Shareholders’ Equity

12 Months Ended

Sep. 30, 2020

Common Shares

Class A Common Shares—Class A Common Shares entitle holders to one vote for each share held of record on all matters submitted to a vote of shareholders.

Class B-1 Common Shares—Class B-1 Common Shares entitle holders to ten votes for each share on all matters submitted to a vote of shareholders. Each Class B-1 Common Share may, at the option of its holder, be converted into a Class A Common Share, on a one for one basis.

Class B-2 Common Shares—ABP Trust owns 15,000,000 Class B-2 Common Shares, which are paired with the 15,000,000 RMR LLC Class A Units and have no independent economic interest in RMR Inc. The Class A Units may, at the option of the holder, be redeemed for Class A Common Shares on a one to one basis, and upon such redemption our Class B-2 Common Shares that are paired with the Class A Units are automatically canceled. RMR Inc. has the option to settle the redemption in cash. Each Class B-2 Common Share entitles the holder to ten votes per share, and, accordingly, the issuance of additional Class B-2 Common Shares would have a significant dilutive effect on the voting power of the then current holders of our Class A Common Shares.

Except as otherwise required in the charter or by applicable law, all holders of Class A Common Shares, Class B-1 Common Shares, and Class B-2 Common Shares shall vote together as a single class on all matters on which shareholders are generally entitled to vote. The holders of a class of common shares shall each be entitled to vote separately as a single class with respect to (and only with respect to) amendments to the charter that alter or change the powers or rights of the shares of such class of common shares so as to affect them materially and adversely; provided, however, if such amendments affect all holders of common shares materially and adversely in the same manner, the separate voting requirement shall not be applicable and all holders of common shares shall vote together as a single class.

Issuances and Repurchases

We grant our Class A Common Shares to our officers and employees under the 2016 Omnibus Equity Plan adopted in 2016, or the 2016 Plan. In addition, each of our Directors receives Class A Common Shares under the 2016 Plan as part of his or her annual compensation for serving as a Director. During the fiscal years ended September 30, 2020, 2019 and 2018, we granted to our Managing Directors, in their capacities as our officers and employees, and to certain of our other officers and employees, an aggregate of 93,700, 77,900 and 65,000, respectively, of our Class A Common Shares. We also granted to each of our Managing Directors and Independent Directors 3,000, 2,500 and 2,500 of our Class A Common Shares during each of the fiscal years ended September 30, 2020, 2019 and 2018 as part of his or her annual compensation for serving as a Director.

The Class A Common Shares granted to our Independent Directors and Managing Directors, in their capacities as Directors, vest immediately and are included in general and administrative expense in our consolidated statements of income. The Class A Common Shares granted to our Managing Directors, in their capacities as our officers and employees, and to our other officers and employees vest in five equal annual installments beginning on the date of the grant and are included in equity based compensation expense in our consolidated statements of income. During the fiscal years ended September 30, 2020, 2019 and 2018, we recorded general and administrative expenses of $564, $784 and $864, respectively, and equity based compensation expenses of $2,916, $2,579 and $3,001, respectively, related to awards we made under the 2016 Plan.

In connection with the vesting and issuance of awards of our common shares to Directors, officers and employees, we repurchase our Class A Common Shares to satisfy tax withholding and payment obligations. The repurchase price is based on the repurchase date closing price of our Class A Common Shares on The Nasdaq Stock Market LLC, or Nasdaq. The aggregate value of Class A Common Shares repurchased during the fiscal years ended September 30, 2020, 2019 and 2018, was $523, $827 and $987, respectively, which is recorded as a decrease to additional paid in capital within shareholders’ equity in our consolidated balance sheets.

In connection with the issuances and repurchases of our Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently issues or acquires an identical number of Class A Units from RMR Inc.

A summary of shares granted and vested, including shares withheld, repurchased or forfeited, under the terms of the 2016 Plan for the fiscal years ended September 30, 2020, 2019 and 2018 is as follows:


	2020			2019			2018
		Weighted			Weighted			Weighted
	Number	Average		Number	Average		Number	Average
	of	Grant Date		of	Grant Date		of	Grant Date
	Shares	Fair Value		Shares	Fair Value		Shares	Fair Value
Unvested shares, beginning of year	126,160	$	59.38	110,240	$	69.11	104,020	$	45.57
Shares granted	111,700	$	30.04	90,400	$	48.31	77,500	$	90.83
Vested shares withheld and repurchased	(17,539)	$	29.83	(17,167)	$	48.18	(11,369)	$	86.92
Shares vested	(75,101)	$	39.18	(56,833)	$	51.46	(59,671)	$	64.90
Shares forfeited	(1,230)	$	40.08	(480)	$	68.95	(240)	$	84.90
Unvested shares, end of year	143,990	$	44.10	126,160	$	59.38	110,240	$	69.11

