DEF 14A of Diversified Healthcare Trust
Filed Mar 19, 2026 · FY20250001104659-26-032082
NOTICE OF 2026 ANNUAL MEETING OF SHAREHOLDERS OF DIVERSIFIED HEALTHCARE TRUST
| Summary Compensation Table | 41 | | 2025 Grants of Plan Based Awards | 41 | | 2025 Outstanding Equity Awards at Fiscal Year End | 42 | | 2025 Stock Vested | 42 | | Potential Payments upon Termination or Change in Control | 43 | | Pay Ratio | 43 | | Pay Versus Performance | 43 | | PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS | 47 | | Audit Fees and All Other Fees | 47 | | Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors | 48 | | Other Information | 48 | | REPORT OF OUR AUDIT COMMITTEE | 49 | | FREQUENTLY ASKED QUESTIONS | 50 | | RELATED PERSON TRANSACTIONS | 55 | | WARNING CONCERNING FORWARD-LOOKING STATEMENTS | 56 | | OTHER INFORMATION | 57 | | ANNEX A—CERTAIN RELATED PERSON TRANSACTIONS | A-1 |
SHOP Managers
SASB Accounting Metric Code: IF-RE-130a.5: Energy management integration discussion. RMR deploys on our behalf energy management best practices at our Office Portfolio, which include: ○ Centralized utility bill processing and payment system; ○ ENERGY STAR® benchmarking and certifications; ○ Real-time energy monitoring; ○ Daytime and nighttime energy audits; ○ Light Emitting Diodes lighting upgrades; ○ Annual energy engagement competitions; ○ Energy performance training for property operations teams; ○ Utilize green lease language, where possible, to promote mutual commitment to environmentally friendly practices and operational efficiencies with our tenants; ○ Energy performance review for end-of-life HVAC equipment replacements; and ○ Exposure to and compliance with Building Performance Standards (“BPS”) laws. As a result of these energy management efforts, we have reduced energy and water usage helping to generate both economic and environmental benefits. Some cities and states in which we own properties require annual whole-building energy and water use disclosure or achieving certain energy or emissions performance standards. In these jurisdictions, RMR engages with tenants to collect and report any direct tenant-paid energy and water consumption and with operators to request compliance documentation. RMR’s programs also aid in complying with BPS by actively seeking out cost effective ways to reduce energy and emissions across properties managed by them and where tenants directly manage energy. SASB Accounting Metric Code: IF-RE-140a.4: Water management integration discussion. On our behalf, RMR supports water management practices at our Office Portfolio that reduce operating costs as well as our impact on the consumption of natural resources. Water usage is managed by benchmarking water performance to establish a baseline and to measure performance improvements resulting from conservation measures. Water benchmarking is performed through the EPA’s ENERGY STAR® Portfolio Manager online platform. Some cities and states in which we own properties require annual whole-building energy and water use disclosure. In these jurisdictions, RMR engages with tenants to collect and report any direct tenant-paid energy and water consumption for our Office Portfolio. RMR also routinely implements water efficiency and water use reduction projects for our Office Portfolio, which include upgrades to indoor plumbing fixtures, low-flow water closets and urinals, low-flow flush valves, low-flow automatic faucet controls, low-flow faucet aerators and shower heads, water-efficient landscaping, cooling tower water management and leak detection and notification. SASB Accounting Metric Code: IF-RE-410a.3: Description of approach to measuring, incentivizing, and improving sustainability impacts of tenants. On our behalf, RMR seeks to provide best-in-class Office Portfolio operations and healthy, efficient environments for our tenants and encourage continual engagement that promotes long lasting relationships and sustainable behaviors.
Board of Trustees’ Qualifications and Experience
Board of Trustees’ Qualifications and Experience Our Trustees have a great diversity of experience and bring to our Board a wide variety of skills, qualifications, viewpoints and backgrounds that strengthen their ability to carry out their oversight role on behalf of our shareholders.
