Shareholders show displeasure with lodging REIT directors. Incumbent directors serving on nominating and governance committees at lodging REITs continued to face opposition in 2018.

Say on Pay votes warrant attention. The 2018 proxy season saw a sharp increase in the percentage of lodging REITs facing greater than normal opposition in Say on Pay votes.

Hospitality Properties Trust (HPT) may be the poster child for poor corporate governance practices in the lodging REIT world. The company has been a proxy access target in each of the last two years.

Human capital management proposal makes a splash at Host Hotels & Resorts, Inc. A shareholder proposal calling on the company to issue an annual sustainability report received 31.1% support. With institutional investor support for E&S proposals rising from 19% in 2014 to 29% in 2018, lodging REITs face rising shareholder expectations regarding corporate governance. •

Since 2012, lodging REITs have adopted a number of corporate governance reforms as a result of shareholder engagement. The human capital management proposal at Host in 2018 marks a shift in shareholder focus on lodging REIT corporate governance.

The full report is available here.