payable. Instead, the annual cash bonuses we paid to our named executive officers with respect to fiscal year 2021 were discretionary in amount and were based on a performance evaluation conducted by our Compensation Committee. The evaluation by our Compensation Committee involved an analysis of both (i) our and our clients’ overall performance and (ii) the performance of the individual officer and his, her or their contributions to us and our clients. We believe this evaluation process allowed us to link pay with performance in the closest way possible and provided us with the flexibility necessary to take all relevant factors into account in determining the bonus amounts, including our named executive officers’ ability to react to changing circumstances that impact our businesses and that of our clients.
We believe our compensation process provided us with a better compensation structure than a formulaic bonus structure based solely on the achievement of specific pre-established performance targets which may not capture all appropriate factors that materially impacted our clients or the individual named executive officer’s performance. In fiscal 2020, we did not increase bonus compensation for our named executive officers in recognition of the market instability and economic crisis brought on by the COVID-19 pandemic. In fiscal 2021, we increased bonus compensation as compared to fiscal 2020 in recognition of our and our clients’ improved financial performance, the efforts of our executive officers through the COVID-19 pandemic and other accomplishments, including the Client Company Transactions. With respect to fiscal 2021, we paid aggregate performance based discretionary cash bonuses of $10,700,000 to Messrs. Portnoy, Jordan, Murray and Pertchik and Mses. Clark and Francis (the specific amounts of which are set forth in the Summary Compensation Table).
Analysis of 2021 Equity Awards
The RMR Group Inc.’s 2016 Omnibus Equity Plan (the “2016 Equity Plan”) rewards our named executive officers and other employees and aligns their interests with those of our shareholders and the shareholders of our clients. We award shares under our 2016 Equity Plan to recognize our named executive officers’ scope of responsibilities, reward demonstrated performance and leadership, motivate future performance, align the interests of our executives with those of our other shareholders and motivate our executives to remain our employees and to continue to provide services to us through the term of the awards.
 
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Under its charter, our Compensation Committee evaluates, approves and administers our equity compensation plans, including our 2016 Equity Plan. Our Compensation Committee has historically determined to use awards of Class A Common Shares under the 2016 Equity Plan rather than seek to issue stock options as equity compensation. We believe that the use of share awards vesting over time rather than stock options mitigates the incentives for our management to undertake undue risks and encourages management to make long term and appropriately risk balanced decisions.
Our Compensation Committee also considers the equity awards granted to our named executive officers by our public clients in determining the appropriate award of Class A Common Shares to our named executive officers. In 2021, our Compensation Committee considered the foregoing factors and decided to award an aggregate of 35,000 Class A Common Shares to our named executive officers which represents the same amount of Class A Common Shares as was awarded to each of the respective officers in 2020, other than to Ms. Francis who received an award of 2,000 Class A Common Shares in 2020 and an award of 5,000 Class A Common Shares in 2021; we promoted Ms. Francis to an executive officer position as of October 1, 2020, the beginning of our 2021 fiscal year.
Our Compensation Committee has imposed, and may impose, vesting and other conditions on the awarded Class A Common Shares because it believes that time based vesting encourages the recipients of the share awards to remain employed by us and to continue to provide services to us. Our Compensation Committee currently uses a vesting schedule under which one fifth of the shares vest immediately and the remaining shares vest in four equal, consecutive annual installments commencing on the first anniversary of the date of the award. Our Compensation Committee utilizes a four year time based vesting schedule to provide an incentive to provide services for a long term and in consideration of the tax treatment of the share awards to us and to the recipients. In the event a recipient who received a share award ceases to perform duties for us or ceases to be our officer or employee or an officer or employee of one of our clients during the vesting period, we may cause the forfeiture of the Class A Common Shares that have not yet vested. As with other issued Class A Common Shares, vested and unvested shares awarded under our 2016 Equity Plan are entitled to receive distributions that we make, if any, on the Class A Common Shares.
Because the consideration of share awards by our Compensation Committee is determined on a regular schedule (i.e., in September for our officers and employees and at the first meeting of our Board after the annual meeting of shareholders for the Directors), any proximity of any awards to earnings announcements or other market events is coincidental.
Our Compensation Committee believes that its compensation philosophy and programs are designed to foster a business culture that aligns the interests of our named executive officers with those of our shareholders. Our Compensation Committee believes that the equity compensation of our named executive officers is appropriate to the goal of providing shareholders dependable, long term returns.
Employment Agreements; Severance Arrangements
We have no employment agreements with our named executive officers or any of our other employees. Awards of restricted shares of our Class A Common Shares to our named executive officers provide for accelerated vesting in the event of certain termination and change in control events (as defined in the applicable award documentation). Our Compensation Committee has determined that such provisions are consistent with market practice and appropriate to further its goals of recruitment and retention.
Accounting and Tax Considerations
Our Compensation Committee takes note of the tax and accounting consequences of the compensation program for our named executive officers; however, those consequences do not dictate our Compensation Committee’s decisions, which are instead based on our Compensation Committee’s view of our overall best interests.
 