Board of Trustees’ Qualifications and Experience
| SKILLS AND EXPERIENCES | | | Risk oversight/management expertise | Familiarity with the public capital markets | | Accounting and finance experience, including a high level of financial literacy and understanding of the impact of financial market trends on the real estate industry | Knowledge of the asset management industry, commercial real estate (“CRE”) industry and real estate investment trusts (“REITs”), including medical office, life sciences and senior living markets | | Corporate Governance | Understanding of healthcare policy, trends and regulations, and medical office, life science and healthcare business trends | | Sustainability | Service on other public company boards and committees | | Experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing | |
Board of Trustees’ Qualifications and Experience
| CORE QUALIFICATIONS AND EXPERIENCES | | | High standards of integrity and ethics | Wide ranging perspectives, backgrounds and experiences, including professional background and skills | | Business acumen, practical wisdom, ability to exercise sound judgment in a congenial manner and ability to make independent analytical inquiries | Commitment 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 | | Strong record of achievements, including work experience with a proven record of success | |
Board of Trustees’ Qualifications and Experience
| 18 | | 2026 Proxy Statement |
Snapshot of 2026 Board Nominees
Snapshot of 2026 Board Nominees Presented below is a snapshot of the expected composition of our Board immediately following our 2026 Annual Meeting, assuming the election of our Trustee nominees. Our Board of Trustees believes that, collectively, our Trustees exhibit an effective mix of qualifications and experience. A plurality of all the votes cast is required to elect a Trustee at our 2026 Annual Meeting. The names, principal occupations and certain other information regarding our Trustee nominees that led our Nominating and Governance Committee and our Board to conclude that such persons are qualified to serve as Trustees are set forth on the following pages. Our Board of Trustees recommends a vote of “FOR ALL” for the election of all Trustee nominees.
Snapshot of 2026 Board Nominees
| | 2026 Proxy Statement | 19 |
Fiscal Year 2025 Trustee Compensation
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | All Other Compensation ($) | Total ($) | | Christopher J. Bilotto(3) | — | 95,000 | — | 95,000 | | Alan Felder(4) | 101,301 | 185,000 | — | 286,301 | | John L. Harrington(5) | — | — | — | — | | Lisa Harris Jones | 102,500 | 95,000 | — | 197,500 | | Phyllis M. Hollis | 100,000 | 95,000 | — | 195,000 | | Dawn K. Neher | 105,000 | 95,000 | — | 200,000 | | Adam Portnoy(3) | — | 95,000 | — | 95,000 | | Jeffrey P. Somers | 110,000 | 95,000 | — | 205,000 |
Compensation Overview
RMR’s named executive officer compensation planning process incorporates key areas of evaluation, including: • external market data; • internal benchmarking; and • quantitative and qualitative assessments of Company, group and individual performance. Named Executive Officer Compensation Practices. RMR’s pay for performance compensation philosophy is reflected in its compensation practices, including: • no guaranteed salary increases or guaranteed cash bonuses; • no specific performance targets on which bonuses would be paid; • no 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; and • annual salary cap. Components of the Named Executive Officers’ Compensation. RMR’s compensation program includes a base salary and a cash bonus. The cash bonuses RMR pays to our named executive officers are discretionary in amount and are based on a performance evaluation. The evaluation involves an analysis of both (i) the overall performance of RMR, our Company and the other RMR Clients, and (ii) the performance of the individual officer and his or her contributions, and services provided, to RMR, our Company and the other RMR Clients. RMR believes this evaluation process allows RMR to link pay with performance in the closest way possible and provide RMR 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 the businesses of RMR, our Company and the other RMR Clients. RMR Inc. also awards shares of Class A common stock of RMR Inc. to our named executive officers. One fifth of the shares awarded vested on the award date and an additional one fifth are scheduled to vest on each of the next four anniversaries of the award date, subject to the applicable named executive officer continuing
Analysis of 2025 Awards under the Share Award Plan
like ours, but a share award plan may create a better identity of interests between management and other shareholders. We also believe an option plan could have the potential to encourage excessive short term risk taking. Our Compensation Committee uses comparative information about the Other RMR Managed REITs as additional data to help it determine whether it is awarding share amounts that are reasonable based on the characteristics of those REITs and their respective officers. Our Compensation Committee also considers the size and structure of the applicable Other RMR Managed REITs and the other RMR Clients, and the experience, length of service and scope of duties and responsibilities of the officers at these other companies to assess the appropriateness of the value of the share awards proposed for our officers in light of the proposed awards for officers with comparable roles at the other companies. Our Compensation Committee reviewed the compensation data regarding the applicable Other RMR Managed REITs and their officers, together with the other factors discussed above in “Overview of 2025 Compensation Actions,” but our Compensation Committee did not undertake a detailed comparison of the named executive officers across the applicable Other RMR Managed REITs or the other RMR Clients