The 143,990 unvested shares as of September 30, 2020 are scheduled to vest as follows: 50,560 shares in 2021, 41,930 shares in 2022, 32,760 shares in 2023 and 18,740 in 2024. As of September 30, 2020, the estimated future compensation expense for the unvested shares was $6,350 based on the grant date fair value of these shares. The weighted average period over which this compensation expense will be recorded is approximately 26 months. At September 30, 2020, 204,359 of our common shares remained available for issuance under the 2016 Plan.

Distributions

During the fiscal years ended September 30, 2020, 2019 and 2018, we declared and paid distributions on our Class A Common Shares and Class B-1 Common Shares as follows:


Declaration	Record	Paid	Distributions		Total
Date	Date	Date	Per Common Share		Distributions
Fiscal Year Ended September 30, 2020
10/17/2019	10/28/2019	11/14/2019	$	0.38	$	6,195
1/16/2020	1/27/2020	2/20/2020	0.38		6,194
4/16/2020	4/27/2020	5/21/2020	0.38		6,200
7/16/2020	7/27/2020	8/20/2020	0.38		6,200
			$	1.52	$	24,789
Fiscal Year Ended September 30, 2019
10/18/2018	10/29/2018	11/15/2018	$	0.35	$	5,680
1/18/2019	1/28/2019	2/21/2019	0.35		5,680
4/18/2019	4/29/2019	5/16/2019	0.35		5,684
7/18/2019	7/29/2019	8/15/2019	0.35		5,683
			$	1.40	$	22,727
Fiscal Year Ended September 30, 2018
10/12/2017	10/23/2017	11/16/2017	$	0.25	$	4,041
1/19/2018	1/29/2018	2/22/2018	0.25		4,040
4/19/2018	4/30/2018	5/17/2018	0.25		4,044
7/19/2018	7/30/2018	8/16/2018	0.25		4,044
			$	1.00	$	16,169

These distributions were funded in part by distributions from RMR LLC to holders of its membership units as follows:


			Distributions Per		Total		RMR LLC		RMR LLC
Declaration	Record	Paid	RMR LLC		RMR LLC		Distributions		Distributions
Date	Date	Date	Membership Unit		Distributions		to RMR Inc.		to ABP Trust
Fiscal Year Ended September 30, 2020
10/17/2019	10/28/2019	11/14/2019	$	0.30	$	9,391	$	4,891	$	4,500
1/16/2020	1/27/2020	2/20/2020	0.30		9,390		4,890		4,500
4/16/2020	4/27/2020	5/21/2020	0.30		9,394		4,894		4,500
7/16/2020	7/27/2020	8/20/2020	0.30		9,395		4,895		4,500
			$	1.20	$	37,570	$	19,570	$	18,000
Fiscal Year Ended September 30, 2019
10/18/2018	10/29/2018	11/15/2018	$	0.30	$	9,369	$	4,869	$	4,500
1/18/2019	1/28/2019	2/21/2019	0.30		9,369		4,869		4,500
4/18/2019	4/29/2019	5/16/2019	0.30		9,372		4,872		4,500
7/18/2019	7/29/2019	8/15/2019	0.30		9,371		4,871		4,500
			$	1.20	$	37,481	$	19,481	$	18,000
Fiscal Year Ended September 30, 2018
10/12/2017	10/23/2017	11/16/2017	$	0.25	$	7,791	$	4,041	$	3,750
1/19/2018	1/29/2018	2/22/2018	0.25		7,790		4,040		3,750
4/19/2018	4/30/2018	5/17/2018	0.25		7,794		4,044		3,750
7/19/2018	7/30/2018	8/16/2018	0.25		7,794		4,044		3,750
			$	1.00	$	31,169	$	16,169	$	15,000

On November 19, 2020, we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.38 per Class A Common Share and Class B-1 Common Share, or $6,230. This dividend was paid to our shareholders of record as of the close of business on October 26, 2020. This dividend was partially funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.30 per unit, or $9,419, of which $4,919 was distributed to us based on our then aggregate ownership of 16,395,641 membership units of RMR LLC and $4,500 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. The remainder of this dividend was funded with cash accumulated at RMR Inc.