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REPORT OF OUR COMPENSATION COMMITTEE
Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, our Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Annual Report on
Form 10-K for the year ended September 30, 2021.
Walter C. Watkins, Jr., Chair
Ann Logan
Rosen Plevneliev
Jonathan Veitch
 
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EXECUTIVE COMPENSATION
The following tables and footnotes summarize the total compensation of our named executive officers. For 2021, we have provided compensation disclosure for all six of our executive officers, rather than just for the five executive officers required under applicable SEC rules. The compensation set forth below includes compensation paid by us and equity awards made by our public clients to our named executive officers, as well as noting the cash compensation TA paid to Mr. Pertchik. For further information regarding the compensation paid by us to our named executive officers, please see the above “Compensation Discussion and Analysis” section.
Summary Compensation Table
Name and
Principal Position
Fiscal
Year
Salary ($)
Bonus ($)(1)
Stock
Awards ($)(2)
All Other
Compensation ($)(3)
Total ($)
Adam Portnoy
Managing Director, President and Chief Executive Officer
2021 350,000 2,700,000 1,052,505 171,576 4,274,081
2020 350,000 2,675,000 693,330 38,683 3,757,013
2019 325,000 2,675,000 914,465 31,891 3,946,356
Jennifer B. Clark
Managing Director, Executive Vice President, General Counsel and Secretary
2021 350,000 2,700,000 1,554,885 156,363 4,761,248
2020 350,000 2,675,000 1,091,920 97,096 4,214,016
2019 325,000 2,675,000 1,432,925 107,727 4,540,652
John G. Murray
Executive Vice President
2021 350,000 2,100,000 1,543,130 160,397 4,153,527
2020 350,000 2,000,000 1,218,325 91,712 3,660,037
2019 325,000 2,000,000 1,557,953 67,919 3,950,872
Matthew P. Jordan
Executive Vice President, Chief Financial Officer and Treasurer
2021 350,000 1,800,000 1,186,840 150,569 3,487,409
2020 350,000 1,300,000 900,980 74,379 2,625,359
2019 325,000 1,300,000 1,112,958 42,646 2,780,604
Jennifer F. Francis
Executive Vice President
2021 350,000 1,000,000 1,259,980 56,980 2,666,960
Jonathan M. Pertchik(4)
Executive Vice President
2021 75,000 400,000 2,797,120 53,600 3,325,720
(1)
The amounts listed in this column represent the annual cash bonuses to each of the named executive officers. The bonuses are described in more detail above in “Analysis of 2021 Cash Compensation—Annual Cash Bonuses.”
(2)
The value included for awards made by us of the Class A Common Shares and awards made by our public clients to our named executive officers represents the grant date fair value of shares compiled in accordance with ASC 718. No assumptions were used in this calculation. Awards made by us were made pursuant to the 2016 Equity Plan. Awards made by our public clients were made pursuant to the applicable client’s equity compensation plan. Class A Common Shares we awarded to Adam Portnoy and Jennifer Clark in their capacities as Managing Directors vested at the time of award. For other awards, one fifth of a share award vested on the date of the award and an additional one fifth vests on each of the next four anniversaries of the initial award date, subject to the applicable named executive officer continuing to render significant services, whether as our employee or otherwise, to us or our public clients and to accelerated vesting under certain circumstances. Holders of shares awarded pursuant to these awards receive any distributions on common shares paid by us or the applicable client on the same terms as other holders of our or the client’s common shares, as applicable.
The amounts presented in this column include shares of our clients awarded to our named executive officers for services as a managing trustee, managing director or named executive officer of a client.
(3)
We maintain a savings plan for eligible employees under section 401(k) of the Internal Revenue Code, or 401(k) plan, in which our named executive officers participate, and provide annual discretionary matching contributions to plan participants. The amounts listed in this column include matching contributions we made to each named executive officer in respect of their participation in our 401(k) plan. The amounts listed in this column also include distributions received on unvested awards of our Class A Common Shares and on unvested awards of common shares of our applicable public clients.
(4)
Mr. Pertchik serves as the President and Chief Executive Officer of TA and 80% of his annual cash compensation is paid by TA, and we pay the remainder. This arrangement is described in more detail above in “Compensation Overview” and “Analysis of 2021 Cash Compensation.” The cash compensation listed in this table are the amounts we paid to Mr. Pertchik and do not include the cash compensation TA paid to him. The amounts listed in this table also do not include relocation expenses paid by TA to Mr. Pertchik or matching contributions made by TA to Mr. Pertchik with respect to his participation in TA’s 401K plan.
 