or assign weight to any particular characteristic of these other companies or their officers because our Compensation Committee determines the share amounts in its sole discretion on a non-formulaic basis. In 2025, our Compensation Committee considered the foregoing factors and the factors set forth above in “Overview of 2025 Compensation Actions” and determined to increase the dollar value of the prior year’s award of Common Shares to Messrs. Bilotto and Brown for the 2025 award. We also considered Messrs. Bilotto and Brown’s level of performance and length of service to us in determining their awards. Messrs. Bilotto and Brown’s share awards were made in accordance with the recommendation of RMR and the Chair of our Compensation Committee. For fiscal year 2025, we awarded $350,000 in value of our Common Shares based on the closing share price on the award date, rounded down to the nearest whole number, to Mr. Bilotto and $160,000 in value of our Common Shares (also rounded down to the nearest whole number) to Mr. Brown. Accordingly, Mr. Bilotto received 81,775 Common Shares with an award date fair value of $349,997, and Mr. Brown received 37,383 Common Shares with an award date fair value of $159,999. We determine the fair market value of the shares awarded based on the closing price of our Common Shares on the date of the award. Our Compensation Committee has imposed, and may impose, vesting and other conditions on the awarded Common Shares because it believes that time based vesting encourages the recipients of the share awards to remain employed by RMR 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 render significant services, whether as an employee or otherwise, to us, RMR or any RMR Client or their respective affiliates during the vesting period, we may cause the forfeiture of our Common Shares that have not yet vested. As with other issued Common Shares, vested and unvested shares awarded under our Share Award Plan are entitled to receive distributions that we make, if any, on our Common Shares. Our Share Award Plan provides that share awards vest upon the occurrence of certain corporate “change in control” or termination events. We award our Common Shares annually to our officers and to other employees of RMR who provide services to us. We do not take into account material non-public information when determining the timing or terms of our annual awards of Common Shares, nor do we time disclosure of material non-public information for the purpose of affecting the value of such awards. Because the consideration of our annual share awards by our Compensation Committee and our Board is determined on a regular schedule (i.e., in September for our officers and employees of RMR and at the first meeting of our Board after the annual meeting of shareholders for our Trustees), any proximity of any awards to earnings announcements or other market events is coincidental. We do not currently grant options as part of our equity compensation for our named executive officers. 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.
Summary Compensation Table
Summary Compensation Table
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus | Stock Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Christopher J. Bilotto(3)(4) President and Chief Executive Officer | 2025 | — | — | 444,997 | 3,523 | 448,520 | | | 2024 | — | — | 339,997 | 1,611 | 341,608 | | Matthew C. Brown(3) Chief Financial Officer and Treasurer | 2025 | — | — | 159,999 | 2,138 | 162,137 | | | 2024 | — | — | 134,998 | 1,360 | 136,358 | | | 2023 | — | — | 34,950 | 1,030 | 35,980 |
Summary Compensation Table
(1) Represents the award date fair value of Common Share awards in 2025, 2024 and 2023, as applicable, calculated in accordance with 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. The values listed in this column for Mr. Bilotto include the value of 29,141 Common Shares awarded to him in his capacity as a Managing Trustee in 2025 and 37,037 Common Shares awarded to him in his capacity as a Managing Trustee in 2024. Mr. Bilotto was first elected as a Managing Trustee in May 2024 and was elected President and Chief Executive Officer, effective January 1, 2024. (2) Consists of cash distributions in the applicable year on unvested Common Shares received in connection with cash distributions we paid to all of our shareholders. We pay no cash compensation to our executive officers. As noted above, our named executive officers are employees of, and are paid by, RMR for their service as our executive officers (other than the awards of Common Shares described in this Proxy Statement for their service as our executive officers, or with respect to Mr. Brown in 2023, for his service as an officer of RMR). (3) Our named executive officers are officers and employees of RMR, and as officers and employees of RMR, also provide services to RMR and RMR Clients. In 2025, our named executive officers received aggregate base salary payments of $750,000 and Messrs. Bilotto and Brown received aggregate cash bonuses of $1,439,000 from RMR for services those officers provided to RMR, our Company and the other RMR Clients. (4) Only two years of information has been provided for Mr. Bilotto because he was not a named executive officer prior to 2024.
2025 Grants of Plan Based Awards
2025 Grants of Plan Based Awards The following table shows the total Common Shares awarded by us to our named executive officers in their capacity as our executive officers in 2025.
2025 Grants of Plan Based Awards
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(1) | | Christopher J. Bilotto | 9/9/2025 | 81,775 | 349,997 | | Matthew C. Brown | 9/9/2025 | 37,383 | 159,999 |
2025 Grants of Plan Based Awards
Equals the number of Common Shares awarded multiplied by the closing price on the date of the award, which is also the grant date fair value under ASC 718. No assumptions were used in this calculation.
