09/26/22 07:15 AM EDT

THE (DIS)TRUST SERIES | VOLUME V - THE CURIOUS CASE OF DISAPPEARING WORK EXPERIENCE | 9.23.22

Rob Simone, CFA

@HedgeyeREITs

Takeaway: Re-publishing a late-Friday note for those who missed it; This is truly a head scratcher

Hedgeye Cartoon of the Day: Picked a H*ll of a Day to Quit Drinking

It is 9.23.22, and Active Short MPW is overvalued by approximately ~$12.35/share.

Ticker: MPW

Company Name: Active Short Medical Properties (Dis)Trust

Subsector: NNN Hospitals (just MPW standing alone)

Headline: Approximately ~15 years of prior work experience no longer exists in a proxy bio

As we started digging into the corporate governance side of MPW, where for example it became clear that the current COO and co-founder was the primary intermediary separating any potential internal/external whistleblower and the Board/NCG/Audit committees, something else interesting caught our eyes.
Refer to Figure 1 below, which is a summary of key prior work experience presented in NEO bios (CEO + CFO + COO) in each of MPW's Proxy statements filed since 2006. These filings can be found on MPW's website here for reference.
Lets focus on observable facts:

Fact #1: From 2006 to 2020, MPW's annual Proxy showed Guilford Capital and Guilford Medical Properties as prior work experience in the CEO's bio pre-MPW.
Fact #2: Beginning in 2021 and following through in 2022, MPW's Proxy filing no longer listed Guilford as prior work experience in the bio.
Fact #3: Guilford is not listed as prior work experience anywhere on the MPW website currently.
Fact #4: Guilford Capital and Guilford Medical Properties were located in Montgomery, AL. Both entities appear to be dissolved. There are some references to funds administered by the firm here, here, here, here and here.
Fact #5: Over the same time period there were no changes to the CFO's prior work history.
Fact #6: PsychPartners was removed from the COO's prior work experience beginning with the 2013 Proxy filing.
Fact #7: Concurrently and beginning in 2013, the COO's investment banking experience was expanded to list three prior firms.

As any reader can easily observe, there have been clear changes to the management team's reported work histories filed with the SEC and ahead of MPW's annual meetings of shareholders.
Questions for MPW:

Why are NEO biographies being scraped of prior work experience? And any "time requirement" claim is not an acceptable answer here, in our view, as the CFO's bios have shown no alteration since 2006.
Why does the CEO of this publicly traded company now show no prior work experience before co-founding MPW, beginning with the 2021 proxy filing? Our understanding is that CEO Ed Aldag graduated from UAB on or about 1986. What were his professional roles and experience prior to running a large, international, publicly-traded triple-net REIT? Proxy statements prior to 2021 describe Guilford Capital Corp. and Guilford Medical Properties as "two private real estate companies." What form of investments did Guilford make, and across what healthcare property types? How are they relevant (or not so) to triple-net hospitals? What was Guilford's track record under Aldag's leadership, where he served in multiple executive roles and on the board of directors? What prompted the departure in 2001, after which MPW was founded in 2003? Why is there also no mention of Guilford on MPW's website? In our view these are highly relevant questions from a corporate governance standpoint, for shareholders deciding whether to trust any management team to be good stewards of their hard-earned capital.
Again to be fair, there appear to be no issues/irregularities with the CFO's work history. It was presented consistently throughout his tenure at MPW.
As it relates to the COO, why was PsychPartners, LLC removed from the bio beginning in 2013? What exactly was PsychPartners, which was described in a prior proxy as "a healthcare services and practice management company?" Is this prior experience directly applicable to running a triple-net hospital REIT? What was McLean's specific role and experience at that company?
In general, "Why?"