30   THE RMR GROUP INC.
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2022 Proxy Statement

 
The following table shows the total shares awarded by us and our public clients to our named executive officers, including for services as a managing trustee, managing director or named executive officer of a client, in fiscal year 2021, including vested and unvested portions of each award.
Name
Company
Grant
Date
Number of
Shares (#)
Grant Date Fair Value of
Share Awards ($)(a)
Adam Portnoy
RMR
9/15/2021 10,000 338,000
RMR
3/11/2021 3,000(b) 128,550
DHC
6/3/2021 20,000(b) 74,000
ILPT
6/2/2021 3,500(b) 89,670
OPI
6/17/2021 3,500(b) 104,580
SVC
6/16/2021 7,000(b) 97,580
FVE
6/8/2021 12,500(b) 76,875
TA
6/10/2021 3,000(b) 88,620
SEVN
5/27/2021 3,000(b) 36,300
TRMT(c)
5/27/2021 3,000(b) 18,330
1,052,505
Jennifer B. Clark
RMR
9/15/2021 5,000 169,000
RMR
3/11/2021 3,000(b) 128,550
DHC
9/15/2021 40,000 136,400
ILPT
9/15/2021 10,000 259,800
OPI
9/15/2021 15,000 381,300
OPI
6/17/2021 3,500(b) 104,580
SVC
9/15/2021 20,000 216,400
FVE
6/8/2021 12,500(b) 76,875
FVE
12/14/2020 2,000 15,700
TA
12/2/2020 2,000 66,280
1,554,885
John G. Murray
RMR
9/15/2021 5,000 169,000
DHC
9/15/2021 40,000 136,400
ILPT
9/15/2021 15,000(b) 389,700
ILPT
6/2/2021 3,500(b) 89,670
OPI
9/15/2021 10,000 254,200
SVC
9/15/2021 30,000(b) 324,600
SVC
6/16/2021 7,000(b) 97,580
FVE
12/14/2020 2,000 15,700
TA
12/2/2020 2,000 66,280
1,543,130
Matthew P. Jordan
RMR
9/15/2021 5,000 169,000
DHC
9/15/2021 40,000 136,400
ILPT
9/15/2021 10,000 259,800
OPI
9/15/2021 10,000 254,200
SVC
9/15/2021 20,000 216,400
FVE
12/14/2020 2,000 15,700
TA
12/2/2020 2,000 66,280
SEVN
5/27/2021 3,000(b) 36,300
TRMT(c)
2/19/2021 3,000(b) 14,430
TRMT(c)
5/27/2021 3,000(b) 18,330
1,186,840
Jennifer F. Francis
RMR
9/15/2021 5,000 169,000
DHC
9/15/2021 60,000(b) 204,600
DHC
6/3/2021 20,000(b) 74,000
ILPT
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