2025 Grants of Plan Based Awards
| | 2026 Proxy Statement | 41 |
2025 Outstanding Equity Awards at Fiscal Year End
2025 Outstanding Equity Awards at Fiscal Year End The agreements governing the Common Shares we awarded to our named executive officers in 2025 (and prior years) provide that one fifth of each award vested on the date of the award and an additional one fifth vests on each of the next four anniversaries of the award date, subject to the applicable named executive officer continuing to render significant services, whether as an employee or otherwise, to us, RMR or any RMR Client or their respective affiliates and to accelerated vesting under certain circumstances. Holders of vested and unvested Common Shares awarded under our Share Award Plan receive distributions that we make, if any, on our shares on the same terms as other holders of the Common Shares. The following table shows the total Common Shares awarded by us in 2025 and prior years to our named executive officers that were unvested as of December 31, 2025.
2025 Outstanding Equity Awards at Fiscal Year End
| | | Stock Awards | | | Name | Year Granted | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Christopher J. Bilotto(3) | 2025 | 65,420 | 317,287 | | | 2024 | 44,775 | 217,159 | | | 2023 | 6,000 | 29,100 | | | 2022 | 3,000 | 14,550 | | Matthew C. Brown(4) | 2025 | 29,906 | 145,044 | | | 2024 | 24,178 | 117,263 | | | 2023 | 6,000 | 29,100 | | | 2022 | 3,000 | 14,550 |
2025 Outstanding Equity Awards at Fiscal Year End
(1) The form of award agreement provides for vesting of the Common Shares in five equal annual installments beginning on the date of the award. The Common Shares awarded in 2025, 2024, 2023 and 2022 were awarded on September 9, 2025, September 11, 2024, September 13, 2023 and September 14, 2022, respectively. (2) Equals the number of Common Shares not vested multiplied by the closing price of the Common Shares on December 31, 2025. (3) Mr. Bilotto was elected as our President and Chief Executive Officer, effective January 1, 2024. The Common Shares awarded to Mr. Bilotto in 2023 and prior years were awarded to him in his capacity as an officer and employee of RMR before becoming an executive officer of our Company. (4) Mr. Brown was elected as our Chief Financial Officer and Treasurer, effective October 1, 2023. The Common Shares awarded to Mr. Brown in 2023 and prior years were awarded to him in his capacity as an officer and employee of RMR before becoming an executive officer of our Company.
2025 Stock Vested
2025 Stock Vested The following table shows Common Share awards made in 2025 and prior years to our named executive officers that vested in 2025.
2025 Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Christopher J. Bilotto(2)(3) | 40,280 | 177,600 | | Matthew C. Brown(3) | 24,537 | 108,503 |
2025 Stock Vested
(1) Equals the number of vesting Common Shares multiplied by the closing price on the dates that such Common Shares vested in 2025. (2) The number of Common Shares shown in the table does not include Common Shares awarded to Mr. Bilotto in his capacity as a Managing Trustee. The Common Shares awarded to Messrs. Bilotto and Brown in 2023 and prior years were awarded to them in their capacity as officers and employees of RMR.
2025 Stock Vested
| 42 | | 2026 Proxy Statement |
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control Our Share Award Plan and the form of share award agreement for awards made to our named executive officers provides for acceleration of vesting of all share awards upon the occurrence of certain change in control or termination events (each, a “Termination Event”). The following table describes the potential payments to our named executive officers upon a Termination Event, if such event had occurred, as of December 31, 2025.
Potential Payments upon Termination or Change in Control
| Name | Number of Shares Vested Upon Termination Event (#) | Value Realized on Termination Event as of December 31, 2025 ($)(1) | | Christopher J. Bilotto | 119,195 | 578,096 | | Matthew C. Brown | 63,084 | 305,957 |
Potential Payments upon Termination or Change in Control
(1) Equals the number of unvested Common Shares multiplied by the closing price of the Common Shares on December 31, 2025. From time to time we have approved, and may in the future approve, the acceleration of vesting of Common Shares previously awarded under our Share Award Plan to former employees of RMR, which may include individuals who are our executive officers, in connection with their retirement or other separation from RMR. For a discussion of the consequences of a Termination Event under our business and property management agreements with RMR, see the below “Related Person Transactions” section.
Pay Ratio
Pay Ratio Pay ratio disclosure under Item 402(u) has not been provided because we do not have any employees.
