This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Select Income REIT Announces Restructuring Of Management Agreement With RMR And Recommending Annual Election Of All Trustees

Select Income REIT (NYSE:SIR) today announced the restructuring of its management agreement with Reit Management & Research LLC (RMR) and the recommendation to shareholders to have annual election of all Trustees.

Restructuring of Management Agreement with RMR.

SIR and RMR have agreed to restructure their business management agreement as follows:

  • The base business management fees paid by SIR to RMR, which are included in SIR’s “G&A” expenses, are currently calculated at the annual rate of approximately 0.5% of the gross historical cost of SIR’s real estate assets. Beginning in 2014, these fees will be calculated on the basis of the lower of: (i) gross historical cost of SIR’s real estate assets or (ii) SIR’s total market capitalization. Market capitalization will include the market value of SIR’s common shares, plus the liquidation preference of preferred shares and the principal amount of debt. The market value of SIR’s common shares will be calculated based on the average shares outstanding multiplied by the average closing share price during the period in which the fees are earned. Accordingly, SIR’s fees paid to RMR may decline when the market value of SIR’s common shares declines.
  • All of the base business management fees currently paid by SIR to RMR are paid in cash. Beginning in 2014, 10% of the base business management fees will be paid in common shares of SIR. The amount of SIR common shares granted as part of the base business management fee will be calculated based on the average closing share price during the period in which the fees are earned. Accordingly, RMR’s common share ownership of SIR is expected to increase over time.
  • Annual incentive fees payable by SIR to RMR included in SIR’s “G&A” expenses are currently calculated based upon increases in funds from operations (FFO) per share and are paid in common shares of SIR which vest immediately. Beginning in 2014, the incentive fees which may be earned by RMR will be calculated based upon total returns realized by SIR common shareholders (i.e., share price appreciation plus dividends) in excess of benchmarks. The benchmarks will be set by the Compensation Committee of SIR’s Board (which is comprised solely of Independent Trustees) and will be disclosed in SIR’s annual meeting proxy statements. Incentive fees will be paid in common shares of SIR which will vest over a multiyear period and will be subject to a “claw back” in the event of certain material restatements of financial results. Accordingly, the incentive fees payable to RMR are expected to have a direct relationship to total returns realized by SIR common shareholders.

Recommending Annual Election of All Trustees.

The SIR Board of Trustees has determined to recommend to shareholders that SIR’s Declaration of Trust be amended to permit the annual election of all Trustees. SIR’s Trustees currently serve staggered, three year terms. The proposed amendment to SIR’s Declaration of Trust will be presented to SIR’s shareholders at SIR’s next annual shareholders’ meeting in the spring of 2014. If this amendment is approved by SIR’s shareholders, all Trustees will thereafter be elected for one year terms.

Stock quotes in this article: SIR 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,505.22 -9.15 -0.06%
S&P 500 1,875.98 -3.57 -0.19%
NASDAQ 4,129.71 -31.7480 -0.76%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs