Why was Tom O'Brien paid an OBSCENE $2.6 million...
...in total compensation in 2011. This is an amount equal to more than 11% of TA's total 2011 net income...when that net income represents LESS than a 10% return on equity. Why shower largesse on someone who is earning only modest returns, and has yet to fundamentally prove himself as a manager?
It's pretty easy to figure out how I'm going to vote on the "say on pay" provision. The pay package is egregious, and evidences to me that O'Brien is an HPT/RMR stooge.
It took Khan's lawsuit to "force" these guys to reduce TA's rent a year ago. I was bugging O'Brien and the CFO to DO something before then (like threatening to resign), but they seemed uninterested in standing independent of HPT/RMR/Portnoy.
The stock is worth a hell of a lot more than its current trading price, but there will always be an HPT/RMR/Portnoy/O'Brien discount on this security, unfortunately. That was also evidenced by the idiotic dilutive issuance of 10 million shares at $5.69, a year ago, which was clearly at least partially intended as a "giveback" to HPT, for the rent cut. (If TA can buy more assets, it can "sell" them to HPT, and lease them back, making HPT happy; dilution be damned.)
This is not a time for me to be negative, I know. But after just reading the proxy, and seeing O'Brien's compensation, I couldn't help it. This guy is bought and paid for, imho.
I guess I will dissent to some of your comments. I have no problem with the dilution to add stores. In fact, it makes too much sense to disparage. Additionally, it allowed me to buy in at less than the secondary price, so I am happy. There may be a discount due to relationship, but there has been way too much of a discount. That is coming off now. I just suggest that everyone take a deep breath and be happy with the business performance...... I am looking at what we have and what it will be under current ownership and management. If IF, something is adjusted in that regard, then that is the gravy on top of the steak! TA is still a screaming BUY!
I am voting NO to anything the management recomends. If Portono doesn't have enough TA shares, he should be ousted from TA board along with all his clonies. This is the time for you and all of us to say this, and it is not being negative.
I have to agree. The stench of the continuing incestuous relationship between O'Brian and Portnoy is nauseating. I have to believe O'Brian is paid so much because he is HPT's man to oversee their TA REIT interests-not for managing TA alone. If Mr. O'Brian were to be paid based on increasing book value, or increasing share price, etc. of course there would be NO way to justify (or even come close) to such over-the-top pay. I'm sure Mr. O'Brian has convinced himself he earns every penny (reminds me of Dr Samuel Johnson's observation a few hundred years ago about how hard it is to get someone to understand something when it is not in their financial interests to understand it). But, TA is cheap by any measure, and that overcomes by aversion to TA/HPT/Portnoy. At the end of the day TA must do well or none of the inbreeding can continue. And that is why I stick with this company that has such huge potential (in spite of it all).
what was it St. Paul said..."abstain from even the appearance of evil"? Hey, TA shares are cheap and part of the reason they are cheap is because TA/HPT/Portnoy et al have NOT abstained from the "appearance of evil". But I am LONG TA not because of O'Brian, Portnoy, HPT, etc but in spite of them. TA is a great story, deeply undervalued and the Street is just catching on.
I believe we are just starting to see the rewards of TA's potential. And what was it that Buffett said...own a business that any fool could run...because sooner a later a fool will. I own TA shares because of TA's business model (a duopoly with Pilot/FlyingJ) and compelling valuations-not because of TA & HPT management, nor Portnoy abd his loaded board of directors, etc. So, load the wagon before this baby's shares hit double digits. It will all work out well in the end. ps and remember, if O'Brian and Portnoy/HPT, etc get too out of hand some of the bigger investors won't have any compunction about suing them just like Mr. Kahn(?) successfully did a couple years ago. And O'Brian and Portnoy know this very well. They do not want a repeat of Nightmare on Elm Street that would come just as sure as the sun shines. They are NOT stupid people.
The base salary is only $300K, by the way, but he gets all this other bonus, etc., largesse? Yes, he's not to blame for the economic collapse, and its effect on TA, in all fairness, but it remains to be seen whether he is actually creating value here, in his own right. (I haven't checked lately, but last time I did, 1 1/2 years ago, I saw a lot of inconsistentcy in execution at TA, at some of its most busy stores, on the critical I-94 corridor around the southern tip of Lake Michigan...Dirty stores, deteriorated parking lots, and worst of all, very ineffective "SteakCenters of America," billboard advertising for its food options, and worst of all, malfunctioning billboards without pricing information for weeks on end.) Perhaps it's time to do another scouting mission, and see if things have changed for the better here. (I have noticed they've got new billboards out on the I-94 that are very much improved.)
One would think the length of an economic cycle would be the measure of effectiveness. And a whole hell of a lot of money was burned through in 2008-2010. Without O'Brien defending TA as a bonafide independent entity, imho. (It took a lawsuit on the part of Khan, to get us relief.)