Pay Versus Performance
Pay Versus Performance The following table and footnotes summarize the total compensation we paid to our named executive officers (our “NEOs”), compensation “actually paid” to our NEOs (calculated in accordance with SEC rules), the cumulative total shareholder return of our Company, the peer group total shareholder return and our net income for the past five fiscal years. We do not use any financial performance measures to link compensation actually paid to our NEOs by us to our Company’s performance. Accordingly, pursuant to the SEC rules, we have not included a “company selected measure” or the tabular list of performance measures. Please see “Compensation Discussion and Analysis—Compensation Overview” above for an explanation of why we pay our NEOs no cash compensation. For information regarding the compensation paid by RMR and RMR Inc. to our NEOs, please see the above “RMR Compensation Practices” section.
Pay Versus Performance
| Pay Versus Performance | | | | | | | | | | | Year | Summary Compensation Table Total for Principal Executive Officer (“PEO”) | Compensation Actually Paid to PEO(1) | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO(1) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEOs NEOs(2)(3) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) ($000s) | | | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return** | | | | Christopher J. Bilotto | | | | | | | | | | 2025 | $448,520 | $675,508 | — | — | $162,137 | $301,051 | $129.11 | $165.09 | $(285,881) | | 2024 | 341,608 | 251,245 | — | — | 136,358 | 74,782 | 60.39 | 127.94 | (370,272) | | | | | Jennifer F. Francis | | | | | | | | 2023 | — | — | 178,710 | 508,007 | 19,090 | 139,720 | 96.87 | 102.75 | (293,572) | | 2022 | — | — | 123,995 | (75,701)* | 53,845 | (61,296)* | 16.21 | 90.72 | (15,774) | | 2021 | — | — | 280,424 | 231,125 | 103,489 | 71,960 | 75.73 | 116.06 | 179,926 |
Pay Versus Performance
* Because our Company does not pay cash compensation to its NEOs, the total compensation from the summary compensation table does not include cash compensation received by our NEOs. The negative values for Compensation Actually Paid in 2022 reflect the decline in value of the share awards granted by us to our NEOs. Peer group total shareholder return is based on the MSCI U.S. REIT/Health Care REIT Index.
Pay Versus Performance
| | 2026 Proxy Statement | 43 |
Pay Versus Performance
The following table summarizes the applicable deductions and additions for the PEO in the calculation of Compensation Actually Paid to the PEO.
Pay Versus Performance
| PEO Compensation Actually Paid | | | | | | | | | | | Year | PEO Name | Total Compensation Per Summary Compensation Table | Stock Grant Amount | Year End Fair Value of Equity Awards Granted and Unvested During Applicable Year | Change in Fair Value as of Year End of Any Prior Year Awards that Remain Unvested as of Year End | Awards Granted and Vested in the Same Year, at Fair Value as of the Vesting Date | Change in Fair Value as of Year End of Any Prior Year Awards that Vested During Applicable Year | Total Equity Value Reflected in Compensation Actually Paid | Compensation Actually Paid to PEO | | 2025 | Christopher J. Bilotto | $448,520 | $(444,997) | $317,287 | $137,126 | $164,999 | $52,573 | $671,985 | $675,508 |
Pay Versus Performance
(2) The only non-PEO NEO for 2025 and 2024 is Matthew C. Brown. The only non-PEO NEOs for 2023 were Richard W. Siedel and Matthew C. Brown. The only non-PEO NEO for 2022 and 2021 was Richard W. Siedel. (3) The following table summarizes the applicable deductions and additions for the non-PEO NEO in the calculation of Compensation Actually Paid to the non-PEO NEO.
Pay Versus Performance
| Average Non-PEO NEOs—Compensation Actually Paid | | | | | | | | | | Year | Total Compensation Per Summary Compensation Table | Stock Grant Amount | Year End Fair Value of Equity Awards Granted and Unvested During Applicable Year | Change in Fair Value as of Year End of Any Prior Year Awards that Remain Unvested as of Year End | Awards Granted and Vested in the Same Year, at Fair Value as of the Vesting Date | Change in Fair Value as of Year End of Any Prior Year Awards that Vested During Applicable Year | Total Equity Value Reflected in Compensation Actually Paid | Compensation Actually Paid to Non-PEO NEOs | | 2025 | $162,137 | $(159,999) | $145,044 | $84,604 | $32,002 | $37,263 | $298,913 | $301,051 |
Pay Versus Performance
| 44 | | 2026 Proxy Statement |